Caroline Lucas
Main Page: Caroline Lucas (Green Party - Brighton, Pavilion)(13 years, 10 months ago)
Commons ChamberRead Full debate Read Hansard Text
Gregory Barker
Of course, CERT is an obligation on the fuel companies and is not part of the Treasury tax and spending regime as such. It will not be included in the comprehensive spending review. I share the hon. Gentleman’s concerns, given that we want to focus on the fuel-poor and that 15% seems a relatively limited amount of money. That is why, as I am going to say—he is pre-empting my speech—when we come to consider the long-term basis for the right form of supplier obligation when CERT ends at the end of 2012, we will need to ensure that it is effectively focused on the most vulnerable households and on the fuel-poor. That will be the key consideration when we are looking to frame a new and appropriate supplier obligation.
As I have said, the green deal is a real game changer. It takes policy out of Whitehall and on to the high street. The green deal is a dramatic change from the status quo. The green deal, we believe, will fundamentally alter the scale of delivery. In terms of scale, to put it in context, the green deal is even more ambitious than Mrs Thatcher’s sale of council houses in the 1980s. Whereas that transformed the lives of about 2 million families, the green deal has the potential to touch more than 14 million homes around the country. Now, there can be no one-size-fits-all model. Our green deal legislation must promote the emergence of a new and dynamic market, working for the incredibly diverse mix of homes in the UK. There must be greater consumer choice, but with a recognition of the need for fairness and, in particular, of the urgent and pressing challenges of fuel poverty.
The green deal will, we believe, unlock billions in new private capital to support energy efficiency, but that will not work effectively without the engagement and support of local communities. Local communities have a key role in driving this ambitious change. We have seen that in Kirklees, where community engagement has been vital for a universal take-up.
Caroline Lucas (Brighton, Pavilion) (Green)
The Kirklees example is an excellent one, and Green councillors have been instrumental in that. They were rolling out free insulation—that was the difference; it was free. Where does the hon. Gentleman think that the money will come from for the Government to be able to roll out such a scheme? Does he agree that we ought to be considering mechanisms such as levying a windfall tax on the energy companies, given that they will be getting windfall profits from their involvement in the emissions trading scheme—at least until 2013? Should we not be using money like that to enable such a scheme to be rolled out to everybody rather than depending on people in poor households having to take out what looks like a loan?
Gregory Barker
First, I welcome the hon. Lady to the debate. I am sure that she will be a key—and welcome—feature of such debates for the rest of the Parliament. Of course, CERT is already a levy on the energy companies and we have a clear idea of where the money is coming from. She mentions that in Kirklees the scheme is free, and that is an important point. We simply cannot afford to give free insulation to the whole country, even though it worked extremely well in Kirklees. However, through legislation and opening up new markets with new regulation, we can ensure that there is no cost up front to every single householder. Unlike other pay-as-you-save schemes that were trialled by the former Government, there will be no reference to the credit score of the household. It will not be a personal loan, a green mortgage or a charge on the property.
What will happen is that the right interventions for that particular property will be delivered and the costs of those interventions will be rolled up in their entirety and repaid through the energy bill for that property over 25 years. If that owner moves away, the cost will simply transfer to the energy bill of the next occupant. If the occupant changes energy company, the cost will simply transfer to the new energy company. We will make sure, through legislation, that it is impossible for a new energy provider to come in and provide energy without taking on the costs associated with the green deal finance. There is a real golden rule.
Gregory Barker
That is what I am saying, with the caveat that there are two big variables, the first of which is behaviour change. If someone decides, in their newly insulated home, to turn up the dial and hoover in the nude, that will affect the energy bill. Likewise, if there is a spike in oil prices or a surge in gas or electricity prices, that will affect bills. On an equalised basis, assuming there is no major behaviour change, the assumption in the model we are working on will be that the financing costs will always be less than the overall costs of installation.
