Civil Nuclear Road Map

Liz Saville Roberts Excerpts

Thursday 22nd February 2024 Commons Chamber

[Damian Collins]

I agree with my right hon. Friend, particularly on her point about the labour markets, and in the Sizewell area that is incredibly important. I know from Dungeness in my constituency that it is the certainty of having long-term employment that attracts some of the best talent and encourages people, including apprentices, to join the industry. The Minister will probably want to comment on the substance of my right hon. Friend’s remarks.

In the time available to me, I want focus on the site lists consultations element of the civil nuclear road map. The Government are saying that the criteria that were applied to nuclear sites in 2011 should still apply today, and in most cases that is true. Safety, access to water—where appropriate—and grid connections could all be important considerations when it is being decided where the sites could be, along with habitat implications and, in coastal areas, flood risk. All those are constants. The one factor that has completely changed since 2011 is the size of the footprint of the nuclear facility itself.

In Dungeness, an important factor has been the existence of a special protected area as a consequence of the unique shingle peninsula on which it sits, which is the second biggest in the world and a habitat that is unique in Europe, let alone the UK—the biggest shingle peninsula in the world is Cape Canaveral, in the United States. The protections are there for areas of the shingle banks that have never been disturbed. However, there are plenty of areas surrounding existing nuclear sites that are, in effect, brownfield sites where that disturbance has taken place. As they are not in special protected areas, I believe that future development would be possible.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

The hon. Gentleman is advancing a powerful argument. If we are to persuade people that SMRs are suitable for use outside conventional nuclear sites, siting them in places such as Dungeness and Trawsfynydd which do not fit under the 2011 list conveys an important message. We have to be able to persuade people that small modular reactors can be used in other areas, as well as not misusing sites that might be better used for larger nuclear projects.

[Damian Collins]

I completely agree. I have a request to make to the Government, who will be considering the responses to the consultation on the road map. I was keen to hold this debate now, during the period of the consultation, so that Members can have their own views as well. I appreciate that it would not be easy or desirable for Great British Nuclear to make technology-by-technology recommendations for every nuclear site in the country, but there should be a recognition of footprint size. There are sites, such as Dungeness in my constituency and Sizewell in that of my right hon. Friend the Member for Suffolk Coastal (Dr Coffey), where smaller facilities could easily be built. They could be built on decommissioned land, where old power stations have been subject to advance decommissioning. They could be built on land that was used as the building works site for the construction of the existing Dungeness B station, or even on the land that is currently a car park for the existing nuclear stations.

We need to give the market some certainty that buildings of a certain size can sit within the footprint of an existing nuclear site, on land that does not have the highest levels of habitat protection, but at present that is not envisaged. What the consultation envisages is that every site on the list must be able to do everything. If there is to be no distinguishing feature between different sources of technology, we are not distinguishing between a single SMR unit and something as big as Hinkley Point C. There must clearly be some relaxation, because otherwise other sites that are currently among the eight locations on the existing list will not be included on the new list.

The industry will have an opportunity to come forward with recommendations to the Department and make a case for individual sites—but obviously without the certainty of knowing that it is believed that technologies below a certain footprint would be suitable there—and to take into account all the other important site considerations such as the local workforce, grid connections, access to water for cooling if it is required.

I think it would be much better if, following the consultation on the civil nuclear road map, we could provide certainty about the types of technology that are possible on some of the smaller sites, so that developers and businesses coming forward with those technologies would know they look with confidence at some of those sites. I think that would make a huge difference to sites such as Dungeness, which in other respects ticks every box in respect of its suitability for new nuclear. It is on the grid, it has a domestic labour market, and it has strong support from the local community. In almost every case, the existing nuclear sites are the most supportive of investments in new nuclear, because people are already familiar with the industry and know how many jobs would be created.

If the Minister could say something about this today it would be much appreciated, but I should certainly like it to feature in the Government’s response to the consultation. As I said earlier, I am not seeking site-specific information about each technology, of which there could be many more in the future, but I hope it will at least be recognised that the big difference between SMRs and reactors the size of Hinkley Point is literally that: their size. SMRs will not be suitable everywhere—in fact, they will be suitable in relatively few places—but other technologies will be suitable on a wider base. If the Government are to meet their target, they will have to do so by deeming sites that are not currently being deployed to be suitable for SMRs. We should give the industry as much backing as possible in making that investment.

