Energy Company Obligation

Debate between Mark Lazarowicz and Lilian Greenwood

Tuesday 11th March 2014 Westminster Hall

[Lilian Greenwood]

My hon. Friend is right. I will address the impact on employment and on businesses in due course. Nottingham will, unfortunately, continue to experience excess winter deaths and excess winter admissions to hospital as a result of cold housing. As he says, hundreds of people employed in our greener housing project are at risk of redundancy, and some have already lost their jobs. New apprentices who are looking forward to long careers installing insulation face, at best, uncertainty about their future. The young people who had completed their initial training and were due to start year-long apprenticeships leading to national vocational qualifications are now back in the dole queue.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

My hon. Friend is making an important point. We all accept that programmes need to be fine-tuned from time to time, which is inevitable with any Government programme, but we have been told that more than 600,000 fewer properties will be dealt with under the hard-to-treat cavity wall insulation scheme. Apart from the impact on the people living in the houses concerned, taking away 609,000 properties will obviously have a major impact on businesses.

[Lilian Greenwood]

My hon. Friend is right. It gives me no pleasure to tell the Minister that those are the effects of his changes to the energy company obligation. Right now in Clifton, the contractor VolkerLaser is working at an incredible pace to try to complete work for all those residents who have signed up and paid their contribution, but the 9 April deadline, when British Gas funding ends, is fast approaching. The Minister knows that. He met me and colleagues from Nottingham on 22 January to discuss the crisis we face. He promised to raise the matter with the chairman of Centrica, British Gas’s parent company. Can he tell us today whether he has held those discussions? If so, what was the outcome?

I also wrote to British Gas following our meeting to ask it to consider a grace period for private customers who have suffered financially, thereby allowing their properties to be completed beyond the 90-day notice period. In his reply, Chris Weston, the managing director of British Gas, said

“we cannot commit to an extension of the termination period”.

Does the Minister agree that those residents who have signed up and paid should have their contracts honoured? If British Gas will not provide that funding, is he prepared to step in to honour that commitment and ensure that my constituents receive the work for which they have paid at the price they expected?

The Minister also said in our meeting that Nottingham city council should amend its bid to the green deal communities fund, which has been increased to £80 million, and we followed his advice. As I anticipated, we have not yet had success, but I remain hopeful after his earlier comments. Can he say when the next tranche of green deal communities funding is expected to be announced?

When the Minister met us, he also suggested that the Government’s announced increase in green deal cashback might help to fill the gap left by the reduction in ECO funding. A few weeks later we learned that green deal cashback could no longer be used alongside ECO. I simply ask the Minister how we can plan for the future and work with him to deliver the energy efficiency measures that our constituents need, and that we all want to see, without some certainty on the policy and funding framework within which we are operating.

The Clifton scheme, which we believe is the largest area-based approach so far, has enabled Nottingham city council to learn valuable lessons about what works. Councillor Alan Clark, the portfolio holder for energy and sustainability, has led the city’s work, and he concludes that, to be successful, a scheme needs to: address the issue on an area-by-area basis; apply to all tenures equally; pay for green deal assessments, avoiding risk and up-front costs for households; identify a fixed price for works to bring certainty to residents; engage specialist contractors of the highest quality; and engage local councils as a trusted broker. Above all, there must be a stable national policy and funding regime.

Phil Angus, the manager of Nottingham Energy Partnership, puts it more bluntly,

“the Government’s stop start approach to funding policy is sending businesses to the wall along with hard working families left in the lurch”.

He illustrates the point with reference to a typical Clifton property for which the funding support available has changed, or is due to change, every few months as a result of policy changes since last December.

Ahead of the green deal’s launch last year, the Minister described it as

“the most transformational energy efficiency programme that this country has ever seen—a programme that is built for the long term.”—[Official Report, 16 January 2013; Vol. 556, c. 983.]

Clearly, as my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz) said, any scheme has to be reviewed and revised in light of experience but, as Phil Angus says:

“How is any small business connected to domestic energy efficiency services supposed to plan ahead and maintain consistency with customers, supplier and workforce…is this Government on the side of business?”

VolkerLaser, the contractor that has been delivering the solid wall insulation in Clifton, surely has to conclude that the answer to that question is no. Here is what managing director Mike Weaver had to say about the effect of changes to the energy company obligation:

“The recent events…and the uncertainty in the market have had, and will continue to have a devastating effect on the VolkerLaser business. We have had to suspend our forward apprenticeship scheme and staff recruitment programme, denying up to 50 young people the chance to get ‘a start’ in this industry.

