Energy Efficiency

Debate between Christopher Pincher and Joan Ruddock

Wednesday 30th June 2010 Commons Chamber

[Joan Ruddock]

When I was speaking about the partners, I may have left out B&Q, which is also participating in the pilots. We certainly had a similar scope of possibilities. We knew and said clearly that primary legislation would be required. We said clearly that we would need to legislate to link the finance to the property, not to the individual, and that is what we were working through. We also believed that in order to motivate people it would be necessary to present a financial package which meant that when they paid their energy bills, they were paying back the upfront costs. So there were no upfront costs, and that is why we called it pay as you save. To that extent, the kernel of this is something that we prepared for and intended. I am delighted that the Minister is going ahead with it. There is no question about that. We will certainly support him as the plans come forward and examine them in great detail. We clearly believe that this is a way forward and we want it to work.

None the less, there are questions that the Minister must answer. In opposition, the Prime Minister spoke of an entitlement. How will an entitlement be created? How many households does the Minister expect to undertake what the Labour Government called an eco-makeover by 2020? Our best-informed target was 7 million. What is his target for 2020? I would be grateful if the Minister could make that clear when he winds up, bearing in mind that people have to opt in. This is not something that they are being given without their own participation. It is unclear whether it is £6,500 or up to £6,500. Ministers know that a single-glazed, solid-walled house would cost at least £10,000 and could be much more. Is there an upper limit to the scheme that can be accommodated in the payback plans, and how many years would it take to pay back if that kind of money is being provided?

That brings me to fuel poverty. The Minister talked a lot about helping vulnerable people, but there was little mention of any concrete action to tackle fuel poverty. Warm Front, the Labour Government’s scheme for the fuel-poor, helped more than 2 million vulnerable households across England from June 2000, including 500,000 households in the last two years alone. It provides grants of up to £3,500, or up to £6,000 for those off the gas grid. Do the Government intend to scrap grant payments for central heating and insulation? I hope the Minister will be able to give us a precise answer to that question today. What evidence does he have that people in poorer households will be able to get help with insulation and improved heating under his green deal?

National Energy Action is sceptical. It has seen the details of the Government’s scheme and it says:

“The overwhelming majority of fuel-poor households currently underheat their homes and the beneficial effects of energy efficiency improvements would generally be in the form of a warmer dwelling rather than in financial savings. NEA is deeply concerned about how these people would be expected to service loan repayments, let alone gain access to loans at commercial interest rates given their often precarious financial circumstances.”

The Minister will say, “But they are not loans.” But somebody has to put the money up front, albeit that it is the energy companies, and somebody has to pay back, so we must know what will happen to the most vulnerable people. How many pensioners and poor families does he think will be able to take out the green deal?

We have discussed energy efficiency in the context of reducing the energy used by better insulation. But climate change dictates that we not only reduce our use, but decarbonise what we do use. That is a much more comprehensive strategy.

[Christopher Pincher (Tamworth) (Con)]

The right hon. Lady speaks about fuel poverty, which is terrible for many people. But despite what the Labour Government did in terms of CERTs, CESPs and Warm Front, all of which are laudable, can she explain why fuel poverty increased?

[Joan Ruddock]

It was because there were unprecedented fuel prices. No Government could have instituted a programme that could have erased the effect of the dramatic global increase in oil prices.

Let me continue with my case that we need a more comprehensive strategy—a point that was made by a number of my hon. Friends, intervening on points of interest at the beginning of the Minister’s speech. Heating accounts for three quarters of home energy use. No matter how much we improve our insulation or reduce consumption by our appliances, we will inevitably still use considerable amounts of energy. At present, we depend on fossil fuels—natural gas, liquid gas and oil. That cannot continue indefinitely, which is why we planned to introduce a renewable heat incentive from next year. That would guarantee payments for those who install technologies, such as ground source heat pumps, air source heat pumps and biomass boilers.

Under our proposed tariffs, the installation of a ground source heat pump in an average semi-detached house with adequate insulation would be rewarded with £1,000 a year, and lead to savings of £200 a year if used instead of heating oil. The heat incentive would help thousands of consumers who are off the gas network to lower their fuel bills and gain a cash reward for greening their heating supply.

In government, we were pleased to achieve a wide consensus for our Climate Change Act 2008 and Energy Act 2008. We were gratified by the enthusiasm with which our 10-year transition plan for low carbon was received, particularly by the CBI and the TUC.

Today, I can promise our broad support for coalition Government plans that reflect and continue on the path that we have set, and I can promise that we will scrutinise fairly the details of any legislation. But the big question remains: will they will the means? Can they resolve their differences, or will Tory ideological cuts totally undermine the critical progress that needs to be made—[Interruption.] The Minister laughs, but he said not a word about public sector housing, or private sector housing where landlords are completely and utterly unwilling to assist with energy conservation. There is so much that needs to be addressed by proper public policy, but ideological cuts cut across that.

Government is about leadership, setting priorities and, yes, making hard choices, but it is also about holding one’s nerve and seeing things through. The coalition had a choice. It could have balanced deficit reduction with investment in the future, investment in manufacturing, such as Sheffield Forgemasters, and investment in decarbonising the electricity supply. However, it clearly lacks the vision to do so.

The Minister promised to make his Government the greenest ever. All I can say is that he has made a shaky start. We will judge him on his strategy to deliver a low-carbon future that tackles climate change, on his record of creating green jobs and on whether the transition to low carbon is made fairly.