--- Later in debate ---

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

We have already had mention of the significance of net zero. We know that, alongside that, the demand for electricity will increase exponentially. We know, too, that energy security not just for the United Kingdom, but for the supplies of electricity that we currently receive from European countries—or the prices that they will be prepared to pay for electricity and energy—will affect what we produce here. Ireland, to the west of the United Kingdom and, very significantly, to the west of Wales, is also going through the same thought processes about its needs for electricity.

The all-party parliamentary group on nuclear energy paid a visit to Finland. Alongside the great significance of employment, which is in no way insignificant in any of our constituencies—least of all in one such as Dwyfor Meirionnydd, which is one of the lowest-paid constituencies in the UK—there are other socioeconomic drivers, which could be part of this programme and which are implicit in the road map. One of those drivers, which we have not considered in sufficient depth, is the cost of electricity in the United Kingdom.

Again, I speak for my constituency when I say that we, alongside Merseyside, pay among the highest standing charges—if not the highest standing charges—in the UK. Yet we have a tradition of generating electricity. I can think of a hydro production facility in Tanygrisiau, which is producing and feeding into the grid and goes over some of the poorest-built housing that we know of in my constituency, and certainly among the poorest-built housing in western Europe. There is a deep anomaly here. We know how much energy poverty is hitting our communities. We must be looking in future not just at the boon that comes with employment, but at the boon that comes from generating electricity. In Finland, for example, large-scale power stations pay in to real estate taxes. They pay so much that everyone else pays less. In France, people pay less for electricity when they are in the environs of a generating station. These are things that we need to consider, because as things stand we are dealing with inequality and people suffering from power poverty.

Like the hon. Member for Folkestone and Hythe (Damian Collins), I want to speak about the decommissioned power station in my constituency, but first I welcome the announcement on Wylfa. It is the policy of my party, Plaid Cymru, to support development at Wylfa and Trawsfynydd, although not at any more sites in Wales. I previously worked in further education. We saw expectations and hopes raised and then dashed in communities, which is of course what has happened at Wylfa in the past. I urge the Government to ensure that what is proposed is robust, resilient and sustainable, and that the development is brought forward. I remember a programme of apprentices who had to finish their apprenticeships elsewhere because they were no longer able to do so at Wylfa. That is very damaging. There is immense potential, but this must not be just a political boon in the run-up to a general election. These schemes matter immensely to our communities, and must not be handled lightly.

Trawsfynydd, just like Dungeness, is a site that did not find its way on to the 2011 list, for reasons that were perfectly understandable at the time, but I would strongly argue that it should be under consideration in the here and now. Why? First, I will namecheck a constituent, Rory Trappe, who, when he worked at Trawsfynydd—he was also the Prospect union rep—almost single-handedly got Trawsfynydd mentioned in the Financial Times and elsewhere as the first site for which an SMR was being considered. That raised people’s hopes in my constituency. As I mentioned, the difference that would make to salaries in an area such as Meirionnydd in Gwynedd is immense. It has been part of the Ambition North Wales growth deal as well. Public money has been allocated to Trawsfynydd, but there is now a question mark hanging over that funding.

Another advantage of the site is that we have grid connectivity. I know that for some other sites that will be a question; there will be a cost, public controversy, and issues over pylons, but at Trawsfynydd, grid connectivity exists. The site is entirely in public ownership. There is a question about the best use of public money. Trawsfynydd was not on the 2011 list because it was on a lake, rather than on the sea. It was recognised then that the site was not sufficiently supplied with water for large-scale development in the future. That comes back to an argument that I raised in my intervention: if SMRs are to be shown to be suitable on sites other than conventional sites, the Government should look at how they can show that on the ground. Again, that was one of Trawsfynydd’s original positive points.

Alongside that, the Welsh Government have invested Cwmni Egino as a development company for the site. That appears to have been disregarded in the criteria. I am sure that the criteria for GBN were very worth while, but that factor, which was unique to Wales, was not considered. I strongly urge that it now be considered. Finally, there is a mix for the area. We have a hydro-generation scheme at Maentwrog, so old that it existed even before the national grid. We also have a company called Ynni Twrog with a local scheme for energy and a scheme for community energy. It wants to engage with the profits generated from Maentwrog. I would welcome the opportunity to discuss that further, and everything else that I have raised, with the Minister.

