Feed-in Tariffs Scheme
Debate between Joan Ruddock and Lord Barker of Battle
Gregory Barker
My hon. Friend is, once again, absolutely right. We have taken the scheme from one that was for the lucky few who were able to afford high-cost installations to one that helps to encourage reductions in the cost of solar installation, and offers a sensible reward for people to do the right thing through well sited installations. It has gone from being a scheme for the few to a scheme for the many.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
When we were in government, the hon. Gentleman was always boasting that he would go further and faster, but actually he fell at the first hurdle. He talks about the gloom and doom among the Opposition, but we are simply representing the people who have lost their jobs, the companies that have gone to the wall and those who have had to take legal cases against the Government. Will the Minister tell me his view on the future of the social housing sector, given the information from the National Housing Federation that he received in the consultation?
Gregory Barker
Yes. I think the right hon. Lady will find there a strong welcome from social housing for the proposals we have set out. We are increasing the level of aggregated tariff from 80% to 90%. As the costs come down, it becomes affordable for all consumers to support the roll-out of solar PV on social housing and other mixed-tenure low-income homes. The scheme can now be rolled out at real scale, unlike the cottage-industry, not-fit-for-purpose scheme that we inherited from Labour.
Oral Answers to Questions
Debate between Joan Ruddock and Lord Barker of Battle
Gregory Barker
Absolutely. I know that my hon. Friend is a terrific advocate for Hastings, and I can assure her that social housing will be among the first to benefit from the green deal revolution. Dedicated funding within the £1.3 billion of energy company obligation subsidy will be focused on the most deprived areas of the country, so I would expect areas such as Hastings to be among the first to see the benefits. With her as its MP, I am sure it will.
Dame Joan Ruddock (Lewisham, Deptford) (Lab)
Will the Minister explain what happened to the 30,000 people who applied for help through Warm Front last year? Despite an underspend, they did not get anything. Will he apologise to them for having to wait for this much heralded green deal and will it actually be delivered to the very poorest? I doubt it.
Gregory Barker
I am pleased to say that since I became Minister in the right hon. Lady’s place, the number of complaints about Warm Front has reduced substantially. She will know that there was a massive complaint bag about Warm Front while she was in office. We have not seen that since I entered office. Of course we will continue to run Warm Front though next year. It remains part of a suite of measures to tackle fuel poverty, and we remain committed to doing much more.
Feed-in Tariffs
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Gregory Barker
This is saving money rather than knocking money off the bill, but I can assure my right hon. Friend that we are absolutely determined to ensure that green policies deliver real value for money. Unlike the Opposition, we are engaged not in some sort of illusion of green never-never land, but in the realities of what will deliver savings to consumers now, and real green jobs and growth. It is that rather than wishful thinking that informs our policy making.
Joan Ruddock (Lewisham, Deptford) (Lab)
What are the implications for housing associations, such as Peabody, which by providing solar energy in my constituency is helping the very poorest in the country to cut their energy bills?
Gregory Barker
That will depend on the assumptions that the housing association has made of the rate of return that it will get. If it worked on the basis of the rate of return that was originally intended for the scheme when the right hon. Lady was in the Department—that is, around 5%—it will have absolutely no problem in going forward. If it has based the rate of return on the inflated rate that we have seen this year as a result of the dramatic fall in prices—conservative estimates are that the fall in costs is 30%, but others, such as Bloomberg, say that it is up to 70%—and if it is assuming a double-digit rate of return, it will struggle to finance the scheme.
However, I would say to the right hon. Lady, who I know is committed to this agenda, that we must see this stage of feed-in tariffs as building the foundations of a decentralised system that includes a large element of solar. However, even given the high costs of solar, at 21p it will attract the highest level of any subsidy of mainstream technologies. At that level, we cannot simply give an open cheque for unfettered deployment.
