Home Energy Efficiency: North of England

Paul Howell Excerpts

Wednesday 6th July 2022 Westminster Hall

[Paul Howell (Sedgefield) (Con)]

It is a privilege to speak in this important debate, Mr Robertson, and it is a pleasure to serve under your chairmanship.

I begin by congratulating my constituency neighbour, my hon. Friend the Member for Darlington (Peter Gibson), on securing this important debate. Although energy efficiency has always been important from an environmental standpoint, the significant increase in energy costs that the UK is experiencing has made it more relevant than ever. Cost of living pressures, and the changing economics of gas and green energy, have significantly increased the opportunities provided by energy efficiency. The cost of gas has increased dramatically, but the cost of installing a heat pump or something similar has not moved. However, the economics are changing massively, in terms of how this will play out.

Sedgefield surrounds Darlington, and it has many villages, from Hurworth to Ferryhill, and from Wheatly Hill to Piercebridge. It has a variety of different properties. Given that the constituency also covers almost 240 square miles, it has many farmhouses and outlying buildings that present energy efficiency challenges.

According to statistics from the Department for Business, Energy and Industrial Strategy produced in April, the north-east has one of the highest rates of fuel poverty in the country. Energy efficiency is one of the three factors that cause fuel poverty, according to the End Fuel Poverty coalition. Although improvements to energy efficiency in households that are struggling with energy costs will not solve the problem on their own, they are certainly a welcome step.

Durham County Council estimates that improving energy efficiency in homes in former mining villages could save households around £250 a year on bills. I think that figure was calculated before the current inflationary price increases, so it is probably much more than that now. The Government have a role to play in enabling residents to make their homes more energy efficient. Although it was not perfect, the green homes grant voucher scheme was broadly popular in providing a substantial subsidy for those who wanted to make their home more energy efficient, but could not cover the entire cost of doing so. The local authority portion of the scheme, which awarded councils funding to upgrade homes for low-income families, was particularly necessary, given how expensive such upgrades can be. For example, the tradesperson site My Builder estimates that insulation work starts at around £200 per external cavity wall. Such work on a two-storey terraced house would cost about £400, but the price increases steeply for buildings built before the 1920s, which usually have solid walls. In that case, internal wall insulation starts at £4,000, but can cost much more depending on the size of the house. Solid wall insulation is even more expensive, starting at around £7,000, and without some help, it is likely that many households in need of insulation would not be able to afford it.

To make rural homes energy efficient is a particular challenge, because they are often, or rather always, somewhat isolated and not connected to gas mains. To enable those properties to have a low-carbon heating scheme was one of the measures covered by the green homes grant. To be fair, Durham County Council took full advantage of it, using more than £5 million of Government funding to install more than 100 low-carbon heating systems in rural homes across the county. It also used to funding to install insulation in villages such as Chilton and Ferryhill. I was pleased to join Lord Callanan when he visited to inspect the properties and to see how delighted the residents were with the scheme, and how much it had improved their situation.

Another barrier to making homes energy efficient, which was mentioned by my hon. Friend the Member for Darlington, is absentee landlords. We may have a terrace of low-value houses and while it is all well and good for someone to insulate their own house and the two walls adjoining the other properties, if the house next door is empty, there will be a great deal of leakage from the heating system. That situation does not incentivise people to make their properties energy efficient. Similarly, a tenant whose landlord has refused to make their house more energy efficient has no option but to pay more for their energy.

My hon. Friend the Member for Darlington has also referred to the fact that the cost of updating a property compared with its value is a major problem in the north. In some of my villages, property can have a value as low as £40,000 or £50,000. If someone has to spend between £5,000 and £10,000 on insulation, even at a basic level that represents a substantial amount of the value of the property. Neither the individual, nor a social landlord or private landlord, will see value in trying to do that. However, it is important for that work to be done so that householders have a better economic base for paying their ongoing fuel costs. We need to make sure that we support them in that endeavour.

We have many different styles of housing in the constituency, so we need a range of insulation options. The same is true about our move to green energy. The local geography provides particular challenges and opportunities. Former mining villages, where houses are close together, are suitable for district heating systems. Geothermal heating is also a possibility in County Durham due to the former mines. Some of my colleagues recently wrote in The Times that the Durham Energy Institute at Durham University has led the way on that research for a while. Support of such solutions can make a huge difference for residents and home owners, whether they are individuals or landlords. I believe that the solutions are out there, and I would like to continue to support the variety of initiatives that help, whether that is supporting insulation, addressing empty properties or promoting the transition to options that could be greener and more cost efficient in the long term, such as a district heating system—possibly even driven by the utilisation of mine water heating. Those opportunities, once in place, can be cheap to run and environmentally efficient. I am confident that we have the solutions to the north-east’s domestic energy problems, but it is a question of ensuring that they reach the households that need them. The Government have made progress in this area. I look forward to them continuing that and taking further steps.

--- Later in debate ---

[Dr Whitehead]

The hon. Gentleman is admirably setting out a series of concerns about how we address the process of retrofitting, which we need to think about very carefully. One of the things that concerns me—here I get a bit political—is just how bad the Government’s overall retrofit programme has been over a long period. It is not just about the collapse of schemes from 2012 onwards. In the previous debate, somebody asked what happened in energy during the previous Labour Government. Well, a lot happened: the carbon emissions reduction target, the community energy saving programme and warm home grants.

