Lord Barker of Battle
Main Page: Lord Barker of Battle (Conservative - Life peer)(11 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Mrs Mary Glindon (North Tyneside) (Lab)
2. What assessment he has made of the potential effects on consumers of proposed changes to the Consumer Credit Act 1974 regarding early repayments and the green deal.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
The hon. Lady raises an important issue and we have taken a lot of care over it. Any green deal provider will be able to charge additional penalties only if it is genuinely able to prove that it will suffer a loss as a result of a consumer’s decision to repay early. In addition, all consumers will have the ability to challenge any additional penalties, with recourse to the Financial Ombudsman Service where necessary.
Mrs Glindon
Given that the Department’s own impact assessment predicts interest rates as high as 9.5% under the green deal, does the Minister think the added possibility of a hefty penalty for early repayment will help to present a compelling case to families hoping to bring their energy bills down?
Gregory Barker
I understand the hon. Lady’s worries, which are why we have considered the matter so carefully, but there is a balance to be struck. If there are not penalties for those who repay early, the rest of the market will bear the additional risk and lack of profit, pushing up the cost of green deal plans for everybody else. I hope the interest rates will be significantly lower than she said, but we think we have got the right balance between consumer protection and a dynamic market.
Dr Phillip Lee (Bracknell) (Con)
3. What estimate he has made of likely capital costs for new electricity generating capacity under (a) contracts for difference and (b) a premium feed-in tariff.
Lilian Greenwood (Nottingham South) (Lab)
13. What steps he is taking to help households improve their energy efficiency.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Our flagship energy efficiency measure is the green deal, which is supported by the £1.3 billion per annum energy company obligation. We are making very good progress towards its introduction, which starts this autumn, and we expect roll-out to grow strongly in 2013 and beyond, bringing new entrants, greater competition, consumer choice and innovation to this growing market.
Kelvin Hopkins
A crash programme to insulate every home in Britain would save millions of people money on their fuel bills and keep them warm in the winter. It would also be billions of pounds cheaper than investing in nuclear power. Will the Government undertake a rigorous cost-benefit study of these alternatives?
Gregory Barker
The hon. Gentleman is absolutely right. Energy efficiency is a no-brainer. That is why we have given unprecedented importance and attention to it and for the first time have created within the Department an office of energy efficiency deployment. The green deal will involve a far greater range of interventions in people’s homes, unlike previous programmes, which were very limited, so I think the green deal will achieve the aims he seeks.
Heidi Alexander
May I bring to the Minister’s attention the excellent work done by Lewisham council in its insulation partnership, which has seen almost 3,000 homes receive cavity wall and loft insulation in the last six months? Given the difficulties that the Government have experienced in getting the energy companies to meet their household energy efficiency obligations, does he agree that local authorities have a vital role to play in ensuring that as many people as possible can benefit from lower fuel bills?
Gregory Barker
Absolutely. The hon. Lady makes a sound point, and that is exactly why I shall shortly be issuing new guidance to local authorities, under the Home Energy Conservation Act 1995, making it clear that I expect every single local authority to draw up a strategy to roll out the green deal to all parts of their areas. Local authorities and communities are key to the success of the green deal.
Lilian Greenwood
In the last five years of the Labour Government, 2,456 people in my constituency got help through Warm Front to make their homes more energy efficient and to cut their energy bills. Can the Minister explain why just 80 people in Nottingham South were helped last year?
Gregory Barker
I cannot give the hon. Lady a breakdown of that, but I can tell her—[Interruption.] I will happily write with more detail about Nottingham South, but I can say that we helped a large number of people through Warm Front last year. However, we need to do much more than we could possibly achieve under the relatively limited Warm Front programme, which experienced so many troubles when the Labour party was in government. The green deal is going to be transformational and offer not just the very poor but everyone the opportunity to retrofit their homes.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)
We have been telling the Minister for months that, to be a success, the green deal must be a good deal. According to calculations confirmed by a spokesman in his Department, if we take the Government’s intended rate of interest—7.5%, which is lower than the highest rate under the impact assessment—a household taking out a green deal of £10,000 would have to pay back around £22,000 over a 25-year period, which is more than double the cost of paying for the measures up front. Does the Minister think that represents a good deal?
