Civil Nuclear Road Map

Wera Hobhouse Excerpts

Thursday 11th January 2024 Commons Chamber

[Madam Deputy Speaker (Dame Rosie Winterton)]

I do apologise for having called two Members in a row from the same side. I shall immediately correct myself by calling two from the Opposition side.

[Wera Hobhouse (Bath) (LD)]

Thank you, Madam Deputy Speaker—I took no offence at all; it is fully understood.

The best route to affordable energy security is renewables. Nuclear power is blighted by delays and rocketing costs, and the Government are never honest about its much higher costs compared with renewables. On the Government’s watch, renewables have faced long delays and the costs for offshore wind development have increased by 40%. Will a renewables road map soon follow the statement to address those challenges and ensure that the Government do not lose their competitive advantage in offshore wind development?

[Andrew Bowie]

I lose track of where the Liberal Democrats sit on nuclear. I know that their current leader was against it, then he was for it, and then against it again. Right now, I am not quite sure.

I do take issue with the hon. Lady’s insinuation that we are not leading the world in renewables. We have the first, second, third, fourth and fifth—and, soon, the sixth—largest offshore wind farms in the world generating power right now for Great Britain. We are investing at pace in solar and in a host of new and emerging technologies because, unlike some parties, we believe that we should not invest all our time and money in one technology. We need a broad range of technologies if we are ever to meet our legally binding net zero commitment. I look forward to the day when the Liberal Democrats can hold a policy for more than five minutes and come to the House and actually support us on the journey to our net zero future.

COP28

Wera Hobhouse Excerpts

Wednesday 29th November 2023 Commons Chamber

[Amanda Solloway]

I know what a champion my hon. Friend is for his constituents. I will of course meet him, although perhaps a meeting with the relevant Minister would be more appropriate. We are committed to making sure that we have that extra security. That is why we are making such an investment in working towards energy security, while at the same time working towards net zero.

[Wera Hobhouse (Bath) (LD)]

The UK was a leader in offshore wind development but is now falling seriously behind. Costs to offshore wind developers have increased by as much as 40%. The recent offshore wind auction failure will have cost the UK 5 GW of new renewable energy, and that was entirely predictable. How will the Prime Minister be able to look in the eye the leaders of countries that are suffering most from the impact of climate change and say, “The UK does everything it can”?

[Amanda Solloway]

First, we are world leaders on offshore energy. That is one of our commitments, but we do not just rest on our laurels and think about offshore wind; we are also looking at other ways to generate electricity, which is much needed, including fusion and small modular reactors. The hon. Lady suggests we are not taking into account where we should be going on energy, but we are world leaders and we are ensuring that we have an impact on our futures.

Energy Bill [Lords]

Wera Hobhouse Excerpts

Consideration of Lords message
Wednesday 18th October 2023 Commons Chamber

A functioning UK Government would embrace this remarkable potential, accept the Lords amendment and seek to enable rather than disable local supply. The regulatory barriers that prevent community energy schemes from selling power to local customers are incongruous with both our climate emergency and the scale of current energy prices. The new £10 million community energy fund is nothing but a paltry smokescreen, which will not scratch the surface and is a veil simply for this Tory Government’s inaction and hostility to the ambition of the people and their drive for net zero. The Government cannot hold a candle to the Scottish Government’s record in this area, but it is high time they at least tried to do so.

[Wera Hobhouse (Bath) (LD)]

Let us remind ourselves what Lords amendment 247B is about. Within 18 months of the Act being passed, the Secretary of State would be required to carry out a consultation and publish a report on the barriers preventing the development of community energy schemes. It would also require the Government to respond and bring forward proposals to remove the barriers preventing the development of community energy schemes within six months of the consultation closing. That is the bare minimum that the Government could do. It would at least move the issue forward, and yet the Government still put forward a motion to disagree with it.

The Government say that they have already committed to consult on the barriers to local supply, but we still have not been given a date when that will actually happen. The Lords amendment would stop the Government’s current policy of dither and delay and require them to get on with taking community energy schemes forward.

Ultimately, the Government should not need to consult, because they are already well aware of what barriers face the sector; Community Energy England has told them repeatedly over the last five years. It is really disappointing, because there is even an all-party parliamentary group for community energy. Officials have engaged with the APPG, yet nothing has happened because the Government, despite warm words, are not really committed to community energy.