Our ambition goes way beyond just household energy efficiency. Households, businesses, industry and the public sector all need to pull together to achieve the change that we need. For businesses, energy efficiency can make sense provided that they are not constrained by unnecessary bureaucracy. The green deal will apply to businesses too, and especially to small and medium-sized enterprises. It has the potential to help many companies improve not only their green credentials but their bank balances and their overall competitiveness.
I want our reforms to take energy efficiency away from the corporate social responsibility managers and plant it firmly on the desk of Britain’s finance controllers. Pioneers in this area are already demonstrating that energy efficiency makes real sense for business. To pick just one example, Marks and Spencer made a saving of £50 million last year alone through energy-efficiency measures. It is just one of thousands of progressive British businesses that realise that energy efficiency has a direct impact on profitability.
Marks and Spencer launched Plan A in January 2007, in which it set out 100 commitments to achieve in five years and the aim of improving fuel efficiency by more than 20%. Critical to Plan A has been genuine and consistent leadership from the very top of the organisation. Providing leadership from Government Departments is a responsibility that we cannot shirk, and that is why the new Prime Minister has committed the coalition to cutting emissions from central Government Departments by 10% in just 12 months. I am pleased to inform the House that work is well under way, but the 10% cut in Whitehall is just the starting point. We are engaged in a major, long-term drive to reduce emissions and save energy costs right across the wider public sector, which alone accounts for 3% of total UK carbon emissions.
The public can watch our progress: all Government Departments are now committed to publishing their energy use online and in real time. Seventeen Departments will publish energy consumption data for their headquarters buildings by the end of July, following the first meeting of the new cross-departmental energy committee. However, I am pleased to say that the Department of Energy and Climate Change, the Home Office and the Ministry of Justice have already made their energy-use information available online and in real time. We have also asked the private sector to join Ministers in this cross-cutting group, so that we can hold Departments to account and ensure that we learn the very best practice from business. This Government are determined to get our house in shape in short order, and we are already delivering clearer leadership, greater transparency and real change.
Caroline Lucas
I am grateful to the Minister for his support of the 10:10 campaign, which aims for 10% cuts in 2010. However, he will know that the campaign will not finish at the end of 2010 and that, if we are serious about tackling climate change, we need 10% cuts year on year thereafter. Can he make any statement now about what will happen at the end of 2010?
Gregory Barker
The hon. Lady is absolutely right. The important thing about our 10% cut is that it is a commitment made by the Prime Minister and it is being driven from the very top in government. She is absolutely right that 10% in one year is simply not enough, but it will be a terrific shock to the system in Whitehall and a great start. In the committee of which I am a member, and which is chaired by my right hon. Friend the Secretary of State, I have been very clear that it is only a starting point.
Achieving such reductions will get progressively more difficult, because behaviour change and the simple interventions that can be made at first cannot be repeated once they have been done. The task will require investment, but we are confident that most of that investment will pay for itself. The new models of investment—involving the energy services companies and the private sector, as well as enlightened and progressive facilities management contracts—mean that the cost of the infrastructure changes that will be needed will not necessarily fall on the public purse.
We are pushing very hard to draw in expertise from the private sector, and I am glad to say that that is largely being provided on a pro bono basis. We want to ensure that the Government, instead of being a national embarrassment, become a showcase for the best in British energy conservation. It is not at all impossible that, if we attach renewable energy sources to our estate, the public sector could one day become a net exporter of energy. Those are lofty ambitions and strategies but we will not superimpose arbitrary targets on them. There have been too many targets cluttering the landscape in the past. We know what we have to do, and the best thing that we can do is to get on and do it.
The potential benefits of energy efficiency are absolutely clear. This coalition Government are committed to making the UK a leader in energy efficiency, and to doing so with a completely new level of ambition and at a scale never before attempted. We are radically improving and refocusing existing policy measures, and we plan to bring forward completely new measures to deliver a real step change in ambition and delivery across both households and the business sector.
