Energy Efficiency and the Clean Growth Strategy

Drew Hendry Excerpts

Thursday 8th March 2018 Westminster Hall

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

It is a pleasure to serve under your chairmanship, Mr Walker. We should all be friends in this Chamber today. I warmly welcome the fact that the hon. Member for Eddisbury (Antoinette Sandbach) has initiated this important and overdue debate. It is something of a scandal that the subject has not been debated for so many years. In this warm debate, I will give the Minister only a couple of bits of heat, which have actually been generated by the contributions of others, while I try to go through the constructive discussion we have had.

First, the hon. Member for Eddisbury rightly raised the issue of fuel poverty. She talked about the fact that this is an issue for many people, particularly in rural areas where lower incomes are more common and costs are higher. The weather is often less favourable and less warm. That is especially true for off-grid customers. In the highlands and islands, distribution charges mean 4p per unit more for customers than other parts of the UK, which is a particular additional problem. I call on the UK Government, as we have called on Ofgem and energy companies, to end this inequality without—importantly—increasing the cost for others: it can and should be done.

The hon. Lady also mentioned energy efficiency and the massive strides that need to be taken towards climate change goals. I was interested in her proposition about mortgage providers providing an incentive. That merits investigation, but I would insert a word of caution there. The measures used would have to be carefully thought out, because we do not want to see the unintended consequence that people who are trying to get on the housing ladder and get their first home are effectively priced out of the market by measures that may not be appropriate for their area and its housing stock. It is worth investigating, but I urge some caution.

The hon. Lady was quite right in saying that the onus should be on new developments to provide more efficient properties. Developers should take that up. I was caught by her comment that she was shivering in her home in London. I think it is quite unusual for people in London to find themselves shivering in their houses. When I was down in my flat last week, although we benefit from a district heating scheme, the insulation is so bad that it was actually very cold in the flat, because the heat was flying out of the windows. That is a good example of what happens. Is it not also the case, however, that that gives us an insight into what people in fuel poverty have to put up with throughout pretty much the whole of the winter? It is a good lesson for us to take away: we should be aware of the genuine suffering that people face through cold.

The hon. Lady, in her very good speech, said that energy efficiency measures should be thought of as infrastructure. I think that is a good idea, which is overdue for consideration. The Minister should take that into account, particularly in the light of the great heat challenge that we will have in the coming decades. It is an important suggestion, which should be taken forward. Of course, investment in energy efficiency creates jobs. That is a great thing to do not only socially and morally but for the economy. I think that is an important point to make.

The hon. Member for Redcar (Anna Turley) talked about not being able to meet emissions targets without taking on the industrial effects, and she was absolutely correct. Industrial decarbonisation has to be accelerated. The whole strategy needs to be given a lot more—if Members will pardon the pun—energy, and the attention that it needs.

The hon. Lady quite rightly talked about carbon capture and storage, and about the Teesside Collective and the investment that is required. She should be commended for fighting for her constituency in that way, particularly given the issues over steel. Happily, in Scotland we were able to save the steel industry, with the Scottish Government working with Liberty Steel to take over the plants in Lanarkshire. It dramatically affects the wellbeing of industrial neighbourhoods if they lose that significant number of jobs, and they should be prioritised for reinvestment. However, we should be wary—this is one of the points of contention with the Minister—of promises of investment in carbon capture, because in Peterhead the Chancellor said that we would invest £1 billion in carbon capture and storage, but the rug was pulled away from underneath that project and it was left without that funding. It will be interesting to see the Minister not only make those commitments but follow through on commitments for the different projects. I will return to that point when I respond to the comments made by the hon. Member for Ochil and South Perthshire (Luke Graham).

The hon. Member for Redcar talked about district heating, which has to come through far more importantly and strongly to support communities. There are great benefits to district heating schemes if they are got right. She and the hon. Member for Wells (James Heappey) also talked about renewable energy, which is very important in both industrial and domestic energy in taking the challenge forward.