In 2021, the Environmental Audit Committee published a series of recommendations to encourage community energy. The only recommendation taken forward so far is the community energy fund, and even that does not yet have a launch date. I hope that the Minister will tell me when the launch date will be. When will we see the fund for community energy?

We are in the middle of an energy crisis. Bills have skyrocketed. Access to cheap, clean, home-produced energy has never been more vital. We need to secure our energy supply, protect consumers and reach net zero. As we have always said in the debate about reaching net zero, we need to take people with us. That is not about delaying targets, as the Government have just done, but about encouraging people to walk the difficult journey to net zero. Community energy does exactly that. Why are the Government not supporting it with all their might? Why are the Government not even supporting the Lords amendment? It is the bare minimum.

Community energy has the potential to power 2.2 million homes and save 2.5 million tonnes of carbon dioxide emissions every year. All it needs is a Government who give it the support that it deserves. I have seen at first hand the benefits that community energy can bring. In my Bath constituency, Bath and West Community Energy has installed enough renewables to power 4,500 homes. It has invested the money that it has earned back into my local community, donating nearly £330,000 to support environmental and fuel poverty schemes. That is what community energy can do. What is there not to support? Why are the Government not committed to doing all that they can to ensure that community energy projects can be delivered?

[John Redwood]

rose—

[Wera Hobhouse]

Unfortunately, the Government are unwilling to see the potential of community energy. Community energy schemes currently generate just 0.5% of the UK’s electricity. That is because—we know all this; we have said it many times—the financial, technical and operational requirements involved in becoming a licensed supplier put initial costs at more than £1 million. That is a massive risk for any new start-up or small scheme. Any community energy projects such as the one in Bath can exist only because it has reached a certain size. That is one of the problems.

The Government are aware of that fact, but voted to remove Lords amendments to rectify it. The Government need to start matching their supportive words about community energy with action. The most effective step that they could take would be to enable local supply and remove the regulatory barriers that prevent community energy schemes from selling their power to local customers. That could include a community right to connect to the grid ahead of commercial projects that deliver little or no social and community benefit. I am sure that I have answered the question that the right hon. Member for Wokingham (John Redwood) was about to ask.

Community energy schemes are ready to provide clean, green energy that helps local communities. They are not asking for a huge amount of public money, just for the Government to stop blocking the system. In this time of energy uncertainty, having a reliable local supplier can only be positive. I fully support Lords amendment 274B to hold the Government’s feet to the fire on community energy. I urge everyone in this House to do the same.

[Andrew Bowie]

I thank all right hon. and hon. Members for contributing to this afternoon’s debate. I will first respond to some of the comments made by my constituency neighbour, the hon. Member for Angus (Dave Doogan). I know that he does not like it very much, and would like it if it were not the case, but he is absolutely wrong and I have to correct him: this is not the English Government; this is the British Government. We are the Government of the entire United Kingdom—a United Kingdom of which Scotland remains a part and, if the opinion polls are anything to go by, will continue to remain a part of for quite some time.

The hon. Member has an obsession with decrying the nuclear industry as something that the Tories alone are obsessed with. Tell that to the Governments of France, Sweden, Finland, Italy, Poland, the Czech Republic, Slovakia, Canada, the United States of America and more, who are reinvesting and restarting their own civil nuclear industry, as is the Labour Welsh Government, who are very much in favour of further investment in, and development of, nuclear. He raised the lack of funding for community energy projects; £10 million over two years is an incredibly generous offer. That is alongside other UK growth funding such as the UK shared prosperity fund, which community energy groups can access by working in partnership with their local authorities.

The hon. Member for Bath (Wera Hobhouse) asked when the community energy fund will be launched. It will be launched as soon as possible. We are aiming to launch applications to the fund as soon as we physically can.

My opposite number, the hon. Member for Southampton, Test (Dr Whitehead), is right that we have had a productive and constructive relationship when it comes to discussion of the Bill. The 72 hours that we spent together in Committee were beneficial to everybody’s health, I am sure, and to the development of Government policy on this matter. We have come some way from where we were when we started discussing how we would support community energy. He rightly praised the role that the sector has played during the passage of the Bill. The community energy sector has been incredibly receptive to our commitment to a consultation and to the £10 million fund.

