Energy Update

Claire Perry Excerpts

Monday 19th November 2018 Written Statements

[The Minister for Energy and Clean Growth (Claire Perry)]

On 15 November 2018 the General Court of the Court of Justice of the European Union found in favour of Tempus Energy, against the European Commission, removing the Commission’s state aid approval for the UK capacity market. The Court held that the Commission should have consulted more fully before granting state aid approval in 2014.

This judgment was decided on procedural grounds. It was not a challenge to the nature of the UK capacity market mechanism itself.

The judgment removes state aid approval for the capacity market, preventing the UK Government from holding any capacity auctions or making any capacity payments under existing agreements until re-approval.

National Grid has confirmed that it does not believe the judgment will cause any risk to security of supply this winter. It has informed market participants of the judgement.

We are considering the judgment in detail alongside the European Commission and are working to support it as it considers the legal options available.

We believe the capacity market is an effective mechanism that is designed in such a way as to minimise costs to consumers. The design of the capacity market has not been called into question, and our focus is therefore on ensuring it can be reinstated as soon as possible.

As part of this, we are seeking immediate state aid approval for a T-1 auction that will cover winter 2019-20. Alongside this, we are working to reinstate the full capacity market regime and are discussing the swiftest means of doing so with the Commission.

The Government and National Grid will ensure that market participants are kept updated.

I will keep the House updated as appropriate.

[HCWS1090]

Draft Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018

Claire Perry Excerpts

Thursday 1st November 2018 General Committees

[The Minister for Energy and Clean Growth (Claire Perry)]

I beg to move,

That the Committee has considered the draft Electricity and Gas (Powers to Make Subordinate Legislation) (Amendment) (EU Exit) Regulations 2018.

It is a pleasure to serve under your chairmanship, Sir David. The regulations were laid before the House on 5 September. They are part of a package of measures that we promised to introduce to carry forward what we said in the European Union (Withdrawal) Act 2018, incorporating relevant EU legislation into domestic law and ensuring that Ministers have the proper powers to act under the legislation.

The legislation we are discussing today is part of the third energy package. Much of this is very technical—it is known as the European network codes and guidelines. As promised, the European Union (Withdrawal) Act will incorporate the majority of that legislation into domestic law.

The instrument before us will ensure that relevant legislation works effectively in two ways after our departure from the European Union. First, it will ensure that directly applicable EU law concerning electricity and gas is effectively incorporated into domestic law. Secondly, it will confer powers on the UK Government and Northern Ireland Executive to amend elements of that retained EU law, should we wish to do so.

The instrument will transfer legislative functions conferred by four regulations to our UK Government and the Northern Ireland Executive under section 8 of the withdrawal Act, and I will turn now to those four powers.

The first power is the incorporation of provisions of network codes into UK law. This provides a limited ability, essentially, to create European network codes. The withdrawal Act says that we will incorporate all direct EU legislation

“so far as operative immediately before exit day”.

That means, of course, that we are not future-proofing for provisions that are enforced on exit day but that do not apply until a later date. That will be the case for several European network codes, so without the transfer of the power, gaps in the energy regulatory framework could be created. It is therefore important that we can incorporate the missing provisions promptly through legislation. That is accomplished by part 2 of the instrument, which substitutes limited powers for the Secretary of State and the Northern Ireland Department for the Economy to make regulations, bringing into domestic law provisions corresponding to the codes, or parts of the codes, not captured by the withdrawal Act, and revokes the European Commission’s powers to make new codes. The statutory instruments, should we use them, will be subject to affirmative procedures to ensure that they are scrutinised effectively.

The second power is to amend network codes. It enables us to transfer powers currently held by the European Commission to the Secretary of State and the Northern Ireland Department. Again, those powers would be exercised using affirmative statutory instruments.

Power three is to amend the regulation on wholesale energy market integrity and transparency—REMIT—and the reporting requirements. The instrument transfers to the Secretary of State and the Northern Ireland Department powers to amend definitions and reporting requirements under REMIT. This is an important, albeit technical, code because it prohibits insider trading and market manipulation in wholesale energy markets, and provides existing energy regulations with tools to fight those crimes. The power to amend the definitions is limited and can be used only to ensure coherence with other relevant financial activities and energy legislation, or to take into account developments in wholesale energy markets.

The fourth, very important, power is the security of gas supply regulation, which creates common standards and indicators to measure threats to gas security, and defines how much gas is needed to maintain security of supply. Quite an interesting document is produced at regular intervals that sets out the definitions of gas security and risk assessment for the relevant group of European countries. The regulation transposing it into EU legislation contains templates for risk assessments, preventative action plans and emergency action plans to be carried out by Governments. It currently contains powers for the European Commission to amend the templates using delegated Acts. This instrument will transfer those powers to the Secretary of State, and they would be exercised if required through subsequent negative statutory instruments. We believe that is appropriate, as the powers permit only very narrow amendments to very limited provisions of the regulation.

The instrument applies to Northern Ireland. It transfers powers variously to the Secretary of State and the Department for the Economy in Northern Ireland, respecting the devolution settlement. Of course, we have consulted extensively with the Northern Ireland Department during the development of this process.

The instrument allows the Secretary of State to exercise powers in respect of Northern Ireland, but that would occur only in respect of a reserved area, such as international relations or where the Department for the Economy determines that, as is currently the case, it is unable to act in the absence of Northern Ireland Ministers. Should that power be used, it will be accompanied each time by ministerial statements explaining why it is necessary.

Although deeply technical in nature, these regulations are, as we have promised, a sensible, proportionate and necessary transfer into domestic law of powers currently applicable to our markets and delivered under EU law. This will maximise continuity in our energy regulation as we leave the EU. I therefore commend these regulations to the House.

--- Later in debate ---

[Claire Perry]

As most Members here voted to trigger article 50 and begin a process of—[Interruption.] Well, most of us voted to trigger it, and most of our constituents would have expected us to do so, as we live in a democracy. My point is that, in the process of bringing forward the Brexit that our country voted for, we must ensure that there is a smooth and orderly transposition of EU law—the acquis—into UK law so we can exercise proper scrutiny of the sorts of powers that we are referring to. I believe it is called taking back control and exercising parliamentary sovereignty.

I commend my officials in the Department for Business, Energy and Industrial Strategy, the Clerks and the Panel of Chairs, because we will all be troubling them a lot over the next few months as we do what people expect us to do—transfer the powers to ensure that there is absolutely no break in the continuity of activity. That is vital to ensure we have a smooth Brexit. In some cases, we will take contingency powers, in the very unlikely event that we have a disorderly Brexit, which would be deeply unpalatable.

Some of the speeches that have been made, including that of the hon. Member for Inverness, Nairn, Badenoch and Strathspey, encapsulated a whole other load of stuff relating to devolution and the transfer of additional powers to the UK Government. I have reminded him several times that his constituents, like all constituents in our very powerful united group of countries, have benefited from legislation such as the price cap Bill, and the enormous growth of the renewable industries in Scotland has happened with the help of subsidies brought about by the taxes and powers taken by this Government. I suspect it is in his constituents’ interests to have as much alignment as possible with the Westminster Parliament on energy matters.

I should preface my remarks by saying that we will clearly have to prepare for a number of fractious Committees ahead if, in the process of introducing the legislation we have committed to, which is an attempt to transfer smoothly some very technical powers on day one, we try to turn this into a rerun of the referendum on Scottish independence, which was thankfully rejected, and the EU referendum.

The concerns of my opposite number, the hon. Member for Southampton, Test, were, as always, valid. He raised a number of issues. The first was what happens if there is no deal? Are we effectively putting things in place that we would have to change in a no-deal scenario? The answer is no. The regulations would be needed in all scenarios. They do not prejudge the outcome of the negotiations. They are designed to target a very limited set of legislative powers, which are held by the European Commission and would otherwise be left behind. They are helpful to our industry. Of course, it is entirely within our remit, once we have left the EU, to decide to change them completely.

One of the most important issues is how we consider gas security—a vital matter for us. It is entirely within Parliament’s power to introduce additional legislation or regulations to create our own domestic view of what gas supply, and reporting and security measures, look like. Those are not Henry VIII powers; as is set out in these regulations, if we wanted to do something as broad as that, it would be for the Secretary of State to introduce it, and it would be subject to the normal legislative scrutiny. We have not had much chance to scrutinise the current regulations under the rather remote functioning of the European Commission.

If we enter into an implementation period, which I believe strongly is what we need, these transfer powers would not need to be exercised immediately, but they may still be needed after the implementation period. The hon. Gentleman referred to an Ofgem note; I hesitate to suggest that it was referring to a slightly different issue, but it was—it was referring to domestic licences that had been granted. It is quite proper for Ofgem to determine whether any amendments are needed for conditions of its licences, in both an EU exit scenario or any other scenario. That is a different issue from amending the EU’s network codes and guidelines, which are currently directly applicable in the EU legislation.

[Dr Whitehead]

I am afraid I handed my copy of the Ofgem letter to Hansard, but my understanding of that letter is that although it relates primarily to domestic licences, there is reference to the European codes and what they represent. That is not surprising inasmuch as the European codes are intended to underpin domestic licences in any event. Therefore, what Ofgem said about whether those changes would be necessary on exit day relates to what is half in and half out of the legislation and what is completely in the legislation. That has a bearing on whether those changes are made immediately or at the end of negotiations.

[Claire Perry]

Again, I think we should all take comfort from that Ofgem letter, which suggests that the markets will operate smoothly, even without these changes. It is a prudent Government who ensure that we transpose relevant codes, as we said we would, where we believe there is a potential threat. We do not want to trouble a Committee in future months to make those changes; a potential change might come up as a result of the governance gap once we leave the EU.

The hon. Gentleman raised an important point about the single energy market in Northern Ireland, which is a critical element of ensuring that we have a smooth-functioning energy system. The substance of the codes created after exit day will be the same; these amendments are needed only to reflect the life of the UK outside the EU. This statutory instrument does not directly relate to the single energy market.

It is the same point with interconnectors: they work under access agreements, as the hon. Gentleman knows. There are already potential changes in elements of the markets on both sides of the interconnector. The amendments we are bringing forward do not materially affect any of those interconnector contracts—as he knows, they are commercial decisions that essentially flow when the price signal is right, rather than Government decisions to bring forward supply.

[Dr Whitehead]

The Minister is right to distinguish interconnection from integrated market arrangements. Other than a brief response to an intervention, I did not mention the question of interconnectors in this context. In EirGrid, what is in place is the integration of what were previously interconnections into a single seamless grid. The question is not the relationship between interconnectors in Northern Ireland and the Republic of Ireland, but the status of an entirely integrated single grid system that is different from an internal energy market, which is another matter that presumably we need to deal with in a different way. There is a specific question here of an interconnection arrangement transformed into a single network, and the relationship with sets of codes on either side of what is not a border at all as far as EirGrid is concerned.

[Claire Perry]

Allow me to remind the hon. Gentleman that we are talking about the existing set of network codes being transposed, and making provision for codes that have already been announced and will come into place post our departure date, to ensure that we do not end up with a different set of codes. It will be our sovereign decision, should we wish to change any aspects of our energy market. We would expect to do that in proper and full negotiation with our EU friends and partners or companies involved in that process. In a way, we are talking about ensuring there is complete continuity, because we are talking about codes that are already announced.

[Dr Whitehead]

This SI repeals those part codes.

[Claire Perry]

No, it does not repeal the part codes; it essentially suggests that we will bring into force those codes that are announced but not yet in place on exit day.

I have set out that the instrument is one of a very large number of SIs that my Department will introduce to ensure that we have a smooth and orderly departure and that we are fully prepared in the event of a no-deal scenario. I hope that we scrutinise those instruments adequately. However, the hon. Member for Southampton, Test asked me why we are not setting out the full legislative programme that we would want to engage in were we to change any element of the legislation. I am not aware of any piece of legislation we go through where we ask how we would subsequently debate it were we to decide to amend it in the future. Frankly, that is probably an ask too far, given that the House voted to trigger article 50 and to start the process.

My No. 1 focus is ensuring that we have a very smooth EU exit for our energy system, to maintain security of supply and low prices and to ensure that the price cap Bill applies. I appreciate the hon. Gentleman’s frustration about being unable to amend the legislation, but if we are to re-run arguments about referendums and have arguments about how we might introduce future legislation when we are debating very technical and narrow changes to existing EU acquis being transposed into UK law, we are in for a very long and jolly autumn and winter. Of course, it would be a pleasure to share that with my friends on both sides of the House, but our constituents might not thank us for doing so. I commend the regulations to the House.

Question put.

Environment Council

Claire Perry Excerpts

Thursday 1st November 2018 Written Statements

[The Minister for Energy and Clean Growth (Claire Perry)]

I attended the EU Environment Council in Luxembourg on 9 October. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Suffolk Coastal (Dr Coffey), and Roseanna Cunningham, Scottish Cabinet Secretary for Environment, Climate Change and Land Reform, also attended.

I wish to update the House on the matters discussed.



Regulation on C0₂ standards for cars and vans

The main outcome of Council was reaching an agreed position (“general approach”) on the regulation on emissions standards for new cars and vans, as part of which the European Commission had proposed a 30% reduction in emissions by 2030. Council began with a full roundtable where Ministers set out their respective positions. The UK intervened calling for greater ambition in 2030 and stressing the importance of getting the package right as a whole. Following debate the presidency presented a revised proposal and called for an informal vote for agreement. Agreement was not reached in that round so a further presidency proposal was presented: the key elements included a higher level of ambition of a 35% reduction by 2030, strengthened incentives for zero and low-emission vehicles, a strengthened review clause and a continuation of the niche derogation for smaller car manufacturers to 2030. This was sufficient for Council to achieve a general approach although a number of member states could not support the text or abstained. Trilogue discussions have already commenced.

Adoption of conclusions on the preparations for the United Nations framework convention on climate change (Katowice, Poland, 2-14 December 2018)

The Council adopted conclusions on the EU’s priorities and approach for the negotiations at the 24th session of the conference of the parties (COP24) to the United Nations framework convention on climate change (UNFCCC).

The conclusions focus on: the urgency of climate action, especially in the light of the Intergovernmental Panel on Climate Change (IPCC’s) special report, “Global Warming of 1.5° C”, published on 8 October 2018; completion of the COP21 Paris agreement work programme (PAWP), which constitutes the implementing rules underpinning the agreement; and the Talanoa dialogue, the facilitative process culminating at COP24 for taking stock of collective progress towards the long-term goals of the Paris agreement.

The UK intervened to underline the stark and sobering messages of the IPCC report, that current global efforts are insufficient, and that COP24 is crucial to making the Paris agreement a reality. The UK highlighted the action the UK is taking to address climate change, including hosting Green Great Britain Week, promoted greater climate ambition and the EU updating its nationally determined contribution (NDC) by 2020, and signalled the importance of continued collaboration on climate change. The UK also supported the inclusion of at least one net zero 2050 scenario in the EU’s long-term strategy on emissions reductions and the need for common time frames for submission of NDCs to the UNFCCC.

The conclusions highlighted the EU’s ambitious climate and energy policy framework to 2030 and acknowledged that recent increases to the EU’s 2030 renewable and energy efficiency targets will have an impact on the EU’s level of achievement. Ministers expressed that they looked forward to the European Commission’s proposal for a strategy for long-term EU greenhouse gas emissions in accordance with the objectives and long-term goals of the Paris agreement, underlining that the strategy should include a 1.5° C scenario and at least one pathway towards net zero greenhouse gas emissions in the EU by 2050. The conclusions stressed that the EU is ready to communicate or update its NDC by 2020 and recalled the importance of striving towards common time frames for all UNFCCC parties’ NDCs.

