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I do not agree with the hon. Member for Brighton, Pavilion (Caroline Lucas) about the nuclear debate, although I used to. Like George Monbiot, I have changed my view on the basis that is probably the lesser of two evils. However, that does not take away from the need for significant uplift in the amount of energy efficiency work that must be undertaken to existing residential accommodation and residential accommodation now being built, as well as to the commercial built environment, as the hon. Member for Richmond Park (Zac Goldsmith)
has pointed out. In cities the commercial built environment is responsible for the lion's share of carbon emissions, so it is important to address that issue in the new green deal that the Minister is talking about.
I said that it was important for this Government to be greener than the previous Government, but that is not to diminish the huge strides made by the Labour Administration. Let me make it clear, for the record, that they were the first Government in the world to pass a climate change Act and that their Warm Front initiative introduced energy efficiency measures to about 2 million homes. Their feed-in tariff was a very important initiative, and the massive expansion of offshore wind energy announced by the previous Prime Minister is also welcome.
My hon. Friend the hon. Member for Southampton, Test (Dr Whitehead) referred to the boiler scrappage scheme. We were ahead of the game on the Kyoto commitments. Indeed, we led the world in securing them in the first place. We also led the world in trying to secure a deal at Copenhagen: that is another thing that we should be proud of, and we should applaud the former Secretary of State for Energy and Climate Change, my right hon. Friend the Member for Doncaster North (Edward Miliband), for the role that he played in that.
My hon. Friend the Member for Southampton, Test also spoke about the need for district heating schemes and how they can be used. Compared with the rest of Europe, this country does not have a great track record in that regard, but I believe that district heating schemes have tremendous potential, especially when linked to initiatives on waste. The treatment plants being developed around the country offer a way of dealing with waste that is better than burying it in the ground, and they also give us an opportunity to generate energy at the same time.
Ms Bagshawe: Does the hon. Gentleman agree that this is an overlooked aspect of renewable energy, and would he welcome investment in innovative technology? For instance, the BioWayste plant in my Corby constituency takes 146,000 tonnes of food waste and, using anaerobic digestion, turns it into enough energy to supply half the needs of an entire food processing plant for a whole year.
Chris Williamson: I do not know the details of the specific scheme to which the hon. Lady refers, but her description makes it sound particularly laudable. Based on the information that she has just given to the House, it is certainly something that I would like to associate myself with. So yes, I agree with her on that.
When Bill Clinton launched the Clinton climate initiative, he said that tackling climate change provided an opportunity to save money, make money and create jobs. I wholeheartedly agree. The point has been made already in this afternoon's debate that there is an opportunity to create green jobs through investing in energy efficiency measures. We need to examine that angle, and the Government should consider how burgeoning new companies looking to enter the field can be encouraged and helped.
In my constituency, Rolls-Royce has been working on a fuel cell for some time. If the company can bring the project to fruition, it will play a significant role in providing environmentally friendly of energy generation in this country. Again, the Government should look at ways to support that initiative.
Other hon. Members have mentioned the link between fuel poverty and energy efficiency. That is something that I, as a former welfare rights officer, am particularly concerned about: we have seen how the increase in fuel prices has impacted on fuel poverty in this country, so it is important to make more strenuous efforts to ensure that low-income households benefit from the green deal.
I am especially worried about low-income households in the private rented sector. Other hon. Members have mentioned them in the debate, and I think that the Minister said that the green deal would apply to that sector as well. We will be watching very closely to see how that develops, but it is clearly going to be an extremely important area.
When I was leader of Derby city council, I set a very challenging target-that Derby should become self-sufficient in clean green energy by 2025. I worked with local companies in the city to get them on board for that agenda, and I have to say that there was a good deal of support for it-both for generating environmentally friendly energy and for ensuring that commercial premises were more energy-efficient. To come back to the point that the hon. Member for Richmond Park made, it will be interesting to hear what the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry), has to say about the commercial sector when he winds up, because if that sector is ignored it will be a significant omission.
The Government's stated aims on public spending, and the Budget that we debated last week and at the beginning this week, seem to militate against much of what the Minister of State, Department of Energy and Climate Change, the hon. Member for Bexhill and Battle (Gregory Barker), said this afternoon. Without Government investment in this important policy area, it will be difficult to deliver on the ambitions that he outlined. It is important for the Government to unlock the potential in local government, but the Chancellor, with massive swingeing cuts to local government finance-we had a debate on local government finance yesterday-will make it very difficult for the innovation locked away in local government to come out and flourish. That is another area that the Minister needs to look at carefully.
Not only are there to be cuts in local authority expenditure, but restrictions are being put on local authorities' ability to use, for example, prudential borrowing as a way of moving the agenda forward. Again, that is something that the Minister needs to look at. Perhaps he might talk to his colleagues in the Con-Dem coalition to see how that can be addressed.
If we can get it right, and address energy efficiency and tackle climate change, there will be significant implications for the size of the deficit. In the prospectus that the Chancellor outlined last week, he took a direction diametrically opposed to the one that he should have taken to tackle the deficit. His cuts package will create large-scale unemployment, with tens of thousands of public sector workers losing their jobs, and tens of thousands-possibly hundreds of thousands-of workers in the private sector losing their employment as well. Investment in green technology and energy efficiency can generate huge numbers of new jobs; that would
take people off the dole, generate income tax revenue for the Exchequer and help reduce the size of the deficit. That deficit will get bigger as a result of the Chancellor's Budget last week, and that in turn will result in further pressure to make even more swingeing cuts. We would then end up in a vicious circle.
I wish the Minister luck in his ambition for the new green deal. It is a good step in the right direction, but he needs to go a lot further. It is important for him to recognise the measures that were taken by the previous Administration and build on them, and to do what he can-although I accept that he has what is probably a fairly junior position in Government at the moment-to persuade the Chancellor of the error of his ways. I am sorry, but last week's Budget will make it very difficult for us to deliver on the ambitions that the Minister outlined earlier.
6.28 pm
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.
6.40 pm
Emily Thornberry (Islington South and Finsbury) (Lab): It is a great honour to close this debate for my party from the Dispatch Box, and this is the first time that I have done so. For many people the debate will be memorable not necessarily for my contribution, but for what will have flashed into their minds and been difficult to get rid of-that is, the picture of the Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), hoovering his carpets wearing less than an apron. However, it is clear from the debate that, although there is broad agreement throughout the House about where we need to get to, there is much disagreement about how we get there.
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