[Andrew Bowie]

My right hon. Friend is absolutely right. I also noticed that—

[Wera Hobhouse]

Will the Minister give way?

[Andrew Bowie]

Two seconds. I will respond to the first intervention before I give way to the hon. Lady. I also noticed that she managed to answer a question that had not even been asked by my right hon. Friend.

[Wera Hobhouse]

The amendment also says that the Government should respond to the barriers and put forward proposals. That is really what we want to know: what is the response to any consultation? The Government have failed to give any response to that.

[Andrew Bowie]

We cannot respond to a consultation that has not been launched yet. We are in the process right now of working with the community energy contact group. In fact, it has already met. Work is under way right now to develop the consultation, identify what the barriers to market are, and get out there and support the community energy sector, as the Government are determined to do.

Net Zero by 2050

Wera Hobhouse Excerpts

Monday 16th October 2023 Commons Chamber

[Claire Coutinho]

The most important thing that we can do to turbocharge that is get the grid working and look at both transition and distribution, which is exactly what we are planning to do in our responses to the Winser report. I would say to anyone who wants to buy an electric vehicle that if that works for them they will be able to do it, and nothing in our plans will change that.

[Wera Hobhouse (Bath) (LD)]

The cheapest energy is the energy that we do not use. It is unforgivable that the Government have cancelled the obligation for landlords to upgrade homes to an EPC grade C rating by 2028 at the latest. A comprehensive home insulation scheme would reduce bills and carbon emissions this winter. I am going to make a proposal that might sound quite attractive to Conservative ears, because it is about incentivising and tax breaks. Will the Secretary of State consider allowing landlords to offset spending on insulation against their income tax bills? That would benefit tenants by enabling them to live in warm and comfortable homes.

[Claire Coutinho]

I set out earlier the amount that we are spending on insulation: £6 billion in this Parliament, with a further £6 billion to 2028 and an additional £5 billion through the energy company obligation and the great British insulation scheme. The real-world reason for why we did not pursue that policy is that it could have cost property owners up to £15,000, and we did not want to put further pressure on rents at a time when families are really struggling. With regard to the hon. Lady’s policy on income tax relief, I suggest that is not necessarily the best response, because a lot of landlords are pensioners and will not necessarily pay income tax. However, we will continue to look at everything we can do to ensure that insulation is properly delivered.

Oral Answers to Questions

Wera Hobhouse Excerpts

Tuesday 19th September 2023 Commons Chamber

[Graham Stuart]

The zero-emission vehicles mandate supports our commitment to end the sale of new petrol and diesel cars and vans. By setting it many years in advance and giving clear notice to the market, it provides appropriate stimulus to industry in a way that the ultra low emission zone singularly fails to do, as my hon. Friend will have noted.

[Wera Hobhouse (Bath) (LD)]

The Energy Minister got his facts wrong in his earlier response to the hon. Member for Brighton, Pavilion (Caroline Lucas), so he might want to correct the record. The Liberal Democrat amendment to the Energy Bill to tackle flaring, venting and leaking of methane was selected for a separate vote. It would have reduced methane emissions by 72 %. Why did his Government vote it down?

[Graham Stuart]

I stand corrected. On that issue, we have infrastructure, some of which dates from the 1970s, and we are moving at the maximum possible speed. It is technologically and economically challenging to make this change, and yet, as I set out earlier, we are already showing significant efforts, and of course we are champions of the methane pledge, which we plan to exceed. When I am at COP28, I will be urging other countries to follow us in agreeing and supporting that World Bank methane pledge.

Energy Supply Market: Small Businesses

Wera Hobhouse Excerpts

Wednesday 13th September 2023 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

It is a pleasure, Ms Fovargue, to serve with you in the Chair. I congratulate the hon. Member for Aberconwy (Robin Millar) on securing the debate.

Bath’s small businesses are the backbone of our local economy. They create jobs and are the heart of our local community. In recent years, SMEs have had to deal with the uncertainty of Brexit, the shock of covid and then the energy crisis. What they need is a supportive Government to help them through tough times, but many of our small businesses feel badly let down.