Conclusions on the convention on biological diversity (Sharm El-Sheikh, Egypt, 17-29 November 2018)

Council adopted conclusions on the convention on biological diversity ahead of the 14th session of the conference of the parties in November. Member states stressed the need to prioritise action on biodiversity as well as climate. Minister Coffey called for 30% of the world’s oceans to be protected by 2030, highlighted the UK’s illegal wildlife trade conference, and stressed the importance of taking action on mangroves. Minister Coffey also argued that a holistic approach was required in order to overcome climate change and other environmental challenges going forward, including biodiversity.

Regulation on C0₂ standards for heavy-duty vehicles

The Council held a policy debate on C0₂ emissions from heavy duty vehicles, with the presidency seeking views on the level of ambition and incentives for low and zero-emission vehicles. Council was broadly supportive of the proposals, with some pushing for more ambition and others indicating they thought the Commission’s proposal struck the right balance. The UK indicated its support for high ambition to help meet our clean growth and climate change ambitions.

AOB Items

Directive on single-use plastics

All Member states, including the UK, strongly welcomed the thrust of the proposal, but views were mixed on scope and targets. The UK, alongside other member states, stressed the need for extended producer responsibility requirements to be sufficiently flexible. Minister Coffey also highlighted the importance of taking into account the context in which products were used, for example in a medical setting, and emphasised that any fishing gear regulations needed to be implementable.

Reports on main recent international meetings

The presidency and Commission updated Council on two recent international meetings:

67th meeting of the International Whaling Commission (IWC 67) (Florianopolis, Brazil, 10-14 September 2018

United Nations high-level political forum on sustainable development (New York, 9-18 July 2018)

Berlin declaration on nanomaterials

Minister Coffey welcomed the information from the German delegation, and noted that the UK is fully engaged, and working with the Malta initiative, the working party for manufactured goods at the OECD, and with other member states to develop test guidelines for nanomaterials, through research and expert input. Minister Coffey also stated that the UK is leading a series of Horizon 2020 projects which are positively inputting into the Malta initiate, with other member states.

Earth innovation forum conference and the second joint preparatory retreat of the bureaux of the UN environment assembly and of the committee of permanent representatives

Estonia updated the Council on its preparations for the UN environment assembly 4 (UNEA-4), which will take place in Nairobi next year. These preparations included holding a high-level “Earth innovation forum” in Tallinn on 5 September.



EU measures to tackle air pollution related to the import of used cars

The Council noted the Bulgarian, Polish and Slovakian proposal to restrict member states from exporting highly polluting second hand cars to other member states. Lithuania, Latvia, Hungary, Cyprus and Romania supported this proposal.

The clean air programme—to protect health, climate and environment—for co-financing of new heat sources and thermal modernisation of single-family buildings in Poland

Poland updated the Council on its clean air programme.

[HCWS1054]

Draft Companies (Directors' Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018

Claire Perry Excerpts

Thursday 25th October 2018 General Committees

[The Minister for Energy and Clean Growth (Claire Perry)]

I beg to move,

That the Committee has considered the draft Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018.

It is always a pleasure to serve under your chairmanship, Mr Stringer. The principle behind the draft regulations is one that we would all support: encouraging good behaviour. What gets measured gets managed, and sunlight is a great disinfectant.

The draft regulations will introduce new requirements for large unquoted companies and large limited liability partnerships, and additional requirements for quoted companies of all sizes, to disclose in their annual report information on emissions, energy consumption and energy efficiency action. They will deliver streamlined energy and carbon reporting, as part of a package of changes announced in the 2016 Budget with the valuable aim of simplifying what some stakeholders saw as an overly complex tax and reporting policy landscape—a point of view with which I have great sympathy. They will also ensure that reporting on energy and associated emissions continues after the closure of the carbon reduction commitment energy efficiency scheme at the end of its current phase.

After Green Great Britain Week last week, the Committee will need no reminding that Britain has led the world in introducing measures to reduce greenhouse emissions. That was thanks to an awful lot of cross-party work—long may that continue. Our emissions intensity reduction by unit of national income is at the top of the G20 measurement league; those are not my figures, but those of PwC. One reason for that success was that in 2013 we were the first country in the world to make it compulsory for quoted companies’ annual reports to include emissions data for their entire organisation.

In September 2017, we were one of the first countries to endorse the recommendations of the brilliant Task Force on Climate-related Financial Disclosures. The taskforce, which was set up by the Bank of England, called on companies and financial institutions to implement “decision-useful” disclosure of energy and emissions information in their mainstream financial reports, so that shareholders, investors and employees can clearly understand the risks from changes in climate.

Our clean growth strategy looks at the other side of the problem. Reporting on emissions should encourage companies to take action to reduce them, so we have set out several measures for leading global efforts to cut greenhouse gas emissions by working with businesses, with the aim of improving energy efficiency in business and industry by at least 20% by 2030. In order to take action, however, organisations must know the quantum of the problem, and the first step is measuring energy use and emissions.

The draft regulations will provide an estimated 11,900 organisations with a legal framework, creating much-needed consistency in organisational energy emissions reporting. We estimate that that will lead to savings for businesses of more than £250 million a year in average energy bills.

The Companies Act 2006 (Strategic Report and Directors’ Report) Regulations 2013 introduced a requirement for approximately 1,200 quoted companies to state in their directors’ report their annual greenhouse gas emissions alongside an intensity metric, and to disclose the methodology used. The draft regulations will introduce a new obligation for those companies to report their underlying global energy use, to better reflect the true impact of their operations.

The draft regulations will also introduce new requirements for more than 10,000 large unquoted companies and large LLPs to report information about their UK energy use and greenhouse gas emissions in relation to electricity, gas and transport, and to disclose the methodology used to calculate the relevant disclosures. They will further introduce a new requirement to report on the principal measures that the organisation has taken to increase energy efficiency in the financial year. As per the existing requirements, those disclosures are to be included in annual reports—specifically, the directors’ report for companies and a new energy and carbon report for LLPs. We believe that not only will they provide improved transparency for senior management, investors and stakeholders but will enable energy and carbon performance to be in line with both financial and operational performance. Companies might well take interesting learnings from considering what other peer group companies are doing.

If approved, the regulations will be introduced for financial years starting on or after 1 April next year. As always, we consulted widely on the policy and we received 155 responses. The majority of respondents agreed that mandatory reporting is important and that it should apply UK wide, be aligned with best practice in the UK and internationally, and build on the existing mandatory reporting of greenhouse gas emissions by quoted companies and mandatory energy audit under the energy savings opportunity scheme.

There was a very strong message that Government should not impose undue regulations and administrative burdens on UK businesses. The provisions contained in these regulations have gone through a number of refinements to meet that aim, such as the introduction of a minimum energy use threshold for the full disclosures. We have introduced the ability for unquoted companies and LLPs to introduce, as sometimes happens with parliamentary questions, a statement that it would not be practical to meet the reporting obligations, because it is impractical to obtain the information or that disclosure would be seriously prejudicial to the interests of the organisation.

In conclusion, we believe these regulations strike the right balance between disclosure of energy and carbon information and limiting the red tape burden, and that they will help to deliver consistent transparent and comparable reporting, to ensure that businesses can make informed investment decisions as we transition to a low-carbon future. I therefore commend the draft regulations to the Committee.

--- Later in debate ---

[Claire Perry]

I thank my friend the hon. Member for Southampton, Test for a characteristically detailed analysis. I have an idea. I imagine that we will be meeting many times over the next few months, on various things, and I thought that perhaps we could enliven proceedings if the hon. Member for Enfield, Southgate taught us all to floss. I was very impressed when I saw his efforts, and that would be marvellous on parliamentary TV.

Turning to the meat of these important regulations, I obviously welcome the support for them expressed by the hon. Member for Southampton, Test. He asked, I think, about why this arrangement is replacing the CRC, but it sounds as though we agree that it is increasing the scope and reducing the burden and this does lead to net cost savings, based on estimates. I am pleased that he welcomes this change.

The hon. Gentleman asked a really important question about what will happen to the data once it is produced. I understand his desire for statutory measures on how the data should be reported. I want to invite him to come with me to something that I am organising about how the world looks at climate-related information disclosure. We had a big event at Bloomberg during Green Great Britain Week, and I was astonished at the amount of analysis and reporting in both standardised and bespoke ways that is happening with all sorts of aspects of climate data, because the audiences for the reporting are very different. Employees might be interested in what their company is doing and will potentially look at the information on a corporate intranet. Government are clearly interested in calculating what the emissions savings are from a particular company. We would be able to query the data remotely, because of course most of this stuff is now in the electronic domain.

There is an enormous and increasingly important raft of activist shareholders and investors whose funds want to align entirely with a low-carbon investment base and who will be relying on analytic platforms such as Bloomberg to grab the information and assess it for them. I think it is rather good that we do not have just one standard way of reporting but are making the information available to a global audience of armchair analysts, who can cut and mash up the data in any way they please. Of course, there are organisations such as BusinessGreen, which both the hon. Gentleman and I have worked with, that will be taking the data and generating their own league tables. I do not think it is for Government to specify how the data is presented. I think it absolutely right that we have made it a mandatory requirement that it be reported, but I imagine that the creative use of the data will be incredible.

I will take away and analyse the hon. Gentleman’s very good point about the league tables, because it would clearly be interesting to see how companies in that group have done over time; we can assess what is happening. We will publish more detailed guidance, and of course any reports that are published will be publicly available from Companies House, which will also act as a repository for all this data.

To pick up the point made by the hon. Member for Inverclyde, I think it is a good idea that if someone is opting out, they say so. I will take advice after the sitting as to whether that is implicit or explicit in the regulations. We have had, on similar measures in relation to some of our offshore oil and gas things, the debate as to what is a material event and what is a prejudicial event; and certainly it would be for companies to be clear about what that is.

My instant support team tell me that we will keep the use of non-disclosure options under review, but I think that we could go further and ask companies to say that they are using the non-disclosure option, without giving away too much information.

I am pleased that we have cross-party support for a very useful and balanced set of measures about disclosure. I am almost amazed by how much scrutiny is happening on a global basis on behalf of investors, including some of our largest pension funds, in determining that their portfolios are investing in companies committed to a low-carbon future.

I will invite the hon. Member for Southampton, Test to my office for a cup of tea when our Bloomberg terminals, which we have in the building, are set up and installed, because perhaps we could have a bit of a tutorial together from Bloomberg on how the information is actually being used. I think that that would be very helpful. With that, I commend the regulations to the Committee.

Question put and agreed to.

Home Insulation

Claire Perry Excerpts

Wednesday 24th October 2018 Commons Chamber

[The Minister for Energy and Clean Growth (Claire Perry)]

I am genuinely interested to hear the comments of the hon. Member for Preston (Sir Mark Hendrick) tonight. The points he makes about damp living conditions and the impact that has on people’s health and whether their homes are fit for purpose also apply in my constituency and are of enormous importance.

I will start by saying that I do not think that what has happened has been good enough. I will also say something that I will repeat at the end of my speech, which is that I am going to instruct one person in my Department to act as the broker and bring together all the people who have played a part in the problem and can also be part of the solution. I hope that that reassures the hon. Gentleman. I am also going to take a moment to set out where the issues the hon. Gentleman raised about this scheme are being addressed fully in the latest iteration of the schemes we are using to help people living in fuel poverty—the ECO3 scheme.

As the hon. Gentleman will know, the scheme he is referring to in his constituency was the community energy saving programme, or CESP, which was set up by the previous Labour Government. All the shortcomings of that scheme—no guarantee and no list of installers—were a function of the scheme design at that time. That is one reason why that scheme was closed by the coalition Government in 2012, and a number of penalties were issued for companies under that scheme because, as the hon. Gentleman’s constituents well know, it had not delivered what had been required both in terms of the carbon savings and the quality of work.

Fishwick was then part of this mitigation activity that was undertaken by InterGen. I totally agree that solid wall insulation is not a suitable way to reduce energy consumption in many homes in the country, but that was part of InterGen’s mitigation scheme. As the hon. Gentleman knows only too well—it is one of the reasons why he is a long-standing champion in this place—this issue has been going on for many years. There were problems as a result of those installations. Ofgem then received complaints from 62 households, although I know the complaints pool is much larger. Those were offered remedial work which was delivered by E.ON. But as the hon. Gentleman also knows, there are real concerns about the quality of that work, because, as he said, it is not good enough to rip the cladding off and leave holes in the wall; people expect to have a warm home that can breathe and is fit to live in.

I understand that E.ON provided some additional funding to carry out the necessary structural work. I am told it carried out full structural surveys, but if the hon. Gentleman is telling me that that was not the case, that is certainly something to investigate further. Some homeowners of course declined to have extra work; there were issues gaining entry and so forth. If full surveys were not carried out, we need to know that, which is why I am keen that we have one point of contact in my Department to get to the truth of the matter.

Since that work was undertaken in the summer of 2017, more complaints have emerged—over 180. As the hon. Gentleman set out, the installer no longer exists. We are insisting on appropriate guarantees through ECO, but the Fishwick homes, which are a strong failure of the scheme put in place by that Labour Government, did not have any guarantees required from any installer, and the Solid Wall Insulation Guarantee Agency now set up to be a backstop did not exist at the time.

[Sir Mark Hendrick]

I fully take what the Minister is saying to be correct, but I would have expected the guarantees and quality of work that we saw in the Warm Front programme to be carried over into this scheme if it was indeed put together by the Labour Government prior to the coalition. I am very surprised to hear that that was not the case, but obviously I believe what the Minister says.

[Claire Perry]

The great thing about these debates is that we do not have to focus too much on the politics, but the hon. Gentleman is right to say that some very good designs and functions were put in place under the warm home scheme, and they have very much influenced the design of the energy company obligation, which is the replacement for CESP.

Perhaps I can give the hon. Gentleman some comfort in relation to other constituents who are receiving measures under this scheme by telling him that the design flaws have been addressed. We have worked with the British Standards Institution to develop new standards over and above building regulations standards for any eco-obligation, and any installer that wants to be part of the scheme must meet those technical standards. All solid and cavity wall installations must be accompanied by a guarantee that gives financial assurance even if the company providing the guarantee cannot honour it. There has to be a bond in place to provide sufficient coverage of at least 25 years, including full replacement or remediation, and to provide a verified quality assurance tick, which we would expect our constituents to be able to rely on in terms of the quality of the work and the products that are being installed.

In July 2015, we commissioned the “Each Home Counts” review. This has been a further key driver of developments in this area. The hon. Gentleman might also have heard of the TrustMark scheme that I launched last week during Green Great Britain week. It sets out a clear code of conduct for businesses. He might also receive complaints, as I do, about cold calling and the aggressive selling of these products, which are completely unacceptable. A process guarantee and rigorous new technical standards to tackle poor design and installation will be published next spring. I entirely agree with him that robust monitoring is key, and enforcement activities are the way to ensure that this happens.

I want to bring comfort to the hon. Gentleman’s constituents, but I know that it is no comfort to learn that some of the failings in the scheme design of 2009 that have caused such problems for them have given us lessons from which we have learned. I was pleased this week to bring forward the next set of measures to support ECO3. It will now be focused 100% on the alleviation of fuel poverty right across the UK, and I hope that some of his constituents will benefit from that.

