Energy Update
Debate between Meg Hillier and Greg Hands(2 years, 3 months ago)
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Greg Hands
My hon. Friend is always a strong voice for Redcar and Teesside. I think that every single question he has ever asked me has included hydrogen somewhere. He is auditioning, I think, to be the UK’s Mr Hydrogen. He has mentioned CCUS as well, which is a big priority of ours, and he is absolutely right to say that energy efficiency is so important. If we can reduce the amount of energy that is used to create the same level of heating in people’s homes, clearly that is a massive gain. That is why we have invested £6.6 billion over the course of this Parliament in energy efficiency.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The annual energy costs of a bar on my patch in Shoreditch—it is part of a large chain—have gone up from £30,000 last year to £120,000 this year. All energy contracts are now being renegotiated, with some experiencing an uplift of at least 300%, and since the pandemic some electricity suppliers are refusing to supply the hospitality sector. The Minister has given warm words, but there are two issues there. Will he give us comfort that he will act on at least one of them by talking to the energy suppliers about making sure that more of them can at least compete for the business of these important hospitality businesses?
Greg Hands
As ever, the hon. Lady raises an important and telling point. It is worth reminding ourselves, as I said earlier, that businesses tend to have long-term contracts for their energy bills. Prices were lower but they are now rising. There is an advantage in being locked into lower prices for a longer term, but there is, of course, a disadvantage when that long-term contract rolls off and they have to replace it. She is quite right about that. I am happy to look into the specifics of the bar that she mentions. There is no obligation currently on energy suppliers to supply businesses, unlike their obligation to provide to consumers, but I am happy to look into the specifics of the bar that she mentions in her constituency.
Oral Answers to Questions
Debate between Meg Hillier and Greg Hands(2 years, 6 months ago)
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Greg Hands
As the Financial Secretary to the Treasury said yesterday, that consultation on the climate compatibility checkpoint has closed and the Government will be responding to that consultation in due course.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
A recent Public Accounts Committee report on net zero highlighted the real challenge of getting consumers onboard. Going net zero and embracing low- carbon technologies cannot be a preserve of the wealthiest and there needs to be much more work by Government. What are the Government doing to ensure that consumers are supported to make green choices?
Greg Hands
The hon. Lady raises some very good points. I am looking forward to appearing before the House of Lords Committee on this very topic on Thursday. I am sure that her Committee has done important work on this. We want to make this process as affordable as possible for people. That is why we have introduced the boiler upgrade scheme. That is why we are spending £6.6 billion of public money in this Parliament on energy efficiency, making sure that those options are there and are affordable. That is one of our key aims, particularly if we are to get to 600,000 heat pumps per annum by 2028.
Energy Price Cap: Residential Buildings with Communal Heating Systems
Debate between Meg Hillier and Greg Hands(2 years, 8 months ago)
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The Minister for Energy, Clean Growth and Climate Change (Greg Hands)
I begin by congratulating the hon. Member for Hackney South and Shoreditch (Dame Meg Hillier) on securing this important debate. I apologise, Mr Hollobone, for having been late for the debate, which now seems some time ago. I think it is the first time, in the 17 years I have been in the House, that I have been late for a debate. It may seem a bit academic, at 8.43 pm, to apologise for being here at 5.25 pm instead of 5.24 pm, but I apologise none the less. I was a guest speaker in the Boothroyd Room for the Net Zero all-party parliamentary group, with the hon. Member for Leeds North West (Alex Sobel), but I of course apologise—as you know better than anybody, Mr Hollobone, Westminster Hall always takes precedence over APPGs.
I congratulate the hon. Member for Hackney South and Shoreditch on securing this debate. I noted that there were, I think, seven London MPs here, and all of the Back-Bench contributions were from London MPs. My own constituency, of course, is also very affected by this issue, as are other inner-city constituencies. They tend to be the places where district heating networks occur, so it is very much an issue for my constituents as well.
This Government recognise and understand the pressures people are facing with the cost of living. This is of course a deeply worrying time for many of our constituents, and for many their fuel bill is perhaps their biggest concern. We know that the war in Ukraine and the recovery from covid-19 have driven up wholesale energy prices, and no Government can control the global price of gas. UK consumers, like many others, are now feeling the effects of that in their energy bills.
Turning to some of the points raised, the hon. Member for Hackney South and Shoreditch asked if we would consider a targeted fund to help those in heat networks. She will know that the Chancellor announced an additional £500 million for the household support fund at the spring statement, which will go towards those in hardship, including heat network customers. There are other measures in place to support vulnerable bill payers.
My hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) asked if we could improve the installation of meters. We introduced revisions to the Heat Network (Metering and Billing) Regulations in autumn 2020, which required a significant expansion in the heat networks required to install heat meters, with an additional 84,000 customers receiving heat meters over the following four years.
The hon. Lady also asked whether we could install a price cap on wholesale prices being used by heat networks. When we introduce new legislation, we will consider all options on price regulation. I will come back to other points raised by hon. Members.
