10 May 2011 : Column 1049
Point of Order
4.33 pm
Sir Menzies Campbell (North East Fife) (LD): On a point of order, Mr Speaker, of which I believe that you have been given advance notice. You may be aware that this morning the Select Committee on Standards and Privileges met to consider the confidential report from the Parliamentary Commissioner for Standards following the self-referral to the commissioner of my right hon. Friend the Member for Yeovil (Mr Laws). Shortly after the conclusion of that meeting, Sky News and the Evening Standard were reporting that the commissioner had found my right hon. Friend guilty of breaching expenses rules. What protection is available to hon. and right hon. Members who find themselves in such a position? Such leaking risks undermining the work of the commissioner and of the Committee on which we all rely. What confidence can my right hon. Friend have that he has been, and will continue to be, given a fair hearing and that the principles of natural justice will be upheld?
Mr Speaker: I am grateful to the right hon. and learned Gentleman for his point of order, and to the right hon. Member for Orkney and Shetland (Mr Carmichael), for giving me advance notice of the intention to raise it. Like the right hon. and learned Gentleman and other hon. and right hon. Members, I strongly deprecate any leaks that take place that constitute a discourtesy to this House. However, I have to say to him that at this stage I have no detailed or authoritative knowledge of the matter and that it is not, at this juncture, a matter specifically for me. However, the very real concern that the right hon. and learned Gentleman feels, for his own part and that of others, has been registered, and if there has been any unauthorised disclosure it is, in the first instance, a matter for the Committee concerned to consider. I hope that is a clear and fair response. I am grateful to the right hon. and learned Gentleman.
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Lip-reading
Motion for leave to bring in a Bill (Standing Order No. 23)
4.35 pm
Ian Lavery (Wansbeck) (Lab): I beg to move,
That leave be given to bring in a Bill to require lip-reading to be classified as an essential skill for the purpose of skills funding; to require the Secretary of State to ensure that people who are deaf or hard of hearing have access to lip-reading classes provided by local learning providers at no cost to the learner; and for connected purposes.
There are an estimated 9 million people in the UK who are deaf or hard of hearing—a staggering one in seven of the population—and this issue touches every family in every community in the land. Lip-reading is a vital communication skill. It prevents social isolation, increases confidence and independence and helps people in work and in employment. It is a key part of the rehabilitation process for people with any kind of hearing loss, and it can greatly help people to adapt to using a hearing aid.
There are a number of reasons why someone might be deaf or might lose their hearing, including, but not only, noise, age and genetics. In areas such as my constituency and throughout the north-east, exposure to noise in mining, shipbuilding, engineering and other heavy industry has contributed significantly to the problem. More than 50% of people over 60 have experienced hearing loss, and about one in every 1,000 babies born is moderately to profoundly deaf.
I recently met constituents and volunteers at a Royal National Institute for Deaf People meeting in the town of Morpeth in my constituency. I should like to place on record my support for the excellent work undertaken by the RNID, its staff and its network of hard-working volunteers. At the meeting I had an opportunity to learn about the hearing problems that my constituents have, about how their everyday lives are affected and about the huge difference that lip-reading would make to their quality of life. I want to share some of their thoughts and personal experiences with you, Mr Deputy Speaker, and with the House, because they effectively illustrate the need for, and the benefits of, lip-reading.
One of my constituents, a 69-year-old former miner, was in his 20s when his hearing went rapidly into terminal decline. He came out of a session at the local swimming baths to discover that he was deaf. Although he is articulate, intelligent and motivated, his inability to hear has had a huge impact on his and his family’s lives. He regularly attended lip-reading classes and found them enjoyable and sociable. His confidence improved and he could interpret lip shapes to communicate with others. He was learning to lip-read when the classes were stopped. He was making good progress and the classes were making a real difference to his confidence, so it was a huge disappointment and setback when they were stopped.
In another case, a man who had been in the armed forces and later employed in the building trade lost his hearing on a holiday flight as the aeroplane began to land. He became deaf and his hearing never returned. His hearing loss caused him severe depression and caused problems in his relationships with his wife and family. He eventually lost his job because of his hearing
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loss, could no longer communicate by telephone, and missed so much conversation that all involved became concerned for his welfare. He became known to the care trust and was assigned a specialist social worker. He attended lip-reading classes, which met his needs. The course was local, always full and with a waiting list, and cost-effective. He found that meeting other people assisted him in his mental health recovery. The lip-reading classes were abruptly stopped, and concern mounted for his welfare.
The man was eventually sent, together with his wife, on a LINK course financed by the NHS after referral by the care trust. LINK is a specialist course for those who have hearing loss, and because it is residential and out of the area—it is usually held in Bournemouth—it is an expensive course, which is financed by the care trust. Had lip-reading classes not been stopped, they would have met his needs and those of his family locally. Lip-reading classes would have stopped the social isolation that he experienced and, in his case, would have negated the need for costly NHS mental health intervention, which required him to travel to Bournemouth.
Another case is that of a chap working in education. He took early retirement after 26 years because of his deafness, which prevented him from being an effective teacher. He was unable to hear young children who were learning to read. Ironically, he became a part-time lecturer at a local university, teaching local history. He said, “I can teach, but I can’t listen!” His family have had deafness problems throughout the generations. He read a novel, “Deaf Sentence” by David Lodge, which showed how lip-reading improves the individual’s quality of life. At the time he was concerned that he had withdrawn from the company of others and had stopped doing things that he enjoyed.
The man searched for a lip-reading class and joined Northumberland RNID as an active volunteer. He was amazed that there were no lip-reading classes available in Northumberland, yet in Durham, the adjoining county, nine classes were held throughout the year. The round trip to the classes in Durham was more than 100 miles so it was not practical to travel. He believes that this life skill should be available to all and free at the point of service. Lip-reading should not be regarded as a recreational pursuit. He says, “To suggest that lip-reading should be linked to adult education or leisure is deeply insulting to those of us with hearing difficulties.”