Oral Answers to Questions
Debate between Joan Ruddock and Lord Barker of Battle
Joan Ruddock (Lewisham, Deptford) (Lab)
Despite my best endeavours when I was in the Minister’s job, Londoners received only 5% of the insulation jobs and of the carbon emissions reduction target, even though they make up 15% of the population of England. Will the Minister now introduce a regional obligation on energy companies so that Londoners get a green deal and not a raw deal?
Gregory Barker
The right hon. Lady is right. Unfortunately, the programmes we had under the previous Government were ineffective, particularly in London. We are transforming that with the green deal and the energy company obligation and we shall certainly ensure that the roll-out of energy efficiency measures under the coalition is much fairer and much more ambitious than we saw under the previous Government.
Oral Answers to Questions
Debate between Joan Ruddock and Lord Barker of Battle(14 years, 3 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
I thank my hon. Friend for his interest in this vital technology. As my right hon. Friend the Secretary of State said, we are absolutely committed to driving forward CCS. I can inform him that it is one of the two schemes that are in that particular competition.
Joan Ruddock (Lewisham, Deptford) (Lab)
The Secretary of State this morning said that he was strongly committed to renewable heat, but last week the independent Committee on Climate Change wrote to him to say that uncertainty about the renewable heat incentive means that “projects are not progressing”. Yesterday, in evidence to the Select Committee, he said that he had simply forgotten the renewable heat incentive when drawing up the coalition agreement. Does the Minister not realise that certainty about the renewable heat incentive is essential in meeting the need for the creation of jobs and investment in industry and, indeed, is crucial in reducing the deficit?
Gregory Barker
I have to say that when we came into office this Government were not only shocked by the state of the public finances but appalled at the lack of preparation for the renewable heat incentive, which left a great deal of work to be done by the new Administration. We will not be able to make an announcement about the RHI until we have had the comprehensive spending review, but I can assure the right hon. Lady that renewable heat is very important to this Government and that we will continue to support the industry.
Joan Ruddock
As this is my last appearance at the Dispatch Box, perhaps I can share a secret with the hon. Gentleman. That is, of course, that the Treasury will always be opposed to mechanisms such as the renewable heat incentive. Will he and his colleagues tell us this morning that they are fighting tooth and nail to get the incentive introduced as planned next April? We convinced the Treasury that that made sense for jobs, for investment and for growth—will he do the same?
Energy Efficiency
Debate between Joan Ruddock and Lord Barker of Battle(14 years, 5 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
The hon. Gentleman is right to say that some very exciting developments are taking place in lighting, not the least of which will be light-emitting diode—LED—technology in the longer term. However, we must be brutal and realistic in the use of CERT; we must opt for the most effective, most value-for-money carbon abatement schemes. That means opting for loft insulation, because any exercise that one chooses to undertake shows that key insulation delivered to our constituents’ homes offers the best value for money and the best use in terms of carbon abatement. We have to be far more focused on that. I checked how many light bulbs had been distributed as a result of the previous CERT scheme and I found that the answer was a phenomenal number. This begs the old question of how many light bulbs it takes to change a Labour Government—the answer turned out to be 262 million.
Joan Ruddock (Lewisham, Deptford) (Lab)
A vast number of light bulbs were sent out, but does the Minister deny that that was an appropriate action to take at a time when the low-energy light bulbs on the supermarket shelves were far more expensive than ordinary light bulbs and consumers were very resistant to change? We encountered all forms of resistance but, despite that, by sending those low-energy light bulbs out we got them into people’s homes, which saved people money and saved energy and carbon emissions.
Gregory Barker
The right hon. Lady is right and, of course, this is not a black and white issue. However, the bottom line is that if one has a finite pot of money to spend, light bulbs do not represent the most efficient way to save energy or carbon. As she knows, the most efficient way of doing that is to insulate, particularly given that we need to do so much more for the fuel-poor and there is so much more that we need to do overall. We must be focused, given the finite pot of money available. I do, however, take her point.
Joan Ruddock (Lewisham, Deptford) (Lab)
I begin by welcoming the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), to his new position. I am sure that he will find it as stimulating and rewarding as I did.