Several companies in my constituency have expressed disappointment that the Government have decided to remove energy support. One pub’s energy bill went up by £35,000. Had the energy bill support scheme that was in place until April continued, the bill would have been reduced by £30,000. However, the Chancellor’s decision to replace that scheme meant that the pub now receives only £3,000. That big gap in support is putting small businesses in my constituency at risk of closing.

Politics is about choices. The Government chose to prioritise cutting tax for big banks over helping small businesses in my constituency. Under Liberal Democrat proposals, small and medium-sized businesses would have been offered Government grants covering 80% of the increase in their energy bills for one year, up to a maximum of £50,000.

As we move into winter, the Government must step up. Suppliers, such as E.ON, have noted that some companies will become unsustainable without Government support, as 15% of small hospitality businesses fear that they might collapse in the next 12 months, with 96% of them saying that energy prices are a significant contributor. Local firms that agreed to new energy contracts in the second half of 2022, have been paying premium prices for their energy since April. That is absurd; they have not benefited from the drop in wholesale prices.

I agree with UKHospitality that the Government must urge suppliers to work with business to resolve the issue. One potential solution from the Federation of Small Businesses is a blend and extend scheme. Blend and extend contracts enable customers to take advantage of the lower wholesale cost under their current contracts: the original contract is extended by a further 12 or 14 months, for example, and today’s rates are then blended with the original contract rates. That will reduce a firm’s energy bill and help to improve its cash flow.

Additionally, the Government must accelerate the review of electricity market arrangements to ensure that households and businesses benefit from lower-cost renewables. That should involve decoupling electricity from wholesale gas prices. Renewables are now the cheapest source of energy, but their price is artificially linked to expensive natural gas. It is incomprehensible that businesses were unable to benefit from the lower cost of renewable energy last winter.

The Government could also reduce energy bills by decreasing demand. The UK has some of the leakiest buildings in Europe. The Government must give a strong commitment to businesses to improve their energy efficiency. We Liberal Democrats will continue to push the Government to do more, so that businesses become more energy-efficient.

The Federation of Small Businesses suggests a Help to Green scheme to provide direct financial support and advice to companies. That would include a grant of up to £5,000 to allow SMEs to invest in energy efficiency or microgeneration. The independent review of net zero also championed the idea. It would be interesting to know whether the Government have considered it.

Winter is fast approaching. We need the Government to provide the short-term help that small businesses need now and the long-term solutions to stabilise energy costs. The energy crisis has the potential to kill many small businesses in my constituency. We need a Government who are willing to help small businesses to provide the goods and services that are so crucial to our local communities.

Offshore Wind Contracts

Wera Hobhouse Excerpts

Tuesday 12th September 2023 Commons Chamber

[Graham Stuart]

My right hon. Friend is also someone who, through thick and thin, promotes that industry and sees the opportunity it offers Wales. He makes a special bid for the Welsh ports, as I would expect him to do, but he will understand that I can make no comment on that. I entirely agree with him on the importance of the Crown Estate round. Suffice it to say that across Government we have been working flat out, with his and other colleagues’ support, to support the Crown Estate to ensure that we maximise the opportunity in the Celtic sea.

[Wera Hobhouse (Bath) (LD)]

The Government’s obsession with oil and gas has left us in this mess. The Department has prioritised new oil and gas licences over support for wind power, which flies in the face of our climate change commitments and our responsibilities to UK citizens—our constituents—to keep energy prices low. Oil and gas will always be more expensive than wind energy. When will the Minister fill the gap of 5 GW of offshore wind that we have now missed out on, which would have saved consumers £2 billion a year? I am not talking about the sixth auction round—I am talking about the fifth one, where we have missed out now.

[Graham Stuart]

The hon. Lady is completely mistaken. We are working flat out both to reduce demand for fossil fuels in this country and to build up our renewables. I would hope she would celebrate the fact that we have the largest offshore wind sector in Europe.

Energy Bill [Lords]

Wera Hobhouse Excerpts

Report stage
Tuesday 5th September 2023 Commons Chamber

[David Duguid]

In the interests of time, I will limit my remarks to carbon capture and storage, and the impact of offshore wind on other commercial activities at sea, specifically fishing. If I have time at the end, I will talk about hydrogen and maybe even the future of oil and gas.