However, I would say this to the Opposition: there is much that unites us on this whole agenda, and we are building on the work begun by the right hon. Member for Lewisham, Deptford (Joan Ruddock) and her Front-Bench colleague, the hon. Member for Islington South and Finsbury (Emily Thornberry). The Liberal Democrats and the Conservatives supported the Climate Change Act 2008 in a constructive spirit, and I hope that we can forge a new consensus across the new House of Commons on energy efficiency and tackling fuel poverty. We should send a strong and united message to business and consumers alike that the time for action is now, and that we are united in laying out a new and clear framework for the long term.
I am glad to report that the new coalition has hit the ground running. We have a strong and ambitious green agenda, with energy efficiency at its very heart. The green deal will be at the centre of this Session’s flagship Energy Bill, along with other measures to drive low-carbon transformation and build energy security. It is clear from the Chancellor’s Budget, which committed to introducing a floor price for carbon, and yesterday’s publication of the work of the green investment bank commission, that we are making real progress already. There is a great deal more to do, and time for action is short, but I know that, by focusing on energy efficiency at the very outset, we are starting in the right place.
Joan Ruddock
Again, I have to tell the Minister that I think he is rather mistaken. The fact is that, whatever his green deal does—I shall discuss that in more detail in a moment—it depends entirely on who opts in. He may get nobody to do so. He is talking about a grandiose scheme covering millions of people, but it depends entirely on individual households deciding to opt into the scheme. The benefit of CESP, on which we expected to build further, was that it involved the whole community, local government, energy companies and partnerships in a way that allowed for an holistic approach. That is clearly what his scheme will fail to do.
Let me make a little more progress. We also introduced the CRC energy efficiency scheme—again, there has been no mention of that today—which is an extremely important energy efficiency measure. It is a new mandatory emissions trading scheme to improve energy efficiency in the large public and private sector organisations that were not otherwise covered by the climate change levy, or indeed the emissions trading scheme, which is, of course, European-based. Consequently supermarkets, banks, universities, hospitals and other organisations were all brought into an energy efficiency framework. The scheme is intended to target emissions from the energy use of those organisations, which represent no less than 10% of all UK emissions. What is the future of the CRC energy efficiency scheme? Again, the Minister has been silent on the issue. Will he guarantee that this important scheme will continue?
Let us not forget the boiler scrappage scheme, which my hon. Friend the Member for Telford (David Wright) mentioned. It was a great success. About 125,000 heating systems have been or are due to be upgraded under the scheme. It helped sustain work for installers and UK-based boiler manufacturers throughout the economic recovery, and it saved carbon. Replacing 125,000 G-rated boilers should save about 140,000 tonnes of CO2 every year—the equivalent of taking about 45,000 cars off the road.
I have reminded the House of the big changes that Labour was making in energy efficiency and in putting the country on track to meet our climate change targets of a 34% reduction in greenhouse gases by 2020 and at least 80% by 2050.
Caroline Lucas
According to the Committee on Climate Change, the emission reductions achieved in the past year have been almost entirely a result of the recession, not a result of Government action. To hear the right hon. Lady talking as though the previous Government did wonderful things to achieve climate change targets beggars belief.
Joan Ruddock
I am so sorry. I was going to—I do—welcome the hon. Lady to the House, but her intervention is not welcome. We more than doubled—hon. Members know better than to laugh at this—our Kyoto commitment. At the last count, when I was in my place, we had seen a 21% reduction in CO2 emissions over 1990 levels, and we were very much on target to achieve what we had set out. We introduced groundbreaking legislation that constrained us, with carbon budgets year on year—three budgets already in place and programmes that could enable us to meet those budgets.