[Sir Mark Hendrick]

Just before the Minister finishes, will she address the matter of finance for the remaining homes and whether the Government can be of any assistance?

[Claire Perry]

The hon. Gentleman anticipates my final remarks. I am fully sympathetic towards what he said, and I am sorry that he has been given the runaround over the years, because he has been doughty in raising such points. There is such a complex array of people involved. He referenced Preston City Council, and I am disappointed that it has been less than active historically, particularly in working with some of the agencies with which he has set up relationships. It sounds as though InterGen, E.ON and Ofgem also need to be corralled into a place where we can come up with a solution.

The scheme’s design, under which insulation is independently installed, never included a backstop to Government finance, although the hon. Gentleman may say that that ought to be a requirement. I therefore do not have any money in any of my budgets to meet the funding requirements, but given that many of the companies are still in operation and will still want to work during the scheme—the market for them is substantial—I feel strongly that they ought to do the right thing and work out ways to fix the problems and ensure that residents are happy.

I will write to the hon. Gentleman shortly with the name and contact details of a person in my Department whom I will task with bringing things together and who will report back to me with progress on a regular basis. I am happy to discuss that progress with the hon. Gentleman, either in the Tea Room or more formally. Lessons have been learned, although I appreciate that that is no comfort for residents who have been bedevilled with problems, but we can work together to try to sort things out.

Question put and agreed to.

Draft Electricity and Gas (Energy Company Obligation) Order 2018

Claire Perry Excerpts

Monday 22nd October 2018 General Committees

[The Minister for Energy and Clean Growth (Claire Perry)]

I beg to move,

That the Committee has considered the draft Electricity and Gas (Energy Company Obligation) Order 2018.

It is a genuine pleasure to serve under your chairmanship, Mr Walker, and I am pleased to open this important debate. The energy company obligation requires energy suppliers in Great Britain to reduce domestic energy bills by installing energy efficiency measures. As Committee members know, partly because many of us have debated this issue, the Government place great importance on supporting low-income families, ensuring that their energy bills are as low as possible. To that end, we continue to provide direct financial support to vulnerable households through the warm home discount and the energy price cap, which has cross-party support and will protect some 11 million energy customers who have been stuck on poor value deals.

Our election manifesto restated our commitment to tackling fuel poverty by increasing the energy efficiency of our homes. In 2015, we also said that we wanted to reform the energy company obligation to provide more help to those who need it most. The order completes that reform and will result in the scheme focusing on low-income, vulnerable and fuel-poor households—rather than on a mixture of poverty alleviation and carbon reduction measures—until March 2022. It also supports the Government’s industrial and clean growth strategies by encouraging energy companies to deliver more innovative measures, supporting manufacturers and installers to develop more cost-effective, consumer-friendly products by providing a better route to market.

ECO has operated since 2013 and has currently installed more than 2.4 million measures in about 1.9 million homes. The scheme is funded through energy bills and we will continue the mandated level of £640 million per annum until 2022, but of course the negotiations could deliver a funding commitment beyond that date. Indeed, the clean growth strategy sets out our commitment to keep that level of funding for domestic energy efficiency until 2028.

The Government consulted broadly on the new scheme’s proposals. We received 239 responses, the majority of which were broadly supportive. We published the response to the consultation and laid the order in July. Should the Committee approve the order, the scheme will begin in November. We are aware of the need to maintain continuity of delivery, so the scheme design includes a number of aspects to enable as smooth a transition as possible.

Changes to the scheme reflect various measures: first, our strategic energy objective; secondly, responses to the consultation; and thirdly, the latest market position. As I have said, the measure attempts to focus the scheme as closely as possible on the alleviation of fuel poverty. It is designed to increase the innovation and flexibility that can be delivered by working with local authority partners, because a reasonable criticism of the scheme is that it has not been sufficiently targeted on those homes that need it.

The other important change is my decision to drop the thresholds at which energy suppliers must have an ECO. The current threshold is 250,000 suppliers. We are keen to have a level playing field in this market, and it is not fair that many suppliers do not have to pick up an ECO. There is evidence that suppliers who otherwise claim to be paragons of virtue are deliberately not growing their customer base because it will take them over the 250,000 threshold, which is completely wrong. It is also important that customers do not suffer a detriment if they switch from an energy supplier that offers an ECO to one that does not. We are therefore dropping the threshold, which was last set in 2013. If the order is passed, from April next year suppliers with 200,000 customer accounts will be obligated to offer the scheme. The threshold will fall to 150,000 from April 2020 and could continue to fall thereafter, reflecting a direction of travel in the retail market that we absolutely want to continue.

We have also expanded the eligibility criteria of the scheme so that households on certain disability benefits, their Ministry of Defence equivalents, and low-income working households in receipt of child benefit are newly eligible for support. That reflects my desire for the scheme to be targeted as much as possible at those who are struggling with low income and fuel poverty, and it increases the number of households eligible for support—from 4.5 million under the affordable warmth part of the previous scheme, to 6.7 million under the new scheme—which strikes the right balance between supporting those households most in need and keeping delivery costs low, thereby protecting bill payers.

As I have said, we have increased the proportion of the scheme that can be delivered under the local authority—the so-called flexible eligibility. I have taken that from 10% to 25% because we believe that local authorities are often well placed to identify those households who need help, including people with health conditions that are exacerbated by cold homes. We estimate that a further 300,000 households will be eligible for well-targeted support through that route.

It is important that we develop new products and provide a route to market as part of the investment we are all making, and suppliers will now be able to deliver up to 10% of their obligation using innovative measures not previously supported under ECO: first, by a demonstration action route, which allows suppliers to provide financial support to new products that have been tested in the lab and may have had limited testing in a live environment but now require wider testing; and, secondly, through innovation score uplifts, which are designed to encourage new products that are at a later stage of development but which have not been delivered under the scheme. Of course, while delivering a broader mix of measures we will continue to maintain safety and installation standards.

On heating equipment, the scheme allows the equivalent of 35,000 broken heating systems to be replaced each year so that low-income households can receive support should their heating system be beyond repair. Although other forms of energy efficiency may have greater long-term benefits, a broken boiler, particularly in cold weather, can be the immediate crisis point for a struggling family. Coal-fuelled heating systems cannot be replaced or repaired under the scheme, but we have listened hard to the sector and are allowing oil systems to be replaced so that poor rural households without a current viable alternative can receive support to heat their homes. In my constituency, where more than 40,000 households are off the gas grid, that measure could be very welcome.

[Scott Mann (North Cornwall) (Con)]

The Minister knows that I have some rural poverty, particularly fuel poverty, in my constituency and a lot of people who are off grid. I notice that there is a 15% rural sub-obligation in the order. Could the Minister expand a little on how that might help communities such as mine?

[Claire Perry]

That is an important point. We are keen to maintain at least 15% of that obligation to rural householders. My hon. Friend knows very well that although he represents one of the most beautiful parts of the United Kingdom, incomes there are lower than average and there is a huge amount of fuel poverty—and, indeed, other forms of poverty—in what would otherwise be picture-perfect rural villages. In fact, evidence from the Committee on Fuel Poverty, with which we have worked closely, suggests that fuel poverty is more prevalent in rural areas than in urban ones, and that is why we were keen to maintain the 15% element of the scheme.

My hon. Friend also knows from his wonderful county that we have fantastic heat pump manufacturers working not too far away him, and we have continued to allow ground source heat pumps to qualify for support under both ECO and the renewable heat incentive. We understand the potential for double dipping. We have limited that for other forms of technology but have made an exception for ground source heat pumps due to their high upfront costs and because they are putting in, through the cost of each individual scheme, long-term and potentially valuable infrastructure, which other forms of technology are not required to do.

To encourage installers to take a broader approach to improving the energy efficiency of homes, inefficient heating systems can be replaced if they are delivered alongside insulation measures. We have retained the solid wall minimum requirement, which is now set at the equivalent of 17,000 solid wall homes per year but, as many of us know from our constituencies, that is not always the appropriate technology. Therefore, we have introduced flexibility, by allowing suppliers to meet the minimum through a combination of other measures, as long as they deliver the same bill savings as solid wall insulation.

The changes we have made to the scheme are really important. They will help to upgrade the homes and reduce the energy bills of more than 1 million households living with low incomes or dealing with vulnerability. They will also pave the way for new measures. They will add further impetus to help to meet our fuel poverty and carbon reduction goals by encouraging more cost-effective and customer-friendly solutions.

If the energy companies are listening, I urge them to take these targeting measures seriously. I am fed up of going home to my constituency every Thursday and finding a card through my door offering me a new oil boiler. I am not living in fuel poverty. There are plenty of measures and plenty of information available to allow those companies to do the job properly and to target those households most in need. With the reforms in the scheme, we should work together to deliver that goal. I commend the order to the Committee.

--- Later in debate ---

[Dr Whitehead]

The essential point about the overall aim of ECO is that it should be concerned with all those issues—with urban and rural fuel poverty and with bringing properties up to a decent level of energy efficiency to ensure that our properties are in a fit and good state with regard to climate change and energy use changes.

The concentration on fuel poverty could solve those wider issues to some extent, providing that the scheme is large enough to enable that to happen. We know that people living in fuel poverty are disproportionately concentrated in properties that have low energy efficiency. In the private rented sector in particular, a large proportion of properties are in bands E, F and G. A large proportion of people living in fuel poverty are in that tenure and in those property efficiency bands. In principle, concentrating on fuel poverty is a good way of targeting the wider issues, as long as enough other things are happening within the scheme. It all depends on the overall status of the scheme.

Several good things have happened between ECO2 and ECO3. I commend the Government’s decision to reduce the obligation threshold for suppliers. A large number of energy supply companies fall just below the current level of 250,000 accounts and are therefore not obliged to undertake any ECO measures. Problems also arise in respect of whether people who switch are eligible for certain schemes. Within a short period, the obligation threshold will be reduced from 250,000 accounts to 150,000, which is a Good Thing, with a capital G and a capital T. I thoroughly support it.

[Claire Perry]

I am craving support today. Does the hon. Gentleman support another measure, namely that which ensures that switching websites make it clear to people in receipt of discounts, such as the warm home discount, that they might lose them if they switch? We want to provide as much transparency in the system as possible, as well as to tackle supplier inflation. I hope that that is also a Good Thing.

[Dr Whitehead]

Indeed it is. As the Minister knows, I have been banging on about that problem for quite a while.

[Claire Perry]

And I have been listening.

[Dr Whitehead]

I also agree with increasing to 25% the proportion of the obligation that can be met through flexible eligibility. As the Minister mentioned, local authorities often know more than most about the whereabouts and construction of the property stock in their area, so involving them in that way is a very positive move. Does she think that such an arrangement could lead to area-based schemes being headed up by local authorities as part of the obligation? She will be aware that ECO has been criticised because its set-up means that energy companies go out to find individuals and treat their homes but do not capture those next door or down the road who are in the same position. Does she think that flexible eligibility arrangements could lead to a better system of area-based activity?

I am not too impressed with the reduction in solid wall treatments in the ECO scheme; that is not a progressive arrangement as far as ECO3 is concerned. We really have to get stuck in to solid wall insulation across the country. There are 8 million solid wall properties in the UK, and solid walls are one of the property elements least treated for energy efficiency, so reducing the target from 24,000 to 17,000 is a retrograde step.

As I mentioned, I support in principle the idea of increasing the concentration on fuel poverty. However, we have to note, at least in passing, that it is one thing to concentrate a scheme on fuel poverty, but if that happens at the expense of all other aspects of the scheme, which is what has happened on this occasion, I am not sure that we will get the whole picture as far as energy efficiency is concerned.

I give two cheers for placing greater emphasis on fuel poverty, but I am concerned about the overall aspects of ECO, which is where that concentrated effort on fuel poverty sits. The Committee on Fuel Poverty has indicated that even that concentration on fuel poverty will not be sufficient to reach current statutory fuel poverty targets. That is a reflection of the overall size of the scheme and its ambitions within its overall setting.

On that overall setting, we need to be clear on two things. First, as the Minister has said, this measure should be placed in the context of the clean growth strategy’s current ambition in respect of the energy efficiency of existing buildings. It is extremely important to note that some 80% of existing buildings will still be here in 2050, and their energy efficiency may need to be uprated so that they do not need to be treated again before then. We cannot get going with energy efficiency in properties simply by building more energy efficient homes; we need to deal with existing homes.

Indeed, the Government’s clean growth strategy document makes clear their ambitions in that respect, stating:

“To achieve this 2032 pathway, we will need to ensure existing buildings waste even less energy. This pathway could see a further six to nine million properties insulated, especially focusing on those in fuel poverty where we are aiming to have the 2.5 million fuel poor homes in England improved to energy efficiency rating C or better by 2030. More broadly, our aspiration is that as many homes as possible are improved to EPC Band C by 2035, where practical, cost-effective and affordable.”

It is salutary to consider that ambition in the context of what ECO was and what it has become. When it was first introduced in 2013, ECO represented a change from the previous Government’s programmes—namely the carbon emissions reduction target, the community energy saving programme and the Warm Front scheme—which had made a demonstrable difference to the standard assessment procedure ratings of properties. If we look at the SAP ratings in household condition surveys carried out on properties when those schemes were in place, we will see that they improved substantially.

By the time they came to an end, CERT, CESP and Warm Front came to a combined Government, taxpayers’ spend of about £1.6 billion a year. ECO is essentially a market-based scheme and is set against customer bills; it was not described as such, but energy companies basically recovered their obligation through customer bills.

The first ECO that came in reduced that overall ambition to £1.12 billion per annum. That was the only spending on energy efficiency in homes at that particular point in 2013, and that was reduced further when ECO 2 came in, to £0.87 billion per annum. Not surprisingly, that meant that over the period there has been something like a 50% to 60% reduction in overall spend on energy efficiency measures and, as the Association for the Conservation of Energy has pointed out, in the period from the early 2010s up to the present, there has been something like an 80% reduction in energy efficiency measures in homes. ECO has presided over not just a substantial reduction but a crash in energy efficiency measures over that period. ECO3 is coming forward, and the obligation figure—which is in the SI, so it is not an imagined figure—is £0.64 billion. That is a halving of overall energy efficiency measures since ECO was first introduced, and since the further reduction that took place when the schemes put in place by the previous Labour Government came to an end.

If we set that ambition—or, should I say, lack of ambition—against the aspirations in the clean growth plan, we can clearly see that even if ECO3 is extended to 2028, as the Government has said and the Minister mentioned, at the present level, it will fail miserably to get anywhere near those aspirations. Will the Minister explain why she is advocating an ECO programme that will signally fail to get anywhere near those ambitions, and whether she has a host of new schemes in her pocket that could help to meet them. If we go to 2022 with ECO at its present level, even with the changes that have been made, and then agree that ECO will continue at that level to 2028, we will get nowhere near those targets. Not only that, but we will miss our one chance to get properties uprated over the next period in line with what the fourth and fifth carbon budgets tell us about the number of properties that need to be uprated. We will fail to make the contribution to energy efficiency, decreasing fuel use and reducing fuel poverty that will help develop an economy in which energy production is both energy efficient and low in carbon.