Our energy price cap insulates millions of customers from volatile global gas prices, but I recognise that, with heat networks not being covered by the price cap, they are more exposed to those increases. That means that a significant minority of customers on networks are seeing price increases that are far in excess of price cap rises. As commercial purchasers of gas, heat networks can ordinarily purchase gas at cheaper prices than individuals, which I think one or two hon. Members drew out. I do not think it is fair to characterise heat networks as being exploitative practices. In fact, they generally render cheaper bills on average. However, without the price cap in place, when the price rises come in, if customers are used to paying a lower tariff, they are likely to be more affected. That ability, which is beneficial when prices are low, is leaving many more exposed to the current price increases, because the prices that customers were used to paying were lower.
To provide immediate support to consumers, including those served by heat networks, the Government have provided, as we know, a £9.1 billion energy bill support package. That is in addition to increases in universal credit, the warm home discount and a £200 discount on energy bills. All households in bands A to D in England will also receive a £150 rebate on their council tax, which will not have to be paid back.
Dame Meg Hillier
I would just point out to the Minister that, while any support on energy bills is welcome, and band A to D households are the focus, many people caught by this issue in my constituency, and I am sure in his, are living in properties in significantly higher council tax bands, but that does not mean necessarily that they are wealthy households by any means.
Greg Hands
Yes, the hon. Lady is absolutely right. Her constituency, and mine probably even more so, will have people in exactly that category. That is why the Government also provided £144 million in funds to local authorities to help those vulnerable customers who do not live in band A to D properties—either they live in a larger property or they do not pay council tax at all. That £144 million fund is available for local authorities to help those who do not fall into the £150 council tax rebate.
We provided a total of £1 billion funding through the household support fund, enabling local authorities to support—on top of that—the neediest households with the cost of living, and all that support will help people in the short term. Clearly, in the long term, we need to see a more sustainable regulatory system for heat networks. That is why the Government have committed to introducing legislation within this Parliament, which will see Ofgem regulate the heat network industry. With Ofgem having regulatory powers over the heat network industry, legislation will secure fair pricing for all heat network customers, as well as ensuring that heat network operators secure the best possible purchasing deals for their customers. Ofgem will also have powers to investigate and intervene when networks appear to be charging customers disproportionate prices.
Heat networks are part of the pathway to decarbonising heat. By operating at scale and, in some cases, by making use of waste heat sources, heat networks can supply heating more cheaply than individual gas boilers. The study commissioned by my Department in 2017 found that heat networks supply heating at a discount of £100 per annum on average compared with individual gas boilers—it is literally a case of economy of scale.
Net Zero Strategy and Heat and Buildings Strategy
Debate between Meg Hillier and Greg Hands(3 years, 2 months ago)
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Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
Once again, we hear warm words, big headlines and big figures from the Government, but too little detail, as the Public Accounts Committee has repeatedly highlighted. So I hope the Minister will make sure that there are repeated and meaningful reports to Parliament on these figures, good or bad, so that we can keep a track on this. Will he also look at the issue of people’s behaviour? As others have highlighted, there is a challenge on not just the money but the hassle factor, for example, in greening homes that are very challenging to insulate. How is the Department looking at that? Will he commit to do so?
Greg Hands
The hon. Lady asks a set of very reasonable questions. First, I commend her for saying that the Government have announced big figures, because her Front-Bench colleague, the right hon. Member for Doncaster North (Edward Miliband), seemed to think they were very small figures. I agree with her that these are very, very big figures of Government money being committed.
The hon. Lady asked a reasonable question on people’s behaviour. Of course we want to make things as straightforward, simple and transparent for consumers as possible. We want people to be making the change—to be incentivised—and the Government are putting in the financial incentives. We want people to feel incentivised to make the right choices. That can be something as simple as making the scheme straightforward and easy to understand. That is where we will be moving on the replacement boiler programme, making sure that it is as easy as possible for people to understand when it starts next April.
Oral Answers to Questions
Debate between Meg Hillier and Greg Hands(3 years, 3 months ago)
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Greg Hands
I look forward to a visit to Yorkshire and the Humber region as quickly as possible. My hon. Friend will know how Yorkshire has delivered incredibly for the UK as a whole, particularly in respect of offshore wind. The world’s largest operational offshore wind farm, Hornsea One, spans 400 sq km off the Yorkshire coast and generates enough power for 1 million UK homes.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The Minister has talked a lot about what is going to happen ahead of COP in respect of net zero, but will he look back at the green homes grant voucher scheme that was delivered in September last year? It was set up in 12 weeks, from announcement to delivery, and was axed six months later without having delivered the jobs or the green homes measures. What is the Minister’s Department doing to reflect on that? Is he thinking about longer-term planning to the benefit of both the industry and our net zero targets?
Greg Hands
The hon. Lady will know the course of that scheme through her important work as Chair of the Public Accounts Committee. She will also know that we are committed to publishing a heat and buildings strategy in the run-up to COP, and she will just have to wait and see what is in it. It is incredibly important that we take strong action to make sure that our public and private building stock remains sustainable for the future and makes its contribution as we move forward to net zero and our chairing of COP in November.