Martin Horwood (Cheltenham) (LD)
I thank the Minister for his statement. He was absolutely right to highlight our collective failure to address energy efficiency adequately, but he seems so keen to do something about it that I could almost mistake him for a Lib Dem—[Interruption.] Not quite, perhaps. On the green deal, the ministerial team has imaginatively built on proposals. Obviously, I shall claim that the Lib Dems were the very first to produce such a scheme, but the Conservatives did, too, and towards the end the Labour Government were—[Interruption.] We will check whether the Green party was ahead of the Lib Dems.
Martin Horwood
Not on that one; I am sorry.
All the parties, and even the Labour Government in the end, were working on variations on that scheme, but the one that the ministerial team has come up with is truly imaginative, and its unique financing raises the ambition for energy efficiency in this country in a way that, if successful, will represent a step change in energy efficiency. As the right hon. Member for Lewisham, Deptford (Joan Ruddock) pointed out, it is not guaranteed to be successful, and we do not know exactly how many people will take it up. The point, however, is to wish it well and for all Members to promote it, support private companies, communicate the scheme’s success and hope that it achieves the step change that we are looking for. I congratulate the ministerial team on coming up with that proposal.
Mr Ellwood
I do not disagree. My point is about the efficiency and security of supply, and not until very late in Labour’s tenure did they work out, “My gosh, we need to get some interconnectors here that actually work, so that we aren’t reliant on just one.” That is what led to the danger of our running out of gas supplies. I understand that the Government are now looking at security of supply, and at long-term contracts that will negate the problems that we faced last winter, when we came very close to some of the lights being switched off. Carbon capture and storage is important, and I am still upset that we did not have a chance to amend that Bill. We tabled amendments to include gas as well as coal.
The previous Government oversaw the demise of another area, our fleet of nuclear power stations—again, until our energy supply was threatened. It took 20 years to get a spark out of Dungeness; we cannot build those things overnight. Therefore, if we are to plan for the future, we cannot live in denial: we cannot live without nuclear power. My hon. Friend the Member for Stroud (Neil Carmichael) spoke passionately about the importance of nuclear power, and although it is an asset that none of us likes, we are forced into that position simply because of the absence of other sources of power.
Caroline Lucas
The hon. Gentleman makes a statement in favour of nuclear power, but it is not based on the facts. Climate change scientists tell us that we need to get our emissions down within the next 10 years if we are to have any chance of avoiding the worst of climate change. The hon. Gentleman just mentioned the time that it takes to get nuclear generation up and running, and that means that we are now outside the critical investment time frame, and there is a real danger that if we put the money into nuclear power we will not put it into energy efficiency, renewable energies or decentralised energy, all of which have a much better chance than nuclear power has of reducing our emissions.
Mr Ellwood
I actually agree with the hon. Lady, whom I very much welcome to the Chamber. She will add an awful lot to these, and indeed other, debates. The Labour Government left nuclear power very late, but what she said does not mean that we should not build nuclear power stations. I guess that she is not in favour of nuclear power, and I am reluctant, too, but she might agree that we should invest in and study nuclear fusion, rather than nuclear fission, because nuclear fusion is the utopia that we have been looking for. Everyone says, “Oh, it will happen 25 years from now,” but they were saying that 25 years ago. If we fully grasped that technology, we would not need the nasty side of nuclear fission, which leaves all the radioactive mess for future generations. Nuclear fusion is very much the way forward.
Mr Ellwood
That—that is—[Laughter.] That is a moot point, but it is on the record.
I am trying to get on to the issue of nuclear fusion versus nuclear fission, and I am sure that the Secretary of State would agree with the position on that.
Caroline Lucas
I cannot resist either. I have two points to make. First, Dungeness is built on a floodplain; it is a bit short-sighted to put lots of nuclear power in the middle of a floodplain, given climate change.
Secondly, if we are still to hold out this great hope that some new nuclear technology will come along, that, again, will mean that resources and research will go into that instead of into the tried and tested technologies that we know will work. We have been talking about energy efficiency. If we rolled out a free programme of energy efficiency to every household in the country, that would create hundreds of thousands of jobs and get us out of recession. It would also get our emissions down much more quickly and cheaply than going down the nuclear route.