I am afraid that the Opposition cannot support the scheme in its present form. We have been developing policies that seek to insulate and uprate the energy efficiency of approximately 4 million homes per Government term, for at least two terms over the next 10 to 12 years. That sort of level is necessary to get anywhere near our carbon budgets—and, by the way, our scheme will not be done on the basis of an obligation. As with previous CERT schemes, it has to be done on the basis of all of us putting money into those schemes, to achieve the public good of energy improvement in properties. I am afraid that the market-based arrangements in the instrument will not get us anywhere near our goal. As I say, it would be good if the Minister were able to comfort me somewhat by saying, “We have a load of stuff that we have not told you about yet, which is going to meet the aspirations we set out so eloquently in the clean growth strategy. ECO3 is going to be part of that.” If that were the case, I might be willing to take a slightly different view of the instrument, but my understanding is that as far as energy efficiency in homes is concerned, this is the only show in town. If that show were a theatre production, it would close after three performances.

I am afraid that the Minister will not have the support of the Opposition this afternoon, although she has my personal support on a number of the changes she has sought to make within the existing ECO envelope on how ECO works. Overall, the scheme is not good enough; it is not good enough now, and it certainly will not be good enough by 2028, which is only four years away from the 2032 target. Really, the Minister has to go away and think through a number of measures that can get us there and come back and tell us what they are, so that we can all sit down together and sort out how we are going to get to the goal we all want to reach on energy efficiency in buildings.

--- Later in debate ---

[Claire Perry]

I thank Members for their interesting set of points. I welcome the support of the hon. Member for Southampton, Test for some of the measures in the scheme. To answer his question about whether the area-based approach allows us to deal with more than one household at a time, the answer is yes, we are encouraging infill measures for certain installations.

The hon. Gentleman asked about solid walls, which links to some of the other points. As he will know, solid wall insulation is one of the most expensive measures, costing an average of £8,000 a household. Historically, ECO has not been as focused on fuel poverty. Indeed, I have been told that one of the criticisms of ECO was that it was buying LED lightbulbs for rich people, which is not something that Government or bill payers’ money should be in the business of doing. With solid wall insulation, many of the contributions have been topped up with householder contributions. Clearly the households we want to be helping with this scheme will not be able to do that.

That is why the number has been cut, but it is also why we have encouraged installers to think more creatively. Often the benefits from solid wall insulation can be achieved by under-floor insulation, using the amazing Q-Bot robot that the BEIS innovation money has funded, or by better loft insulation or improvements in windows. Rather than just having a one-size-fits-all proposal, the idea is that many other measures can be delivered.

I can tell by the way that Opposition Members are whipped that, regardless of what I say, the hon. Gentleman will press the order to a vote, but let me at least have a try. He will know, because he is a very intelligent man, that the challenge with these schemes is to balance the carbon reduction against the cost and whom it falls on, and the creation of a competitive advantage. The Government should direct funding—whether taxpayers’ money or, as in this case, bill payers’ money—in a way that creates better products by pushing a particular market. The challenge is that, while we have been rolling out ECO, there has been a precipitous decline in the cost of some energy-saving measures. The cost of LED lightbulbs is down 80%. That was nothing to do with ECO; somebody just figured out how to make them much more energy efficient. I imagine that most people in this room have fitted at least one LED lightbulb in their home, not because the Government have suggested that they should get money for doing so, but because it saves them money on their energy bills.

The missing piece in what the hon. Gentleman was saying—he said that this is nowhere near enough, and that we need to spend more just to do the same—is that there have been dramatic price falls for many products, but not for those that this scheme has supported. This scheme, in focusing in on tried-and-tested technologies such as cavity wall insulation, has led to very little innovation. Look at what is happening around the world. Thermal paint, for example, can help with the heating and cooling of a property, but we ain’t doing none of that in this country using ECO money or other forms of money.

We are directing £0.64 billion a year into these measures. We must focus that on innovation to ensure we develop new products. We could support products such as home thermostat systems. I am not allowed to mention brand names, but smart thermostats can make a dramatic improvement in a home’s energy efficiency and can lead to bill savings—we want people to save money, as well as have a warmer home. They have not been supported by the scheme, even though they can save people substantial amounts. The purpose behind the scheme is to do something to drive down the cost of those products so more people can buy them, benefit from the energy efficiency savings and potentially invest their own money in the scheme if they can afford it.

[Dr Whitehead]

Will the Minister reflect on whether the cost per treatment of the innovations she is talking about has overcome the more than 50% loss in funding for ECO schemes since they were first introduced?

[Claire Perry]

If the scheme can pivot away from extremely expensive, highly interventionist measures, and deliver many more measures that in aggregate have the same cost, that would be a good outcome. The hon. Gentleman says that the Labour party has all these grand plans, but I see no evidence, as always with the Labour party, about how they will be paid for and who will bear the burden. He and I spent many a happy hour debating the price cap Bill. We know that consumers want warm homes and the eradication of fuel poverty, but do not want to overpay for their electricity or gas. I have a sneaking suspicion that the Labour party’s uncosted plans would inevitably lead to whacked up consumer bills and taxes.

[Dr Whitehead]

indicated dissent.

[Claire Perry]

But no one has ever said how Labour will pay for any of this stuff—including the shadow Chancellor—so it is all ambitious pie in the sky as far as I am concerned. What we need to do is to balance continually the cost of what we are doing, the carbon dioxide reduction and the competitive advantage, because by solving our own problems in the UK we can help to solve the world’s problems.

Unlike the Labour party, I do not have a quiver full of magic arrows and the promise of a unicorn at the end of every garden. What I have is a serious and sober set of policies, based on regulation. As the hon. Gentleman knows, we have already regulated for an improvement of the energy efficiency of the worst-performing private rented homes in the market. Those regulations are in force, and we think they will have a material impact.

We are rolling out the world’s biggest smart meter programme. Why do people get smart meters? Because they want to take control of their energy, and because smart meters help them to reduce their energy consumption. By the end of 2020, every home in the country will be offered a smart meter, or an upgraded smart meter if they already have one, to ensure that there is no interruption of data.

We are investing our own money. Sorry—the Government do not have any money of our own; it is always other people’s money. That is another lesson for the Labour party. We are investing other people’s money in energy efficiency measures in many parts of the housing stock right across the country. I am also told that increasingly large sums of money are coming particularly from pension funds and other private sector investors who want to invest in such things because doing so is good for their investment return.

I want to create markets that invest in the right sorts of technologies and that bring in the greatest amount of capital. The hon. Gentleman knows, although his Front-Bench colleagues do not, that Governments can never take enough in taxes or control enough of the economy to make a difference by themselves. We always have to incentivise others to innovate and to invest. Another quiver in our bow is the £2.5 billion of innovation money that I am putting into the smart energy space over the course of this Parliament—money that is targeted to get costs down, get carbon down, and build a competitive advantage.

I am disappointed that I am unable to persuade the hon. Gentleman to support what I think is a very sensible set of measures, which manage not to overburden consumers, who are paying for them, and manage to take a scheme that has for too long not focused on helping those who are in the worst financial straits or living in fuel poverty, often in rural areas, and will then drive up innovation and the level of local flexibility, which will mean that the scheme is better targeted.

I conclude by addressing the point made by the hon. Member for North Ayrshire and Arran. We already have many co-operative energy companies running south of the border. There is no barrier to one being set up. If an energy company wants to start up and focus entirely on that issue, that is absolutely fine. She knows that I applaud what is being done by the devolved Administrations, but energy bills and large amounts of energy policy are set and, in many cases, paid for by Westminster taxpayers. It is good to see the innovation, but she should never forget who is actually paying for much of the innovation that we are seeing north of the border.

[Patricia Gibson]

Does the right hon. Lady think that the very high strike price for power from nuclear energy helps or hinders fuel poverty?

[Claire Perry]

I find the hon. Lady’s party’s ideological objection to a balanced energy supply to be really worrying. I encourage her, as the party’s expert on this subject, to go away and have a look at the modelling. In no modelling of any energy system that I have seen, and indeed that has been shown to me by even the most ambitious pro-renewables, are base load, peak load and renewables delivered at the same time.

Luckily, across all the countries we care about having an energy system that is secure, balanced, keeps the lights on and does not overburden consumers. Again, it is easy for the hon. Lady to take such ideological positions, because she never has to sit and think about the energy system in the round, but I would encourage her to think very hard about the fact that for households that she represents in her constituency, as for those in mine, what actually matters is keeping the lights on, keeping the costs down and keeping the carbon falling.

I suspect that we may divide on the order, but I commend it to the House.

Question put.

Oral Answers to Questions

Claire Perry Excerpts

Tuesday 16th October 2018 Commons Chamber

[John Stevenson (Carlisle) (Con)]

4. What steps he is taking to tackle rising energy prices.

[The Minister for Energy and Clean Growth (Claire Perry)]

My hon. Friend’s constituents are keen to invest in the energy transition, as well as to ensure that their bills do not go up. Earlier this year, we brought forward the price cap Bill, which received strong cross-party support, and we are looking forward to those provisions coming into place by the end of the year. We estimate that my hon. Friend’s constituents on the most expensive tariffs will save around £120. All the other steps that we are taking, including the roll-out of smart meters, the warm home discount, the energy company obligation—which is now focused on the most fuel-poor households—and our work with Citizens Advice and the Energy Saving Trust are helping to keep bills down.

[John Stevenson]

I thank the Minister for that positive response. Given that we as a society want carbon-free energy but also low energy costs, does she agree that requiring all newly built residential properties to incorporate solar panels would be a step in the right direction, and will she ask her Department to consider that initiative?

[Claire Perry]

My hon. Friend is quite right that solar PV has an important role to play in the energy system. It might be ideal on some existing or new build homes. What I hate to see is the tokenistic solar panel that some developers pop up on roofs. Obviously, there may well be more effective and expansive measures to reduce running costs and cut emissions. When the Prime Minister launched her buildings mission as part of the industrial strategy earlier this year, she targeted the measure of overall energy. We want to halve the energy consumption of all new buildings by 2030 and we are working closely with the construction sector to deliver that goal.

[Anna Turley (Redcar) (Lab/Co-op)]

As Ministers know, the development corporation site in Redcar is critical to the economic development of the Tees valley, and to get international industrial investment, we need affordable energy supplies. Will Ministers review the current arbitrary limit of 100 MW on the amount of electricity that can be supplied by private wire networks so that we can bring in jobs and investment, and fulfil our potential?

[Claire Perry]

As always, I commend the hon. Lady and her colleagues for doing such an amazing job, cross-party, in promoting the next iteration of Teesside as the centre of clean economic growth. I know that the Secretary of State has met the company. We are aware of the issues. We will continue to review this, but we will also continue to review the chance to have a low-carbon industrial cluster, which is the way to get the new investment and get the carbon down in the area she is so proud to represent.

[Sir Desmond Swayne (New Forest West) (Con)]

The price comparisons available to the public are not transparent and often unintelligible. Can the system be made easier?

[Claire Perry]

My right hon. Friend is always seeking advice on how he can cut his energy bills. I am delighted to see that, particularly as it is Green GB Week. There are lots of opportunities on the website to see what more he could do. The price comparison websites are getting better. One of the challenges is that they do not always show consumers who are in receipt of a warm home discount whether they might lose that. That point was raised by the hon. Member for Leeds West (Rachel Reeves), who chairs the BEIS Committee, and we are working with it. We want that decision to be as transparent as possible. As somebody who has switched twice, both times using a price comparison website, I can tell my right hon. Friend that it is actually a much simpler process than it used to be.

[Mr Speaker]

I was rather hoping that the right hon. Gentleman would be minded to consult the meerkat.

[Seema Malhotra (Feltham and Heston) (Lab/Co-op)]

The Minister will be aware that wholesale prices of gas and electricity have risen significantly in the past year. What protections will she be ensuring for people on lower incomes, from poorer families, or who are older citizens and may be worried about the winter, particularly those who may still be using prepayment, pay-as-you-go meters?

[Claire Perry]

It is quite right to note that the wholesale price determines the overall energy price, and of course it goes up and down. That is why the price cap Bill that we have all supported introduces a cap, not a freeze. I am sure that the hon. Lady is as pleased as I was to welcome the roll-out of the protection for customers on prepayment meters. That cap is already in place. It is already saving those households tens to hundreds of pounds a year. Indeed, the extension of the cap to the vulnerable consumers group is required by the CMA report. I would like to see these protections continue. Of course, all customers who are on rip-off tariffs will benefit when the price cap Bill we all worked so hard for comes into effect this year.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

Winter is almost upon us, yet those suffering most from fuel poverty in the highlands are still paying higher electricity charges than those anywhere else in the UK, despite living in a centre of energy production. When will the Minister act to end this electricity unit price discrimination, which is estimated to add £400 a year to the already high cost of rural living?

[Claire Perry]

The hon. Gentleman raises a point that is also often raised by MPs who represent other areas, such as the peninsula of Cornwall and Devon. There has always been a convention that because it costs more to deliver energy through conventional structures to those furthest parts of the UK, they bear a higher tariff. There is work ongoing, supported through BEIS innovation funding, to encourage self-generation and self-storage in many of the most remote communities—perhaps some of the things we have seen around the Orkneys with the hydrogen bus. The hon. Gentleman raises an important point. That is why the price cap Bill is so valuable and should be supported by all parties—because it caps energy prices for everyone in the UK.

[Henry Smith (Crawley) (Con)]

5. What steps he is taking to support economic growth while decreasing emissions.

[Mr Richard Bacon (South Norfolk) (Con)]

19. What steps he is taking to support economic growth while decreasing emissions.

[The Minister for Energy and Clean Growth (Claire Perry)]

My hon. Friend the Member for Crawley (Henry Smith) will know—and, I am sure, celebrate—that we have led the developed world in cutting emissions in our economy. Growth in our economy went up by 72% while emissions have decreased by 43%. That is not good enough—we want to go further and faster. That is why we set out last year all the policies in the clean growth strategy and why this week the first ever Green GB Week is helping us to re-emphasise the message that growth and green go hand in hand.

[Henry Smith]

Earlier this month, I was pleased to welcome a Virgin Atlantic flight into Gatwick, the first ever sustainable fuels flight to land at the airport, using fuel derived from the recycled steel-making process. What can this Government do to ensure that the UK leads in this technology, which has the potential for zero carbon aviation by 2050?

[Claire Perry]

This is a brilliant project and an example of exactly the innovation we need to tackle one of the most insurmountable problems we face, which is airline emissions. The Government relaunched last year a £22 million industry competition on future fuels for flight and freight to stimulate exactly this sort of innovative thinking.

[Mr Bacon]

Given that most people would prefer to live in a house that costs nothing to heat, boosting their spending power, that we have known for decades how to construct such houses cost-effectively and that there is no sign that big house builders will routinely offer such houses, are the Government planning to raise minimum standards for the thermal performance of new build houses, which will help the planet, the real economy and ordinary people’s household budgets?

[Claire Perry]

I have here a card with my hon. Friend’s title—he is the chair of the all-party parliamentary group on self-build, custom and community housebuilding and placemaking, and he speaks with such knowledge and enthusiasm on this subject. He is quite right, and that is why we have set up the clean growth mission, why we have set out clear standards to drive up the energy efficiency of all homes to at least band C by 2035 and why we can no longer see new homes—particularly new build homes—that are off the gas grid being built with fossil fuel heating; we want that out by 2025.

[Thangam Debbonaire (Bristol West) (Lab)]

But does the Minister not agree that the two aims can be brilliantly combined if we have an ambition to become a world leader in renewable energy and to increase investment in research and development in tidal and wave energy—two resources we have in abundance—to take them rapidly to commercial stability and create the jobs of the future?