Trawsfynydd ceased to generate over 30 years ago. The fear is about what is being proposed now. I will be told that Trawsfynydd is not off the list, and I know that other sorts of technologies will be mentioned, but they are 30 years away. That is 60 years without any generation at a publicly owned site. That is more than a professional lifetime. This is a waste of a resource. We are talking about something that would make an immense difference to the area, and to north-west Wales as a whole. I would like to know what the Minister proposes for the site. Is there a possibility of an SMR? If the Minister proposes an alternative technology, what is it? How realistic is that? Are we talking about medical isotopes as well, because that has been mooted? I have mooted it, because there is a security question over their supply. I reiterate that this is a waste of a public resource. Just like at Dungeness, we have so much that we could be making better use of. I urge the Minister to consider how best to do that.

Civil Nuclear Road Map

Liz Saville Roberts Excerpts

Thursday 11th January 2024 Commons Chamber

[Andrew Bowie]

I agree with my hon. Friend on the amazing work being conducted at Sellafield in the constituency of my hon. Friend the Member for Copeland (Trudy Harrison). The lessons being learned through the decommissioning process at Sellafield will yield benefits. We are leading the way across the world on the decommissioning of sites and are very happy to be advising other countries on their decommissioning efforts. We need to ensure that any projects run by the Nuclear Decommissioning Authority are proved to be value for money, and that we learn from the lessons of the past.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

My party’s policy is to support the development of the present nuclear sites in Wales, one of which is Trawsfynydd in my constituency. The Welsh Government have funded Cwmni Egino to develop Trawsfynydd, and £20 million was allocated only last autumn for that purpose by the north Wales growth deal to enable critical development and planning, prior to the final investment decision to be made anon. Given the strategic developments and investments in Wales, can the Minister confirm that the entirely publicly owned Trawsfynydd, with its potential 550 jobs, remains a possible location for an SMR in the near future? Will he please visit Trawsfynydd?

[Andrew Bowie]

I would be delighted to visit the right hon. Lady’s constituency. Trawsfynydd has exciting potential as a site for an SMR, and for other nuclear licensed activities. It and many others are potential sites for the deployment of these new technologies in the years ahead.

Road Fuel Prices

Liz Saville Roberts Excerpts

Monday 3rd July 2023 Commons Chamber

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Patchy public transport contributes to high costs for rural households, as many people have no choice but to use their cars for essential journeys. Despite this, the rural fuel duty relief scheme does not apply to a single area in Wales. Will the Minister commit to pressing the Treasury to reconsider the scheme to take into account access to local public transport networks, as well as providing a guarantee of inclusion for Welsh areas?

[Graham Stuart]

I thank the right hon. Lady for her question and will ensure that His Majesty’s Treasury is aware of it.

Energy Company Obligation Schemes

Liz Saville Roberts Excerpts

Tuesday 27th June 2023 Westminster Hall

[Ben Lake (Ceredigion) (PC)]

I beg to move,

That this House has considered the implementation of ECO4 and ECO+.

It is a pleasure to serve under your chairmanship. Mr Paisley. I am grateful for the opportunity to discuss the importance of energy efficiency schemes for domestic properties in general, and more specifically the implementation of the energy company obligation 4 and energy company obligation plus schemes.

As everybody will be aware, households have had to endure wave after wave of challenges to budgets in recent months, with each adding to the financial burden on families and eroding living standards. Although we have recently received welcome news that falling wholesale energy prices will begin to feed through to households, it is unlikely that energy bills will return to pre-crisis levels any time soon.

A frequently cited statistic that bears repeating, lest we allow current prices to be normalised, is that in April 2022 the Welsh Government estimated that energy bills of £1,971 would push 45% of Welsh households into fuel poverty. Next month, when Ofgem’s price cap kicks back in, it will still be marginally higher, at £2,074. The New Economics Foundation suggests that that pressure will continue into next year, with energy bills in April 2024 estimated to be as high as 70% above pre-crisis of 2021 levels. To put it simply, for too many households energy prices will continue to be a significant pressure on their budgets for some time to come. Households will also be more vulnerable this coming winter, after being forced to use savings or take out debt to make it through last winter.

Citizen Advice Cymru has seen an increase in the number of people seeking debt advice, and reports that more people are falling into arrears on essential household bills. The number of people seeking advice on debt relating to energy bills, for example, has more than doubled between May 2021 and May of this year. Although that is not the purpose of today’s debate, it demonstrates why short-term relief with energy bills is still required, including another round of the alternative fuel payment for off-grid households next winter.

In the long term, the energy crisis has thrown into very sharp relief the urgent need to implement measures to bring down energy bills permanently for households and businesses. One solution is to transition to renewable energy sources, another—the focus of today’s debate—is to introduce comprehensive policies to enhance the energy efficiency of the UK’s housing stock.