Mr Ellwood
The hon. Lady is new to the House and I do not wish to be disparaging about what she has just said. But she seems to be saying that the issue is either/or, black or white. I am saying that it is not like that, and that we must invest extra research on an international basis. Work is being done, including in the United States, but it is not enough.
The hon. Lady is absolutely right that we must push for more efficiencies—in fact, that is what half today’s debate is about. How can the home be made more efficient? How can we reduce our emissions and the amount of energy that we use? All those things are important. Is she suggesting that we should park any further advances or research on the idea of nuclear fusion? That is absolutely wrong.
Caroline Lucas
I am grateful to the hon. Gentleman for giving way; I appreciate that he is trying to make progress.
I am saying, very realistically, that there is a finite pot of money, which is even smaller as a result of the cuts that the hon. Gentleman’s Government are about to make. The idea that that money can be put everywhere at the same time comes from cloud cuckoo land. We need to decide where the money can be best and most effectively spent; scattering it around the place is not the answer. If we were to implement a major programme of energy efficiency, including renewable and decentralised energy, that would be tried and tested and offer a much better bang for the buck than investing in the chance that we might some day come across a nuclear technology that is safer than what we have now.
Mr Ellwood
On that I stop agreeing with the hon. Lady. We are not talking about a technology that may or may not work. We know that it can work; it is a matter of harnessing it. Experiments have already been done. To park the issue, or put it on the back burner—that is probably the wrong phrase—would be wrong. If we can harness the technology we can roll it out, not only in Britain but in other countries, particularly developing countries that are thinking of using nuclear fission. We could say to Iran, “Here is nuclear fusion.” An atomic bomb cannot be made out of a nuclear fusion reactor. This therefore makes sense in the long term, and generations will thank us for it. Given the position we are in, I am afraid that we cannot survive over the next 20 years without investing, reluctantly though it will be, in nuclear power. I think that there is agreement on that in all parts of the House.
Let me spend a few moments explaining why nuclear fusion is so important and useful. It is the fusion of hydrogen atoms to form helium, and an awful lot of energy. It is a safe process whereby there are no nasty by-products. Of course, hydrogen is found in water, so fusion power is a potentially limitless source of energy. In fact, it is recognised that in 100 years’ time nuclear fission will be in the past, and everything will be powered by nuclear fusion. That may sound scatty, too advanced or too romantic, but it is the case. However, I am afraid that we will slow down that harnessing of power unless we are able to ensure that we join with other countries to guarantee that money is not wasted or taken away to be spent on other important related products, as the hon. Member for Brighton, Pavilion (Caroline Lucas) passionately said.
The main focus of my speech is not nuclear fusion or carbon capture and storage, but the subject of my intervention at the beginning of the debate. It is about a very simple way of reducing carbon emissions, saving the Government money, and creating a feel-good factor—that is, moving our clocks one hour forward.
Thomas Docherty
I am grateful for that intervention, as it sums up entirely the correct decision taken on the basis of getting good value for the taxpayer because of the amount of revenue raised.
That leads me to my next point—that there is a myth about how long it would take to build new nuclear power stations. It does not actually take 10 or 15 years to build nuclear power stations. Westinghouse has an excellent model on the shelf, which they can take off it. It would take only three to four years; the problem comes in the planning process. I gently suggest to the Minister that I hope he will ensure, as part of the energy drive, that carbon capture and nuclear plants are not slowed down by the planning system, so that we can get them up and running as quickly as we possibly can.
Caroline Lucas
I am sorry, but I cannot hear all this talk about nuclear power without feeling the urge to leap up—so I have leapt. Will the hon. Gentleman please list those nuclear power stations that have been built, first, on time, and secondly, to budget?
Thomas Docherty
I am grateful. I do not have that long left; I cannot list them all.