Another bone of contention that I have with the Minister —perhaps she will tell us what she will do about it—is the shabby treatment of the solar industry. Energy efficiency in commercial and industrial properties could have been greatly enhanced by supporting the solar industry, yet Government policy has withdrawn that support. Investments in new solar projects have dramatically declined—they have fallen off the scale—so I hope that the Minister will have an answer on how it can be supported.

Heeps—sorry, the hon. Member for Wells—said that big infrastructure was “toys for boys”. On International Women’s Day, it is worth pausing to reflect on that and say to the Minister, as I and others have before, that we need to encourage more girls and young women into the energy industry so that, large, small or however the infrastructure is designed, it is no longer “toys for boys” but “toys for boys and girls”. It is important we continue to challenge the language that we use, although I know that was meant in the best possible way.

The hon. Gentleman also discussed whether the domestic supply was near to crisis. I know the Minister answered that point; but I will pose the slight warning that, owing to capacity, people in off-grid areas came perilously close to running out. Some in my constituency of Inverness, Nairn, Badenoch and Strathspey actually did run out of liquefied petroleum gas during that period. It was not job done. I appreciate what the Minister said, but there needs to be more focus on off-grid gas customers to ensure that we support them. I would welcome a comment on that either now or later.

[Claire Perry]

The hon. Gentleman and I, and I suspect others in the Chamber, share exactly the same off-grid problem. It is a problem of effective supply. At the moment, heating oil is relatively cheap, but a couple of years ago the price was going through the roof, so we end up with unmanageable spikes in demand, although we have many collective buying schemes. He knows that one of the ambitions of the clean growth strategy is to phase out fossil fuel heating for new build in off-grid areas—it is simply ridiculous that we continue to put oil boilers in—and to look at how we create a cost-effective technological pathway. My hon. Friend the Member for Eddisbury (Antoinette Sandbach) has installed a heat pump, which, as she mentioned, can require a lot of reworking of a home, which may not be cost-effective. We are all collectively determined to solve this problem. To me, the answer lies in investment, innovation and creating some good routes to market.

[Drew Hendry]

I thank the Minister for that intervention. I understand that she wants to create solutions, but the proof will be in the pudding. I look forward to seeing what tangible measures come forward.

The hon. Member for Wells also talked about comfortable homes improving productivity. It is absolutely true. Studies have shown that in cold homes, children’s educational attainment is held back. He is right to point out that people are more productive when they have reasonable places to live in, and we give our children the best possible start in life when we give them warm homes to live in and have their education in.

The hon. Gentleman made very salient points, which I was delighted to hear. The voucher scheme for fuel-poor households is a really good thing to follow up—it is another idea that has merit and deserves further investigation. If something could be produced on that level, it could help a number of people and, as he said, improve housing stock. A measure that could improve things right away is the rapid acceleration of the programme to put the latest generation of smart meters into homes. A lot more needs to be put in to ensure that that happens much more quickly.

[James Heappey]

The key to getting smart meters into people’s homes is not only that the technology will allow all sorts of smart solutions that will bring down energy bills for people who are using less, but that the new tariffs being brought forward by the insurgent energy companies and based around half-hourly settlement will allow people to access cheaper bills because they will be in a better market. The more that we can all, on both sides of the House, encourage smart meter deployment, the better job we will be doing for our constituents.

[Drew Hendry]

The hon. Gentleman makes a very salient point. It is important that we encourage these measures, especially for people living in poor households, because they are less likely to take this up off their own backs. A focused programme and looking at how we incentivise this rapid uptake for poor households is very important.

[Steve McCabe]

I agree with the hon. Gentleman and others about the potential of the smart meter programme. Does he concede that at the moment the problem is that it costs households? They do not know how much it is costing them, because the Government will not release those figures, and we do not know how much the Data Communications Company is costing. At the moment, while the potential is there, we have a programme that looks as though it is not on track and could lead to an inflation of energy bills, rather than savings for people.