I welcome the announcement on 31 July by the Prime Minister in my constituency confirming the Acorn CCS and hydrogen project; that will mean that four CCUS clusters will be operational by the end of the decade. The Scottish cluster is particularly crucial for my constituency of Banff and Buchan, as well as the whole of Scotland, not just for the estimated 21,000 jobs the project is predicted to support but to enable the construction of a new CCS power station at Peterhead. That power station will replace the existing one, which is currently the only dispatchable thermal power station north of Leeds. It will be critical is providing stable baseload in support of intermittent renewable sources of energy, and will do so in a way that is 95% emission-free.

Again in the interests of time, I am not going to speak about every single amendment that I tabled, but I hope the Minister will bear with me and perhaps respond to the following questions. In respect of clause 2, which deals with licensable activities and their prohibition, can he clarify whether, or why, an economic licence would be required specifically over and above the geological storage licence that would be granted under the existing regulatory regime, namely the Storage of Carbon Dioxide (Licensing etc.) Regulations 2010? Will private operators be able to develop merchant models in competitive transport and/or storage markets in the longer term?

As the Minister will know, the UK has about a third of Europe’s entire offshore carbon dioxide storage potential undersea, roughly equal to that of all the other EU states combined. Only Norway has slightly more than the UK in the North sea. This enormous potential to offer CO2 storage services to European and other countries presents an opportunity for the UK to become a global leader in CCUS, and accelerate the global efforts to prevent CO2 emissions. How will cross-border transport and geological storage of carbon dioxide be enabled to develop in time, without having to rely on the granting of exemptions to allow private networks to develop? Can the Minister also confirm that it will be possible to facilitate transportation by ship, and any other means of transport other than pipeline, through regulation, and that that is covered adequately by clause 128(1)(a)? I see him nodding.

Finally, may I raise the subject of offshore wind? The fishing industry understands that energy security matters, and that offshore wind has an important part to play in the overall energy mix, but food security matters too. The Minister will be aware of studies which have shown that up to half our seas could be lost to fishing owing to other activities, including offshore wind. Academic studies carried out by Heriot-Watt University, among others, have shown the impact that electromagnetic fields from subsea cables have had on the migration, growth and development—including abnormalities—of crabs and lobsters. The Energy Bill already makes provision for the principle of a levy to address the environmental impact of these new wind farms, which is absolutely right and proper, so what consideration—including engagement with devolved Administrations, as required—has been given, or could be given, to the businesses, industries and coastal communities that will inevitably be impacted by offshore wind operations?

Last month, the think-tank Onward published a compelling paper arguing for statutory payments, from developers, to be made to communities where—if and when—onshore wind was developed. If that principle is fair, payments for actual loss of earnings to other marine business from offshore developments are even more compelling as a principle. I am aware of the various voluntary codes and guidance that are available, but they have so far proved to be insufficient. If the Minister is unable to respond to that last question today, will he agree to meet me, and representatives from the fishing industry, to discuss how best to embed a fair and equitable principle in Government action, that would come at no cost to His Majesty’s Treasury?

[Wera Hobhouse (Bath) (LD)]

The UK has a responsibility to deliver an effective net zero strategy. This Energy Bill provided a chance to ensure that the Government’s own climate commitments could be met. Some parts of the Bill are welcome, but as it stands, it presents us with many missed opportunities. The Liberal Democrats fully support the establishment of the independent systems operator, and I am pleased that the Government have finally listened and given Ofgem a net zero duty. However, I am disappointed that the Government removed sensible amendments in Committee, such as the amendment to ban new coalmines, and I strongly support new clause 2.

Let me now focus on the Liberal Democrats’ new clauses 11, 12, 15, 24 and 28. The aim of new clause 28 is to ban fracking permanently. Fracked fuel is a fossil fuel; it hardens our reliance on expensive gas, and it flies in the face of our net zero commitments. The Government’s own experts have said that the seismic activity caused by hydraulic fracking is not safe. It is incomprehensible that the Government ever considered lifting the ban, and it caused huge anxiety among communities across the country. That must never happen again.

