Warm Home Discount (Miscellaneous Amendments) Regulations 2021

Lord Oates Excerpts

Tuesday 18th May 2021 Grand Committee

[Lord Oates (LD)]

My Lords, I thank the Minister for her introduction to the regulations. It is always a pleasure to follow the noble Baroness, Lady McIntosh of Pickering, who raised a number of very important questions. If the Minister is unable to answer them immediately, I hope that any answers in writing will be copied to the Committee, in particular in relation to the rebate being covered as an energy-saving measure, which is clearly a counterproductive approach.

I wonder if the Minister could tell us a little, first, about the way in which this statutory instrument has been dealt with. My understanding is that these measures have come into force already; I think they did so on 31 March. It is obviously slightly concerning that we are debating issues which are already in operation. Secondly, in her response can she explain to me, in a way that I did not quite gather from the Explanatory Memorandum, what happens where the supplier of last resort does not take on the obligations? I understand that part of the purpose of these regulations is to try to encourage that, but what happens in those circumstances?

As noble Lords will know, the warm homes discount was introduced in 2011, during the coalition Government, to help tackle fuel poverty by placing obligations on energy suppliers. But in the 10 years since then, significant costs have been placed on bills because the cost of power sector decarbonisation has been funded pretty much entirely through them. This is obviously a highly regressive way of addressing the problems of climate change—an issue that is, after all, critical to us all and to which the wealthiest, in fact, contribute the most in emissions. The fact that those on low incomes are having to pay a disproportionate share of that burden seems the wrong starting point.

Not only that, but the impact assessment states that the cost of the warm homes discount is met by energy suppliers. Of course, that is not really correct: it is met by energy consumers, because those costs are passed on by the suppliers to the consumers. This means that it is, again, an extremely regressive—and in my view inappropriate—way of paying to tackle fuel poverty if it burdens costs in a disproportionate way on others who may find them difficult to pay. We have to look again at the whole way in which we share fairly the burden of decarbonisation and how we support those in fuel poverty out of it.

The most sustainable way of addressing fuel poverty—the noble Baroness, Lady McIntosh, touched on this—is to ensure that everybody lives in the most energy-efficient buildings. We are otherwise literally letting our money go up in smoke, which is why it is particularly unfortunate if the rebate is treated as an energy-saving measure. Again, the impact assessment gives an indication of the increased emissions as a result of these measures.

Can the Minister give us in her response, or else put it in writing, a breakdown of the EPC rating of all the homes where households are in receipt of the warm homes discount? She reminded us that the Government have committed to improving the homes of those in fuel poverty to EPC band C by 2030, while the Explanatory Memorandum reminds us that the Energy White Paper committed to all homes reaching band C by 2035. That is an incredibly unambitious target. The Liberal Democrats have set out a target that we should reach that point by 2025, but we should note also that even the unambitious target set by the Government is caveated by the words

“where practical, cost-effective and affordable”.

At some point, the Government will have to recognise that there is no point setting the highly ambitious targets that they have—a 68% reduction in emissions of greenhouse gases on 1990 levels by 2030, or the 78% reduction by 2035, or achieving net zero by 2050— if they will not match those targets with ambitious actions. The Minister knows that the one cannot be achieved without the other. She also knows that these targets of 68%, 78% and net zero are absolute targets and commitments; they are not caveated in the way that the Energy White Paper caveated the energy efficiency ambition.

I ask the Minister in her reply to confirm specifically that those targets are not subject to those sorts of caveats but absolute targets, and to recognise that if we are to have any hope of meeting them, our actions have to be much more ambitious. That has got to start with the energy efficiency of fuel-poor homes. We have to make much more rapid progress on that. All the time we fail to do that, we—the consumers—are having to pay out costs to support those in fuel poverty who continue to burn excess amounts of fuel in homes that are not properly insulated.

We have to recognise that the world has 79 months at the current rate, at the current burn level, before we have used up the carbon budget to keep us within the 1.5 degrees aim of the Paris agreement. We do not have the luxury of time. Much will rely on future technologies, but on the things that we know how to do we must act much more swiftly and ambitiously. As I say, our actions must be as ambitious as our targets.

Having said that, obviously we support the alleviation of fuel poverty and, in the absence of a more progressive scheme, welcome the renewal of the warm home discount and the increases in rebates. However, I urge the Minister and the Government to really get on to the issue of the energy efficiency of our buildings. We simply cannot proceed on the current timetable.