The whole business has a cloud of insecurity hanging over it and for a Managing Director who started this business over 20 years ago this is particularly distressing. VolkerLaser prides itself on retaining good staff, with a large number of long serving employees enjoying their 20th year alongside me. It is now impossible to map out our employees’ future and it is inevitable that if current conditions persist, there will have to be redundancies.

Due to the collapse of the funding market it is now extremely difficult to plan a future order book. The proposed changes to ECO have swung the market so much in the favour of the energy retailers that even if funding becomes available, it will come with onerous conditions which will place enormous risk on contractors and clients alike.

No one in this industry believes they are owed a living, but it would be good for once to operate on a level playing field. Our staff and the residents of Clifton need some security and some reassurance that ECO is not just another flash in the pan. Or, to put it bluntly, yet another initiative the government asks thousands of people to spend millions of pounds gearing up for, only to see it decimated in one fell swoop.

The impact of the proposed changes to ECO, and in particular the 100,000 solid wall minima, will be significant and will undo all of the good work the partnership has achieved to date. 42% of the staff on the Clifton Greener HousiNG initiative are residents of Nottingham; ten apprentices have been inducted so far and are now working towards a nationally recognised qualification; and countless sustainable job opportunities have been created with local SMEs.

With a doubling of the minima to 200,000 measures (or 8 million tonnes equivalent) thousands more residents will be guaranteed a reduction in their fuel bills and be afforded the opportunity to live in warm and energy efficient homes. With the certainty of funding going forward, more and more employment opportunities and apprenticeships would be generated for the benefit of Clifton residents and the local economy.”

I do not doubt that the Minister wishes to see more energy efficient homes; what I doubt are the policies and funding support he has put in place to deliver on that aspiration. He says that the ECO will lead to insulation of at least 25,000 solid wall properties a year, but at that rate it will take 304 years to complete the task. Although he ramps up green deal cashback to persuade people that they want to take up energy efficiency measures, his funding changes are denying energy efficiency measures to my constituents who desperately want them. That simply is not good enough.

As Sally Longford, one of Ilona’s local councillors in Nottingham, says:

“Many of my elderly residents living in the Wollaton Park estate cannot keep warm without paying ridiculous amounts to the energy companies. Even then cold patches on the walls attract condensation and mould, they deserve better.”

She is right. What hope can the Minister give me that they will get it?

Inter-City Rail Investment

Debate between Mark Lazarowicz and Lilian Greenwood

Thursday 9th January 2014 Commons Chamber

[Lilian Greenwood]

As the hon. Lady says, we think the east coast main line is providing an important public sector comparator that will help us to evaluate the future of the rail industry. What is clear is that the current structure is not delivering enough for passengers. That is why, unlike the Government parties, we are prepared to review it and to look at alternatives that will deliver the best deal for passengers and taxpayers.

Unfortunately, all of the essential projects that I set out a moment ago were subject to delays after the general election. That caused uncertainty and, in some cases, pushed back completion dates.

[Mark Lazarowicz (Edinburgh North and Leith) (Lab/Co-op)]

I have been at the Westminster Hall debate this afternoon, otherwise I would have been here earlier. My hon. Friend mentioned the east coast main line. May I endorse the comments, which I know were made earlier by hon. Members on both sides of the House, on the need for the excellent services on the east coast to be improved by ensuring that the electrification system works and that the overhead lines do not come down too often and disrupt traffic in a way that, unfortunately, they have done all too often in the recent past?

[Lilian Greenwood]

I will return to the east coast main line in a few moments.

Electrification of the Great Western main line, which has come up several times today, is a case in point. After pausing the project in May 2010, electrification to Newbury was announced in November that year, but the project’s extension to Cardiff was not announced until March 2011. Ministers said then that the line to Swansea would not be electrified, and it was not until they faced further pressure that, over a year later, they agreed that the route to Swansea would be electrified after all. In other words, thanks to the Government’s prevarication, a project initially announced in July 2009 was not confirmed until three years later. Given the importance of bringing forward infrastructure projects to deliver sustainable economic growth, even a Tory-led Government can surely do better than that.