This debate is entitled “Progress and Prospects in Energy Efficiency”, and I am delighted to have the opportunity to record the very considerable progress made by the Labour Government over the past 13 years. Today, the Minister of State announced his plans for the carbon emissions reductions target scheme, but I have to remind the House that I announced in 2009 that there would be an extension of the scheme to 2012. I also announced that the new scheme would have an insulation minimum, and that there would be a super-priority group that would receive benefits from the scheme. I also announced that there would be an end to fluorescent bulbs—so I congratulate the Minister on following through on all the things that I said would happen a year ago.
I am glad that the Minister intends to lay the statutory instrument as soon as possible. It was, of course, the advent of a general election that made it impossible for the previous Government to proceed with that. Overall, however, he is of course fortunate to have such a good framework on which to lay his future plans, and I am grateful to him for the acknowledgment that he just gave. Labour’s Climate Change Act 2008 led the world in establishing the first national legal limits on greenhouse gas emissions, and I share the Minister’s pleasure at the fact that it finally achieved an all-party consensus.
Energy efficiency is central to addressing both climate change and energy security. That is why, in September 2008, we announced the home energy saving programme, a package worth £1 billion. We did so, of course, for exactly the reasons that the hon. Gentleman has outlined. There is no disputing the failure to build well-insulated homes in this country, but at no time was the situation worse than under the previous Conservative Government, when Mrs Thatcher’s ban on council house building drove people who could not afford to buy into decrepit private sector housing with the lowest possible insulation standards. I regret to say that history is about to repeat itself, with housing benefit changes certain to drive already poor standards down further. Will the Minister regulate private landlords, as we planned to do, to ensure that privately rented accommodation is properly insulated?
In 1999, we inherited a £19 billion backlog of repairs to public housing. No such legacy exists today. Our decent homes standard has resulted in 95% of England’s social housing stock reaching decent homes standard, with considerable improvements in energy efficiency. As a result, social housing today is more energy-efficient than housing in general.
Furthermore, Budget 2009 announced £100 million of funding for local authorities to deliver new energy-efficient homes, and “Building Britain’s Future” announced up to £250 million for direct development by councils of around 3,000 new energy-efficient homes. Will the Minister tell us whether those programmes will go ahead? Or will the draconian cuts in local authority budgets, announced by the Secretary of State for Communities and Local Government, put an end to all the progress made on energy efficiency in the social housing sector? What will happen to local area agreements, under which 97% of local authorities had opted for at least one of our three climate change indicators? What is happening to the £25 million fund to help local authorities support community heating infrastructure? When will the Minister make an announcement on that topic?
We have been told that the Minister for Housing
“is moving quickly to toughen building standards.”
Can the Minister of State tell us how far the plans to tighten those standards will go, and how fast that will happen? What discussions has he had with the construction industry? I remind him that the Labour Government consistently raised building standards. We introduced the code for sustainable homes; a target of a 25% reduction in carbon emissions this year, relative to the 2006 part L building regulations; the target for a 44% reduction in 2013, leading to a zero-carbon standard for new homes in 2016; and a target for zero-carbon non-domestic building by 2019. Does he really think that the Housing Minister can better that?
The Minister of State’s main argument was that reducing energy use is a much greater problem in existing homes than in new homes. That is absolutely obvious. That is why Labour, in government, placed an obligation on energy companies to deliver energy efficiency measures through CERT, including 100% subsidies for the poorest pensioners and low-income families.
When answering an intervention, the Minister said that we could not afford free insulation. He—or his colleague the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry)—may like to clarify that in the winding-up speech, because of course we have been providing free insulation to millions of people through the CERT programme.
Gregory Barker
It is not that we cannot afford free insulation; I have made it very clear that for vulnerable groups and hard-to-treat homes, there will continue to be a need for free insulation. What we cannot afford is to insulate the homes of the entire population for free. I do not think that it was ever anticipated that CERT would be able to do that job. There is a multibillion-pound black hole in the plans that we were left with by the Labour Government. We need to bring in private capital to fill that gap.