[Claire Perry]

The hon. Lady will be pleased to know that our renewable energy build is already over 30%, which is why we were able to get off coal earlier than many other developed countries. The problem with the tidal projects that we debated so extensively this year was that we were being asked to fund the most expensive power station that this country had ever built, with very few jobs created, and it was simply too expensive to burden consumers with. That is why we have said that the door is always open to innovation, but it has to be funded at the right price.

[Jeff Smith (Manchester, Withington) (Lab)]

18. There is a huge opportunity for economic growth in the solar industry, but the news that the export tariff is being scrapped has alarmed many clean energy providers. More than 300 organisations, from small solar co-operatives up to Nissan, have signed a letter calling on the Secretary of State to reinstate the tariff. I am grateful to the Minister for meeting me in the past to discuss solar. Will she again meet me and representatives from the industry to discuss why a fair export tariff is essential to a viable solar industry?

[Claire Perry]

It is always a pleasure to meet the hon. Gentleman. The problem we have with feed-in tariffs is that we have spent nearly £5 billion since 2011, through consumer bills, on supporting some often very uneconomic projects. Quite rightly, particularly given the reduction in the cost of other renewable energies, the decision was made that that was no longer affordable. I support that. He asks whether there are other ways to continue to invest in the sector, and he is quite right that solar has an important role to play in the system. We have just finished the call for evidence and are considering the responses, and I hope to come back to the House soon.

[Barry Gardiner (Brent North) (Lab)]

Yesterday, the Minister requested that the Committee on Climate Change update its advice on the action necessary to respond to the report on 1.5° by the Intergovernmental Panel on Climate Change. For a brief moment, I thought she had done the right thing, but then I read her letter, which says:

“Carbon budgets already set in legislation…are out of scope of this request.”

The committee has already written to her twice, warning that the country is not on track to meet the lesser targets in those budgets. By saying that those budgets are out of scope, the Minister is pushing back the necessary change by 12 years. When did she become a follower of St Augustine—“Lord, make me virtuous, but not yet.”?

[Claire Perry]

Blimey! Let me just clarify some of the hon. Gentleman’s misinformation. The reason those budgets are out of scope is that we already have a set of policies and procedures that will deliver 97% and 95% of the decarbonisation—[Interruption.] If he listens for a second and stops mansplaining, he might learn something. I live in hope; which saint said that?

The point is that the Committee on Climate Change told us last time we discussed the challenge of zero carbon that it was not technically feasible now. It would be pointless to ask for its advice again when we already have some of the most ambitious carbon reduction plans in the world up to 2032, set in statute. We need to know what to do from 2032 onwards, so that we can start planning for it now. Just once, it would be lovely to have some cross-party consensus on the challenging, vital issue of the destruction that climate change will cause. I live in hope.

[Neil Gray (Airdrie and Shotts) (SNP)]

6. What recent discussions he has had with the Chancellor of the Exchequer on the level of UK Government financial support available to businesses in Scotland.

--- Later in debate ---

[Daniel Zeichner (Cambridge) (Lab)]

10. What his policy is on achieving net zero greenhouse gas emissions by 2050.

[The Minister for Energy and Clean Growth (Claire Perry)]

As the hon. Gentleman will know, on Monday I wrote to the chair of the Committee on Climate Change for advice on how to get to a zero-carbon future. We did not ask for a specific date. We asked for advice on what date would be appropriate, as well as an analysis of the costs and benefits. I expect a response by next March. He will know, as the proud representative of one of the finest universities in the world, that so much of that change will be based on innovation and research, much of which is going on in his fine city. That is why we have contributed more than £2.5 billion during this Parliament to support that research, which can help us to save the planet.

[Daniel Zeichner]

I thank the right hon. Lady for her reply, but does she not understand that freezing fuel duty and cutting support for electric vehicles and hybrids is in no way going to help us to achieve the goal that we all want to arrive at?

[Claire Perry]

I know the hon. Gentleman’s city well and I commend the council there—it is the wrong colour, but it is making many good decisions on such things as solar bins, cycling and walking, which are very possible in a city such as Cambridge. In constituencies such as mine, people have to rely on their vehicles. We know that the cost of living is an issue and it is right that we continue to help people to put some money back in their pockets. On electric vehicles, 13% of new vehicles sold in August this year were ultra-low emission. That market is evolving and the cost of those vehicles is coming down. We have spent half a billion pounds of taxpayers’ money subsidising the purchase of those vehicles and my expectation is that the price will continue to fall faster as we see the infrastructure build up.

[Kevin Foster (Torbay) (Con)]

11. What progress he has made through the industrial strategy on ensuring that the UK is the best place to start and grow a business.

--- Later in debate ---

[Colin Clark (Gordon) (Con)]

T4. During Green GB Week, what steps is the Minister taking to minimise the negative impact on farmers of renewable energy incentives that are taking away valuable distillery and brewery by-products to be used in anaerobic digesters, thus potentially undermining the livestock industry not only in Scotland but in the rest of the United Kingdom?

[The Minister for Energy and Clean Growth (Claire Perry)]

My hon. Friend has made a valuable point. We have high sustainability criteria, but we must ensure that biofuels are sourced sustainably. We have asked the Climate Change Committee for a bioenergy report, which it will provide shortly, and which will give us new advice on questions of land use and the long-term best use of resources.

[Louise Haigh (Sheffield, Heeley) (Lab)]

T2. Rather than listening to communities where shale gas applications have been made, the Government have continued to dismantle the hurdles over which fracking companies should be forced to jump. Will the Minister confirm that she is now genuinely considering weakening the controls on earthquakes in relation to fracking companies?

[Claire Perry]

I can absolutely confirm that I am not considering weakening the monitoring controls on seismicity.

[Sir Henry Bellingham (North West Norfolk) (Con)]

T5. The Minister will be aware that there has been a remarkable revival in the UK extractors and mining sector. What can he and the Secretary of State do to make sure these ventures are environmentally sustainable and command local community support?

--- Later in debate ---

[David Duguid (Banff and Buchan) (Con)]

In this Green GB Week, will the Minister join me in recognising the work being done by the major oil and gas companies, through the oil and gas climate initiative? They are voluntarily making huge efforts and investments towards a lower carbon future.

[Claire Perry]

My hon. Friend is a strong defender of that industry, which is vital to the UK economy. He will know that those companies have set out their own pledges and that they have set out how they see world changing fundamentally. They are also investing heavily in the new technologies that they want to be part of the future.

[Alison Thewliss (Glasgow Central) (SNP)]

The Department’s consultation on limited partnerships closed on 23 July. Scottish limited partnerships continue to be used for dirty money, to the absolute discredit of the country. When will the Minister do something about this?

Green GB Week and Clean Growth

Claire Perry Excerpts

Monday 15th October 2018 Commons Chamber

[The Minister for Energy and Clean Growth (Claire Perry)]

With permission, Mr Speaker, I will make a statement to this House.

As the Prime Minister said earlier this year, the international determination to address climate change and deliver a cleaner future is one of the facts of our time and one of our greatest opportunities. Only this month, we had a reminder of the importance and urgency of our mission in the form of the publication of the Intergovernmental Panel on Climate Change’s latest special report.

The report’s conclusions are stark and sober. They show that we are not on track to cap global average temperature rises to below 2° from pre-industrial levels, let alone to reach 1.5°. The implications of this difference in warming are spelt out in the science: from flooding risk going up to fisheries going down; from extreme weather events to extinctions due to loss of habitat—serious, challenging and difficult outcomes. To mitigate against the impact of climate change, we need to understand how to best transform our energy generation, land use, transport systems, industrial processes, homes and buildings. That is why, earlier today, I officially requested the advice of our UK independent advisers, the Committee on Climate Change, on the implications of the Paris agreement, and this latest IPCC report, for the UK’s long-term emissions reduction targets.

We are the first major industrial economy to seek such advice, which again reaffirms our determination to lead the world in this area. I have asked for this advice on when and how we could achieve a net zero target for our economy, including whether this is the right time to set such a target, and how reductions might be achieved across sectors in the most cost-effective way.

This request was the first event in our very first Green GB Week, which is designed to bring together businesses, government and civil society to celebrate the extensive cuts in emissions that we have achieved in the UK, and to open up the discussion about the challenges and opportunities from cleaner growth. The week involved tens of partner organisations, more than 100 events, and thousands of participants right across the UK.

No country other than the UK has done more to prove that action on climate change and economic growth can go hand in hand. Since 1990, we have led the G7 group of countries in cutting emissions and also in growing our economy. Since 2000, according to a recent report, the UK has cut emissions per unit of economic growth by an average of 3.7% a year—I know it is a bit technical, but the reduction of carbon for every unit of growth we deliver is how it is measured—which is well ahead of the G7 average of 2.2%. Last year, 2016-17, we achieved minus 4.7% compared with a global average of 2.6%.

This low carbon transition offers huge opportunities for the UK, which is why clean growth sits at the heart of our modern industrial strategy. It creates jobs. There are already more than 400,000 jobs in the UK’s low carbon economy, and this thriving sector could grow by 11% a year up to 2030—four times faster than the rest of the economy. We are already seeing UK businesses leading the world. We have more offshore wind installed in the UK than any other country. Auction clearing prices for offshore wind have halved in the past two years, which is great news for industries and consumers alike, and this progress is opening up new markets from North America to South Korea.

In the first half of 2018, one in five of electric vehicles sold in Europe was made right here in the UK. In the service sector, the UK is consulting, and engineering firms are international leaders for global sustainable and low carbon projects. Since 2010, we have invested £52 billion in renewable energy projects in this country and the result is that we now generate more than half our electricity from low carbon sources—32% came from renewables in 2017.

We have committed more than £2.5 billion in Government investment in low carbon innovation in this Parliament, and we have galvanised action and initiative internationally, helping to secure the historic agreement of 195 countries to sign up to the Paris climate agreement. We have also established the Powering Past Coal Alliance, which has seen more than 70 countries, cities, states and businesses commit to transition away from coal power generation. We are leading from the front. In April this year, our power sector was entirely coal free for three days and we will phase out coal entirely from our power generation by 2025.

In the last seven years, we have delivered international climate finance to over 200 programmes in more than 75 countries, improving access to clean energy for over 17 million people and building the foundations for cleaner economic development in some of the poorest parts of the globe. Our progress to date is cause for celebration. I am proud to think of the UK—through successive Governments’ actions—as one of the greenest nations in the world. But while the world continues to deal with the implications of man-made climate change, we must not be complacent, and there is almost always more that we should be doing.

Today we publish our response to the annual progress report of the Committee on Climate Change, setting out what we have done since publishing our clean growth strategy this time last year and our next steps. The pace of innovation means that we cannot predict with certainty the most cost-effective path to our long-term carbon targets, but I can predict this: from how we travel to how we build our homes, we will need to make profound changes. Our strategy sets out some of the paths that we will need to take to do so.

This Government have set out the ambition to be the first to leave the environment in a better state than the one we inherited, but this must be consistent with strengthening our economy and providing opportunities for young people right across the country. Clean growth—which we are celebrating today and this week during the inaugural Green GB and Northern Ireland Week—can deliver all three, but to build on this success will require ongoing ambition and leadership from politicians right across the House, business, academia and civil society.

Ten years after the groundbreaking Climate Change Act 2008 was passed with almost unanimous support in this place, we want Green GB Week to bring the whole country together to celebrate the UK’s success and to set our ambitions for the future. Crucially, we need to understand that there are profound risks to our planet from uncontrolled warming, but that there are also huge opportunities in rising to this challenge. This Government are committed to maximising those opportunities. I commend this statement to the House.

--- Later in debate ---

[Claire Perry]

Is it not disappointing, on a day when we should be celebrating what politicians can come together to do, that the hon. Lady could not bring herself to do anything remotely cross-party?

I think the fundamental mistake that the hon. Lady and many other Labour Members make is that they confuse Government spending with results. We have seen a dramatic fall in the price of renewable energy, of solar panels and of energy efficiency measures, so thankfully we no longer need to make enormous subsidies with other people’s money in order to deploy the energy. In terms of the results, as I mentioned, we are now at 32% of renewables, and we had our first coal-free day. I know that the leader of her party, as long ago as 2015, was calling for reopening all the deep-cast coalmines in the north-east and has said that he will rule out nuclear.

[Jeremy Corbyn (Islington North) (Lab)]

indicated dissent.

[Claire Perry]

He has changed his policy now, but back then it was not at all obvious what it would be.

The hon. Lady knows that investment in this sector is very lumpy. We have brought forward some of the biggest offshore wind projects the world has ever seen. One would always expect that money to go up and down.

The hon. Lady talked about feed-in tariffs. We have spent nearly £5 billion in subsidising feed-in tariffs since 2010, and it has indeed worked. We are now seeing record levels of solar deployment. We signalled back in 2015 that we would be seeking to remove subsidy from the sector. We have had a call for evidence to see what we will replace that with, and I look forward to making some announcements on that shortly.

The hon. Lady is right that we all need to do more on energy efficiency. That is why we have set out the most challenging targets the country has ever seen in order to improve efficiency both in our homes and in our other buildings.

The hon. Lady talked about shale gas. I find it amazing that so many Labour Front Benchers will take the shilling of the GMB union but will not take its advice on shale gas extraction. They are claiming that this does not create jobs; the union fundamentally disagrees with them. They claim that it is not consistent with a low carbon future. The Committee on Climate Change has said that it is entirely consistent with our measures. When they go home tonight to cook their tea, I ask them to think about what fuel they are going to use, because we know that 70% of the country relies on gas for cooking and heating. We have a choice. On current projections, we are going to move from importing about half our gas to importing almost 75% of it, even with usage falling, as it needs to going forward. I know that some Labour Members would love us to be spending more hard currency with Russia, but I am quite keen to soberly—[Interruption.] Perhaps if Labour Front Benchers would all like to stop mansplaining, I could actually make some progress. I would like to answer the hon. Lady’s questions without a whole load of chuntering as if I am the referee at Chelsea.

As I was saying, the challenge on shale is that we do use gas. We want to rapidly decarbonise gas as we will continue to do. This is entirely consistent with all our low carbon pathways. It is even consistent with the hon. Lady’s proposals for the renewable economy, because she will need 40% of that to come from some sort of thermal generation. It seems crazy to me not to soberly explore the science of exploiting a resource beneath our feet that could create thousands of jobs rather than importing it from an extremely unstable nation. [Interruption.] Well, do not listen to me—go and listen to your union paymasters.

We signalled that we would at some point have to stop subsidising electric vehicles. We have spent half a billion pounds of taxpayers’ money since 2011 on driving up the deployment of EV, and three things have happened. First, the number of these vehicles has ballooned, with up to 13% of new car sales being electric in August this year. Secondly, the price of those cars is now falling, to the point where the decision to buy electric is becoming less of a challenge. Thirdly, the Government are investing £1.5 billion in the charging infrastructure that this country so desperately needs.

The hon. Lady talked about the carbon budgets. I have said this before, and I will say it again. Budgets 3 and 5 end in 10 and 15 years respectively. If we achieve budget 5, we will have achieved a cut of almost 60% in our emissions since 2010. We are on track already, without costing many of the policies and proposals that we set out last year, to deliver 97% and 95% of what is needed for those budgets. That is a pretty reasonable approach, and, given that we have made clean growth such a fundamental part of our industrial strategy, those figures will only accelerate.