Thomas Docherty
I suspect that if the hon. Lady looked at the number of wind farms built on time and on budget she would find that that list would be about the same length as for nuclear power stations.
I am very clear, as a champion of both the nuclear and clean coal industries—I have been throughout my whole time in politics—that there is no source of electricity that does not have some challenges and liabilities around it. The ones on nuclear are well documented, and I accept that some Conservative Members have raised some genuine points about clean-coal technology and the importing of coal. The problems surrounding both onshore and offshore wind farms are also well documented, as are problems with tidal power, which does not always work, so there are challenges to be overcome.
That brings me back to the central point that the previous Government were absolutely correct to promote a balanced energy. They said that we needed an element of nuclear power, an element of renewables, an element of coal and, indeed, an element of gas. It is quite surprising that we have heard so little in this debate about the role of gas in our energy mix. Again, I gently suggest to Government Members that the 3,000 mile pipeline presents an issue that we might need to look at.
We have had a fantastic debate. I very much welcome the Ministers to their new posts and I look forward to their perhaps providing some reassurance to my constituents when they sum up.
David Morris
Exactly. It is because of the wind, but the wind comes in from the sea, so why do we not put battalions of wind farms out in the sea? That is common sense. We do not have to put them all across the hills, valleys and mountains of this great country; we can put them out at sea instead, where they will generate more energy. There is evidence to suggest that turbines erected out at sea are more efficient than those erected on land in other ways too, because, as has been said, it can take quite some time to secure planning permission for the construction of both nuclear and wind sources of energy on land. This is a very contentious subject.
We have to figure out how we are going to power this country in future. Yes, the coal mines did get closed down in the ’80s, but in the town I am originally from, Leigh, the pits were closed down naturally, purely and simply because they had been over-mined. I still hear stories in my home town that Thatcher closed down the pits, however. She did not. If we all remember rightly, we will recall that there was a political argument going on between the unions and the Government of the day.
Members need to acknowledge that we are now in 2010, and in 10 years’ time the lights will go out unless we start building nuclear power stations and battalions of wind farms out at sea.
Caroline Lucas
I am in danger of repeating myself a lot, but given that it will take at least 10 or 15 years to get nuclear power up and running, if it is really the case—which I do not believe—that the lights will go off in 10 years, nuclear power simply will not help us. I find it ironic that this is supposed to be a debate about energy efficiency, yet the hon. Gentleman is spending his time talking about nuclear, wind and coal. Let us talk about energy efficiency. According to the previous Government’s own figures, 40% of our existing energy could be saved using energy-efficiency measures alone.
David Morris
I thank the hon. Lady for her comments, and they are good comments, but we are talking about energy efficiency. Nuclear power is very efficient; it has a low carbon footprint.
One subject that has not been addressed is how we in this country use energy. I use card meters in my domestic home. When I bought my house, an old gentleman had lived in it beforehand, and he used card meters so I carried on using them. When my family was growing up, I was one of those dads who was always saying, “Switch the lights off.” Using card meters started to make us change our habits and how we used energy in our home. The Government might want to consider that. Perhaps we could top up through the internet as we might with a T-Mobile phone—excuse me for unintentionally plugging a particular company. We might usefully consider how we obtain our energy.
Caroline Lucas (Brighton, Pavilion) (Green)
I welcome the Minister’s statement today, not least because I was getting a bit worried about the Government’s commitment to this agenda. The Chancellor’s Budget statement contained absolutely nothing about energy efficiency, and a mere 23 words on the proposal for a green investment bank. There was a little more detail in the Budget report on measures to bring forward a low-carbon economy, but that was still only six paragraphs out of a total of 121 pages. That gave us a bit of a sense of what the Government’s priorities might be, and it shows that we still have a long way to go, in spite of the Minister’s fine words.
Although the first of those paragraphs stated:
“Climate change is one of the most serious threats that the world faces”,
I still do not see anything like the kind of urgency that we need if we are to avoid the worst of climate change. If I compare climate change to the kind of military threat with which we are more familiar, we need a response commensurate to the response that would be forthcoming if we were facing a military threat. We need that degree of single-mindedness and that level of resources.
