Nick Raynsford
Main Page: Nick Raynsford (Labour - Greenwich and Woolwich)
Mr Davey
I agree with the hon. Gentleman that fuel poverty is a real problem. [Interruption.] Opposition Members, from a sedentary position, say that the number of those facing fuel poverty is going up. Indeed, with global gas prices going up we have a challenge to keep bearing down on fuel poverty, but we are completely committed to doing that. Later this year we will produce a fuel poverty strategy, the first to be produced for more than a dozen years. One reason why he can quote the Hills review is that the Government commissioned that review to look into the exact nature of fuel poverty to ensure that it is being measured correctly. It shows that the previous Government could not even measure fuel poverty correctly. We will ensure that we measure it correctly, so that our policies can be targeted far more effectively to help the fuel poor. Opposition Members are not the only people in this House who are compassionate about the fuel poor.
It is important that we are concerned about the high cost of energy for all businesses, and energy-intensive industries in particular. That has to come through greater energy efficiency and we have a number of programmes to deliver that. There also has to be compensation and extra help for energy-intensive industries. I am grateful for the work and co-operation of the Treasury and the Department for Business, Innovation and Skills to ensure that we have a package to address the problem, particularly for energy-intensive industries. We have not had one before.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
The right hon. Gentleman was critical of the previous Government’s definition of fuel poverty and praised Professor Hills’ proposals. The problem is that no one can understand them. Will he please explain to the House the Hills’ definition of fuel poverty?
Mr Davey
The interesting thing is that that definition has two parts: it tries to measure overall fuel poverty in terms of energy efficiency; and, most importantly—it has not been done before—it looks at the depth of fuel poverty. If we consider not just fuel poverty statistics, but income poverty statistics too, we should be most concerned about those in poverty year in, year out—the grinding fuel and income poverty. Unless we have measures that show what is happening to deep fuel poverty and allow us to attack it, we will not be able to deal with fuel poverty. Our measures are more effective and more sophisticated than anything produced by the Labour party.
We must ensure that business energy costs are, through climate change policies, similar across the EU and the globe. One measure that the UK and the EU have pushed is the European carbon market, which is often known as the EU ETS. It is important that the EU ETS carbon price provides incentives and signals to the markets for investment in low carbon, and that it creates a level playing field for industries across the EU. I regret that the vote in the European Parliament on the back-loading proposals was lost by 19 votes. The proposals were part of the reform of the EU ETS. We need to do a lot better. I hope that the ENVI Committee in the European Parliament can come forward with another package so that we can reform the carbon market. That is in everyone’s interest, not just on climate change, but to ensure that we have competitive industries on a level playing field across the European Union.
I want to end by talking briefly about climate change. Some will say that we should put off action on climate change until we get to better financial times, and some will say that we should not be looking at this issue at the moment given our financial and economic problems. I reject those arguments completely. The science of climate change is unequivocal: we have to act now and we should have acted before. That is why we need to reform the EU ETS. It is about not just the back-loading proposals, but structural reform. I am working with fellow EU Ministers and have set up a like-minded group—the Green Growth group—to try to build a coalition at the European Council, so that we can achieve these vital reforms on climate change.
There has been a big debate during the passage of the Energy Bill—a carry-over Bill in the Queen’s Speech—on the proposal for a decarbonisation target, which has a role to play in tackling climate change. Of the general election manifestos from the Liberal Democrats, the Conservatives, the Labour party and even the Green party, guess how many mentioned a decarbonisation target for the power sector? Not a single one. When we published the draft Energy Bill in May 2012, it did not contain a decarbonisation target, and there was no decarbonisation target promised in the coalition agreement. Now we have one in the Bill. The Government have looked at the issue and put the target in the Bill. We are the first Government ever to do that, and it is a very strong move. We are an early mover. The Opposition want to carp at one or two details, but I am afraid that they fail to acknowledge what we have done and what we have delivered.
Mr Nick Raynsford (Greenwich and Woolwich) (Lab)
I intend to focus, as many other hon. Members have done, not on what is in the Queen’s Speech, which is one of the thinnest in recent memory, but on one of the most serious omissions. I refer not to Europe, but to the absence of adequate measures to stimulate growth and improve housing output, and by doing so improve people’s living standards.
As I propose to speak about the vital importance of increased housing investment, I should at the outset draw attention to my interests as recorded in the register.
The figures speak for themselves. Housing starts last year totalled just 98,000, 11% down on the already hopelessly inadequate level of 111,000 the year before. Those two years, 2011 and 2012, represent the worst output figures from any Government since the 1920s. Why has this happened? Clearly, the financial crisis which erupted in 2008 had a huge impact. Before that, housing starts totalled 183,000 in 2007—a level that was not sufficient, because a larger output was necessary to meet the forecasts, but it was massively ahead of anything we have seen since.
With the impact of the global meltdown, starts fell to just 85,000 in 2009, the nadir, and then recovered to some 110,000 in 2010. Since then, housing starts, like the economy, have been flatlining. We have seen no growth and no further recovery. The telling figure is that new starts in the second quarter of 2010—the quarter in which the Government changed hands—were the highest that have recently been achieved. No quarter since then has matched the level of output in that second quarter of 2010. That reinforces the point about the housing market flatlining, like the economy.
The case for doing something about the level of new starts is not just about meeting housing needs—although that is a powerful case. It is also about the economy, because the housing sector has a huge economic benefit. Not only is it labour intensive, but there is a considerable multiplier effect. It has a long supply chain, with all the manufacturers and material suppliers who contribute to house building, and all the firms involved in manufacturing the white goods, furnishings and fittings that go into finished homes. Stimulating house building has real scope to create new jobs and create growth in the economy. So why are we not doing it?
To be fair to the Government, they have been almost obsessive about trying to find ways in the past year to get the house building market going again. We have had endless announcements and proposals, some of which have been reasonably, if modestly, effective. Schemes such as NewBuy and First Buy, which were of course modifications of the previous Government’s homebuy schemes—I may have got the names wrong, because they change all the time, but the Minister knows what I am talking about—have made a modest but useful contribution. Others, however, have not. I am afraid that the new homes bonus has proved to be an extraordinarily expensive and ineffective measure, as the National Audit Office report devastatingly reveals. There has been no measurable sign of real advances in stimulating local authorities to grant planning consents.
Similarly, the Government seem to be tinkering obsessively and endlessly with the planning system to no demonstrable benefit whatsoever. The level of planning consents for new housing in the past two years has been the lowest on record for a very long time. That has not been successful, and nor is it likely that the mortgage support scheme announced in the Budget will be of great benefit. Acting to help to support demand when supply is absolutely inadequate is, as the Treasury Committee has highlighted, likely to stimulate house price inflation. We need to act on supply.
The Government need to focus on two areas, the first of which is the private house building sector. The big house builders are doing pretty well at the moment, but are doing so on the back of very low volume. They are seeing their balance sheets recover and their stock market valuations rise, but they are not building many new houses. Their model is very much geared towards high-value, low-volume development. The small and medium-sized house builders are suffering desperately, yet they are the people capable of providing greater volume and meeting the middle market.
The affordable and social housing sector is an even greater priority. The Government were responsible, with their ill-judged 60% cut in investment at the very start of their time in office, for undermining disastrously the affordable and social housing programme. Reversing that and investing in building new homes is a key priority. I regret that that is not in the Queen’s Speech, but I hope the Government change their mind and recognise its importance.