Gregory Barker
I do not think there is any division between the hon. Lady and myself in wanting a good deal. We can certainly agree on that, and that is why we have put so much time and effort into this transformational plan. However, the obsession with interest rates alone, to the exclusion of everything else, does not serve her well. I think that the Labour party is actually announcing that it would subsidise interest. That will cost consumers billions and force up everybody’s energy bills. Why do the Opposition not just come clean, say that they are going to subsidise interest and put everybody’s bills up, rather than doing what we are doing, which is coming forward with a progressive market solution?
Luciana Berger
I thank the Minister for that response, but he need refer only to the contributions I made in debates on secondary legislation to know that there are many things in the green deal that we are concerned about, beyond the interest rate. With interest rates so high, there is a great risk that the public will not be interested in the green deal. We know from polling conducted by the Great British Refurb campaign that anything over 6% means that 90% of the British people will just not be interested. Indeed, the Department estimates that the number of homes being insulated next year will fall dramatically. Given that the green deal is meant to launch in October, why is the Minister not doing something about this now, to ensure that consumers really will get a good deal?
Gregory Barker
We are absolutely committed to giving consumers a good deal, which involves a high range of competition, new entrants and more choice. This is not some Stalinist five-year plan; this is a brand new market. It is perfectly valid to suggest that there should be subsidised interest rates, but let us hear how the Labour party is going to pay for that and how much Labour is going to put on consumer bills. We have a proposal for targeted support from the green investment bank, but the hon. Lady’s blanket approach, which does not understand economics, would be very costly for everybody and force up bills for families.
Mr Peter Lilley (Hitchin and Harpenden) (Con)
8. What comparison he has made of the potential capital cost of meeting the Government’s 2020 renewable target using wind power backed up by open-cycle gas plants and meeting the same level of electricity demand using combined-cycle gas plants.
Damian Hinds (East Hampshire) (Con)
9. What steps he is taking to ensure that small and medium-sized enterprises can participate in the green deal.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
Small and medium-sized enterprises are key to the successful delivery of the green deal. To give them the help that they need to get started, we have given them special financial help to get the training that they need, and waived SME installer and assessor registration fees for the first two years of the green deal. We have also begun a series of regional green deal road shows aimed at explaining to SMEs exactly how they can access the market, and I am pleased to tell the House that they are proving highly popular.
Damian Hinds
Large installer companies will partner large financing companies to offer a seamless product to households. How will my hon. Friend promote white-labelled financing products so that small businesses in my constituency can do the same?
Gregory Barker
My hon. Friend is absolutely right to suggest that a lot of SMEs want to be green deal providers and offer that service in their own right to consumers, and it is vital that they should be able to do so. I am pleased to say that a number of commercial offers are now coming forward to create exactly that white-label proposition, and the Department is doing everything it can to facilitate that. We are also looking at other ways in which we can give confidence to the SME sector.
Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)
Given the current financial situation, SMEs are often reluctant to take on additional loan finance even if they are offered it. Would the Minister therefore accept that it is particularly important that the support for SMEs under the green deal should have a large element of either grant or long-term financial support, rather than deals that are attractive only in the short term?
Gregory Barker
The hon. Gentleman is right to say that we must have an easy-to-access offer for SMEs. The good news is that that can take a number of different shapes and forms, depending on an SME’s needs and on the offer that they want to provide for their customers. It is early days yet, but some interesting models are being put forward, and we are keen to support anything that helps to increase SME take-up.
Graeme Morrice (Livingston) (Lab)
10. What assessment he has made of the potential effects of the provisions of the draft Energy Bill on the competitiveness of the energy market.
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
About 13,800 solar PV installations, with a total capacity of 58.5 MW, were confirmed on to the feed-in tariff scheme’s central register in May 2012. I am pleased to report that that is more than double the number of installations—with more than triple the capacity—that were confirmed in the same month last year. Preliminary figures indicate even stronger growth this month.