That issue is particularly acute in Wales, given that we have some of the oldest and least efficient housing stock in western Europe. Data from the Department for Levelling Up, Housing and Communities shows the percentage of dwellings within each local authority with energy performance certificates rated level C or above. The data shows that five out of the 15 local authorities with the smallest percentage of dwellings with EPCs rated level C or above are in Wales, with Gwynedd third from bottom at 23% and my constituency of Ceredigion only slightly better at 25%.

It is perhaps not surprising that Ceredigion does so badly, when we consider that 35% of our homes were constructed in the 19th century. It is sobering to reflect on the fact that the vast majority of the county’s 2050 housing stock has already been built, more than a third of it in the Victorian age. The case for action is, therefore, quite clear and simple. We need to upgrade the energy efficiency of our housing to reduce people’s exposure to increased energy costs. Almost a quarter of tenants in the private rented sector live in fuel poverty, with those living in the least efficient homes spending as much as £950 more per year on their energy bills, compared with homes rated EPC level C.

The UK Government have made the case that it is unsustainable to maintain support indefinitely for households with energy bills. By retrofitting, we can mitigate the need for ongoing and future support packages. Indeed, the New Economics Foundation estimated that had all homes in England and Wales been upgraded to EPC level C by October last year, the energy price guarantee would have cost £3.5 billion less over its first six months and households would have saved an average of £530 over the year.

Of course, retrofitting would also have significant beneficial outcomes for health. We know that living in a cold home can worsen asthma and other respiratory illnesses, and increases the risk of heart disease and cardiac events. It can also worsen musculoskeletal conditions such as arthritis, as well as having a detrimental impact on mental health. Wales’s Future Generations Commissioner estimated that a comprehensive home retrofitting programme could save the Welsh NHS as much as £4.4 billion by 2040 by tackling some of those health issues.

Finally, reducing household energy demand is of course vital for us to improve energy security, reduce our reliance on fossil fuels and, of course, realise our climate targets. A coalition of charities, including Fuel Poverty Action and Green Alliance, have warned that without action on housing and buildings, there is no plausible path to achieving the fifth carbon budget or meeting the 2030 statutory fuel poverty target.

It is clear that home retrofitting is vital and that action taken now will place the UK in a good position in the future. The UK Government’s flagship fuel poverty reduction scheme, the energy company obligation or ECO, has a key role to play in upgrading our homes to permanently reduce the cost of heating for households and to address fuel poverty. ECO has operated since 2013 in several iterations and up to March of this year it had delivered a total of 3.6 million energy efficiency measures in Great Britain. The energy performance improvements that have been delivered have saved low-income customers as much as £17.5 billion in lifetime energy bills and saved the average home some £290.

ECO4 is, of course, the fourth iteration of the scheme. It began in April last year and is planned to run until March 2026. In the past year, however, installations have dropped quite significantly. All versions of ECO have experienced difficulties in some form or other, but ECO4 has undoubtedly been delivering at a slower rate than previous iterations. Energy suppliers and installers are now warning that structural issues are preventing the scheme from fulfilling its potential and I want to dwell on those issues today.

Between April last year, when ECO4 commenced, and March this year, approximately 45,000 households had received support under the scheme. Given that that is around 10% of the 450,000 households that the scheme is supposed to support over its four-year lifetime, there is concern about the pace of the roll-out so far. One reason might be that the number of measures installed per property during the roll-out of ECO4 to date has been much higher than expected, with an average of nearly 3.5 measures per property since April 2022 compared with the average of 1.8 measures expected in the scheme’s final impact assessment. In the first quarter of 2023, the figure increased to an average of 4.93 measures per household.

E.ON Energy estimates that, as result, industry could achieve its overall national bill saving target by delivering ECO4 to only 215,000 properties of the 450,000 targeted. Of course, it is not a bad thing that energy efficiency is being significantly improved for those households supported by ECO4, but it raises a question about the adequacy of the funding in place if ECO4 is to achieve its target of supporting 450,000 households, as I am sure that Members will agree.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

I agree entirely with my hon. Friend, as I am sure that many would, that this is primarily a question of funding. We should take a step back and realise that Shell has directed £5 billion in windfall profits towards its shareholders in the first quarter of this year, so there is surely a good case to be made for an emergency windfall tax to enable additional work for the other households that would benefit so much from it.

