Energy Company Obligation
Debate between John Pugh and Lord Barker of Battle(10 years, 8 months ago)
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John Pugh (Southport) (LD)
Thank you, Ms Dorries; that will be ample.
I congratulate the hon. Member for Nottingham South (Lilian Greenwood) on her timely and effective presentation of the problems with the energy company obligation. I am increasingly in despair, and not just because of being a Liberal Democrat. I should like to be able to say that the green deal is great, and the ECO scheme is perfect, and that I support every detail of it without criticism or quibble; but I cannot. I should like to be able to say that the Government correctly understand the problems being experienced by people in the ECO scheme and that they are thoroughly engaged and are ironing out possible difficulties; but I cannot quite do that. I am grateful that the Minister responding to the debate is the right hon. Member for Bexhill and Battle (Gregory Barker), because if anyone can solve the problem he can.
I should love to be able to say that everything that is involved in managing a market composed of myriad private suppliers and big corporate giants, to environmental effect, is easy, but it is not. It is difficult, and I sympathise with the Minister. However, like him, I have lived through the solar panel trauma, when schemes hit the buffers and businesses crashed, projects were caught and there was boom and bust—white van man trying to cash in and good schemes being trashed or abandoned. I think that we all learned a lesson from that: in the green business, predictability helps an awful lot. We seem to have a similar problem now, although it is not necessarily the one that the hon. Member for Nottingham South touched on. I want to talk about the problem that the ECO scheme is creating for boiler suppliers—a topic that I have become familiar with simply because suppliers have brought it to my attention.
The phenomenon is similar to what happened with solar panels. There has been an increase in the number of suppliers and installers—I have looked at the Government stats—followed by what currently appears to be the sound of businesses collapsing and the stalling of installation.
Gregory Barker
If we could replicate for insulation what happened in the solar industry I should be extremely delighted. The fact is that since we took those difficult decisions in 2011 we have reached the point where nearly 3 GW of solar are installed; almost 500,000 roofs have solar, compared with 15,000 in 2010; and we have the highest growth prospects for solar, with the cheapest installations, anywhere in Europe. Solar in the UK is a huge success, because we cut costs, bore down on the expense to the consumer, and as a result are getting genuine commercial deployment.
John Pugh
I am delighted that the Minister can tell me that. I am a great enthusiast for solar panelling. If he can solve the problems with boilers I shall be even more in his debt.
It seems to me that the Government are not quite to blame for the problem I have outlined. It is almost an unintended consequence of the Labour fuel pledge, which led to a bit of a media panic about the green levy, which led to discussions between the energy companies and the Government. There may be some tacit agreements between the Government and the big six. I know not—it is above my pay grade. However, it is true at the moment that the big energy companies are substantially reducing their funding for boilers, from 25p per pound lifetime savings to something like 8p. The drop is sudden and dramatic.
There is some evidence that those companies do not want referrals, particularly in connection with fuel poverty. I am in possession of a letter from British Gas to Sefton, my local authority, which basically says “Don’t send us any more work at the moment. We are simply not going to commission it or progress it.” There is some evidence that some big companies have stopped commissioning altogether, and there is no doubt that the price has crashed. How should a small boiler supplier react to that? If he is severely exposed he goes bust; if he is very canny or unscrupulous he can start to fit boilers of substandard quality, which will not last, and will eventually need to be repaired and replaced. Another thing that he could do is target carbon savings rather than fuel poverty.
A large part of my constituency consists of Edwardian housing, with solid walls. We also have many old houses of the maisonette type, with old or no boilers. In those houses are many elderly people, including widows living alone, and the like. Companies in my constituency once did the jobs needed in such houses, but they no longer do them because they cannot be done without some financial support being offered; and customers in fuel poverty are precisely the ones who cannot do a deal of that kind. In rare cases that I know of, the company exercises a degree of charity and takes a hit on the job. I also have evidence that in some hard-to-treat large houses—we might call them mansions—where there is someone who meets the qualifying criteria in some way, the job will pay; obviously, putting a boiler into those places gives a substantial carbon saving and brings a better reward from the energy companies. A genuine case that was featured on “File on 4”—or it may have been “You and Yours”; I forget—involved a premier footballer profiting directly from the ECO scheme.
Clearly, something is wrong. I am not an expert—I know that there are experts present for the debate—but I know people who are. People in the trade tell me things and I am inclined to believe them. Deborah Judd, who runs a firm in Darlington, writes:
“It is so disheartening having to turn clients down who are exactly the sorts of people who need it. We’ve been going 20 years in June and now we just don’t see a future…In some cases, you can get paid £12,000 for fitting a boiler in a large house because the energy efficiency saving is so large. Realistically, that person can afford to replace their boiler themselves. We could fit 5 boilers in homes where people are in real need for that amount.”
I have similar evidence from a supplier in Blackpool, and from assessors and so on. People who appear to know tell me that there is a problem, and that it is analogous to the one that the Minister solved à propos of solar panelling.
Perhaps I can offer the Minister a solution rather than a problem. He needs to talk not to me, a relative ignoramus on the subject, but to the people who bring the problem to me, who are in earnest and have a genuine problem. Importantly—and this issue has come up previously—during the spring we must monitor how fuel poverty is addressed. Clearly, the targets might slip a long way before anyone notices. I suggest that because of the reduction applied by the gas and energy companies there is a perverse incentive to target big houses and big carbon savings, rather than people in fuel poverty.
My final point, and the point that will haunt the debate, was made by the hon. Member for Nottingham South when she summed up: we need stability in the market. If we are to get many small businesses working regularly to good effect with large corporates and funders—in this case the energy companies—and if we are to solve the problems of greenhouse emissions and fuel poverty, we shall need a strong element of stability and predictability in the market. I am concerned because at the moment the suppliers I know and talk to do not think we have that.
Oral Answers to Questions
Debate between John Pugh and Lord Barker of Battle
Gregory Barker
Obviously, we are very sorry when any business goes into administration, but I think the hon. Gentleman is being a little hasty. It is very early days for the green deal and for one business that, sadly, has gone into receivership there are dozens, if not hundreds, of new small and medium-sized enterprises that are starting up to come into the new competitive marketplace that we are creating.
John Pugh (Southport) (LD)
What steps are being taken to stop profiteering by the National Grid, which can charge a fortune to move or change a domestic meter?
Gregory Barker
If my hon. Friend has real evidence of profiteering, we would love to see it. If he shares it with us, we will take steps to crack down on it.
Oral Answers to Questions
Debate between John Pugh and Lord Barker of Battle
Gregory Barker
It is ridiculous for the hon. Lady to pretend that the number of fuel poor did not rise from 2004 to 2009 from 2 million to 5.5 million. It would be good, on this really important subject, if, rather than trying to score cheap partisan points, we could build a new consensus. We are bringing forward some very important measures on fuel poverty and we are determined to really make a difference.
John Pugh (Southport) (LD)
8. What recent assessment he has made of the use of incineration for power and heat generation.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
There is no place for old-style incinerators in our future energy mix but there are an increasing number of new energy-from-waste technologies being deployed that offer real potential for local low-carbon and environmentally friendly generation of electricity and heat.
Gregory Barker
My hon. Friend is absolutely right. There has been a sea change in safety and environmental standards as well as in the type of technologies that can now be deployed. These smaller, new technologies often have a role to play, particularly in our vision of an ambitious roll-out of decentralised energies and of communities taking more responsibility for and greater ownership of their own energy-generating assets.