The final case is that of a constituent who became profoundly deaf as a four-year-old child, following an illness. She struggled in mainstream school and felt excluded and lonely. She later married and raised her twin daughters together with her loving, caring family.
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Her hearing loss has caused her severe problems throughout her life. Some six years ago, in her mid-50s, she was considered as a candidate for an implant. The operation took place in Middlesbrough and was extremely expensive for the NHS. For the first time in decades she could hear sounds and was able to distinguish between them. It took time for the “Dalek-like stimulus”—her description, not mine—to be assimilated by the brain and for her to make sense of people’s mouth shapes.
Hearing again has made an enormous difference to my constituent and her family. She has had good support from the NHS. However, she feels that although she is fortunate and that the pre and post-operative care were good, there was a vital ingredient missing from her long-term care—lip-reading classes.
Lip-reading is classified in the UK as personal and community development learning within adult safeguarded learning. The Skills Funding Agency policy summaries describe one of the purposes of such learning as enjoyment. The document also highlights the fact that adult safeguarded learning
“is increasingly being referred to as Informal Adult Learning”.
Examples of other skills in the same classification are cake decorating and balloon modelling.
There appears to be a postcode lottery in the UK for lip-reading classes. Surely that cannot be acceptable. The benefits of someone learning to lip-read are well proven. It assists greatly in employment, health and life skills. From my experience it is clear that there is a demand for lip-reading classes, and urgent action must be taken to halt the current decline in the number of classes available.
In all our constituencies and communities there are individuals and families who would benefit hugely from the provision of such a service. It is our responsibility to ensure that those services are available locally and at no cost to the learner. We must remember that one in seven people suffers from hearing loss—9 million people in the UK. Lip-reading classes should be treated very seriously indeed. The simple fact is that we should all band together, and there should be no dissent from the motion so that we can ensure that all people suffering from serious hearing loss at least have the chance to attend lip-reading classes, and a modicum of quality of life as a result.
That Ian Lavery, Grahame M. Morris, Ian Mearns, Mrs Sharon Hodgson, Catherine McKinnell, Mr David Anderson, Mrs Mary Glindon, Mr Ronnie Campbell, Mr Dennis Skinner and John Cryer present the Bill.
Ian Lavery accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 4 November, and to be printed (Bill 186).
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Energy Bill [Lords]
4.47 pm
The Secretary of State for Energy and Climate Change (Chris Huhne): I beg to move, That the Bill be now read a Second time.
Over the past year, energy policy has been in the spotlight. From the gulf of Mexico to Fukushima, no one can doubt the importance of our energy choices. For the first time, scientists have linked greenhouse gas emissions to an increased risk of major floods. Faced with a difficult financial situation, the Government’s objectives are clear: we must secure affordable energy supplies for the future and avoid dangerous climate change. Neither will be easy. The gap between our energy demand and our energy supply is growing and we are increasingly dependent on imported energy. We still rely heavily on unclean and unsustainable fossil fuels. By law, we must cut our emissions by 80% by 2050, and we must get 15% of our energy from renewable sources by 2020 under EU law. Our energy infrastructure is ageing. Our old polluting power stations are shutting down.
Barry Gardiner (Brent North) (Lab): While the Secretary of State is talking about the targets, will he expand on the dispute that appears to be taking place between Cabinet colleagues on whether the recommendations of the Committee on Climate Change should be met or abandoned?
Chris Huhne: The hon. Gentleman can take it from me, as a former journalist on The Guardian,that he should not always believe everything he reads. The Government will make our announcement on the question of the fourth carbon budget in due course.
Building the next generation of power plants will take time and money. If we are to cut our carbon emissions and keep the lights on, we must act now. The cheapest way of closing the gap between supply and demand is to reduce the amount of energy used.
Mr John Baron (Basildon and Billericay) (Con): The Government are rightly concerned about fuel poverty and whether customers are paying too much for their energy—a situation not helped by a myriad of tariffs and complex energy bills. As my right hon. Friend’s fellow Ministers know, I have submitted simple proposals to his Department that would oblige energy companies to show customers how much they would save if they were on that company’s cheapest standard tariff, based on the customer’s actual usage, rather than a generic or average usage. Other Ministers have been supportive. Will he be?
Chris Huhne: I am grateful to my hon. Friend, and I know that he has been very active in promoting that cause. I thank him for the way in which he has been championing that change, which will help to increase consumers’ control of their energy bills, and I very much hope that he will continue to do so. I can certainly say—for myself and the whole ministerial team—that we are supportive of his work and the ideas that he has brought forward; we see a lot of merit in them. I would want to consult more before introducing detailed legislation, but we very much welcome the thrust of that work.
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Mr John Redwood (Wokingham) (Con): Given the looming shortage of capacity, how much new capacity is in-build as a result of decisions taken in the last year, and how much does the Minister wish to get in-build as a result of decisions in the forthcoming year?
Chris Huhne: I am grateful to the right hon. Gentleman for his question on that issue. Obviously, there is an absolutely central objective of the electricity market reforms, on which we are consulting, and it is that we bring forward proposals. We are determined that we should have an adequate supply margin through even the toughest of winters. My whole ministerial team is determined to ensure that, and I merely urge him to wait for our White Paper, which will I hope reassure him about the prospect.
Joan Ruddock (Lewisham, Deptford) (Lab): In the light of what the Secretary of State has just said, what does he make of Centrica’s threat not to reopen its gas field because of the punitive taxation that his colleagues have imposed on it? If he really wants security of supply, surely that is central to its future.
Chris Huhne: Perhaps the right hon. Lady has more information on that than I do. I read the comments very carefully, but I did not read a comment about closing down the Morecambe gas field. That would be a very odd thing for an operator to do, but we will have to wait for the fullness of time to see whether she or I are right.