[Ben Lake]

I am very grateful to my right hon. Friend for that important intervention and you will be unsurprised, Mr Paisley, to hear that I agree with her that there is an important opportunity to introduce emergency measures. At the end of the day, energy companies are making eye-watering amounts of profit at a time when households across the country are struggling. I think it is very appropriate for us to consider ways of recouping some of that potential income to put against this important measure.

Adjustments are required to get the scheme back on track so it can achieve its full potential. The first adjustment requires the UK Government to look again at ECO4’s cost assumptions. They were finalised in April 2022 and do not reflect current market conditions, including the escalation in costs caused by labour shortages and manufacturing prices. More recent cost assumptions, such as those included in the Great British insulation scheme’s impact assessment, reflect those price increases.

For example, the fixed assumed costs of installing external solid wall insulation, which comprises 12% of measures installed under ECO4 to date, increased from £4,200 in 2021 to about £5,000 in 2022—by almost 20%. Meanwhile, the UK Government estimate that the cost of installing cavity wall insulation for bungalows, as well as detached, semi-detached and end-of-terrace houses, has increased by 50% to 63%. That is all without factoring in the inflationary pressures we have seen in 2023 so far. At the start of 2023, insulation and associated material prices increased significantly, many by close to 10% and some by as much as 35%, compounding similar increases seen last year.

Another aspect of the scheme that requires attention is the minimum requirements threshold, which means that a household’s energy performance certificate must be improved to a particular level. For example, if band D and E homes are to be eligible for the scheme, they have to be upgraded to at least band C, and band F and G homes must be upgraded to at least band D. We should welcome the intent of that requirement. Providing support to the poorest households in the least efficient homes by bringing them up to a significantly higher energy performance rating is an important objective. Nevertheless, the requirement is proving to be a limiting factor on the scheme’s delivery. I have spoken to installers and energy suppliers who say that the minimum requirements are too inflexible compared with previous schemes.

It is suggested that the requirements are making it difficult to find eligible properties, and installers are reporting difficulties in proving how properties in higher EPC bands, such as those in band D, as well as on-gas properties, can meet the requirements. E.ON Energy estimates that around 90% of qualifying fuel-poor households cannot have works delivered to their properties, as either they fail to meet the minimum requirements threshold or it would be economically unviable to upgrade them to the levels required to meet it.

[Ben Lake]

The reality is that a very high proportion, if not the majority, of homes in rural constituencies find it difficult to access the scheme because they are not on the mains gas network. In my constituency, some 72% of properties are not connected to mains gas and they are struggling uphill to get on to the scheme. The Government would do well to look again at whether we can change the ECO Flex pathways to allow local authorities greater flexibility to support off-grid properties in particular. That might be a way forward. We certainly need to address the issue. If we do not, I worry that rural areas, which often have an older, less efficient housing stock, will be left behind. I am grateful to the hon. Gentleman for making that important point.

As greater investment is required per property to meet the minimum improvement threshold requirements, the current iteration of the scheme appears to be more exposed, and therefore more vulnerable, to the inflationary pressures that I mentioned earlier, so we need to look again at how it is funded. I ask the UK Government to look at that very carefully.

Another aspect of ECO4 that is welcome in principle, but which is putting pressure on those delivering the scheme, is the Flex pathway. The pathway is important, because it enables local councils to identify low-income households that are in need of support, but that are unlikely to be eligible under the scheme’s standard approach. It also provides an opportunity for local councils to better tailor energy efficiency schemes to their respective areas, and I refer back to the remark from the hon. Member for Central Suffolk and North Ipswich (Dr Poulter) about rural properties. The issue, however, is that local councils feel that the Flex pathway is too onerous and that the information required of them for each application takes up significant staff time and resources. Indeed, I am told that the level of detail required can make the Flex pathway inflexible when considering different local factors.

One of those factors is the nature of the housing stock in an area, and I have already mentioned that Wales has some of the oldest and least efficient housing stock in western Europe. I spoke to representatives of Gwynedd Council, who expressed concerns that the products available via ECO do not always work well with the design of older houses.

[Liz Saville Roberts]

On that point, I would like to mention Meilyr Tomos at Gwynedd Council, who supplied me and others with advice on this debate. In relation to the ECO Flex programme, another issue in Gwynedd is second homes. Younger people are now priced out of staying in their own homes, and more non-dependant children are remaining with their parents—between 2011 and the 2021 census, in Gwynedd the figure increased by 6.8%. Given that non-dependant children artificially inflate household incomes, that has a knock-on effect on ECO Flex. The Government would be wise to give due attention to such rural issues.

