Net Zero Strategy and Heat and Buildings Strategy

Lord Bishop of Durham Excerpts

Wednesday 20th October 2021 Lords Chamber

[Lord Callanan (Con)]

The noble Lord will be pleased to know that I do believe in market mechanisms. His question is impossible to answer, and let me explain why. Heat pumps are three to four times more thermodynamically efficient than existing gas boilers. At the moment, because of the costs of various policies on the production of electricity to successfully decarbonised the electricity sector, there is an imbalance in pricing. The Treasury and the Government have accepted that we need to do something about rebalancing gas and electricity prices. Now is clearly not the time to do this, when we are experiencing record gas prices. In the longer term, and bearing in mind that this is a 15-year strategy, we need to change the balance of these costs. We are committed to do so. There are other market mechanisms of which I could speak in favour. We will consult on a market mechanism for gas boiler manufacturers to have a certain proportion of their sales be in heat pumps. I repeat what I have said before: the boiler upgrade scheme is not the only support mechanism we offer for installing heat pumps.

[The Lord Bishop of Durham]

The Minister and I live in the same region, where masses of new building is going up. I have had only a quick read of the document —we have not had time for anything other than that—and there is a lot about retrofitting in it. Given that we have all the technology and knowledge now, can the Minister explain why new builds are not being built to a net-zero target from this year or perhaps next? Everything is in place to be able to do this. We are delaying too long.

[Lord Callanan (Con)]

The decision was made by what was then the Ministry of Housing, Communities and Local Government that the future homes standard would kick in in 2025. There is a long process of consultation to go through with industry to ensure that the standard is applicable, that the supply chain is there, and so on. The right reverend Prelate will be pleased to know that we are changing what is called Part L of the building regulations next year. This will also produce substantial carbon savings in advance of the future homes standard coming in in 2025.

--- Later in debate ---

[The Lord Bishop of Durham]

It is obviously the evening to get a second go. Yesterday, the Transition Pathway Initiative launched the Global Climate Transition Centre, which will be a key part of the COP 26 financial infrastructure, to assess 10,000 companies on their alignment with the net-zero pathway and support accountability and action on this very important issue. Understandably, that is not in the paperwork, because it was announced yesterday. Is the Minister aware of the Transition Pathway Initiative—which has been around for a while now—and the Global Climate Transition Centre, and what actions will the Government take to support these initiatives?

[Lord Callanan (Con)]

Yes is the answer to the right reverend Prelate’s question. They are excellent initiatives, and they are indicative of some of the leadership of many of our leading companies and how they are committing to net zero. Many of them are going to be displaying at COP, and it is great to see some of the biggest businesses in our land also helping us on the pathway to net zero.