Last year, Shell forcibly installed prepayment meters in more than 4,000 homes, while making £32 billion in profits. Those on prepayment meters typically spent about £130 a year more than direct debit customers. Why are so many vulnerable people forced into this? The Government must support my new clause 15 to prohibit the installation of new prepayment meters unless consumers explicitly request them.



Solar is one of the cheapest forms of energy, and again it is incomprehensible that this Government do not give it the support that it deserves. The Climate Change Committee says that UK solar power deployment is significantly behind the Government’s target of 70 GW by 2035. The smart export guarantee should incentivise households to invest in solar panels by allowing them to sell the excess electricity produced back to the grid. However, under the current system it will take householders decades to break even and this will not incentivise solar investment. Our Liberal Democrat new clause 11 aims to enhance the reward under the smart export guarantee.

Energy Infrastructure

Wera Hobhouse Excerpts

Wednesday 5th July 2023 Commons Chamber

[Stephen Crabb]

I am going to disappoint the hon. Gentleman, because I do not have those specific figures in the pile of notes I have brought with me. However, those figures are out there and the evidence is there. He is right that small modular reactors are a technology for the future and testing is still required, but that work is going on, and not just in the UK but in other countries. It will be a technology for the future, so there is no point in us putting our heads in the sand and wilfully pretending otherwise. I believe it will be a technology for the future, but a lot will depend on future costs.

[Wera Hobhouse (Bath) (LD)]

Particularly on estimates day, are we really “putting our heads in the sand” when that technology is simply the most expensive? In considering Government expenditure, should we not be looking for a technology that produces clean energy and is the least expensive, not the most expensive?

[Stephen Crabb]

The evidence we considered took in the entire life cycle of a nuclear power station. Looking at the energy produced over 30, 40, 50 or more years shows that they give us a secure, reliable base load of affordable energy production. People who oppose nuclear per se will not be persuaded on cost or on the efficiency of the technology; they will not be persuaded at all.

However, the bulk of the evidence that the Committee received supported the analysis made not only by the UK Government, but by the Welsh Labour Government in Cardiff, which shared the view that nuclear power will be an important part of the mix. In debates about energy, people sometimes sound like football supporters, cheering for just one team. In truth, we need a blended basket of different energy sources to help provide energy security through a systematic approach. I believe nuclear has a significant role to play in future energy production.

--- Later in debate ---

[Wera Hobhouse (Bath) (LD)]

It has been an interesting debate so far, but there is no doubt that the pace at which we are getting to net zero is too slow. The recent report from the Climate Change Committee is very clear: it describes the Government’s efforts to scale up climate action as “worryingly slow”. The committee has lost confidence that the UK will reach its targets for cutting carbon emissions. That is an unacceptable dereliction of duty, and I worry that it is becoming increasingly normal to accept that we will not meet our climate change target of limiting the rise in temperatures to 1.5°C by 2050. Let us remind ourselves why that target is very important: if we do not stay within the 1.5°C limit, the permafrost will melt, releasing huge amounts of methane into the atmosphere. That would be irreversible—no amount of human effort would be able to stop it.

[Andrew Bridgen]

Will the hon. Lady give way on that point?

[Wera Hobhouse]

Let us not make the 2050 target something that we cannot reach. We must reach it—it is an absolute necessity that we do. I will not give way to people who will not follow the science, and who deny that evidence.

To reduce territorial emissions by 68% from 1990 levels, the UK must now quadruple its rate of emissions reductions outside the power sector. The CCC uses a variety of indicators to measure the UK’s progress in reducing emissions, and we are only on track on nine out of 50. Today’s debate focuses on energy infrastructure; even power, which has been the only success story so far when it comes to net zero, is now falling behind. We will miss the target of decarbonising the power system by 2035, which the Government should be very worried about. The CCC says that renewable electricity capacity is not increasing at the required rate. One of the biggest barriers is grid capacity: our unprepared infrastructure has left ready-to-make renewable projects waiting up to 15 years to connect to the grid. It is high time that the Government put their mind to those huge delays and create a regulatory system fit for the net zero challenge.

At times like this, we need more Government, not less. The prevailing laissez-faire attitude of hoping for the market to settle all our net zero challenges is no longer fit for purpose. The CCC has said that we could have mitigated the energy crisis if the Government had rapidly deployed onshore wind and solar power—here lies the hypocrisy. On the one hand, the Government say that they do not want to interfere with the market; on the other, they actively limit the onshore wind and solar industries. The de facto ban on onshore wind and a framework that does not create enough incentives for the solar industry have meant that people in the UK have paid far higher prices for the energy crisis than would otherwise have been necessary.

