Winter Heating Initiatives

Lord Callanan Excerpts

Thursday 7th July 2022 Lords Chamber

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, the Government will continue to look at ways to work with energy companies to make homes more comfortable and cheaper to run. To help consumers with rising bills, we are doubling the value of the universal energy bill support scheme to £400 and scrapping the requirement to repay it over five years. Our simple energy advice service provides home owners with advice on decarbonising their homes; we plan to move the service to GOV.UK to improve the user experience.

[Baroness Worthington (CB)]

My Lords, I thank the Minister for his reply. I fear that this Government are somewhat distracted and about to expend considerable effort on picking an unproven loser; I am of course referring to the Energy Bill that was published yesterday and its heavy weighting towards carbon capture and storage and hydrogen. These are expensive and inefficient solutions, and thus will play only a minor role in the transition to a secure, affordable and clean energy system. Energy efficiency and electrifying everything are the clear winners, yet they get scarcely a mention in the 300-plus pages of the Bill. Can the Minister explain what is being done to get energy companies behind delivering these two proven solutions at a pace that will help home owners this winter?

[Lord Callanan (Con)]

Well, we could spend the whole of this Question Time debating those issues. The noble Baroness makes some good points. I am sure that we will have some extensive discussions on those issues during the passage of the Energy Bill. On energy efficiency, I agree with her, of course. It is no secret that I have been working with energy suppliers to try to put in place additional energy-efficiency measures. We will continue to take those forward.

[Lord Redesdale (LD)]

The simplest way of saving money on household bills is through insulation. Will the Government say whether they will redirect their successful efforts in insulating people’s roofs into draught-proofing people’s houses? Some 15% of the energy in a house is wasted through draughts, and a cost-effective method of dealing with that would be a national campaign to deal with draughts in people’s homes.

[Lord Callanan (Con)]

The House and I need no convincing of the value of energy efficiency. As I constantly remind the House, we are already spending considerable sums on energy-efficiency schemes, but I am sure that there is always more that can be done.

[Lord Howell of Guildford (Con)]

First, as well as the improvements that the noble Baroness, Lady Worthington, wisely suggested, has my noble friend noticed that international oil and gas prices are falling quite quickly? They are well away from their original peak. Should we not be ensuring that somehow these benefits get through to households before they are hit by an enormous energy bill increase in the future? Secondly, does my noble friend accept that if we took half the fuel duty revenue off consumers, that would be a huge hit on public revenues, but it would be an even larger saving in public expenditure from the public payments that have to be made linked to indexes? As a result of the fall in the CPI, that would be a win all round. Will he pass that on to the Treasury?

[Lord Callanan (Con)]

I will certainly pass my noble friend’s thoughts on to whoever occupies those great offices in the Treasury in the next few weeks. Regarding his first point, we want to ensure that any reductions in international energy prices are passed on to consumers as quickly as possible.

[Lord Whitty (Lab)]

Does the Minister accept that fuel-poor households will seriously suffer not just during the coming winter but, given the way that the energy market is going, in subsequent winters? Do the Government accept that, in order to deal with the problem of fuel poverty, they need to knock the heads of the energy companies together and introduce proper, targeted social tariffs, and to reintroduce a comprehensive insulation programme that does not depend solely on the rather haphazard procedures under the ECO scheme? That needs to be done as a matter of urgency, in line with the rest of the energy strategy.

[Lord Callanan (Con)]

I am sorry that the noble Lord is so down on the ECO scheme. It is a good programme and, as he is probably aware, we are expanding it to £1 billion a year. It is not the only energy-efficiency scheme we have: there is the home upgrade grant, the local authority delivery scheme and the social housing decarbonisation fund, which is about to launch bids for another £800 million of grants to local authorities and housing associations.