Mr Andrew Smith (Oxford East) (Lab) rose —
Chris Huhne: I will give way once more—to the right hon. Gentleman—before making a little more progress.
Mr Andrew Smith: The Secretary of State said a few moments ago that we need to act now to combat climate change. Will he therefore act now to bring in emissions performance standards for power stations by adding an enabling clause to the Bill, so that we make progress in that crucial area as soon as possible, the electricity companies know where we stand, and we do not have to wait months and years for action that, as he says, needs to be taken now?
Chris Huhne: The right hon. Gentleman knows that it is not a question of months or years; the proper place for the House to debate as significant a change as emissions performance standards is as part of the electricity market reforms. We will give a very clear indication, as I said to the right hon. Member for Wokingham (Mr Redwood), of exactly what direction we are taking with our energy policy on the production side. The thrust of this Bill, which we are debating today, is more on the energy saving side, but we will make very clear the detailed proposals on emissions performance standards. We have a clear commitment in the coalition agreement—and, indeed, in our parties’ manifestos.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP): Will the right hon. Gentleman give way?
Chris Huhne: I am going to make a bit more progress, if I may, and if the hon. Gentleman will excuse me, because I have taken four interventions without being able to draw breath between any of them.
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Building the next generation of power plants will take time and money. If we are to cut our carbon emissions and keep the lights on, we must act, and the cheapest way of closing the gap between supply and demand is, as I said, to reduce energy use.
The Bill contains provisions to boost our energy security, to encourage low-carbon technologies and to improve energy efficiency. It gives energy companies a new obligation to reduce carbon emissions and to support vulnerable consumers, and it delivers a key coalition commitment: the green deal—a self-financing building improvement scheme to bring our properties into the 21st century.
The UK has some of the oldest and least efficient buildings in Europe. Every day, throughout the country, our homes and businesses leak heat and waste energy.
Mr Dave Watts (St Helens North) (Lab): As up to 24% of heat can go out of the window, will double glazing be included in the green deal?
Chris Huhne: The exact specifications of the measures that can be included in the green deal are properly left to secondary legislation—and for several reasons, because setting it out will require detail and my officials are in the process of talking to industries throughout the country about getting costs down. The scale of the green deal gives us an opportunity for economies of scale that may well bring a whole new series of measures into the possibilities that it offers. I would very much like to see the maximum possible range of measures—including, indeed, double glazing. As the hon. Gentleman rightly says, a quarter of the UK’s energy emissions come from energy used in the home, and billions of pounds spent on domestic heating literally disappear up the chimney. Businesses are wasting money and our outdated building stock is costing us the earth. Not any more: under the green deal—
Mr John Leech (Manchester, Withington) (LD): Does my right hon. Friend accept that the biggest problem is in the private rented sector, and that one of the best ways to deal with some of the worst properties is to stop landlords being allowed to let F-rated and G-rated properties by 2016?
Chris Huhne: I entirely agree with my hon. Friend, and I will respond to his point later if he will allow me to make a bit of progress.
Under the green deal, energy-saving packages worth thousands of pounds will be installed in millions of homes and businesses right across the country. There has never been anything quite like it. It is the most comprehensive energy-saving plan in the world. Green deal measures will be provided by trusted businesses, installed by accredited professionals, and backed up with a watertight legal framework. Customers will pay nothing up front; businesses will do that for them. Once the property has been refitted, green deal providers will get their money back from the expected savings on energy bills over the lifetime of the measures. This is the big change: payments can be made not just by the existing tenant or owner-occupier but by the new beneficiaries once the original installers have moved out
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and moved on, so there is a longer repayment period. That makes the whole scheme much more financeable and much more attractive.
Andrew George (St Ives) (LD): My right hon. Friend refers to the companies that will undertake the assessments and potentially the work itself. Has he had time to reflect on the lessons from the Warm Front scheme, where large companies cleaned up all that work when a lot of it could have been undertaken efficiently by small local companies? Will he ensure that the way in which the legislation is framed does not keep those small local companies out of undertaking this important work?
Chris Huhne: My hon. Friend makes a good point. We are absolutely determined to ensure that this scheme is open to small businesses that are properly accredited and properly qualified as installers. I am sure that all of us, in all parts of the House, want not only the biggest companies but small businesses to benefit from the advantages of the green deal.
Barry Gardiner: The right hon. Gentleman talked about householders moving and the contract then being taken on. However, in the evaluation process that took place at the beginning, the estimated savings were based on usage by the initial occupier. What will happen when the occupier changes and those savings then change as well?
Chris Huhne: As the hon. Gentleman knows, when we are looking at savings or cash flow, money today is worth more than money tomorrow, so from the point of view of the installer, the longer the period, the more the work is worth doing. The key change in the Bill is to introduce the ability to go beyond the existing owner-occupier or tenant in order to spread payments out over a long period.
At the heart of the green deal is a golden rule—that for typical households, expected savings will offset costs. Each month, a green deal home will save energy while providing the same level of comfort. Money from likely energy savings will pay off the costs of the work. This is not a personal loan. Let me repeat: once a property has had the green deal, payment will stay on the energy bill at that address, even if the occupants then move out. When someone moves into a green deal home, they inherit the energy savings that pay for the work. Everyone has a part to play. This is about Government helping businesses and households to come together to deliver energy savings that are important on a national scale.
Through this legislation, we are creating a new market in energy saving. Just as the law establishing joint stock companies unleashed big investment, so this law will set the legal framework for a new green growth industry.
Mr Andrew Tyrie (Chichester) (Con): The Secretary of State said that he is creating a new market. Considerable consumer protection and competition concerns have been expressed to me about the creation of this market. What advice has he taken on the aspects of the Bill that will set aside the Consumer Credit Act 1974? Is it not the case that many people will feel tied to a particular energy provider? How will he ensure that these measures do not inhibit people from switching between energy providers?
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Chris Huhne: We have taken extensive advice on the provisions of the Consumer Credit Act 1974, and the Bill is absolutely in line with the protections.