Offshore and onshore wind deployment has been slow, and solar is particularly off track. We need to deploy 4.3 GW of solar per year to meet our target of 70 GW by 2035, but last year only 0.7 GW of solar was deployed. On estimates days, we discuss Government spending, and the UK is clearly not spending enough on net zero. As Lord Goldsmith detailed in his resignation letter, the problem is that the Prime Minister is “simply uninterested”. [Interruption.] The Minister says “rubbish”. He will have the opportunity to respond in his speech, but I am very much talking about the facts.

[Caroline Lucas]

The hon. Member is making a powerful case, and I thank her for it. The Secretary of State told me yesterday that ending new North sea oil and gas licences is, in his words, “bonkers policy”. Does the hon. Member agree that what is really bonkers is a Government subsidising oil and gas companies to drill more of the very thing that is destroying our planet, and handing billions in subsidies to the fossil fuel companies in the middle of a cost of living crisis?

[Wera Hobhouse]

I could not agree more. This is about creating level playing fields—at least for the renewable sector versus the oil and gas industry—but we do not even have that.

The US Inflation Reduction Act and the EU’s Net-Zero Industry Act will be transformative, and will incentivise huge investment in new renewable technologies and crucial net zero infrastructure.

[Andrew Bridgen]

Will the hon. Lady give way, please?

[Wera Hobhouse]

I have already said that I will not give way, and I stick to what I have said.

The US plan will see nearly $400 billion provided in subsidies and tax credits to boost green infrastructure and manufacturing. The EU has announced a green industrial plan worth $270 billion. Even Canada, an economy smaller than ours, announced a package in March offering nearly £50 billion-worth of tax credits for clean technologies. What is the UK Government’s response? No meaningful new funding was announced on Energy Security Day, and the Chancellor has refused to match the ambition set out in the Inflation Reduction Act. In March, the Government cut £80 million for vital renewable projects from the contracts for difference budget. The UK’s budget for net zero does not come close to matching the ambition of our partners: we need to spend now to save money in the future. The country’s finances are already straining under the weight of Conservative Government incompetence, and the London School of Economics predicts that UK banks and insurers will end up shouldering nearly £340 billion-worth of climate-related losses by 2050 unless action is taken to curb rising temperatures and sea levels.

I have already said why it is so very important to get to net zero by 2050, not just for us in this Parliament but for future generations. If the Government continue to deny reality, we will miss out on the huge economic opportunities that net zero presents. The Government-commissioned review of net zero recognised that their tepid approach means that the UK risks losing out on green investment, and as we heard from the hon. Member for Kingston upon Hull West and Hessle (Emma Hardy), there are many projects that could benefit from that investment. Employment could benefit, as could our tax revenues, yet the Government’s dither and delay and their tepid response to the climate emergency means that we are not only losing out on stopping carbon emissions, but losing out economically. If the public and private sectors do not invest now, we will turn our backs on investment that is potentially worth £1 trillion by 2030, as well as up to 480,000 new jobs by 2035.

We Liberal Democrats call on the Government to announce a £150-billion public investment programme to fire up progress towards net zero. Much of that money should be invested to support renewable projects such as solar and wind, as well as marine energy, about which we have not heard anything today. Our target is for at least 80% of the UK’s electricity to be generated from renewables by 2030, which is possible with the right investment and the right frameworks. We Liberal Democrats believe in incentivising not only businesses, but households, to invest in the green transition. That could and should include increasing the pitiful amount people are paid from the smart export guarantee, ensuring that those who invest in solar panels on their roofs get a fair return.

The climate crisis cannot wait. Penny-pinching now will lose us fortunes in the future: Government investment and the right Government policies and frameworks are needed to meet the climate change challenge. We need a Government led by a Prime Minister who is very much interested, rather than “simply uninterested”.

