Fuel Poverty and Energy Efficiency

Charles Hendry Excerpts

Wednesday 16th January 2013 Commons Chamber

[Caroline Flint]

Well, the Government certainly are not doing the job of tackling fuel poverty, and that will be outlined further in my speech and in the motion. Who in the House would disagree that the best way for people to save money on their bills is to improve their energy efficiency? That does not just keep out the cold for one year, it does so every year. If ever a Government set out to prove that they were out of touch and completely lacked any common sense, they would begin by making it harder for people to make their homes energy efficient.

[Charles Hendry (Wealden) (Con)]

rose—

[Caroline Flint]

I will perhaps take an intervention a little later, but I have taken quite a lot of interventions and I want to make some progress.

Let me come on to the green deal. We have always said that we want such a scheme to work. All three parties went into the general election with a pay-as-you-save scheme in their manifestos, and the pilot started under the previous Labour Government. Properly executed, it could really help to cut people’s bills and create jobs. In the build-up to the launch of the green deal, the Government have not been shy of making big claims for this policy. Ministers have proclaimed that it would reach 14 million homes by 2020, and 26 million by 2030. We were promised that it would create up to 100,000 jobs by 2015. They told us it would be the biggest home improvement scheme since the second world war. That is not the scheme before us today.

Under this scheme, just to find out eligibility and what measures are available, someone might have to pay £100 or more. This is a scheme where, instead of using the green investment bank to make green deal loans good value—as happens in Germany—interest rates could be as high as 8%. People could end up paying more in interest repayments and charges than the original measures cost. This is a scheme where, if people try to do the right thing and pay off their loan early, or have to pay it off because they are moving house and the new owner does not want to take on the green deal, they will be hit with penalty payments running to thousands of pounds. Yes, the Government who preach about debt will penalise people who want to pay off their debts. Under this scheme, according to the Government’s own impact assessment, the number of lofts lagged every year will plummet by more than 80%. This is a scheme that has so far seen nearly 2,000 people in the insulation industry lose their jobs, and 1,000 more put on notice of redundancy. For all the hype, this is set to be the green disaster, and the public will vote with their feet. Given the choice of deal or no deal, the public, in their millions, will be saying no deal.

Let us look at the obligations on energy companies. Not only have the Government made a mess of their flagship policy, but they have failed to get the energy companies to keep their side of the deal. In government, we put tough obligations on the big energy companies to make them offer energy efficiency measures for free, or at a very low cost, to households in deprived areas. Those programmes were known as the community energy saving programme and the carbon emissions reduction target, and they came into force on 1 October 2009 and ended on 31 December last year. Ministers and Ofgem have therefore had two and a half years to keep the policy on track. Instead, they sat back and did nothing, as month after month companies failed to stay on course, and they watched, in the final few months, as the energy giants threw money at the problem of take-up, which they should have dealt with far sooner and more effectively, instead of leaving their customers to foot the bill.

Ministers cannot say that they did not have any warning. On 16 May last year, I told the Government in this House that the energy companies were not on track to meet their targets. Let me remind the House what the Minister of State, Department of Energy and Climate Change, the right hon. Member for Bexhill and Battle (Gregory Barker) said in response:

“we fully expect them to deliver their obligations and we will make sure that they do.”—[Official Report, 16 May 2012; Vol. 545, c. 554.]

Now that the scheme has closed, will the Minister tell us whether he has kept his word and made sure that the energy companies met their obligations, or will he now admit that because of his complacency the energy companies have missed their targets? As a result, families across the country are facing a cold winter with poorly insulated homes when they could have been helped. If those companies have failed to honour their obligations, will he tell the House that he will expect Ofgem, as it states in the motion, to use its full range of powers to take tough action to ensure that companies know that there is a price to pay if they do not do what is required of them?

[Charles Hendry]

The point I wanted to make earlier—I am grateful to the right hon. Lady for giving way—is that in the interests of transparency can she confirm that the number of people in fuel poverty started to come down in about 1995 or 1996, as wholesale prices came down? They continued to decline until 2005, when they bottomed out at approximately 1 million, and then rose inexorably to 3 million, 4 million and 5 million from that point onwards as wholesale prices increased. That was not a matter of political success or failure; it was a matter of wholesale prices more than anything else.

[Caroline Flint]

I do not accept that it is just a matter of wholesale prices. There are issues about prices and I recognise the experience that the hon. Gentleman brings to the Chamber on this issue, but the truth is that if we had not had the decent homes programme, the Warm Front scheme and other measures to help tackle homes that leak energy, in both social and private housing, we could have left office with more people in the grip of fuel poverty. The truth is that the numbers went down.

Under Labour, the Warm Front scheme helped well over 2 million households insulate their homes, improve their energy efficiency and cut their bills. No one would pretend that the scheme is perfect—no scheme of such a size ever is. I have dealt with cases in my constituency where people have not received the kind of service expected, but when Warm Front closes on Saturday, the Government will be, as I have said, the first Administration since the 1970s not to have a Government-funded energy efficiency programme. I do not think that that is a fine record to set.

In its final year, it is no exaggeration to say that Ministers have run the scheme into the ground. The number of people receiving help this year is on course to hit an all-time low. Between 2006 and 2010, nearly 250,000 people were helped each year, but so far this year fewer than 22,000 households have been accepted for help—not 80,000, as the Prime Minister told the House earlier today. In the Secretary of State’s own constituency, just seven households have received assistance in the last year. I am not sure whether that will feature in his election literature in 2015.

--- Later in debate ---

[Mr Davey]

My hon. Friend tempts me down a particular road, but it does not relate to the motion, so for reasons of time I am happy to get back to what I want to say.

[Charles Hendry]

I was delighted to go to the constituency of my hon. Friend the Member for Monmouth (David T. C. Davies) to help open a wind-turbine manufacturing plant, which is keen to take advantage of this technology. That was not, however, the point I wanted to make in this intervention. Does the Secretary of State agree that the Labour did not just talk, but blocked progress? When the Minister of State, my right hon. Friend the Member for Bexhill and Battle (Gregory Barker), and I proposed a green deal as an amendment to the Energy Bill under the last Labour Government, Labour vetoed it. We could have seen progress two years earlier than it has happened.

[Mr Davey]

My hon. Friend is absolutely right, and he is an authority in the House on this issue. It was not just the green deal or nuclear or other things that Labour failed to do when in government; it failed to get investment into the energy system in the UK, and we are having to make up the backlog.

We are helping people now, in the short term, by intervening directly—getting extra money into the pockets of those who need it to pay their bills and looking after those who are struggling most—through the warm home discount. We are helping people now and in the medium term by helping everyone to be able to help themselves to cut their bills by saving energy through the green deal. We are ensuring through the Energy Bill that our country and future generations are not hit by future volatile fossil fuel prices, as we are being hit by major reforms for a more competitive, more diverse market of suppliers and energy sources. Let me deal with each of those areas in turn