In the view of this ministerial team, it is essential that the consumer has the highest possible protection, both financially and in terms of the quality of the installation, for the simple reason that the success of the scheme will depend on word of mouth. If people go around saying that they have had a bad experience, either financially or in terms of the installation, the scheme will not be the success that we want it to be. That is why we have been careful not to rush the Bill through. A lot of pressure has been brought to bear on us, because of the state of the economy, to ensure that we get it through as quickly as possible, but we have been determined, particularly drawing on the experience of Australia, to avoid the mistakes of countries that have rushed this matter, and to ensure that we get it right. I assure the hon. Gentleman that we have done that. I will turn to some of the more detailed answers to his question later.
Caroline Lucas (Brighton, Pavilion) (Green) rose—
Chris Huhne: I give way to the hon. Lady who has not yet intervened.
Caroline Lucas: I am grateful for the opportunity to speak. Is it not the case that the golden rule will not help people in fuel poverty much because they are far more likely to feel any green deal benefits through greater thermal comfort rather than through reduced fuel bills? The energy company obligation pot does not have much money in it, although £2 billion is a good start. However, even that is being paid for by a levy on consumers’ bills, and there is research to suggest that that mechanism will push more people into fuel poverty than it pulls out.
Chris Huhne: I do not agree with the hon. Lady’s assessment. It is important to deal with people in fuel poverty. The energy company obligation, as she pointed out, will enable us to fund green deal measures for those in fuel poverty. The ECO will ensure that people, such as the stereotypical little old lady in her extremely draughty home who could suffer from hypothermia, can enjoy more comfort and do not have to generate energy savings to install insulation. The hon. Lady is right that we want such people to have more comfort and to enjoy a higher temperature, because we do not want to see our fellow citizens dying from hypothermia. Providing more comfort is explicitly allowed for in the Bill, and we have just introduced legislative measures for the warm home discount. We want to ensure that there are means through the green deal to tackle the root of the problem of fuel poverty, and to deal with fuel poverty problems for those who have not benefited from that.
Dr Alan Whitehead (Southampton, Test) (Lab): On the ECO, does the right hon. Gentleman regret agreeing with the Treasury cap on Department of Energy and Climate Change levy-based spending over the current funding cycle, under which any new levy spending—if it is so defined by the Office for National Statistics—would come within the levy cap? Under that scenario, what present levies does he intend to carve out in order to carve in the ECO?
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Chris Huhne: The hon. Gentleman should first realise that the ECO is not covered by that as yet, although it may be in the future. Secondly, it is legitimate for the Treasury to have an interest in the taxable capacity of the country as a whole. If we impose an additional obligation on electricity consumers through legislation, we should be absolutely transparent about it, and we have committed to do that through the annual energy statement, for example. It is also absolutely appropriate that the Treasury should have oversight of that, and that there should be ongoing negotiation to ensure that the balance is struck between the progress that we want to see on fuel poverty and hard-to-treat homes, and the charges that are put on the electricity consumer.
Chris Huhne: I will make a little progress, if I may.
Millions of homes, and millions of businesses, could benefit from the green deal in the next decade. We expect that households will be able to install measures worth up to £10,000. That is a massive undertaking, and it can make a real difference. Heating is the second biggest driver of energy demand in Britain, and British Gas pilots show that householders who put in energy efficiency measures can cut their gas consumption, and their bills, by up to 44%. That is a very substantial and significant saving, but so far energy efficiency has passed under the radar. We estimate that between £2 billion and £3 billion of energy is wasted every year because our homes are poorly insulated and inefficiently run. We may as well be standing outside our front doors burning £50 notes. That waste represents £2 billion to £3 billion of gas and oil imports that make us more vulnerable to the vagaries of global oil and gas markets.
Gavin Barwell (Croydon Central) (Con): What estimate have the Government made of the contribution that the energy efficiency measures in the Bill will make to the UK’s obligations on reducing carbon emissions?
Chris Huhne: One problem that we have in making that assessment is that, as I have said, this is the first scheme of its kind in the world. If an economist is trying to make a projection of what is going to happen in future, they usually examine what has happened in the past, but there is no history for this scheme, so it will be a case of “suck it and see”. However, later in my speech I will give some estimates of what will happen if the scheme progresses as rapidly as I would like it to.
Joan Ruddock: Will the Secretary of State give way?
Chris Huhne: I happily give way to the right hon. Lady for a second time.
Joan Ruddock: I am exceedingly grateful.
I have to say that much of what the Secretary of State is telling the House is familiar to me, as the person who pioneered and piloted so much of the history of the green scheme that he denies exists. What conversations has he had with the banks? How investment is to be raised is the key element that has not been described to date.
Chris Huhne:
I am grateful to the right hon. Lady, and I pay personal tribute to her for her work on the matter. I am not—repeat not—attempting to make any
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partisan points. This has been a genuinely important piece of work to which Members of all parties have contributed, and I think it will be a game changer.
On the banks, I shall read the right hon. Lady a quotation that I believe sums up better than anything that I could say what is likely to happen with the financing of the scheme. It comes from Conor Hennebry, the director of global capital markets at Deutsche Bank, who says:
“We believe the Green Deal has the potential to improve access to home energy efficiency for families across Britain, and we are delighted to be working with DECC on this exciting initiative.”
He added on another occasion that
“the City is practically champing at the bit to finance the government’s green deal.”
I believe that the finance for the scheme will come through very strongly. The securitisation market is opening up—Eaga, for example, has already gone to the bond market with a securitisation, and many of the utility companies have securitised gas bills. I think that finance will be readily available, which will be an important part of making the green deal work.