Joan Ruddock
The hon. Gentleman is absolutely wrong. Of course the schemes were never intended to provide insulation for every home in the country; we were talking of millions and millions of homes. The fact is that we prioritised getting insulation for the most vulnerable and the poorest, but we also had additional programmes, none of which he has said that he will match today.
Gregory Barker
The fact is that in the consultation that the right hon. Lady oversaw, it was assumed that 10% of the poorest would be in a super-priority group. We have extended that to 15%, so we have increased by 50% the amount of effectively free insulation that will go to the homes of the most vulnerable. We have not minimised the commitment; we have built and expanded it, so that under our proposals, more money will go to the most vulnerable.
Joan Ruddock
The hon. Gentleman is talking about one small element of one of the programmes. We had a consultation on the subject, and it was perfectly reasonable to move to 15%. The 10% was the starting point. I remind him that the figure in the CERT scheme is 40% anyway; it was uplift on that. There are many other programmes, and I will come on to what is planned in them when I ask the other questions that I think the Government need to be asked, because it would in no way solve the problems if we were left only with CERT.
It is utterly untrue to say that there was a huge black hole. As I shall illustrate, we had plans and programmes set in place to move to a stage beyond 2012. The Minister has not said anything today that will move the programmes of additional work beyond what is already in the pipeline. We insulated 5 million homes between 2002 and 2008. We aimed for another 6 million to be tackled in the 2008 to 2011 programme, which was on target when we left government. We aim to have every cavity and loft, where practicable, insulated by 2015. The Minister has not said today that he will achieve that, but unless he says otherwise, we have to assume that he will continue those programmes.
We developed and extended the obligation, launching a £350-million community energy-saving programme that works on a street-by-street basis in the areas of the poorest decile of people in the country. That is a well-targeted programme that works in a different way, but the Minister has not said anything about it today, so perhaps, in response to my points, he will clarify the issue of the future of CESP.
Gregory Barker
The problem with the programmes that the right hon. Lady has specified, which are all good in themselves, is that they are not up to the scale of the challenge. CESP is a good programme, but it deals with tens of thousands of households. We have to reach, within the time scale that she mentioned, 14 million. At that rate of progress, we would still be lagging by 2030. We are not abandoning her programmes but bringing in an entirely new level of ambition. We are consolidating and building on those programmes, and bringing in more resources and ingenuity, as well as demand from the private sector, so it is a plus-plus agenda from this new coalition.
Joan Ruddock
Again, I have to tell the Minister that I think he is rather mistaken. The fact is that, whatever his green deal does—I shall discuss that in more detail in a moment—it depends entirely on who opts in. He may get nobody to do so. He is talking about a grandiose scheme covering millions of people, but it depends entirely on individual households deciding to opt into the scheme. The benefit of CESP, on which we expected to build further, was that it involved the whole community, local government, energy companies and partnerships in a way that allowed for an holistic approach. That is clearly what his scheme will fail to do.
Let me make a little more progress. We also introduced the CRC energy efficiency scheme—again, there has been no mention of that today—which is an extremely important energy efficiency measure. It is a new mandatory emissions trading scheme to improve energy efficiency in the large public and private sector organisations that were not otherwise covered by the climate change levy, or indeed the emissions trading scheme, which is, of course, European-based. Consequently supermarkets, banks, universities, hospitals and other organisations were all brought into an energy efficiency framework. The scheme is intended to target emissions from the energy use of those organisations, which represent no less than 10% of all UK emissions. What is the future of the CRC energy efficiency scheme? Again, the Minister has been silent on the issue. Will he guarantee that this important scheme will continue?
Let us not forget the boiler scrappage scheme, which my hon. Friend the Member for Telford (David Wright) mentioned. It was a great success. About 125,000 heating systems have been or are due to be upgraded under the scheme. It helped sustain work for installers and UK-based boiler manufacturers throughout the economic recovery, and it saved carbon. Replacing 125,000 G-rated boilers should save about 140,000 tonnes of CO2 every year—the equivalent of taking about 45,000 cars off the road.
