Energy Efficiency and the Clean Growth Strategy
Debate between Antoinette Sandbach and Steve McCabe(6 years, 2 months ago)
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Steve McCabe
I have heard about a scheme of that nature, but I have to confess that I do not know very much about it; I would be interested to learn a bit more. We definitely need to think about how we both improve energy efficiency and make it affordable for people who can afford it on paper, but who we know in practice can often find it difficult.
Antoinette Sandbach
One of the big problems is that many of those measures need to go in when back-to-the-brick restoration or work is done in the home, because putting in solid wall insulation internally requires re-wiring, re-plastering and many other things. There is therefore a need to incentivise homeowners who are making changes to their home to do so at the right time. I am not certain that I see that being incentivised by the Government at the moment.
Steve McCabe
I certainly agree. A lot of the low-hanging fruit has been picked and we are moving to a different level of problem, which I think gives us all the more reason to come up with practical, realistic incentives for that purpose.
As I say, it is good that ECO will continue until 2028. However, it is estimated that, to meet the 2030 fuel poverty target, the scheme requires funding of about £1.2 billion per year, as opposed to the current proposal to keep funding at about £640 million per year. I am curious to know how the Minister thinks she can meet that target with a projected funding shortfall of roughly 50%.
A further concern about ECO is that it is essentially a regressive funding mechanism. It pays for installing efficiency measures in fuel-poor homes by increasing energy bills across the board, which negatively impacts low-income customers who do not themselves benefit from the scheme. It seems analogous to the arguments about the cost of the smart meter programme, in that the cost of that is spread across all bills but without all people gaining the same benefits. That is something I have been looking at with some interest for a while now.
The hon. Member for Wells was looking for a way to vary the funding, and he talked about what might be done with the winter fuel allowance. I agree with the UK Energy Research Centre, whose recent report recommended that the environmental and social levies, including ECO, should be funded through general taxation rather than increased energy bills, which they claim would save the poorest 10% of households £102 per year while the vast majority of people would see no change to the amount they pay for environmental and social levies.