[Drew Hendry]

That is something to be aware of. I thank the hon. Gentleman for raising that point and look forward to the Minister’s response.

The hon. Gentleman mentioned home insulation, which must be taken forward much more rapidly—I know I am using that word a lot today, but it is important because this is somewhere where we can make a real difference very quickly. In Scotland, as he pointed out, there is four times the progress on insulation. I make that point because it is important to thank the people, in particular in organisations such as Warmer Homes Scotland, who have been on the ground, working with consumers and making the breakthroughs by talking to people and persuading them to take on the new measures. If any hon. Member in the Chamber or anyone else wants to look at that, they will see the fantastic work being done.

[Luke Graham]

The Warmer Homes scheme was a fantastic initiative. I know that some of the terms changed in 2017 because a number of constituency cases were brought to me, with people sometimes being disadvantaged. Will the hon. Gentleman join me in working on addressing some of those issues to ensure we are still reaching as many people as we can?

[Drew Hendry]

I will come in a moment or two to what the Scottish Government are doing.

The hon. Member for Birmingham, Selly Oak (Steve McCabe) talked about energy efficiency schemes, and in Scotland some of those are changing the housing landscape. I want to point out one of the commercial companies, a private developer from the north of Scotland: Springfield Properties. It is not only looking at more energy efficiency measures in its buildings, but in Perthshire, where it has a new development of thousands of homes, it is putting in electric vehicle charging points for every single house. That is a very innovative thing for a private developer to be doing, adding to the fact that Scotland is leading the way in electric charging for vehicles.

[James Heappey]

The hon. Gentleman is making another important point. At the moment, when new houses are built in England, I think they are being built with 2 kV or 3 kV fuse boards, but an EV requires an 11 kV fuse board. I do not understand why we are building hundreds of thousands of houses with electrical connectivity that is insufficient to charge at full flow cars that are very likely to dominate the market in future. I hope that our friends at the Ministry of Housing, Communities and Local Government will amend that part of housing policy quickly.

--- Later in debate ---

[Drew Hendry]

The hon. Gentleman makes a good point, and I share his hope that people are listening to the need to adjust those things. To achieve the outcome of improving homes, making them ready for the future through energy efficiency and tackling the clean growth challenge, it is important to take a holistic view.

I agree with the hon. Member for Birmingham, Selly Oak about introducing grants, loans and measures to help people to gain energy efficiency but, again, it is always good to look at those kinds of ideas with real caution. His talk about an equity release scheme should give us pause for thought about its unintended consequences. It is a good idea that merits investigation, but we need to reflect on whether it is a position that only people with assets could access and whether we would be forcing people to release those assets, instead of promoting it as a core policy across the board.

I hoped that I would not have any heat from the hon. Member for Ochil and South Perthshire, as is usual in exchanges between near-neighbours in Scotland, but he bravely brought up the carbon capture and storage challenge. I will not repeat my words to the Minister earlier, but in a positive sense, I ask her whether she will support the Scottish Government’s commitment to developing carbon capture in St Fergus. What will she do to put real weight behind that Acorn project?

My cheeky word of caution, which is in fact not cheeky but factual, is that in the vast majority of city deals in Scotland, the UK Government have failed to match the Scottish Government’s funding. If a city deal comes forward, I hope the hon. Gentleman’s constituency gets its fair share, unlike Aberdeen and Inverness.

[Claire Perry]

The hon. Gentleman and I debate Acorn and St Fergus frequently. I will double-check the numbers, but my understanding is that the UK Government have put in £1.6 million and the Scottish Government have committed a welcome £100,000. We are absolutely keen to support those projects and we continue to be a major investor in all sorts of levels of carbon capture and storage; I will address CCS and its future in my closing remarks. I will double-check those numbers and write to him, but I am confident that we have already committed several multiples of what the Scottish Government have to that project—and quite rightly.