I have reminded the House of the big changes that Labour was making in energy efficiency and in putting the country on track to meet our climate change targets of a 34% reduction in greenhouse gases by 2020 and at least 80% by 2050.
Joan Ruddock
I am grateful to my hon. Friend, who always manages to read more comprehensively than I do. I meant to look at the detail before I came to the Dispatch Box, but we were rather busy, so I am grateful that he was able to make that point and that the House has heard it.
I was referring to the fact that we had made changes and were putting the country on track to meet our climate change targets, but we were never complacent. That is why, one year ago, we launched our great British refurb programme, and in July last year published the UK low carbon transition plan. Our proposals signalled a step change in the level of ambition for the household sector over the next decade—precisely the game-changer of which the Minister spoke.
The House should not just take my word for it. Paul King, the chief executive of the UK Green Building Council, said:
“This is a bold and welcome move. The biggest barrier to low carbon refurbishment—the upfront cost—is set to fall. Pay As You Save is a radical scheme, which could trigger a revolution in household refurbishment—creating at least 100,000 new jobs, saving money and conserving energy.”
That was the opinion of our transition plan.
Everything that the Minister outlined today could be found in Labour’s transition plan. We said that we would introduce clean energy cashbacks—the feed-in tariffs—to enable households to profit from generating their own electricity. We did. We said that we would legislate for a mandated price support for poorer people and raise the level of Warm Front grants, and we did. We said that we would pilot “pay as you save” ways to help people green their homes, and we did.
The Minister has made the Tories’ green deal proposals the centrepiece of his departmental policies, but for us it was part of a much more comprehensive strategy. None the less, we were very clear that we needed to engage the public directly in energy efficiency. That is why we began to test the concept of “pay as you save”—what the Government now call the green deal. We established five pilots. The partners in those pilots included 500 households, a housing association, an energy company—British Gas, Birmingham, Sutton and Stroud councils and the Severn Wye Energy Agency, the whole programme being overseen by the Energy Saving Trust.
Can the Minister report on the progress of the pilots? Will they run their course? Does he plan to take any account of them? Is it part of the learning that the Government plan to do, or do they intend to leap in, having cooked up some programme with somebody?
Gregory Barker
Of course the Government will look at all such evidence, where it is helpful, and learn what we can. I am puzzled—I hope it is not just “not invented here” syndrome—that the right hon. Lady does not understand what I tried to explain at length. Our green deal will require primary legislation because there is a fundamental difference between her scheme, which ultimately relied on credit scoring, personal debt, a green mortgage or a charge on the property. None of those things applies to the new green deal. It will not be personal debt. It will not be a charge, a loan or a mortgage. It will be secured on the property, not on the people who live in the property. It may sound technical, but that is a fundamental difference. It requires primary legislation and it is not the same as the small test pilots which, useful as they may be, the right hon. Lady was trailing.
Joan Ruddock
There is no dispute between us on that matter, and I have not suggested that there is. I asked the Minister if he would take any credit—any benefit, rather—[Interruption.] He takes credit for plenty of things that he has not started himself. Will he take any benefit from this in terms of finding out what motivates people and how interested they are? It will be completely central to his plans that people are motivated and can be persuaded. These things require people to have many people in their houses doing many things. It is not easy to motivate people to undergo a great deal of change and upheaval. Such pilots show how acceptable they are, how interested people are and how best to make things work.
Gregory Barker
The right hon. Lady is absolutely right: finance is only part of the issue, as we found in Kirklees. Two things are vital. Community involvement is very important, but the other exciting thing about the green deal is that it is not just reliant on the big six energy companies, which have mixed reputations, but brings in some of our most trusted high street retailers and brands, such as Marks and Spencer and Tesco, which have strong degrees of consumer trust, and I hope that new companies, not yet formed, will also come in. It is exciting that there will be new participants, on a far greater scale than was ever imagined under the previous Government.