The Committee on Climate Change reported today, and it is scathing about what it calls the “light-touch” regulation policies of the past decade. It made four recommendations that it says should be acted on within a year, including a new national programme for energy efficiency in buildings. The chief executive of the committee said:
“This is not going to happen from the bottom up. We need crunchy policies that provide strong incentives.”
I am not sure that I know what crunchy policies are, but they are certainly not the late and voluntary measures that we have seen so far. We need urgent action now.
Let us take housing as an example. More than a quarter of the UK’s CO2 emissions come from the energy that we use in our homes. If all the 6.1 million homes with uninsulated cavity walls installed cavity wall insulation, we could save 3.9 million tonnes of CO2 a year, and £690 million on energy bills. If everyone with a gas, oil or LPG boiler upgraded to a condensing boiler, the UK would save 6.7 million tonnes of CO2 a year and £1.3 billion in energy bills. If all the 13 million homes with insufficient loft insulation topped up to 270 mm, the UK could save nearly 3 million tonnes of CO2 a year and £560 million in energy bills. Those three measures alone could reduce the UK’s emissions from the household sector by nearly 10%, so we need to see faster action.
As others have said, it is the existing housing stock that is the real challenge. New build homes will be required to meet a defined zero carbon standard by 2016, but at least 85% of the homes that will be in use in 2050 have already been built. Worryingly, there is no set of standards for existing homes to meet in order to achieve an 80 per cent reduction in emissions.
The Government have given sketchy outlines of some of their intentions. We have heard a little more about the green deal proposals, and I am grateful to the Minister for that. But I am not convinced that a market mechanism alone will be enough to generate the level of take-up that we need to achieve large scale energy efficiency improvements for the housing stock. Current proposals focus all their attention on the up-front capital costs, relying on this market-led solution, but they risk ignoring other barriers that need to be addressed, such as lack of consumer awareness, and particularly the belief that measures could cost much more than they actually will.
We need to ask ourselves how realistic the proposals are, particularly at a time of economic difficulty, and whether all the people whom we need to target will be willing to opt in. Many households that could pay for energy efficiency measures may not do so as long as those actions remain discretionary, and economically disadvantaged and fuel- poor households will need significant extra support beyond CERT to be able to act.
If the Government want mass take-up of energy efficiency measures, legislation must introduce mandatory standards for domestic heating and insulation in the form of an energy efficiency rating. The legislation could stipulate, for example, that by 2020, where technically feasible, all dwellings should reach an energy efficiency standard no lower than an E rating, as measured on the energy performance certificate scale. That requirement could apply to all landlords, social and private. Failure to comply would mean that the property could not be let, for example. The requirement would also have to be introduced in the owner-occupied sector, where failure to comply would mean that the property was not fit for sale.
It is on such a scale that the Government need to think. If they backed a major programme of public and private investment in energy efficiency and renewables, we could all reap big rewards. I have been part of a group calling for just such a green new deal for quite a long time before the Government adopted the green deal as their own branding. A serious investment in building new energy systems, including energy efficiency, combined heat and power, and renewables, for millions of homes and other buildings would amount to a £50 billion-plus programme per year.
That is what we need—a ground-breaking programme based on Government investment to create hundreds of thousands of jobs, to stabilise the economy and to reduce emissions. Those are the kind of measures that we need—particularly when we have one foot still in a recession—not the savage public spending cuts announced by the Government, which are likely to trigger a double-dip recession.
Even if the Government were not as ambitious as that, there are other measures that they could consider to achieve mandatory minimum energy efficiency standards. Able-to-pay households could have the necessary work funded through a mechanism such as the proposed green investment bank, while for low-income households work could be funded through a system of 100% grants on top of CERT expenditure. Those grants might also be funded through the green investment bank and accessed through local authorities, but the Government would be responsible for repayment.