Andrea Leadsom (South Northamptonshire) (Con): I welcome the Bill—it is a superb idea, and I applaud the Government for bringing it forward so quickly. May I press the Secretary of State on consumer protection? As with any new initiative that a tremendous number of people want to take up, some providers will inevitably promise the earth and not deliver. What protection will there be for consumers, particularly those in fuel poverty to whom much is promised but little is delivered, to ensure that they get the insulation and the reduction in their fuel costs that they are expecting?
Chris Huhne: I absolutely sympathise with the hon. Lady’s question—I spent a number of years on the board of the Consumers Association, and I am a firm believer in the need for good consumer protection. There are several layers of protection, and the first line of defence for the consumer is competition. The inability of householders to get an assessment and an alternative quote—such competition keeps suppliers lean and mean—is perhaps what went wrong with the Warm Front scheme.
In addition, we will have all of the usual protections. I mentioned the Consumer Credit Act 2006 in respect of finance, but there is also the accreditation scheme for assessors, so we will know that assessors are properly trained to assess what people need in their homes to meet that golden rule. We will have properly qualified installers, so avoiding the problems that occurred, for example, in Australia, where untrained people crawled through people’s lofts, banging nails into wires and setting fire to homes. The whole Australian energy efficiency industry was given a bad name for many years because of that, but we are avoiding those problems. The hon. Lady will see in Committee that we have delivered a lot on consumer protection.
Mr Michael Meacher (Oldham West and Royton) (Lab):
The Secretary of State has concentrated on the benefits of the Bill, which of course depend on whether there is high take-up, which in turn depends on the interest rates on loans under the green deal. Will he give
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us some idea of what he intends the interest rate to be? Most expect that it will be of the order of 8% to 10% over a 25-year period, which will rule out very large numbers of people, particularly the poorest.
Chris Huhne: The right hon. Gentleman is right to say that the interest rate is important. However, it is up to competing businesses to arrange that finance. I also very much hope and trust that finance houses will make pools available for the small businesses of which my hon. Friend the Member for St Ives (Andrew George) spoke, so that providers other than the B&Qs and the Scottish and Southerns—the big providers—can get involved. The key point is that the securitisation market is opening up for such businesses, and the finance available is at a reasonable level, which I believe will ensure that we have take-off. However, the right hon. Gentleman is right that that is a market decision.
Mr MacNeil: The Secretary of State mentioned qualified installers, which in theory are all very well. However, one problem, especially in rural and island areas such as mine, is that in practice, local businesses are often unable to tender for the work because of the big contracts that are put together. People in the locality are cut out and left without the work while people come in from outside and take it up.
Chris Huhne: As I have already said, the Government are committed to trying to make the benefits of the green deal available to small businesses, which obviously includes those in remote islands and rural communities. We have consulted widely on that with both of the devolved Administrations, including the Scottish Government. We have a very substantial measure of consensus with the Scottish Government, but if issues need to be addressed in Committee, we will happily address them. I am terribly keen to ensure that the Bill works throughout the UK, because the homes that need insulating exist throughout the UK. Some of the greatest beneficiaries will be communities that are off the mains gas grid. Homes in such communities are often quite hard to treat, and the Bill will be of enormous benefit to them.
Under the green deal, households could save up to £400 a year once the measures have been paid off. That will flow through to spending power, boosting living standards for all, yet many people have never even considered making their homes more efficient—they do not know what better energy efficiency could do for them. New green deal assessments will set out clearly and consistently just how homes and businesses can save energy. The green deal is a new way of doing energy efficiency.
Jim Shannon (Strangford) (DUP): Will the Secretary of State give way?
Chris Huhne: Let me make a bit more progress, but I will give way again later.
There will be no more picking off the easy bits, with a little insulation here and a low-energy light bulb there; no more relying on regulation alone to change behaviour; and no more top-down schemes imposed using public money. Instead, we are creating a new dynamic market in energy efficiency, shifting from small-scale improvements to deep retrofits on a national scale. This dynamic
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market will bring jobs across the length and breadth of the country, and real growth, reaching into the most deprived areas, with no regional bias.
James Morris (Halesowen and Rowley Regis) (Con): On that point about the added benefit of the scheme to regional economies, can the Secretary of State estimate the number of the quality jobs that will be created in areas such as the west midlands and the black country, a part of which I represent?
Chris Huhne: That will depend on the take-up in different areas, but we estimate that nationally—there is no reason for any geographic or regional disparity; the numbers should be the same across the country—that the number of people employed in insulation alone could soar from 27,000 to 100,000 by 2015. The potential benefits are huge, with opportunities for skilled and unskilled labour alike up and down the supply chain.
The green deal will save energy and help us to hit our carbon emissions targets. It will also give us a chance to get people thinking about how they can reduce their own energy consumption. Millions of homes and businesses could benefit from the green deal, but as with any new product, building consumer trust will be critical to success. We want people to know that the green deal is not just a smart choice, but a safe choice, which is why the Bill also ensures that consumers will be protected. The green deal will be delivered by partnerships across the country.
Jim Shannon: For a minute I thought that as a Democratic Unionist Member I was not going to be allowed to speak in a green debate. When I was a Northern Ireland Assembly Member, I was involved in discussions on these measures, so it is appropriate that I have the opportunity to speak today. At the time, we proposed a clause on guaranteed performance standards that made it clear that if providers did not live up to their promises, they would be accountable for losses and monetary penalties could ensue. Does the Secretary of State intend to enshrine that principle in the Bill, so that what the Assembly proposed will be applicable across the United Kingdom? It would ensure good customer service and enhance security and protection.
Chris Huhne: The short answer is that there is a limit to what we can guarantee—the hon. Gentleman used the word “guarantee”—for reasons that will become obvious: if someone were suddenly to marry a Brazilian and wanted to keep their temperatures 3° or 4° higher in the winter, I could not guarantee that their energy bills would be lower. We have to be cautious, therefore, but if there is no behavioural change, we would expect energy savings.