Energy Company Obligation Schemes

Wera Hobhouse Excerpts

Tuesday 27th June 2023 Westminster Hall

[Wera Hobhouse (Bath) (LD)]

It is a pleasure to serve under your chairmanship, Mr Paisley. I congratulate the hon. Member for Ceredigion (Ben Lake) on bringing this important debate to this place.

We are in the middle of a cost of living crisis. Bills are soaring, wages are not keeping pace with inflation, and people are struggling to make ends meet. We must not forget how harsh last winter was. The energy price cap rose by 54% and many people were trapped in cold, leaky homes. We cannot allow that to happen again.

Households in poorly insulated homes will pay an estimated £13 billion a year more in energy bills. That is because the Government have failed to bring those homes up to at least band C of the energy performance certificate rating. Some 43,000 homes in Bath have a poor efficiency rating, and the Government’s inaction has meant that some of my constituents are more than £1,300 poorer each year.

We are also in the middle of a climate emergency. The UK has some of the leakiest homes in Europe. Insulating our homes would push down energy demand and cut our country’s greenhouse gas emissions. For the past decade, the energy company obligation schemes have delivered warmer homes, cheaper bills and greener buildings for millions of vulnerable households. The ECO4 scheme is the latest iteration. It provides grants to fund energy-efficient upgrades to homes, and pays for loft or cavity wall insulation, new heating systems such as boilers, and other measures designed to increase energy efficiency, as we have already heard.

However, ECO4 installations are not keeping up with the target to improve 450,000 homes by March 2026. The Energy Efficiency Infrastructure Group has shown that, by March 2023, only 15,000 homes had been treated. That is just 3% of the overall delivery target. That is very poor, and an example of the Government’s inaction on delivering what has been promised.

The cost assumptions made in the ECO4 assessment are outdated and unrealistic. The modelling used to set ECO4 targets was based on estimated costs in 2021 prices, with an allowance for general inflation over time. Since that assessment was made, inflation has soared. December 2022 saw inflation having risen by 9.2% in the previous 12 months. That is more than three times what Ofgem projected it to be.

The costs of delivery far exceed what Ofgem has accounted for. Loft insulation is, on average, 430% more expensive, cavity wall insulation is 372% more expensive, and external wall insulation is 147% more expensive. The Government should ensure that those costs are taken into account and must match the cost of measures in ECO4 with inflation. That is the main point that I wanted to make; the 2021 estimates do not take into account the soaring inflation that we have seen over the past year.

The ECO4 criteria restrict the number of homes that can be improved. The eligibility requirements set out that the homes must be improved by at least two EPC bands, which makes it hard to find suitable homes. Energy Efficiency Infrastructure Group members estimate that 90% of qualifying homes miss out because they are unable to meet the minimum requirements of the scheme. To illustrate my point, E.ON attempted to deliver energy-efficiency measures to a three-bed mid-terrace property in Dagenham. The owners of the property qualified for ECO4 as their home was rated EPC band E and they were living in fuel poverty. The package of measures that E.ON proposed would have saved the family about £600 a year on their energy bill, but the installation was rejected because the measures would not improve the house enough to make it jump two EPC bands.

When it comes to tackling the climate and cost of living crises, every little helps, so why is the ECO4 scheme making perfection the enemy of the good? The Government should relax the minimum requirements when all reasonable measures have been installed in an eligible household. That would ensure that vulnerable households could still receive much-needed support. To tackle the cost of living and climate crises, we must improve the energy efficiency of our homes. We must do all that we can to ensure that the ECO scheme benefits as many people as possible, as soon as possible.

[Alison Thewliss (Glasgow Central) (SNP)]

The hon. Lady is making some excellent points. I am sure that in her constituency, as in mine, there are many older properties that are very difficult to convert. Does she agree that more needs to be done to ensure that those households can access the scheme, because it is harder for them to convert their house?

[Wera Hobhouse]

Absolutely; I could not agree more. In Bath, we have a lot of old, leaky homes. They are very beautiful, but they are not particularly energy efficient. People really want to do something, but ECO4 does not work for a very large number of households. If we really want to help vulnerable people and tackle the climate emergency, we must look at how the scheme has been designed and make some improvements to it. The two-jump requirement is particularly difficult in old properties.

The Government must take urgent action and improve ECO4, in order to protect the most vulnerable from cold winters and tackle the climate emergency as soon and as effectively as possible.