Lastly, the hon. Lady invited me to talk about Labour’s policy. Well, where to start? As always, there is no detail on how their targets would be met, whether they are technically feasible, how much they would cost, how much they would add to energy bills or whether the supply chain could deliver it. As always, it is a load of fantasy numbers designed to create a press release. Labour talks about getting 44% of homes to renewable heating within 12 years, but 80% of homes are on the gas grid. Is the hon. Lady going to add to people’s energy bills the cost of disconnection and reinstatement of gas? I think we should know.

One of Labour’s own MPs said that we do not need to

“talk about renationalising vast swathes of the economy or reopening the pits”,

as the right hon. Member for Islington North (Jeremy Corbyn) made such a virtue of doing in his leadership campaign. We will get on with delivering policies that are realistic and fully costed and deliver the most ambitious decarbonisation of the economy, and we will leave the Labour party to play fantasy economics with its energy policies.

[Richard Benyon (Newbury) (Con)]

Our annual reduction in emissions per unit of GDP is roughly three times that of the European Union. My right hon. Friend articulately described how the efforts of this Government are starting to pay off. Does she agree that, however much effort the United Kingdom is putting in, we have to look at this as a global problem, continue with whatever arrangement we have with the European Union and encourage it to move and use our budgets in other parts of Government to ensure that this is a global endeavour and that we are using our skills in this country to create a world where there are much lower greenhouse emissions?

--- Later in debate ---

[Claire Perry]

I pay tribute to my right hon. Friend’s long-standing work in campaigning and his ministerial work on the whole question of environmental sustainability. He is quite right that we are well ahead of our EU counterparts in decarbonising our economy. I was at the European Council on Monday, where we debated our emissions reduction targets. The Road to Zero is a very ambitious programme of emissions reductions, and we were among a handful of nations pushing for maximum ambition on reducing CO₂ emissions from cars and vans. We should continue to do that regardless of the technical rearrangements of our relationship with the EU, because when it comes to carbon, we are so much stronger working together.

[John Mc Nally (Falkirk) (SNP)]

I thank the Minister for advance sight of her statement and agree with her wholeheartedly that profound changes are needed and that more needs to be done. As a member of the Environmental Audit Committee, I share the concerns that it has raised.

It is surely obvious to all that we need to rebalance the economy urgently towards sustainable energy, sustainable business and sustainable manufacturing. However, what is the point in the UK Government launching a Green GB and NI Week at the same time as they are prioritising nuclear over renewables and dragging their heels on climate emissions reductions? Actions speak louder than words. I think the Minister recognises that we are at a privileged moment in time, with most of the world crying out for change.

Will the Minister match the Scottish Government’s world-leading statutory climate targets of reductions of 56%, 66% and 78% by 2020, 2030 and 2040, as well as 90% by 2050? Will she tell the Government to stop dragging their feet and to use reserved powers, including subsidies and technology support, that would allow Scotland to achieve net zero emissions sooner? Will she tell the Government to deliver their green obligations by scrapping plans for new and expensive nuclear power plants and instead bring back renewable subsidies, support the oil and gas sector by aiding the low carbon transition, give Peterhead the £1 billion for a new carbon capture facility that it had expected and restore long-term certainty of policy to the whole sector?

[Claire Perry]

The hon. Gentleman makes some very good points. I am pleased to pay tribute to the work of his Committee, and indeed to the work of the Scottish Government and the other devolved Administrations in contributing to our world-leading climate targets. We do of course score our CO₂ emissions on a UK-wide basis.

The hon. Gentleman raised some important questions. He will of course know that UK energy policy is set in Westminster. Many of the subsidies that have been paid for—indeed, they have brought forward much of the renewables deployment in Scotland—have been set on a UK-wide tax basis. I do not think we should be bringing back renewables subsidies, as he called for, as we are getting to a point at which we no longer need to do so. We opened the world’s first subsidy-free solar farm last year, and we are of course buying offshore wind at very low rates.

I think we do have to work together. It is fantastic for all the Governments—I would expect the same of local authorities and Mayors of combined authorities— to set their own targets because there are so many levers that can be pulled on the ground, not least to motivate people and to motivate businesses to change the way in which they carry out their activities.

[Rachel Maclean (Redditch) (Con)]

Does the Minister welcome, as I do, the fact that recent research indicates that two thirds of millennials are looking for green jobs? What more can the Government do to encourage this very welcome news?

[Claire Perry]

I do welcome that, and it was my Department that conducted the research. There is a myth that we do not have many green jobs, as we already have 400,000 in the economy. On the basis of our current work, we think that the number could grow to almost 2 million. One of the reasons why so many large companies are changing the way they do business is that they think they have a bit of a recruitment crisis, because they know that so many young people would much rather work for a sustainable company than otherwise. Indeed, Thursday of Green GB Week is all about opportunities: how people can get into this business; and how we can motivate the next generation—from schoolchildren up to young adults—to think about working in what will be one of our great long-term growth areas.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

The Minister’s green words are great, but back on planet Earth the reality is somewhat different. What happened to the huge leap forward that Britain had with green power until recently? Does she think the present huge decline in renewables investment is anything to do with the Government? There is the ban on onshore wind, for example. How does she square that mad policy with the climate change challenge?

[Claire Perry]

Again, it is a bit sad to hear that from someone with whom I was very proud to work in coalition and who did so much in this area. I would unpick two of the right hon. Gentleman’s points. First, there is no slowdown. Renewables usage is absolutely accelerating, and we are now at 32%—[Interruption.] Again, if we combine more for less as prices fall, why are we falling into the trap of defining success as how much we are spending rather than how much we are getting? We are getting 32% from renewables. That, along with the investment in new gas, is the reason why we are able to phase out coal.

The right hon. Gentleman raised the question of banning. There is no ban on offshore wind. In fact, he was the Minister who led so many of the fights about offshore wind farms. Frankly, those fights threatened to derail many of the conversations about clean growth, because they were so terribly controversial. [Hon. Members: “Onshore wind!”] There is no ban on onshore wind. Onshore wind is still operating. What we were elected on in our manifesto—the Government’s manifesto—was that we did not think large-scale onshore wind development was right for England, and I am afraid I believe in carrying out our manifesto commitments.

[Mark Menzies (Fylde) (Con)]

I urge my right hon. Friend not to take any lectures from the Labour party when it comes to shale gas, because it was under the Labour party that the current licensing round for the shale gas that is being fracked today was issued. May I urge her to continue to put in place the relevant safety measures and environmental protections, as this Government have done, which were not there when the Labour party issued the licence round?

[Claire Perry]

I thank my hon. Friend for sharing that information with us. He is absolutely right. One of the reasons for believing that we can safely extract shale gas is that we have the strongest environmental standards in the world when it comes to oil and gas extraction. We believe that we may, indeed, need to continue to strengthen them.

However, is it not interesting? My hon. Friend has dealt with the brunt of a lot of the protests against the shale site to which we have granted a licence, and I was very disappointed to see the hon. Member for Salford and Eccles (Rebecca Long Bailey) having a bit of a chit-chat with the protesters without bothering to go into the site to see its potential and the number of jobs that could be created by that vital industry.

[Kerry McCarthy (Bristol East) (Lab)]

As an electric car driver myself, I would point out to the Minister that the growth of electric cars means it is more imperative to invest in charging infrastructure, because it is pretty difficult at the moment to find a charging point that is not already being used. However, on the broader point, we are now talking about trying to move from a target of 80% in 2050 to net zero. Can she name one new thing she is doing, rather than going backwards, that will help us to meet that goal?

[Claire Perry]

I again have to commend the hon. Lady’s long-standing and non-virtue-signalling commitment in this area; she is one of the few people who takes the advice on diet. I would love to know about electric charging stations between Bristol and London, because I will hopefully be making that transition shortly.

The hon. Lady is right, however. One of the key things that came out of the IPCC report, and will come forward, is that we may overshoot. What are we going to do about that? What are the technologies that will help us get back under 2°? We are one of the first Governments in the world to invest substantially in greenhouse gas removal technologies. I am not saying that that is the answer—I would not want to go there, and I would rather change—but if we have to pull CO₂ out of the air or somehow get it out of the ecosystem, we will be one of the first Governments who are able to do that. That is something—[Interruption.] Well, I am afraid we need to consider it, and that is what the IPCC and the CCC have advised us to do.

[Rebecca Pow (Taunton Deane) (Con)]

First, I commend my right hon. Friend on the advances she is making in asking when and how we might reach a net zero carbon economy, because that laudable endeavour fits entirely with the Government’s moves to leave the environment in a better place than we found it in. However, does she agree that reducing our greenhouse emissions need not come at the expense of growing the economy, because we can invest in new technologies to achieve that? That would cut our energy bills, reduce emissions and increase efficiency. All those things were covered by my recent ten-minute rule Bill, and my right hon. Friend was extremely supportive of it.

--- Later in debate ---

[Claire Perry]

Indeed I was. The idea that we need a jolly good recession to get emissions down is not in any way appealing, and I hope there is cross-party consensus on that. We of course need to grow in a sustainable way, but in pursuing this opportunity for the UK and to help the world, there is an absolutely immense and incredible opportunity to create jobs, prosperity and growth right across the UK. It is a complete win-win situation, which is why we should be pursuing it, and are pursuing it, so vigorously.

[David Hanson (Delyn) (Lab)]

Is it still the Minister’s plan to end the export tariff on new solar installations from April next year? If so, what assessment has she made of the impact on the solar industry?

[Claire Perry]

The right hon. Gentleman raises an important point. He will know that the signalling of the ending of the current tariffs was done several years ago. He will also know that we have just had a call for evidence, and I am reviewing that information. I will come back to the House shortly with proposals on those policies.

[Luke Graham (Ochil and South Perthshire) (Con)]

Does my right hon. Friend agree that reducing greenhouse gases need not come at the expense of growing the economy? Will she continue to make available funds for innovative energy sources such as geothermal energy from the projects currently being explored in Clackmannanshire in my constituency?

[Claire Perry]

My hon. Friend has already made a powerful case for investment in geothermal. In many constituencies, we have old mine workings and we have some pockets with natural currents of geothermal—the hon. Member for Southampton, Test (Dr Whitehead) has worked hard on that in the past. We do have some opportunities to extract relatively warm water and to use it for district heating. Indeed, one of the announcements I made today was about how we are going to bring forward some of the competitions to improve the way we collect waste heat and potentially reuse it. The projects in hon. Friend’s constituency are interesting, and I am sure he will continue to make strong representations about them.

[Diana Johnson (Kingston upon Hull North) (Lab)]

In terms of joined-up Government, I wonder whether the Minister has had an opportunity to discuss Clean GB Week with the Transport Secretary, who seems to be merrily cancelling rail electrification schemes in favour of polluting bimodal trains.

[Claire Perry]

I think that is a little unfair, because the bimodal trains that have been put in place have substantially lower CO₂ emissions than the diesels they are replacing. The hon. Lady will know better than most the economic benefit that can come from this clean growth transition, because she has the new Siemens wind turbine factory in her constituency, creating many relatively well-paid, highly productive jobs, and we want to see a lot more of that.

In terms of the transport industry, I am very struck that, in Europe, we are able to push at the maximum envelope for ambition because of our “Road to Zero” strategy. We are pushing the envelope when it comes to transport emissions.

[Sir Desmond Swayne (New Forest West) (Con)]

Aside from cutting the emission of hot air in this Chamber, we can do a number of things individually. Will the Department be issuing advice to nudge us in the right direction?

[Claire Perry]

If my right hon. Friend has a moment to go on to the fantastic Green GB Week website, he will find 10 things that he and local businesses in his constituency can do, ranging from test driving electric vehicles to upgrading heating controls and understanding where his pension is invested. If he wants to signal the importance of this transition, he should make sure that his investments are in a pension plan that is not investing in unsustainable businesses. There are many things he can do and I would love to hear back from him about which ones he does.

[Mr Speaker]

I trust that the right hon. Gentleman will be accessing the said website within a matter of minutes, if not indeed seconds.

--- Later in debate ---

[Mr Paul Sweeney (Glasgow North East) (Lab/Co-op)]

Many of my constituents, as well as thousands of people across the country, have been subject to mis-selling under the Government’s green deal scheme, which was launched in 2013. Many are still paying the price and are thousands of pounds in debt. What will the Government do to compensate them and address the long-standing toxic legacy of the green deal scheme?

[Claire Perry]

There are examples of mis-selling—and, indeed, under the current energy company obligation scheme. There is the usual redress through consumer channels, which hopefully the hon. Gentleman’s constituents know about. If he has specific cases he would like me to take up, I would be happy to look at them. I am working with a number of MPs. The Government do not step in—this was always a third-party scheme—but we do have an ombudsman in the green deal finance sector. It is important that whatever responsibilities and rights are there are used for the benefit of all our constituents.

[Paul Masterton (East Renfrewshire) (Con)]

I was delighted to mark the launch of Green GB Week up at Whitelee wind farm in Eaglesham, the largest onshore wind farm in the UK, to which my right hon. Friend has an open invitation any time she can fit it into her schedule. Does she agree that Green GB Week is not just about recognising how far we have come, but recommitting ourselves to where we want to get to, and, most importantly, how we want to get there, such as by committing to this as part of our industrial strategy?

[Claire Perry]

When we talk about climate change, it can seem like an incredibly powerful threat that we are all completely powerless to deal with, but that is simply not true. We have already cut our emissions by 30-odd per cent. since 1990. In fact, the last time emissions were as low as this in the UK, Queen Victoria was on the throne. We can do it and we can lead the world in doing it, but there is no complacency. We are not doing this to give ourselves a birthday cake and a pat on the back. We are doing this because we think there is much more opportunity, and we can push the world to go further by showing that it is possible.

[Thangam Debbonaire (Bristol West) (Lab)]

May I gently invite the Minister to come share a meal with me at some point? I say that because I wish to encourage her, after promising to consider using an electric vehicle, to go one further and consider a meat-free day every week. Alternatives to meat are available; there is a very tasty meat-free “chicken” stir-fry in my fridge right now. This is not something we have to do every day. She is very welcome to come and try out what going meat-free would involve. The serious point is that going meat-free or reducing the amount of meat we eat one day a week makes a huge contribution to reducing our emissions.

[Mr Speaker]

I feel rather excluded from this generous invitation.

[Claire Perry]

I would enjoy the hon. Lady’s company. As I said this morning, I am not trying to sell cookery books. We are here to set out some sober and serious policies. She makes an important point and I know that many people have made it. I am also very mindful of the farming community. If people are eating meat, they should look for locally sourced meat that is raised to the highest ethical welfare standards. We should all have a healthy diet, because it reduces the burden overall. Perhaps she can bring me in a takeaway version of one her specialties at some point.

[Mr Philip Hollobone (Kettering) (Con)]

In the borough of Kettering, 150 GWh of renewable electricity is generated every year, which is enough to power all 38,000 homes in the borough. Will the Energy Minister hail Kettering as one of this country’s greenest boroughs and use it as an example to encourage others to do the same?