[Mr Charles Walker (in the Chair)]

We are all looking forward to the Minister’s closing remarks.

[Drew Hendry]

I have not even got to the bulk of my speech, but I will try to speed up. I was getting to the end of my responses to hon. Members’ comments, which I was certain we had time for.

I will finish on a positive remark about the comments made by the hon. Member for Ochil and South Perthshire. I am pleased to say that geothermal investigation has been embraced around the Chamber. I am sure that he will support the delivery of the Scottish Government’s ambition for accelerated clean growth in Scotland.

To aid the debate, I will cast aside some of my notes. As we have heard in this debate, much more needs to be done on energy efficiency. In my meetings with energy companies and climate change activists, they all agree on one principle: not enough is done for energy efficiency in our homes and businesses across the nations of the UK. Old housing stock is part of that huge challenge.

On new housing stock, I was struck by the comments in an intervention about new heating systems and new ways of looking after buildings that can reduce costs for people. When I was the leader of the Highland Council, I was pleased to be involved in a Highland housing fair, which adopted a housing development model from Finland. Some houses on that scheme were so innovative that it was reckoned that they would have average energy costs of about £2 per year, so it can be done with the right will. They have been sold now, so someone who wanted to see them would probably have to knock on the householder’s door. It was a good project, and the Minister might want to consider more innovation like that.

I will skip a page of my notes. We welcome the industrial energy efficiency accelerator, but we look for more detail from the Minister. We want to see how that will move forward.

My conclusion will not be too lengthy, but I will touch on some things that are happening in Scotland. Energy efficiency has been mentioned several times; it is fundamental to Scotland’s meeting its ambitious climate change targets. The Scottish energy efficiency programme route map—I am sorry to tell the hon. Member for Wells that its name is now SEEP rather than HEEPS—will be published in May 2018.

Last December, the Scottish Government published their energy strategy, which will strengthen the development of local energy projects, empower customers and support Scotland’s climate change ambitions, while tackling poor energy provision. Our ambition to improve the energy efficiency of Scotland’s buildings is central to our efforts to tackle fuel poverty.

On 28 February, the Scottish Government’s Cabinet Secretary for the Environment, Climate Change and Land Reform published the “Climate Change Plan, Third Report on Proposals and Policies 2018-2032”, which details how the Scottish Government will meet their emissions target of 80% by 2032. With the Climate Change Bill, Scotland is sending a message that it is the place to do low-carbon business, which seems to be endorsed around the Chamber.

Energy efficiency is fundamental to Scotland. Heating and cooling Scotland’s homes and businesses costs £2.6 billion a year, and accounts for just under half the country’s greenhouse gas emissions. In June 2015, the Scottish Government announced that they would take long-term action to reduce the energy demand of residential services and industrial sectors by designating energy efficiency as a national infrastructure priority. Again, something that has been called for in the debate has already been done in Scotland. That was subsequently confirmed in the Scottish Government’s “Infrastructure Investment Plan 2015”.

Would you believe, Mr Walker, that I am going to cut my remarks considerably short? I wanted to go into a lot more detail about what is happening in Scotland, but given the response in the Chamber today, there is plenty of incentive for the Minister to look at that in detail.

As the Member for Inverness, Nairn, Badenoch and Strathspey, it would be remiss of me not to mention a wonderful development: the Scottish Government’s dualling of the A9 between Perth and Inverness. The A9 is set to become the world’s—well, Scotland’s—electric highway because of the Scottish Government’s investment in ensuring that it has rapid charging points all the way along. It will be a real boon for the electric vehicle proposition in Scotland, and it is just the start of much more work that will be done there.

The debate has been very constructive, and I thank the hon. Member for Eddisbury for introducing it. There is still an awful lot of work to be done, but hopefully the debate has given the Minister a bag full of ideas to take forward and develop in future.