We will ensure that high-quality, standardised advice is given so that each customer can see clearly where and how the green deal will work for them, and that those installing green deal measures must meet robust standards. We will guard against mis-selling, and ensure that the right information is on hand at the point of sale. Competition will keep suppliers keen: if a customer does not like the quote from one green deal provider, they will be able to get another.
Heather Wheeler (South Derbyshire) (Con):
This is a key test that will give legs to the Bill. Some of my constituents have contacted me about their troubles
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with Warm Front. There has to be a clean break with the past. This has to be a better way of doing business and giving us all a green deal for the future. I am looking forward to that particular piece of the Bill.
Chris Huhne: The hon. Lady is right. Many of us have been visited in surgery by constituents saying that they were quoted under Warm Front for an improvement, but oddly the entire subsidy was taken up by the provider, rather than going to the constituent. The point of introducing this competitive provision is to ensure that the subsidy goes where it is meant to, instead of disappearing into the pockets of some large business.
The Bill will also introduce a new energy company obligation to replace the carbon emissions reduction target and the community energy savings programme, which have not unlocked carbon savings fast enough. The new obligation will be more ambitious. Energy companies will be expected to pay to support hard-to-treat properties such as those with solid walls, where insulation costs can be higher and the payback period longer than with the typical home. ECO payments from energy companies will be bundled with green deal finance and delivered together to ensure that the green deal is available to all. The scheme will also help the most vulnerable people—those in the coldest homes—to get the heating improvements that they need to keep warm and stay healthy. Cold homes cost lives. By targeting support more closely, we can reach more people more effectively.
Tessa Munt (Wells) (LD): I wonder whether this Energy Bill might be the right place for the Government to instruct the regulators to say that companies should no longer charge so much for the first units of electricity used—or whatever power it is—but instead swing that round to the point where there is better use of power. That will help the vulnerable and those in fuel poverty, because the whole thing has tipped the wrong way.
Chris Huhne: My hon. Friend makes a good point. There are many difficulties in the energy market of the kind that she describes—for example, with prepayment meters, which often make things more expensive. That is precisely why we introduced the Warm Homes discount, which provides people in vulnerable households with extra support, and why the green deal is so important. We are not just using a sticking plaster—which is what we do when we subsidise people—but dealing with the root cause of the problem. One of the key points is that people in fuel poverty and those at the bottom end of the income distribution have an enormous range of energy use. Their use can vary by a factor of six merely depending on the kind of property they happen to be in. If they are lucky enough to have a social landlord who has recently renovated the property to the decent homes standard, their energy bill can be low; if they are in the private rented sector, it can be six times as high.
Chris Huhne: If I may, I am going to make some progress.
We will focus our resources on where they can do the most good. That means finding practical solutions to identify households that need the most support. We are determined to get to grips with the causes of fuel
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poverty, not just the symptoms, but the tools at our disposal are not up to the job. That is why I have asked Professor John Hills to conduct an independent review of the fuel poverty target and definition, so that we can understand the problem and what we can do to fix it, and also be held to account as a Government for the progress that we make. The review will produce an interim report in the autumn and a final report early in 2012.
For too long, a sizeable minority of tenants has suffered from higher bills and colder homes. Privately rented houses are more likely to have the lowest energy efficiency rating than those that are owned outright.
Caroline Lucas: I thank the Secretary of State for giving way again. Are not tenants unlikely to challenge their landlords on the introduction of the green deal because of a fear of retaliatory eviction? Would it not be much more effective to introduce minimum energy efficiency standards that landlords have to keep to if they want to put their buildings on the market?
Chris Huhne: The hon. Lady anticipates a point that I will turn to very soon.
Landlords do not want to invest because tenants benefit; tenants do not want to invest because they will move on. By linking the green deal measures to the property, not the tenant, the Bill bridges that divide. With the green deal, everybody wins. Landlords will face no up-front costs; tenants will keep warm for less.
I welcome many of the positive responses that we have had from landlords to the prospect of the green deal. However, some individuals and organisations feel that we are not committed to securing improvements to the least energy-efficient properties in the private rented sector. Many tenants suffer appalling conditions without the power to agree improvements with their landlords. The debate has been lively, and we have listened. That is why I am pleased to announce that we will change the current provisions to make it clear that we will regulate. This is significant step and a marker of our intent. From 2016, any tenant or their representatives asking for their landlord’s consent to make reasonable energy efficiency improvements cannot be refused. From 2018, the rental of the very worst performing properties—those rated F and G—will be banned through a minimum energy efficiency standard. We will of course seek to work with landlords well in advance to support their take-up of the green deal. The precise form of these regulations will be subject to the usual scrutiny processes.
We also remain committed to ensuring that all councils play a role in delivering the green deal. The recent memorandum of understanding between DECC and the Local Government Group recognises the enthusiasm that councils have for delivering the green deal.
Malcolm Wicks (Croydon North) (Lab):
I have a question about the private rented sector, and I ask it in a spirit of non-partisanship because I know that the Secretary of State likes that kind of thing. I welcome what he has said about putting some pressure on landlords but, given that the public sector will in effect be paying the rents of some of these energy-efficient dwellings, through housing benefit and housing allowances, has
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his Department had talks with the Department for Work and Pensions to see whether the withdrawal of housing benefit could become another weapon in his Department’s armoury?
Chris Huhne: We have discussed this with the DWP, and that would certainly be one route down which we could go. There would be dangers in doing so, however, not least because some of those on housing benefit find it hard to get into privately rented property. The simpler route that I have suggested will have a clear and predictable effect and will touch more than 680,000 homes in the private rented sector that are currently rated F and G. This is a substantial move.
Stephen Gilbert (St Austell and Newquay) (LD): The Government are clearly announcing significant changes to improve energy efficiency in the private rented sector. Will the Secretary of State expand on what he would consider to be reasonable, in the context of his saying that any reasonable request from a tenant would not be refused? Also, why has 2018 been chosen, rather than 2016 as many outside groups have been calling for?