[Ben Lake]

I agree with my right hon. Friend. The Flex pathway offers a real opportunity to allow the policy to be tailored to the specific needs of local areas, so as to accelerate the delivery without impacting on the broader scheme that the Government have implemented.

The consequence of rising costs and a perceived inflexibility in the structure of the scheme has been that supply chains are starting to stutter, and I am told that many installers are leaving the market. The Installation Assurance Authority warns that there are now fewer than 10,000 people involved in the industry and public-funded schemes, whereas there were 54,000 in 2012. Those who have moved away from ECO4 are reluctant to return. If installers continue to leave the market at this rate, it will make it very difficult not just to deliver ECO4, but to achieve the level of home retrofitting required to meet our future climate and fuel poverty targets.

If those issues are not addressed, thousands of eligible households will miss out on crucial energy-saving measures, meaning that they will face higher energy bills this winter and beyond. I believe that the Department for Energy Security and Net Zero is consulting on the deliverability of elements of ECO4. If it intends to do so, I ask that they publish the consultation before the summer recess in order to allow sufficient time ahead of April 2024 for industry to adjust accordingly. A failure to do so may mean that even more installers drop out of delivering the scheme due to continued uncertainty.

It is not too late to get ECO4 back on track, and I would argue that a consultation could play a key part in doing so, but I would appreciate it if the Minister could explain what consideration has been or will be given in a consultation to the following points. Could ECO4’s cost assumptions be revised in line with current supply costs to reflect current market conditions? Could the eligibility of homes be widened to ensure that more people can benefit from the scheme? That could include increasing the number of fuel-poor households eligible in the private and social rental sector, or it could mean enabling the Flex channel to be more responsive to local needs in order to be able to capture more fuel-poor households, such as those in receipt of means-tested benefits or with health conditions.

Another suggestion is that we investigate the possibility of extending the buy-out mechanism, so that others besides energy suppliers can take on obligations, and enable local councils to deliver ECO. Other suggestions are: making long-term funding available for training, so that we can boost the supply chain, and considering measures to boost recruitment and careers in the retrofitting energy efficiency industry; ensuring continuous and open engagement with installers, energy suppliers and other industry and fuel poverty experts, to guarantee that the scheme remains on the right track and to ensure that the UK Government can respond effectively to any future issues that arise; and finally, exploring the possibility of expanding the range of technologies that will be considered in scope in future iterations of ECO4 to, for example, water control technologies, which can help bring down the cost of energy used to heat water.

I will briefly touch on ECO+ or, as it is now known, the Great British insulation scheme. I of course welcome the scheme, which is designed to support households in installing single energy efficiency measures in their homes, but again possible adjustments could vastly improve delivery. Can the Minister say what consideration has been given to refining the scheme’s targeting, so that it better helps fuel-poor households? For the majority of the scheme, households are expected to make a financial contribution to the cost of the measures. That will effectively make a large proportion of the scheme inaccessible to the lowest-income households, which cannot afford to make those contributions. In a cost of living crisis, when disposable income is diminishing across the UK, surely the requirement for contributions should be taken out of the scheme, or the percentage of participants who are expected to make contributions should to be lowered.

It would be remiss of me not to mention that I have heard from constituents who were unfortunately let down by contractors delivering measures under the ECO4 scheme. Of course, any measures installed are now covered by the UK Government-endorsed quality scheme, TrustMark. I appreciate that incidents of poor delivery may be isolated examples, but in those worst-case scenarios where delivery goes horribly wrong, the protection and security for households is still inadequate.

[Liz Saville Roberts]

I would be grateful if the Minister addressed the issue of providers who place solar panels on agricultural land, but do not guarantee against damage caused by animals. Obviously, placing panels on agricultural land is very convenient, and it makes access cheaper, although attention is not always paid to planning requirements. However, the convenience may be outweighed by the risk for the householder of damage caused by animals that is not covered by a guarantee. I very much wish the Government to address that rural issue.

[Ben Lake]

I thank my right hon. Friend for raising another important point. It perhaps illustrates the need to strengthen the accountability of the scheme. In Ceredigion, households have had measures installed that were of substandard quality, and they find it almost impossible to get information about redress and holding the installers to account for the sub-par work. Her concerns would be captured by a broader effort to improve the scrutiny and accountability of the scheme. Will the UK Government consider ways of improving oversight of installations? We need a stronger mechanism by which installers can be held to account.