[Claire Perry]

It is great to see a Kettering green GB champion on our Benches. My hon. Friend is right: so many of our communities are living this process. It is not some scary existential threat. People are living it. They experience renewable energy—or not—and do not see it as a huge imposition. So many of our towns and communities are committing to these sorts of sustainable initiatives. That is part of Green GB Week, so that people can come together, learn from one another and, frankly, get a pat on the back for some of the things that they have done.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

The Minister rightly mentioned the need to use innovation and new technology in rising to this challenge, yet her statement had not one mention of carbon capture and storage, which is considered vital to reach the Paris treaty targets. Norway is pushing ahead. Germany is planning this along the Rhine. Does she regret the £1 billion betrayal of Peterhead and will she commit to restoring CCS funding levels to 2015 levels?

[Claire Perry]

The hon. Gentleman and I have had exchanges on this. He knows that we have committed £100 million from our current budget to invest in carbon capture, usage and storage technology. That money is being spent. We are working with several industrial clusters to work out how we decarbonise the power and get industry to put its emissions in there. Frankly, I was not the Minister at the time of the project’s cancellation, but we were going to spend £1 billion on decarbonising coal, which we no longer want in our mix at all, and we had not thought at all about how we would get industries in this area to put their emissions in. Since the pause of that competition, we have spent more than £300 million investigating our aquifers. They are the best in the world—offshore—and we will continue to explore how to do this in the most cost-effective way.

[Mr Philip Dunne (Ludlow) (Con)]

I applaud my right hon. Friend’s initiative. First, with her announcement today, the Government are one of the first around the world to respond to the IPCC report, and secondly, she has taken the initiative of Green GB Week to provide more focus on this country’s achievements—it is leading the world—in developing clean growth. I encourage her to get her officials to come up with a rather more snappy means of demonstrating the metrics used to show that we can grow the economy and renewable energy at the same time. If I might give her a pointer in that regard, will she please work more closely with Ofgem to encourage pre-accreditation for anaerobic digestion plants, which will shortly run out of time to get installed to take advantage of the feed-in tariffs?

[Claire Perry]

My hon. Friend is the definition of “snappy”, so I will always take his advice on how to spice up any of these visuals. He is right that the way to make this acceptable is to make it visual and easy for people to understand. There is some very good stuff on the Green GB Week website, which I encourage him to look at. I will take away his point about pre-certification and perhaps we can discuss it at a separate time.

[Anna McMorrin (Cardiff North) (Lab)]

I am not going to congratulate the Minister on a letter. Action on this is long overdue. Scientific advice to the UK has been very clear. It tests political and policy consensus and hard decisions will have to be made. Is she ready, and crucially, does she have the influence across the Government to deliver? When will she start focusing on the cheap, tried and tested form of renewable technology—onshore wind?

[Claire Perry]

We benefit from a lot of experience in this House and the hon. Lady has more than many in this area. Even though I could not get her to congratulate us, I am always very willing to listen to her thoughts on this issue. Two things are important. The clean growth strategy was the first cross-Government document we have ever published that set out in detail how we plan to decarbonise all sections of the economy. And, it was very lovely that the Prime Minister asked me to attend Cabinet, albeit at what I call “the kids’ end of the table”—it demonstrated that this is fundamentally part of the Government’s plan going forward. So yes, we are up for the challenge. We do not underestimate it and it will be a cross-Government initiative, as the hon. Lady can see and as we are delivering.

[Neil Parish (Tiverton and Honiton) (Con)]

I very much welcome this statement on green growth. With green growth, can we make sure that we concentrate on electric cars, electric buses and electric taxis so that we can get better air quality in our inner cities, especially in the 43 spots across the country where we really do need to improve air quality, so that we have a greener Britain?

[Claire Perry]

My hon. Friend, in his capacity as Chair of the Environment, Food and Rural Affairs Select Committee, knows very well that what is referred to as the “co-benefit” of cutting emissions also means better air quality, better human health and better child outcomes, in terms of reduced asthma levels. We did not think about that before, but now we are, and luckily we can understand those things and work out the costs and benefits, taking into account some of these new measures.

[Chris Elmore (Ogmore) (Lab)]

The Minister has made decisions now around scrapping the tidal lagoon project and rejecting her own commissioned report. We need to move on from that. What is her plan now for introducing tidal energy across the UK and making sure that south Wales is given the investment it was promised by the Conservative Government?

[Claire Perry]

The hon. Gentleman will know that we have spent tens of millions of pounds looking at wave energy—we have Wave Hub off the coast of Cornwall and we have invested substantially in many of the trial sites. As we debated at the time, the problem with the Swansea lagoon was not the source of power per se, but the fact that it was the most expensive power station proposal we had ever had in the UK, and it is right that we care about taxpayers’ money. That said, we are always interested in looking at tidal: several other proposals have been brought forward, and the door is always open. I, like him, know the power of the Bristol channel, having grown up on the other side; the problem is delivering it in the most cost-effective way.

[Craig Mackinlay (South Thanet) (Con)]

My right hon. Friend will be aware that businesses that do the right thing and install solar panels for electricity generation for their own use face a revaluation of business rates, which results in a higher charge, but that they do not face such a revaluation if the energy generation is for provision into the standard domestic grid. Will she commit to working with the Treasury to solve this somewhat unintelligible inequity?

[Claire Perry]

The short answer is yes. I would point out, however, that there are companies making substantial investments in solar—Rolls-Royce, for example—that absolutely see its value and see it as part of their whole energy-balancing process. So this is happening, but my hon. Friend makes a good point.

[Steve McCabe (Birmingham, Selly Oak) (Lab)]

I commend the Minister’s aims, but surely one easy way to pursue a clean growth strategy would be for the Government to require all new builds to include some form of solar energy panel in their design, apart from in the handful of situations where technical problems preclude it.

[Claire Perry]

Whether solar, some other form of renewable energy or just improving energy efficiency, all were set out in the clean growth strategy. One of our aims is to get new homes built off the gas grid—there are 42,000 homes off the grid in my constituency—not to have fossil fuel heating from 2025. We intend to do that not only because we want to reduce emissions but because it will boost routes to market for some of our world-leading renewable heat technology.

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

rose—

[Mr Clarke]

Thank you, Mr Speaker. I was looking particularly beseechingly there.

I thank the Minister for her statement. She is a great champion of growing our economy while also protecting our environment. Last week, I was proud to go to Downing Street with the hon. Member for Wakefield (Mary Creagh) to present a letter from 130 colleagues from across the House setting out our shared commitment to supporting the Government in the event that they decided to pursue net zero. Does the Minister recognise the strength of feeling across the Chamber that we must do everything in our power to limit the rise in global warming to 1.5° C and that net zero is the key to this?

[Claire Perry]

I thank my hon. Friend and the other MPs for that challenge and their support. Ultimately—forget the political banter—we are the House that will have to agree these policy decisions, justify the spending to our constituents and help to communicate to them the opportunities that are there. I urge him to look at the Green GB website. There are masses of events in his area over the week, for students, businesses, local authorities and the like. There is lots of good stuff we can use to spread this important message.

[Alex Sobel (Leeds North West) (Lab/Co-op)]

The Minister has written to the UK Committee on Climate Change, but that committee has written to her twice saying she is failing to meet our Paris commitments, which it is important that we meet. When I was on Leeds City Council, we put 1,000 solar roofs on council housing. We cannot do that now without the subsidies. On cars, again she has cut the subsidies. Why not consider changes to subsidies for new hydrogen technologies for both heating and transport?

[Claire Perry]

The hon. Gentleman, in his former role as a councillor—and, indeed, Leeds City Council—did amazing work on one of the really big challenges, which is decarbonising heat. As he will know, some of those heat projects are proceeding thanks to Government investment. In fact, a project up in the north-west involving Keele University is going live, blending hydrogen into the heat network. We are innovating, and are doing so in a way that could completely change the methods through which we heat our homes over the next 20 years. However, this is not just about subsidy. The Government cannot do this all on their own, while putting the burden on taxpayers. We must leverage in private industry, and we must work out the most cost-effective way to deliver our aim so that we can keep bills down.

[James Heappey (Wells) (Con)]

The key to a decentralised smart energy system is people installing generation not for the purpose of selling to the grid, but to meet their own needs. Does my right hon. Friend agree that the way to make all that happen is to encourage people to install the storage, the electrified heat, the electric vehicles and all the other facilities that will help them to consume the power that they generate on their premises?

[Claire Perry]

Indeed, and they should also be encouraged to install the smart meters that can join everything up and show them where the energy generation and export are coming from. We are seeing more and more of that, and we are supporting many of those investments through our innovation funding. Decentralised energy generation and energy balancing are a big part of the future.

[Gavin Newlands (Paisley and Renfrewshire North) (SNP)]

As one who represents the constituency with the greatest number of green deal mis-selling cases, I think that the Minister’s answer to the hon. Member for Glasgow North East (Mr Sweeney) was nowhere near good enough. The shameful mis-selling by Home Energy & Lifestyle Management Ltd of UK Government-backed green deal products has cost potentially hundreds of thousands of pounds in my constituency alone, but so far the Government have shamefully washed their hands of any responsibility. When will they do the right thing and fund a compensation scheme for all those affected?

[Claire Perry]

I refer the hon. Gentleman to my earlier answer. The scheme was employed in the private sector. [Interruption.] Does the hon. Gentleman want to listen, or does he want to keep shouting? There are obviously risks to consumers, and, as I also said to the hon. Member for Glasgow North East (Mr Sweeney), I should be happy to sit down and have a conversation to see whether we can do more to make the current statutory powers more effective.

[Trudy Harrison (Copeland) (Con)]

Does my right hon. Friend agree that nuclear will play a vital role in securing a low carbon future for this country? Does she think that we could keep the lights on if we stopped using it, as the Leader of the Opposition would like us to?

[Claire Perry]

My hon. Friend is a doughty campaigner. She has seen the benefits of nuclear locally and understands its international importance. We need a diverse energy mix, and that means making good decisions. It was very sad to see this reported in the Financial Times:

“In private, Jeremy is against, as is the majority of the shadow cabinet, but no one wants to put Rebecca in an awkward position.”

I feel terribly sorry for the hon. Member for Salford and Eccles. Dealing with that level of ideology cannot be easy. However, this Government can be trusted to deliver ideology-free energy policy that keeps the lights on and bills down.

[Steve Double (St Austell and Newquay) (Con)]

As my right hon. Friend will know, along with the Minister for Disabled People, Health and Work, my hon. Friend the Member for Truro and Falmouth (Sarah Newton), I have been a champion of the potential of geothermal energy in Cornwall. Although progress has been frustrating, we are very excited to be on the verge of seeing test drilling. Does my right hon. Friend agree that geothermal energy has the potential to play a significant role in the delivery of clean renewable energy in this country, and will she back its development in Cornwall?

[Claire Perry]

I think that that is an incredibly important challenge. How amazing it is that the economic opportunity created so many years ago by the removal of all the various minerals there can now give us the potential to decarbonise our heat and to generate more jobs in my hon. Friend’s beautiful constituency.

[Mr Speaker]

I am extremely grateful to the Minister for her statement.

Central Heating Installations: Consumer Protection

Claire Perry Excerpts

Wednesday 10th October 2018 Westminster Hall

[The Minister for Energy and Clean Growth (Claire Perry)]

It is a pleasure, as always, to serve under your chairmanship, Mr Gapes. I congratulate the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on securing the debate and on approaching it in a collegial way. He asked important questions on behalf of his belated mother—I extend my condolences to him for his loss—and raised important questions that cross the provision of better forms of central heating as well as, more broadly, telephone mis-selling and consumer rights. I feel qualified to answer some of his points but, in my summation, I will say how I will help to perhaps raise all of our understanding.

As the hon. Gentleman will know, the Government are committed to making energy bills more affordable, particularly for lower income or more vulnerable households. Of course, that involves working with industry in particular to improve both the targeting of schemes such as the one to which he referred and the process of delivering improvements in a way that benefits consumers. I will take a moment to talk about current protections and then address some of the hon. Gentleman’s excellent suggestions.

Reasonable levels of protection are in place for boiler installations. Indeed, all installations should be reported to a local authority building control, which is responsible for ensuring that such work meets building codes and regulations, not least because of safety questions. All installers of gas boilers must be on the Gas Safe Register—and, of course, they can be struck off. We have the highest energy efficiency standards for gas boiler installations of any European country, and we continue to raise those standards to ensure that consumers get the maximum heating efficiency for the minimum cost and carbon dioxide emissions. As with any other consumer contract, if consumers are dissatisfied with how the work has been delivered, they can appeal to their local citizens advice bureau or trading standards. In Scotland, people can appeal to Home Energy Scotland, which can provide free and impartial energy advice.

On the hon. Gentleman’s question about cooling-off periods, the installation of a boiler, as with any consumer contract, is subject to a cooling-off period, which I believe is 14 days. I will put that in a letter to him, which I will refer to later in my remarks.

As the hon. Gentleman noted, we also have the energy company obligation scheme to help those who are struggling with bills. Historically, that scheme has been split between helping those struggling with bill payments and reducing carbon emissions. I have decided to put as close as possible to 100% of that scheme into solving the challenge of fuel poverty, as part of the Government’s manifesto commitment to reduce the level of fuel poverty by 2035. The scheme is worth about £640 million a year—a large sum of money—and 10% of the households in the hon. Gentleman’s constituency have received measures under it, which might include electric storage heaters and oil boilers. I am sure that, like in my constituency, many of his constituents will live off the gas grid and be reliant on stand-alone heating.

The hon. Gentleman asked an important question about how we can ensure that these things are needed. I live in an off-gas-grid area in the middle of my constituency, and most weeks I go home to a flyer through my door suggesting that I apply for a new oil boiler. I do not feel that I am the target audience for these measures, and I have raised repeatedly with my team how we improve the targeting of this valuable sum of money towards those who need it most.

I hope the hon. Gentleman will be pleased to know that, in the latest iteration of ECO, we have increased the level of money that a local authority can spend with its discretion to 25%. We have also increased the level of money spent in rural areas such as those we represent to 15%, so there is now more of a local targeting element. On the hon. Gentleman’s suggestion that local authorities should know who has been approached, I am the least likely person to want to burden our hard-pressed local officials with more reporting requirements on behalf of central Government, but the local relevance of measures, as he said, is incredibly important.

The hon. Gentleman mentioned standards. Any ECO installation must meet building regulations and British installation standards, and insulation measures must have an appropriate lifetime guarantee—even tighter measures than for general installations

The hon. Member for North Ayrshire and Arran (Patricia Gibson) rightly raised the question of renewable heat contracts sold to constituents that had indirect payments associated with them. In June, I introduced an assignment of rights so that people trapped in such contracts can assign them to another party, which should enable them to free up their homes for sale. One of my action points from the debate is to write to her with the details of that scheme to share with her constituents.

[Patricia Gibson]

I thank the Minister for promising to write to me on that, because it is important to many constituents. Given that we know that HELMS exploited constituents by mis-selling a Government-backed deal and that the Government backed the company, will the UK Government undertake even to consider a review of green deal loans proposed by that company, given the high volume of loans that have a payback period exceeding 20 years?

[Claire Perry]

The hon. Lady is not alone in raising the challenges of mis-selling under the green deal, and I have asked my officials to look at that. The green deal—I was on its Bill Committee—was designed to unlock the issue of persuading people to improve the energy efficiency measures of their homes. Currently, all contracts are covered by existing consumer protection, but as a second action point I undertake to go away and review this specific company and write to her with the state of progress on those conversations.