Chris Huhne: The clear idea here is to give a point at which we know people are going to be able to aim. It is not reasonable to introduce changes very rapidly when, for example, there might not be voids in property renting. We do not want to impose unnecessary costs, and it is therefore appropriate to set a date. Let us remember that the scheme does not begin until October 2012, and we want to set a date by which the private rental sector can deliver.
Andrew George: Before he took those last two interventions, my right hon. Friend had just reached the point about the memorandum of understanding between his Department and the Local Government Group. The Bill does not at present include any powers for local authorities, and some of us are concerned that if it is simply left to the private sector to generate the scheme, it might not be sufficiently targeted at the communities that need it the most. Should we not give a duty, or at least a power, to local authorities in this regard? Does the Local Government Group sign up to that kind of joint arrangement with the Government?
Chris Huhne: My hon. Friend needs to recognise that a substantial number of councils are very enthusiastic about the scheme, because of the benefits that it can bring in regard not only to energy saving but to local jobs. I personally think that we are going to see go-ahead councils trumpeting the work that they do in this area. They already have substantial powers to monitor and to ensure that this will happen.
Alongside the green deal provisions, the Bill also contains measures to enhance energy security. They include legislative changes to reduce the likelihood, duration and extent of gas supply disruption, and to protect consumers from very high wholesale prices. These new powers would sharpen the commercial incentives for energy companies to meet their contractual supply obligation during a gas supply emergency. The Bill also introduces a special administration regime for gas and electricity suppliers, which will help to maintain market stability and protect consumers.
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Mr Mike Weir (Angus) (SNP): The right hon. Gentleman is rapidly going through energy security measures, but clause 100 provides a power to change the boundaries of the continental shelf. According to Library research papers, the aim is to provide flexibility in managing the UK continental shelf resources. Will the Secretary of State give us more information about which parts of the UKCS he envisages changing, what resources are involved and what consultations have taken place with the devolved Administrations?
Chris Huhne: We have indeed had consultations with the devolved Administrations on all aspects of the Bill. One objective of this part of it is to ensure that the smaller and more difficult to get at fields, which have potentially higher costs, are nevertheless attractive and can be handed on to companies who will exploit them to the full. I hope that the hon. Gentleman will see from the Public Bill Committee that that is what we are trying to achieve.
Chris Huhne: I must make progress.
The regime will ensure that if a large supplier becomes insolvent, customers will be supplied with gas and electricity as cost effectively as possible until the company is rescued, sold, or its customers are transferred to other suppliers.
The Bill also includes an updated regime for third-party access to oil and gas infrastructure. Timely access to infrastructure on fair terms will be increasingly critical over the next decade. The discoveries now being made in the North sea are typically smaller than those in the past and need to make use of existing infrastructure where possible. The measures in the Bill will help us to secure the full economic benefits of our North sea oil and gas resources.
The Bill brings energy efficiency to homes and businesses across the country. It boosts the security of our energy supply, protects consumers and supports green technology. In setting up the green deal, it places us at the very forefront of the low-carbon drive—with an innovative, dynamic market delivering energy efficiency at scale, with no extra cost to the public purse.
Chris Huhne: I have come to my peroration and I have given way many times. I would like to continue.
Together with our reform of the electricity market, which will open up our energy portfolio and deliver the next generation of low-carbon electricity, the Bill represents a signal step towards a cleaner, greener future for the UK. In the scale of its ambition, this Bill is a statement of intent. It will help cut our carbon emissions, reduce our dependence on imported energy and protect the most vulnerable in society. This is our flagship policy on energy saving. This legislation provides for it, and this Government will deliver it. I commend the Bill to the House.
5.32 pm
Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op):
I was starting to think that my moment might not come this afternoon. I am delighted that the Secretary
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of State managed to make it to the House this afternoon to speak to his own legislation. The power of Twitter knows no end!
It is important to outline where the Opposition stand on the vital issues facing the Department of Energy and Climate Change and the Government. We would all agree that there is no greater threat facing the planet than global warming. In the 19 years since the Earth summit in Rio de Janeiro, when climate change was firmly put on the agenda, the issue has moved from the fringes to the centre stage. Even during the 13-year period of the last Labour Government, for whom I had the privilege to serve, the issue became more urgent and pressing. That is why Labour not only introduced tough targets to reduce our emissions of the gases that cause global warming, but enshrined them in law.
This coalition Government cannot be accused of ignoring climate change. The Prime Minister himself put the environment at the top of the Tory agenda when he took his husky ride to the Norwegian glacier. At the time, there were sceptics—including the Secretary of State for Energy and Climate Change—who dismissed that as merely a public relations stunt. We could doubt the Prime Minister’s commitment; after all, he has uttered hardly a word on the matter since. Why else, though, would one install a wind turbine on the roof unless one were committed?
As the Secretary of State has said, the Energy Bill provides a once-in-a-lifetime opportunity to catalyse Britain’s journey from a high-carbon to a low-carbon economy, to change customer behaviour for ever, to lead the world in reducing carbon emissions and to be a bright beacon to our partners in Europe, America and the Commonwealth. So the coalition Government have set out their stall, claiming to be “the greenest Government ever”, and what have they come up with? After months of bravado, bragging and boasts from the Energy Secretary and his ministerial team, we have a Bill that adds new meaning to the word “disappointment”. It is a flaccid lettuce leaf of a Bill, laden with missed opportunities and ducked decisions. If the school playgrounds of Britain have indeed adopted a new phrase, “doing a Clegg”—which, for the benefit of Liberal Democrat Members, means saying one thing and doing another—the lexicon will soon contain another new phrase, “doing a Huhne”. That will mean “talking big”, for 45 minutes in this instance, “but delivering little”.
Andrea Leadsom: I am very disappointed by what the hon. Lady is saying, on behalf of many of my constituents. A couple of months ago I was at a fish-and-chips supper with some retired people, and one elderly lady was literally in tears, saying that given her very limited resources she did not know how she would manage to keep warm in the winter and eat as well. I find it pretty shocking that an initiative that is making a bold effort to remedy that situation should meet with such complete disregard from the Opposition.