Before closing, I will touch on the need to incentivise those who are ineligible for the ECO scheme to invest in retrofitting—those who might have the means to do so. A few measures come to mind. First, could we look again at removing VAT from insulation products, and not just from the installation of these products, as well as from storage batteries? I appreciate that that might be a Treasury matter. What work might the Government undertake on providing interest-free loans to those who wish to install energy efficiency and low-carbon heating measures? Providing access to such support will be even more important in the face of steep interest rate hikes.

Finally, I come to another area that deserves a brief mention in a discussion on how we can help households to bring down energy bills and expand our renewable capacity: incentivising households to invest in smaller-scale renewables. I have been contacted by several constituents who are concerned that the reduction in support from the feed-in tariffs—and now their replacement, the smart export guarantee—has vastly reduced the incentive to invest. I urge the Government to consider increasing the tariffs that the energy suppliers are required to offer to homeowners who generate renewable energy. I draw my remarks to a close, and very much look forward to the comments of my colleagues.

--- Later in debate ---

[Kerry McCarthy (Bristol East) (Lab)]

It is a pleasure, as always, to see you in the Chair, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on securing the debate.

We have heard from all Members who have spoken how important it is for the Government to look at the complexities of this issue. I represent a predominately urban constituency and, by and large, the other Members we have heard from represent rural constituencies. Each area will have different problems depending on its housing stock, the availability of skills and so on, but it is the Government’s job to try to iron those problems out. That is why it is important that we are having this debate so that people can put on the record some of the issues they have found.

Let me start with the broadbrush issues with retrofitting. Members have set out well that the crisis of rising energy bills has brought home to people how much energy they lose through having poorly insulated homes—energy is literally going through the roof—and how we could reduce not only bills, but our emissions if we had homes that met the EPC C standard.

I would say that this is about retrofitting existing homes, but the Government had a pledge to introduce zero-carbon new homes and then dropped it. Estimates suggest that well over a million homes have been built since then that do not meet the EPC C standard. Given that we face such a massive task in retrofitting existing housing stock, it seems ludicrous that we do not insist that new builds meet a certain standard, because we will need to retrofit them not too far down the line.

I have just come from the Energy Bill Committee, where we were talking about how we ensure that we have the skills for a just transition. This work tends to be carried out by small and medium-sized enterprises and sole traders—it is not as though there is one big company that will deliver it—and they need certainty that this is a line of work in which there will be jobs for the foreseeable future. With schemes stopping and starting as they have in the past—there was lack of consumer confidence because of the way some earlier schemes floundered—people will not move into those jobs, particularly given the shortages of construction workers, plumbers and electricians. It can be difficult to get people to do even the traditional jobs, let alone move into this area. We must address that to create stability.

The need for consumer advice was mentioned, and I just mentioned consumer confidence. Previous experience shows us that that is really important. This is about going into people’s homes, uprooting their domestic lives and putting them at risk of having to pay a lot of money. Under earlier schemes, cowboy operators did not do work to the expected standard and people were suddenly told that they needed extra—

[Liz Saville Roberts]

It seems evident to me that, since many of the people who will qualify for support through these schemes will be vulnerable, unless protections are built in for them, they may not be able to deal with it when work is not done to the expected standard, which is what we will hear about as MPs. I would have expected the Government to build that into the schemes in the first instance because of the nature of the people they are trying to support.

[Kerry McCarthy]

That is very much the case. I have been in this place for 18 years. Earlier in my career, I saw in my casework people who had been ripped off really struggling to deal with the bureaucracy of whether they would be able to get public funding and whether they had to pay the people who were literally on their doorstep asking for money.

Turning to where we are now, the ECO scheme was well intentioned and welcome, but it is not working. At the moment, the UK has the least energy-efficient housing in Europe and home insulation rates have plummeted. Many statistics have been bandied around. My numbers are slightly different and relate to a different time period. In 2013, the coalition cut energy efficiency programmes; in the same year, insulation rates fell by 92%. That is what I go back to—the period when the market crashed, setting us back about a decade to where we are now. Last year, only 159,699 ECO measures were installed in low-income and fuel-poor homes, a reduction of 59% from the 393,706 in 2021.