I mentioned the assignment of rights, and both hon. Members have raised the challenge of whether there should not be more trust in the system. We have a question of mis-selling, which I will address in my final remarks, but should households not be able to trust the installer phoning them up to offer what could be a valuable addition to their homes? We conducted a review called “Each Home Counts”, and one of its key recommendations was for an independent, all-encompassing mark of quality for both installation and customer service that consumers can rely on and trust. We will launch a more robust, Government-endorsed quality scheme through TrustMark.

[Jamie Stone]

This is a side issue to what I said earlier. Given what the Minister just said, there may be some evidence that wood pellet boilers are being proposed for households—particularly for the elderly—where that may not be the most suitable form of heating. I have heard stories of pensioners going out in the snow to shovel wood pellets.

[Claire Perry]

The hon. Gentleman raises an important question, and because of the changes to the renewable heat incentive, which were a driver for many domestic wood pellet installations, such things will no longer be supported. I agree, however, that we had a shortage of domestic pellets for much of the winter, and in my region we have a shortage of engineers to service those boilers. I do not suggest that people should rip those boilers out, because they play a valuable part and are supported historically under the RHI, but in future I would like homes in rural areas that are off the gas grid to be supported with things such as heat pumps and other technologies that are far less complicated and costly. That is part of the change that we are hoping to make to the RHI scheme and the energy compliance obligation going forward.

Let me return to the question of trust. We plan for all Government schemes such as the ECO to require installers to deliver those TrustMark standards. That will help drive out rogue traders—the hon. Gentleman is right to say that some traders claim falsely to be part of the Government’s scheme, when they are no such thing—and we will strongly support such measures, and encourage consumers to use only reputable traders. Consumers should be certain when they see a brand that they are dealing with a company that has the right technical competencies and is committed to customer service and the customer for the long term. The Consumer Protection Partnership has identified energy efficiency measures as a priority area, and it will be taking forward work to see how consumer detriment can be reduced in that area.

The hon. Gentleman raised other important points, which I do not feel qualified to answer, regarding the whole challenge of consumer mis-selling over the phone—that has now switched to mobile phones, since many of us decided never to answer our landlines to an unidentified number. He raised the question of rights for consumers under existing contract law, and my fellow Ministers have done good work in this area. I am afraid I am not prepared to give the hon. Gentleman the details, but I will write to him as a third action point to set those out, so he can be sure that the question of telephone mis-selling and consumer protection is being addressed.

I hope that that partially answers some of the hon. Gentleman’s excellent suggestions about independent bodies, local involvement, an accreditation system and cooling-off points. I have set out a number of actions for my team to follow up, and I thank the hon. Gentleman and the hon. Member for North Ayrshire and Arran for raising such important points on behalf of their constituents.

Question put and agreed to.

Shale Gas Exploration: Planning Permission

Claire Perry Excerpts

Wednesday 12th September 2018 Westminster Hall

[The Minister for Energy and Clean Growth (Claire Perry)]

It is a pleasure to serve under your chairmanship, Mr Howarth, and to see so many engaged colleagues in the Chamber. I remain grateful to my hon. Friend the Member for North East Derbyshire (Lee Rowley), whom I have met on many occasions to discuss at length his facts versus other facts. I will continue to engage with all Members; as they know, my door is always open to discuss any issue relating to energy policy.

As all Members know, given Ministers’ quasi-judicial role in the planning system, I am not at liberty to comment on any particular applications or any local mineral plans.

[Tim Farron (Westmorland and Lonsdale) (LD)]

Will the Minister give way on that point?

[Claire Perry]

I will make a little progress and then I will happily give way. To be clear, Government Members stood on clear manifesto commitments to develop a shale industry in this country and to bring forward proposals to review permitted development rights and the NSIP regime. We put together an extensive, long-running consultation so that all views, which are profoundly held on both sides, had an opportunity to be expressed.

[Several hon. Members rose—]

[Claire Perry]

As I said, I will make a little progress and then I will give way. I welcome a longer debate on this issue because I am a passionate advocate of convincing people of the scientific evidence for climate change. Everything that my Department has done has been based on scientific evidence. I find it profoundly disturbing that, when it comes to exploring the potential of an industry, we refuse to accept the science. I have met—[Interruption.] I am not giving way.

[Mr George Howarth (in the Chair)]

Order. If the Minister chooses to give way, she will do so. In the meantime, Members need to behave with a little bit of decorum.

[Claire Perry]

Thank you, Mr Howarth. Decorum is always the watchword.

I have met, and continue to engage with, many of the scientists who have put out studies relating to fugitive methane emissions and the seismicity question, which is of course concerning. I find when talking to those scientists that, behind that, they have a fundamental aversion to using any form of fossil fuel. Indeed, the briefing that many Members received today, and which I have seen, says that fossil fuels should stay in the ground.

[Caroline Lucas (Brighton, Pavilion) (Green)]

Indeed.

[Claire Perry]

When the hon. Lady goes home and turns on her energy supply to cook her children’s tea, she will probably turn on—

[Caroline Lucas]

I have a solar panel.

[Claire Perry]

She says she has a solar panel. [Interruption.] Can I please make some progress? Some 70% of homes in this country— maybe more—rely on gas to cook children’s teas. We also rely on gas for a substantial proportion of our energy supply. We have a choice: we can continue to import increasing amounts of foreign gas and effectively be at the behest of other nations that do not share our interests, or we can soberly, calmly and scientifically assess whether we can develop the shale gas industry.

I refer all Members to our superb Committee on Climate Change, which will tell them that, in every single scenario for reaching our carbon dioxide reduction targets, gas is in the mix. I am happy to debate the safety and responsibility of the industry in terms of doing that correctly, but I will not set this country’s energy policy based on an ideology premised on using 100% renewables now, which cannot be delivered at the right price. If Members accept that—[Interruption.] No, I will not give way; I will respond to the points from my hon. Friend the Member for North East Derbyshire.

Members will have received data today suggesting that the vast majority of the British public are opposed to shale gas exploration. That is not true. The data suggest that 13% of people strongly oppose it, almost 50% of people do not have a view, 15% support it and 2% strongly support it. Most people do not have a view on this because they understand that being at the behest of a foreign gas provider is probably not great for British energy sovereignty. Many coalmining communities also understand the value of high-value jobs and economic investment in their areas. That is why I urge all Members—[Interruption.] I am not giving way.

[Mr George Howarth (in the Chair)]

Order. The Minister has indicated that she will not give way, certainly for the time being. Members standing up and asking her to do so after she has said she will not does not make a lot of sense. Perhaps she will indicate at some point if she is willing to take interventions.

[Claire Perry]

I will move on to the substance of the debate and respond to the points from my hon. Friend the Member for North East Derbyshire on the decision-making process.

It is in no one’s interest—in Government, in local government or in a community—for the planning process to be where it is today. We are stuck in a morass of protest and countervailing information. Frankly, I pity any local councillor who gets an application on their desk, because they will shortly have a travelling circus of protestors to deal with, most of whom do not hail from the areas where these sites are located. We then have policing issues and protestors blocking roads and preventing young children from getting to hospital. That is an entirely unacceptable way to express democracy in our country. [Interruption.] I will certainly not give way to the hon. Member for Brighton, Pavilion (Caroline Lucas) at any point.

[Mr Skinner]

What about me then?

[Claire Perry]

I will certainly not give way to the hon. Gentleman.

As set out in our manifesto, we intend to consult on what can be done to the planning process. As well as looking at moving production rights into a national regime, as we have done for other complicated energy sources, we have considerably increased the level of support for local authorities and local decision makers. We have set up training; we have provided funding. I will shortly appoint a shale gas commissioner, who will have deep and extensive constituency knowledge of the issue and will be out there, helping local residents to understand some of the challenges that exist. To put the myth-buster in place again, we are not overriding local decision making; there are plenty of opportunities for decision makers to express their views in the pre-consultation stage, as is done for other complicated and difficult energy policies.

There is another myth I want to bust, after which I will be happy to take some interventions. Some talk as if we are not in a country that prides itself on environmental regulation, but we have the strongest environmental regulatory regime for offshore oil and gas production in the world. I find it perverse that political parties north of the border promote offshore oil and gas and those regulatory controls with gusto, but when it comes to applying exactly the same—indeed, more rigorous—regulatory standards onshore, those parties suddenly turn a blind eye to energy sovereignty and cheap sources of fuel that are entirely consistent with Britain’s global low-carbon leadership. We will not have energy policy in this country set by politics and ideology; we will deliver cheap energy, low-carbon energy, and energy that is consistent with energy sovereignty.

[Several hon. Members rose—]

[Claire Perry]

I will happily take an intervention from my hon. Friend the Member for North East Derbyshire.

[Lee Rowley]

I am disappointed by the Minister’s response so far. I put on the table some clear views about planning, but she has spent the first eight minutes of her speech not talking about planning. The reality is that people need to be heard, and people are not being heard with this speech.

[Claire Perry]

I am sorry, but I did begin by saying to my hon. Friend that I could not comment on individual planning applications. The purpose of the consultation is to get as many views as possible, particularly from those who are engaged in the planning process, about what the rights should look like. The floor is open for my hon. Friend to express his views, and all the things he has said today will be fed into the consultations.

[Ruth George (High Peak) (Lab)]

A vast majority of respondents to the consultation on the national planning policy framework were opposed to fracking, as the Government’s own response set out, yet you are going ahead regardless. How can anyone have faith in any consultation process that this Government launch on fracking?

[Mr George Howarth (in the Chair)]

Order. Before the Minister resumes, the hon. Lady has said that I am going ahead, but I am not—the Minister is.

[Claire Perry]

You are a master of restraint as always, Mr Howarth. The hon. Lady has been in politics for a while, and she will know, as we all do, the click-and-paste nature of so many responses to consultations.

[Ruth George]

indicated dissent.

[Claire Perry]

The hon. Lady shakes her head, but she should check the number of responses she will get. As I have set out, based on the public polling data, the vast majority of people do not have a particular view on this issue. Many people understand, especially after the “beast from the east” and the Salisbury poisoning, that being reliant on foreign energy sources is not a great place for us. If the hon. Lady shares my faith in the Committee on Climate Change and its view that gas is an important part of a low-carbon future, she will know that many responses come from organisations that are profoundly opposed to ever burning a molecule of fossil fuel. That is not a sensible place for our energy policy to be in.

[Stephanie Peacock (Barnsley East) (Lab)]

The constituency I represent has a history of coalmining; it once powered a nation. However, the people I represent do not think that fracking is an alternative to a meaningful industrial strategy. Why should my constituents be asked to take a huge leap of faith on behalf of fracking companies?

[Claire Perry]

I am sure that the hon. Lady engages extensively with her constituents. I spend a lot of time talking to communities, and to the representatives of former coalmining communities. In many cases, they are convinced that shale gas exploration could bring high-value jobs and economic development safely to parts of the country that have been left behind by successive Governments.

[Alec Shelbrooke (Elmet and Rothwell) (Con)]

I will expand on comments made by the right hon. Member for Rother Valley (Sir Kevin Barron). My constituency is an area that can be fracked, and has a rich history of mining, especially in the village of Allerton Bywater. Because that history of mining is so long, there are many unmapped mine shafts and mine workings in the area, and a great many of my constituents are gravely concerned that, with the injection of water and the other things that are going on, there is a real possibility of geological movement and sinkholes. We are talking about a planning issue, and it is vital that the Minister hears on behalf of my constituents that the situation of communities varies hugely. Where there are former mine workings, there are real concerns about the geological impact of so many unmapped mine shafts.

[Claire Perry]

My hon. Friend is absolutely right to point out the complexity of the geology. He is absolutely right that local geological knowledge and seismic management and measurement are, and will remain, a vital part of any exploration or production site. However, many of his constituents will have been told that there are massive seismic risks from any form of shale gas exploration. In fact, our environmental standards are so tight that if there is a seismic tremor less than that brought about by the rollercoaster on Blackpool seafront, that well process—

[Gordon Marsden (Blackpool South) (Lab)]

Come on.

[Claire Perry]

It happens to be true: the well process will have to be paused. I refer back to the fact that we have the toughest environmental standards for oil and gas extraction in the world. Other countries are coming to us and saying, “Could we use those standards, because we also recognise the opportunity presented by shale gas extraction?” Frankly, if anyone in this room believes that the UK, with its proud history of environmental regulation, would want to do anything to endanger its green and pleasant lands, they need to go away and have a nice cold drink.

[Mark Menzies]

As I have said, I have been working on this for eight years, and the Minister is absolutely right to highlight some of the progress that has been made, such as the traffic light system. I urge her to listen to the concerns of Members about permitted development and planning changes. I urge the Government to work with us in a constructive way to address those concerns, as they have in the past.

[Claire Perry]

I thank my hon. Friend for his measured approach. He is looking at these developments in his constituency and working very closely with his local communities. He is absolutely right, which is why we have launched an extensive, extended consultation to ensure that we hear from as many people as possible.

[Jim Shannon (Strangford) (DUP)]

I thank the Minister for her comments. It is quite clear that we need to be assured of what steps the Minister and her Department will take, and what criteria will be in place, to ensure safety is paramount. When doing shale gas investigation or mining in former mining areas, safety has to be paramount. Can the Minister give an assurance that it will be?

[Claire Perry]

The hon. Gentleman is quite right; that is why our environmental regulatory regime is already the best in the world. Colleagues will see from various write-rounds that we are bringing together the regulators to form one virtual regulator, so there can be no doubt about what regulatory matters apply to which communities.

[Nick Herbert (Arundel and South Downs) (Con)]

I accept that there is tight regulation on below-the-ground issues, but, above the ground, planning permission is currently required for non-conventional drilling. That will not happen if there is permitted development, and the ability of local authorities to regulate lorry movements, for instance, will be taken away. There is huge concern about that, and I invite the Minister to look again at the proposals, because I do not believe there is a parliamentary majority for them.

[Claire Perry]

I will always accept my right hon. Friend’s advice on these points.

[James Frith (Bury North) (Lab)]

Will the Minister give way?

[Claire Perry]

I will give way shortly. I want to assure my right hon. Friend the Member for Arundel and South Downs (Nick Herbert) that the challenges presented by waste water and traffic movements are driving innovation and investment in the industry. The industry is working with the National Physical Laboratory to innovate, to reduce those challenges and to create something that we can export to other countries that are desperate to improve.

[Several hon. Members rose—]

[Claire Perry]

I promised to give way to the hon. Member for Bury North (James Frith).

[James Frith]

Thank you, Minister; you have been very generous with your time. To me, this strikes at the heart of a community’s ability to determine its future. Local democracy is undermined if Whitehall is seen to be undermining it with a consultation that, in the case of Bury, ignores votes that have already taken place about whether we want fracking in our town. We determine the investment; we determine the plans for jobs and homes interpreted by Government targets; and we have already rejected the Government’s plans for fracking. Will the Minister take seriously the voice of the people on this issue?

[Claire Perry]

There has been an unprecedented level of decentralisation of decision making under this Government. The hon. Gentleman referred to homes and business involvement; all of those issues are being devolved.

The challenge in this space remains that there are far too many people shouting fact-free nonsense about the process. I was at the conference of the parties in Germany last year. Germany has turned its back on nuclear power—a policy that some in this Chamber agree with—and as a result, its emissions are going up as it burns more coal. That is a country in hock to ideology. In this country, we make energy policy to drive down our emissions, keep costs down for consumers, and create a competitive advantage and energy sovereignty. That is why we are going through the process of consultation.

Motion lapsed (Standing Order No. 10(6)).