Mr Spencer
Clearly, this is a very popular technology. Given that—and the discussion that has just taken place in the Chamber—might it be time to consider switching subsidy from wind farms to solar panels?
Gregory Barker
My hon. Friend is right: it is a very popular technology, and as our reformed FIT scheme is now driving down the costs and helping to promote competition, it is also scalable to a very large scale. Solar will be included properly for the first time in our renewables road map that we will publish later in the year. Solar will have a meaningful part to play in the energy future of Great Britain.
Laura Sandys (South Thanet) (Con)
What assessment he has made of the likely level of future global oil and gas prices.
Amber Rudd (Hastings and Rye) (Con)
T2. The residents of Hastings and Rye are looking forward to cheaper energy bills following the implementation of the green deal. What plans does the Minister have to make sure that residents of social housing also get the benefit of that? May I also invite him, as Minister and constituency neighbour, to come to Rye to share that information with AmicusHorizon?
The Minister of State, Department of Energy and Climate Change (Gregory Barker)
I congratulate my hon. Friend, who has taken a very close interest in this issue of how we are going to help the poorest people in our society access the green deal and to improve the housing stock for everyone. I can assure her that we are working very closely with both the Local Government Association, the National Housing Federation, and with individual local authorities and community groups. I would also be delighted to come across the border and have a round table meeting to see how we can drive forward the agenda in Hastings and Rye.
Alun Michael (Cardiff South and Penarth) (Lab/Co-op)
T3. Ministers will be aware that the Welsh landfall for an optimal Severn tidal barrage will be in my constituency. Given the need for a major increase in renewable energy and the potential for creating nearly 40,000 jobs, will Ministers provide us with some clarity on what the Government will do to promote this project?
Lilian Greenwood (Nottingham South) (Lab)
T6. Under Nottingham’s decent homes programme, more than 15,000 tonnes of carbon will be saved each year. Nottingham City Homes, the local arm’s length management organisation, can use decent homes funding to lever in additional benefits from the green deal’s energy company obligation, but that funding remains indicative for 2013 to 2015. What discussions has the Secretary of State had with the Department for Communities and Local Government on decent homes funding and will he join me in praising the environmental benefits achieved by Nottingham’s “Secure Warm Modern” programme?
Gregory Barker
I would go further and praise Nottingham for a whole range of things that it is doing. It has a very progressive agenda and I look forward to visiting Nottingham in the near future to engage on how we can drive that agenda forward. I cannot comment in detail on something that is the responsibility of DCLG—the decent homes programme—but I can say that we are keen for the green deal programme to leverage in all sorts of additional finance where possible. It is about not just energy efficiency but the wider sustainable regeneration of areas such as Nottingham.
Chris Heaton-Harris (Daventry) (Con)
The Department’s own figures suggest that, in 2009, 50,000 people were put into fuel poverty because of the wind element of renewable energy. Will the Secretary of State give up-to-date figures on that?
Damian Hinds (East Hampshire) (Con)
Does my hon. Friend agree that the continued growth of UK solar vindicates the approach of this Government, who keep returns attractive and make the money go further, in stark contrast to the limited ambitions and dodgy maths of a previous Secretary of State, now Leader of the Labour party?
Gregory Barker
Absolutely. We will see far, far more deployment now in the rest of the Parliament than we would have done if we had carried on with Labour’s very expensive, unfit for purpose, form of subsidy. Moreover, there is other exciting news. I am delighted that Sharp, the leading European manufacturer of solar, has announced that subsequent to the reforms, it will move its European manufacturing base from Germany to the UK—a real vindication of our reforms.
Derek Twigg (Halton) (Lab)
The Heath business and technical park in Runcorn in my constituency is one of the most important employment sites in the north-west, but the decision by SP Manweb plc to apply for a wayleave to retain electric lines on the site is putting at risk a multi-million pound investment in jobs and houses, which has been made worse by the fact that the Department will not be able to make a decision on this until well into next year. Will the Secretary of State intervene quickly to ensure that the investment does take place and is not put at more risk?