There is a substantial gap between Government insulation targets and delivery where ECO4 is concerned. Analysis from E.ON Energy suggests that, as of December 2022, the industry had completed around 11% of the obligation, compared with an expected 19%. We estimate that at the same point during the ECO3 scheme, the industry had completed 29%. That delay will have consequences. A report from the World Wide Fund for Nature and ScottishPower warns that the Government are on track to insulate just one sixth of the homes needed to meet their target of reducing energy consumption by 15% by 2030.

I have spoken to people from various businesses in the retrofit industry, and they fear that the same mistakes are being made. Nigel Donohue, chief executive of the Installation Assurance Authority, said the transition to ECO4 was

“really poorly managed…despite conversations with the Government about not allowing this to happen to the industry again”.

There is no getting away from the fact that the scheme is really struggling.

There are two major issues delaying delivery. The first is limitations on scoring. Aeon estimates that up to 90% of the properties eligible for ECO4 will not receive the support they desperately need because those homes do not meet the minimum improvement requirements. The goalposts that must be cleared for properties to meet the SAP score are being moved, so vulnerable, fuel-poor households have been ruled ineligible and are missing out.

The second issue is costs. Funding assumptions under ECO4 are significantly lower than actual installation costs, and rising inflation has led to costs in the supply chain escalating even further. With current inflation rates and the skill shortages, those costs are likely to be increasing incrementally, almost by the week. I am not convinced that the Government have taken that into account. Delivering loft insulation, for example, is currently 430% more expensive than the Government estimate, while cavity wall insulation is 372% more expensive. These are clearly not small discrepancies, and they have to be recognised in the ECO4 scheme.

The Department for Energy Security and Net Zero acknowledged the increased costs when consulting on the ECO+ scheme back in December, but ECO4 has not been aligned. There is also the problem I mentioned of the gaps between schemes causing confusion and a drop in uptake. There was a four-month gap before ECO4, and I think at one point prior to that there was an 18-month gap between schemes, which I am told had a major impact on the skills front. We cannot allow the same to happen with ECO+. Continuity is needed.

I have also spoken to a housing association boss who says that he thinks the schemes are working okay generally, but that timescales and bureaucracy are a big problem. Low levels of contribution to band D homes means that installers and energy companies are less likely to take them on. He would like a focus on ensuring that installers are compliant with publicly available specifications, PAS, in the long term, so that people trust retrofitting more, but at the moment the process is very bureaucratic. He cites a case where a 115-page form was needed to fit loft insulation that took only an hour to install. I do not know how long it takes to fill out a 115-page form, but I would imagine that it was considerably longer than one hour. He also said that with schemes such as the home upgrade grant, the focus on specific measures, rather than letting retrofitting co-ordinators decide what is best, sometimes means that they cannot offer support for some houses.

It would be remiss of me not to mention how well Bristol is doing at retrofitting homes through its City Leap programme. The 3Ci website has a really good account of what we are doing. One of our ambitions, for example, is to get all social housing up to EPC C by 2030, which involves an innovative arrangement with private sector finance. Under our green prosperity plan, Labour is committed to spending £6 billion a year to retrofit 19 million homes to EPC C within a decade, saving families an average of £1,000 a year on their energy bills, creating over 206,000 new full-time equivalent jobs, and cutting national gas imports by up to 15%. I hope that we will be ready to start work on that in just over a year’s time, or whenever the election is called, but it would be good if the current Government addressed some of the underlying issues, particularly the skills gap, ensured continuity of supply, and listened to what Members have said today, so that we are ready to hit the ground running. Even if we do not win the next election, I am sure the Minister would hope to get things in a better place so that we can steam ahead with this programme.

Oral Answers to Questions

Liz Saville Roberts Excerpts

Tuesday 18th April 2023 Commons Chamber

[The Parliamentary Under-Secretary of State for Energy Security and Net Zero (Andrew Bowie)]

Grid-scale lithium-ion battery energy storage systems are covered by a robust regulatory framework, which requires manufacturers to ensure that products are safe before they are placed on the market, that they are installed correctly and that any safety issues found after products are on the market are dealt with. I am meeting my right hon. Friend this week to discuss this in more detail and I look forward to that very much.

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

T9. The Minister must surely recognise that fuel poverty cannot be solved by threatening to send vulnerable people to court or imposing the installation of smart meters. When will he stop passing the blame to Ofgem? When will he really start to support vulnerable people who are facing fuel poverty?

[Amanda Solloway]

It is incredibly important to this Government that we support vulnerable people. We are looking at all of the issues around prepayment meters, but we have provided £400 of support through vouchers and I encourage all Members to ask their constituents to come forward to get those if they have not already collected them.