We have not yet even been told whether the Government will retain the previous Administration’s target of insulating every home in the UK, where technically possible, with cavity wall and loft insulation by 2015. That target did not go far enough or fast enough, but it was at least a welcome acceptance of the principle of setting standards affecting the energy efficiency of privately owned or rented homes. I would be grateful if the Minister would clarify the situation when he replies. According to the National Insulation Association, we still need to insulate another 15 million lofts and 9 million cavity walls by 2015. Are the Government still committed to achieving that? The previous Government never did produce a plan to deliver that target, and I know that green councillors working on large-scale, free, area-based insulation programmes are still waiting with bated breath for such a plan.
Perhaps part of the finance for a mass street-by-street insulation programme could be obtained if the Government followed the example of the German Government, who have implemented a windfall profit tax on the production of nuclear electricity. In the UK the tax could be levied, for example, on British Energy. Currently, assuming carbon prices of at least €10 per tonne, EDF, which owns British Energy, is receiving around £350 million a year in windfall profits from nuclear electricity production that would still be generated without any carbon price at all. That money is not being used to reduce carbon emissions, but is simply being swallowed up by the company. If instead a windfall tax were levied, the revenue could be used to pay for a whole raft of energy efficiency measures.
There is also a case for levying a windfall tax on the fossil fuel utilities, while we wait for the reform of the emissions trading scheme to come into effect in 2013. As hon. Members will know, at the moment carbon permits are given away, not auctioned, and that means that the fossil fuel companies, too, are receiving windfall profits.
I also hope that the Government will give proper consideration to both a stamp duty rebate and some form of equivalent grant for homes that do not reach the stamp duty threshold, so that we take maximum advantage of the house-moving process for incentivising costly and disruptive whole house retrofits.
The decent homes standard for social housing comes to an end this year, and it has been successful in improving the energy efficiency of such homes. However, this Administration, as far as I know, is offering no successor to the decent homes standard, although one was proposed by the previous Government in order to provide the framework for social housing providers to make long-term investment in energy efficiency. That hardly sits well with the Government’s green claims—nor does the announcement that the previous Government’s welcome proposal of a register of landlords is to be scrapped. That register would have provided an opportunity to make landlords in the private rented sector adhere to minimum energy efficiency standards, as well as other standards, for tenants. That sector has the highest proportion of dangerously cold homes, and often houses particularly vulnerable families, but it is not being addressed by any policy measures.
The Government’s proposed green deal also, as far as I know, splits the incentive—in other words the landlord pays for the measures but the tenant receives the benefit via their energy bills—and that, again, could be a significant barrier to wholesale improvement to homes in the private rented sector, which in England number 3.1 million, nearly 15% of the housing stock.
The best approach to the private rented sector would make minimum standards mandatory and toughen those over time to make it illegal to rent out a property below a certain energy efficiency rating, with very few exceptions. That could start with properties in energy performance certificate bands F and G, and then tighten over a clear timetable. Information on the energy performance of the property through the EPC needs to be of a much higher quality. It needs to be better enforced, and given a higher profile for both landlords and tenants. The Energy Saving Trust and local authorities should have access to the information on EPCs so that action can be better targeted and co-ordinated. Primary legislation may well be needed to get the full potential out of those measures. There should also be financial incentives to support and encourage investment to the standard required by the minimum standards, including an extended landlord’s energy-saving allowance, and a reduction in VAT on refurbishment.
Any Government who were serious about energy efficiency would have used their first Budget to reduce VAT to 5% on building repairs and on improvement work to existing buildings immediately, because that measure would have made it much easier for home owners to make energy-efficient repairs and improvements to their properties. That is a win-win agenda. The Government have said that they want to be the greenest Government, and I have said that, unfortunately, that is not a very ambitious target. None the less, if they do want to meet it, they will have to do a lot better.