Net Zero Strategy and Heat and Buildings Strategy

Lord Liddle Excerpts

Wednesday 20th October 2021 Lords Chamber

[Lord Callanan (Con)]

I believe there were some documents that were published in error, but they have been withdrawn. Fundamentally, we do not believe in telling people what to eat or how to live their lives. Our focus is on helping people, incentivising them to make green choices, and to make those choices easier and cheaper. As we transition to net zero, we will be tech- led using British technology and innovation, just as we did in the last innovation revolution. I appreciate that the Greens want to lecture people and instruct them; I believe that carrots are much better than sticks.

[Lord Liddle (Lab)]

My Lords, I welcome this Statement. I have not had the opportunity, as yet, to read all the documents. I fear the criticism that I made in the debate on levelling up on Thursday is relevant. There is a clarity of destination about the Government’s policies, but no viable plan to get there. The thing that stuck in my mind is that when we are looking at the necessary move away from gas central heating, the incentives being offered for heat pumps—the £450 million over three years—is clearly inadequate, in comparison with the huge scale of the challenge.

I have always understood the noble Lord, Lord Callanan, to be a Conservative who believes in the use of market mechanisms—they are what Conservatives normally support. Can he tell me the Government’s estimate of the rise in gas prices that would be necessary to persuade the public, under market mechanisms, to install heat pumps?

[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.