There has been a real noticeable increase in standard assessment procedure ratings in properties over the years. From about 1990 to 1995-96, the schemes really started working, and they were publicly funded. What happened in 2012 is that the publicly funded schemes were removed, and after that the schemes were entirely market based. The green deal died a death. Recently, the green homes grant was sort of publicly funded, but it also rapidly died a death.

Significantly—I want to emphasise this point, in terms of how we treat retrofit—the only part of the green homes grant that was successful was the part that applied to local authorities. Local authorities were and are able to take some of that grant and do a lot of good work. The hon. Member for Sedgefield (Paul Howell) said that his local authority has done a lot of public work on that, yet the Government systematically set their face against the idea that local authorities can play a substantial leading role in retrofitting.

I suggest—the hon. Member for Darlington and I spoke about this a moment ago—that the case has overwhelmingly been made for retrofit funding. We are saying that there should be a 10-year programme to retrofit 19 million homes of all tenures through a combination of loans, grants and direct local authority schemes, with two million homes retrofitted immediately. That would be a comprehensive programme of retrofitting across the country, with the emphasis on area-based schemes so that local authorities can look at where their areas are worst and at what needs to be done in their particular circumstances, and concentrate resources accordingly on retrofitting with that knowledge and those concerns at the front of their minds. How much better would that be than the sorts of schemes we have had over the years? In this case, energy companies have been asked to go around and pick out individual properties to do up to a greater or lesser extent.

[Paul Howell]

I declare an interest: I am a private landlord. Does the hon. Gentleman agree that, in terms of segmenting the approach and trying to make sure it is right, we need a different approach when considering the economics of the north, for landlords and owners, in contrast to the high-value property areas of the country, to ensure that we focus on absentee landlords and people who are not doing the right thing? In parts of the north they almost walk away because the value of the property is so low. We need to ensure that does not result in the properties becoming derelict. Rather, they should either be resold or go back into the rental market properly.

[Dr Whitehead]

I agree with the hon. Member that we need to ensure that we tailor our programmes, not just to the particular areas of the country but to the particular resources that we will need in order to deal with the arrangements in different parts of the country. Labour’s programme would not only allow that to happen, but ensure that, right across the country, we were not applying a one-size-fits-all arrangement and we were allowing local authorities in particular to tailor their programmes. We can imagine the equivalent of the old housing improvement areas or general improvement areas being applied in the form of energy efficiency improvement areas in various local authority areas. They would be chosen by those local authorities, and would be able to concentrate on different tenures in the way that the hon. Gentleman outlined. The difference is like night and day between what Labour is proposing at the moment and what the Government—albeit they have spent some money on retrofitting—continue to try to do.

I just want to take a few more minutes, because I appreciate that we will in the end run out of time—even though we have more time than we thought—and I want to give the Minister ample time to reply to the debate. I would like him to address his thoughts to three particular questions.

One of the only schemes that is doing any serious work on retrofitting at the moment is ECO—the energy company obligation. The ECO scheme is now in its fourth iteration; ECO4 was supposed to come onstream in April this year, and the hon. Member for Darlington asked, “Where is ECO?” There is an answer in the press release for the Energy Security Bill that appeared on my desk today. That press release states:

“The current ECO4 scheme came into force in June 2022 and will run until March 2026.”

That is just not true. No ECO4 scheme is in operation at the moment, because the regulations have not yet been sorted out as far as this House is concerned; we still have to discuss them and put them into being. Today, I was at a lunch where an energy management and building company guy sitting next to me was bemoaning the fact that the people there could not just get on with ECO4 because they just do not know what is going to happen with the regulations.

Therefore my first question to the Minister is this. When will that happen so that we really can get under way with ECO4? Why has he put it in the Energy Security Bill that ECO4 has already started when it has not? Can he get it started as soon as possible so that the people I have been talking to recently can actually have some security about the future arrangements for retrofit? We obviously consider that the uprating for ECO4 that has already taken place, from £750 million to £1 billion, is welcome but not enough. Certainly we would want to see that programme substantially increased in size at a very early stage in order to get this retrofit programme going as quickly as possible.

The second question is this. Why is there nothing in the Energy Security Bill—as far as I can see—that takes us beyond the level of ECO4? Certain things in the Bill suggest some amendments to ECO4, but there is nothing to take us beyond that particular scheme in the way that has been described today in this Chamber. I do not know whether the Minister—because I suspect that the Energy Security Bill is a Bill in progress even as it is published—will want to bring forward amendments, during the passage of the Bill, that allow those further things to take place, but I will be interested to know this afternoon whether that is under serious consideration.

As I think every Member present this afternoon has said, this is a pressing problem that needs to be sorted out as quickly as possible, and on the widest scale that is compatible with our net zero commitment and the duty we have towards our citizens’ style of living, energy bills and expectations of what their housing will look like in future years. Pushing forward on that is something we in this Chamber are completely united on, and I look forward to hearing the Minister’s response to that unity of purpose.