There has been a similarly sorry tale in rolling stock procurement. In March 2011, the Prime Minister met the chairman of Bombardier and said that he was

“bringing the Cabinet to Derby today with one purpose – to do everything we can to help businesses in the region create the jobs and growth on which the future of our economy depends”,

but just four months later, Bombardier announced 1,400 job losses as a result of his Government’s decisions. Even after this debacle, there was an unacceptable two-year delay before financial close was reached on the contract. The Public Accounts Committee said recently that it was

“sceptical about whether the Department has the capacity to deliver the remainder of the programme by 2018.”

After the Government’s failure to keep HS2’s cost under control and the collapse of rail franchising on their watch, it is difficult to have faith in the political leadership of the Department. The failure of the franchising system has cost the taxpayer at least £55 million, and the Government’s refusal to consider Directly Operated Railways has left civil servants in an exceptionally weak bargaining position when agreeing direct awards. Under the terms of the Great Western contract extension, FirstGroup will pay only £17 million in premium payments next year, compared with £126 million in 2012-13. Investment has been delayed and orders have been put on hold, hurting the supply chain and threatening jobs and skills.

At a time when Ministers have been overtaken by problems of their own making and the Department is struggling to get essential projects out of the sidings, it is remarkable that the Government’s top priority is selling off the east coast main line franchise before the next election. I commend my hon. Friend the Member for Edinburgh East (Sheila Gilmore) and the hon. Member for Brighton, Pavilion (Caroline Lucas) for their persistence in raising this question with Ministers. Since 2009, East Coast has gone from strength to strength. It has delivered a new timetable, achieved better punctuality and passenger satisfaction scores than the previous failed private operators, won multiple industry awards and developed a five-year plan for improving inter-city services on the line.

The casual reader will be forgiven for not getting this impression from the Government’s franchise perspective, but thanks to a leaked draft of that document, we know that positive references to the company’s performance were removed at the last minute, as Ministers desperately tried to rewrite history. But East Coast’s commercial performance speaks for itself. By February 2015, it will have returned almost £1 billion to the taxpayer in premiums, and it has invested every penny of its profits—some £48 million—back into the service, but under the Government’s plans, that money would be split between private shareholders instead.

Before Christmas, East Coast announced that half its fares to London would be frozen and that most of its fares would be cut in real terms in 2014. Will the Minister tell us how many private operators have announced a cut in the average cost of their fares? The truth is that the Government have allowed train operating companies to raise prices by up to 5%—more than double the rate of inflation—and the average season ticket is now 20% more expensive than it was in 2010. So at a time when passengers are facing a cost-of-living crisis, why are the Government seeking to abolish the publicly owned operator that is cutting the cost of fares?

It is difficult to resist the conclusion that East Coast has risen to the top of the Secretary of State’s to-do list because it has proven itself as a successful alternative to franchising, and that is why Ministers are so determined to push it out the door before the election.

We know from written answers that the public cost of refranchising could reach £6 million, along with other wasted millions lost due to the west coast shambles. All this money could have been spent instead on alleviating the cost-of-living crisis or investing in the railways. As it stands, the refranchising of East Coast represents the triumph of ideology and short-term political calculation over passengers’ best interests and a wilful disregard for public resources.

I urge Government Members, particularly Liberal Democrat Members who before the election were opposed to selling off East Coast, to think again and halt this un-needed, unwanted and wasteful privatisation. The priority must be delivering a fair deal for passengers and ensuring that the essential projects that so many Members wish to see are completed.

High Speed Rail (Preparation) Bill

Debate between Mark Lazarowicz and Lilian Greenwood

Thursday 31st October 2013 Commons Chamber

[Lilian Greenwood]

I thank the Minister for his response; clearly the media reports are wrong. It is ironic that the SNP should be proposing to take this line to Scotland, given that the one thing we can guarantee is that the SNP plans for separation would make the possibility of a high-speed line across the UK even less likely.

[Mark Lazarowicz]

One can excuse the Minister for not having this at the top of his to-do list only because he is new in his job. I have asked similar questions of previous Ministers over the past few months, so may I suggest to my hon. Friend that if it is not at the top of a Minister’s to-do list now, it should be pretty soon and that the Minister should be giving details of this study in the near future?

[Lilian Greenwood]

My hon. Friend is right. We will continue to press the Minister on the issue in the months ahead.