[Baroness Hayman (CB)]

The Minister has said the House needs no persuasion of the importance of energy efficiency, yet the Social Housing (Regulation) Bill currently in front of the House contains no mention of energy efficiency and makes no requirement to take it into account for social housing landlords. Will he have a word with his noble friend Lord Greenhalgh, who is in charge of that Bill, to see whether that can be remedied in Committee? The Energy Bill has 370 pages, and 10 lines alone for the Long Title, so, given that we are dealing with it in very short order, I wonder whether he can assure me that that Bill is fitter for purpose than the Schools Bill and the Procurement Bill have been?

[Lord Callanan (Con)]

There were a number of questions there. The noble Lord, Lord Whitty, mentioned the considerable sums that we will expend on the social housing decarbonisation fund; that funding will be matched by local authorities and housing associations, so we will get more bang for our buck. I am sure that we will have many debates on the Energy Bill. A considerable amount of work has gone into it. There will be some additions to the Bill to cover late policy changes, but I will outline those to the House at Second Reading.

[Lord Flight (Con)]

My Lords, is there any information about the extent to which domestic heating costs are benefiting from global warming?

--- Later in debate ---

[Lord Callanan (Con)]

That is a complicated subject but, irrespective of the impact, we can all agree that energy efficiency is a good thing. Using less energy and spending less money on it is an all-round good societal benefit.

[Baroness Blake of Leeds (Lab)]

My Lords, the previous Chancellor—forgive me if I do not have the appropriate way of expressing that—introduced additional payments for the cost of living crisis and they were welcomed across both Houses, but I think we can all agree that they came far too late. At every step the Government have been playing catch-up, which is why an emergency package was needed. Many thousands of households are still struggling, and when winter comes round again energy prices in particular will hit hard, and that is before any mass rollout of energy-efficiency schemes—if they come along—can possibly be in place. Will the Government learn lessons and put support in place in time to avert even more misery next winter?

[Lord Callanan (Con)]

I am slightly confused by the noble Baroness’s question. Yes, of course, we are rolling out the energy bills support scheme, which is a £400 payment that will be delivered through energy bills directly to all consumers. There is a considerable package of support. I could list all the other measures if the noble Baroness had time but there is a £37 billion package of cost of living support across the economy.

[Lord Forsyth of Drumlean (Con)]

My Lords, could my noble friend help me? Surely the easiest way to help people faced with large energy bills is to remove the tax from them and cut the 5% rate of VAT?

[Lord Callanan (Con)]

Of course, the rate of VAT has already been reduced on some energy-efficiency measures, but my noble friend makes a good point and I will be sure to convey it to the Treasury.

[Baroness Blower (Lab)]

My Lords, I am sure the Minister recognises that the cost of energy is having a very bad effect on education budgets in schools. I hope he will be liaising with whomever ends up at the Department for Education to see what can be done to ensure that schools are properly heated, as cold children cannot learn and cold teachers cannot teach.

[Lord Callanan (Con)]

The noble Baroness makes a powerful point. I point to the public sector decarbonisation scheme, for which I am responsible, which has already rolled out billions of pounds’ worth of improvements to all our public buildings to help make them more energy efficient.

[Baroness Garden of Frognal (LD)]

My Lords, £400 to households is surely a profound waste of public money since a lot of it is going to people who really do not need it. Why can the Government not target the money more closely at people who truly need it?

[Lord Callanan (Con)]

I look forward to seeing the Liberal Democrats campaigning on taking away from people money that has been allocated. It is a universal payment but of course there are considerable extra funds that have been closely targeted. There are shortages and problems across the economy. That is one part of the package but there are many other parts of the package directed at those most in need.

[Baroness Foster of Oxton (Con)]

My Lords, for the first time this winter we in the United Kingdom imported shale gas from the USA. Could my noble friend the Minister please tell the House when the report will be published on shale gas extraction for the future?

[Lord Callanan (Con)]

My noble friend makes an important point. The Secretary of State has asked the British Geological Survey to have an additional look at the problems and evidence surrounding the whole issue of shale gas extraction. I would say that the environment in this country is very different from that of the US, but we will certainly respond to that as quickly as we can.