Meg Hillier: The hon. Lady may be jumping to conclusions. It is this Government who are removing the Warm Front scheme, and it is this Bill that is failing to deliver for the fuel poor. I shall say more about that shortly.
In his 45-minute peroration, the Secretary of State promised 100,000 jobs. He promised that the poorest would be saved from the cold, and that the market
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would protect the consumer and many others. However, he did not give us the details of some important matters. We have a Secretary of State who has been rolled over by the Tory Chancellor—and, we have learned in recent hours in days, by his own party colleagues, particularly the Business Secretary—on every important issue in his Department. We have also learned today that the ECO may be within the levy cap, but not yet. We have a Liberal Democrat sheep in a wolfish Government: a Government who want to be green-tinged, but who are under-delivering on their grand promises.
David Mowat (Warrington South) (Con): When the last Government left office, one half of 1% of the UK’s total energy production was delivered by renewables. Is that under-delivery or not?
Meg Hillier: The Opposition seem to misunderstand—[Hon. Members: “You are the Opposition!”] They are the Opposition to me. They seem to misunderstand the position. There is cross-party agreement on the need for more renewables and a lower-carbon economy, but we believe that the Bill could do more to deliver that. What disappoints us is that a Bill that promised so much is delivering so little. We hope that in Committee we shall see some movement from the Government.
At the heart of the Bill is the green deal, which the Secretary of State spent much of his speech telling us about. The task is obvious. We all agree that Britain needs to insulate its homes and buildings. It needs to improve energy efficiency in millions of households. Given rising energy bills and the need to hit our carbon reduction targets, that work must be done, as Labour’s manifesto made clear at the last general election.
Laura Sandys (South Thanet) (Con): If the hon. Lady wishes to improve energy security and insulation in homes and to reduce carbon, I do not understand why she does not recognise that the Bill is a game-changer. I recall another game-changing piece of legislation, the Clean Air Act 1956. That was the first in the world; this is the first in the world. That attracted—
Mr Deputy Speaker (Mr Lindsay Hoyle): Order. I think that the hon. Lady has made her point.
Meg Hillier: First does not always mean best. We want the Bill to succeed in its aims, but if the hon. Lady looks at the detail of the Bill and reads the report of proceedings in the other place, she will observe the glaring gaps that I will shortly highlight. As I have said, the task is obvious and the challenge is great.
Neil Carmichael (Stroud) (Con): For the record, can the shadow Secretary of State tell us whether the level of fuel poverty went up or down under the last Labour Government, for whom she, of course, served?
Meg Hillier: The point is that this Government are removing Warm Front, and there will be nothing for the fuel poor; this Bill will not deliver for them.
The challenge is great. As the Secretary of State said, 27% of all UK emissions come from our homes. All Members are committed to an 80% reduction in emissions
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by 2050; there is cross-party agreement on that. However, during the Bill’s passage in the other place Ministers were offered opportunity after opportunity to make their proposals clearer, to introduce proper measures of accountability such as an annual report, and to safeguard consumers, but they rejected those offers of help, and we have not heard any further detail throughout the entire 45 minutes of the Secretary of State’s speech today.
Other Members may have longer memories, but I do not believe that this House has ever been asked to vote on the Second Reading of a Bill in which so much of the detail is unclear or not worked out. We are being asked to buy a massive pig in a poke, and that is simply not good enough. At the very least, the Secretary of State should concede the need for evidence sessions for the Bill, so we can shed some light on its murkier aspects, but he has refused to do so. As a result, Members will not have a single opportunity to discuss the Bill outside Committee. Today, the longer the Secretary of State’s answers were, the less we learned. [Interruption.] No, those are my words.
The key question this afternoon is whether the Government’s proposals meet the challenge. Sadly, my confirmed conviction is that they do not.
Christopher Pincher (Tamworth) (Con): The hon. Lady seems to turn disappointment into an art form. Is she not aware that many people are very disappointed that under the Government with whom she served fuel prices and the number of people in fuel poverty went up, and she did nothing about it?
Meg Hillier: I am sure the Secretary of State would be delighted if he had the power to control fuel prices, but now may not be the time for a lesson on the global oil economy.
Steve McCabe (Birmingham, Selly Oak) (Lab): What impact does my hon. Friend think a VAT rise has on fuel prices, and what impact does that have on elderly people?
Meg Hillier: I agree with my hon. Friend’s point. This Government cannot lecture us, given the impact of their policies on the budgets of households throughout the country, leaving them nowhere to go when oil prices increase.
In answer to a question from the hon. Member for Harlow (Robert Halfon), the Secretary of State said every home would benefit from the green deal—he clearly has no shortage of ambition in this area—but the Department for Communities and Local Government predicts that there will be more than 27 million households in England by 2033, so how can the green deal possibly hit that target? The Secretary of State talks about companies being keen to get involved, but we know that most have already stepped back, so unsure are they of what the Bill will deliver.
If the Secretary of State is so confident about his proposals, why has he refused to set a target for the number of homes that would benefit? He gave us a waffly answer earlier, but at a public event he said he had wanted to call this Bill the Energy Saving Bill but was told that the parliamentary Clerks would not allow it.
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I am sure that all Members are far less concerned about the title of the Bill than about what it achieves, and there are a number of obstacles to achieving the Secretary of State’s aims. First, we have no details about the interest rates at which the green deal cash will be loaned. Evidence suggests that an 8% rate will deter many households. Although there were rumours that incentives would be provided in the Budget, none were announced, yet without any tangible incentives most householders just will not bother. A loan of about £6,000 will barely scratch the surface of paying for what will need to be done to make most homes as green as they will need to be to meet our targets. The Minister of State, the hon. Member for Bexhill and Battle (Gregory Barker), has now suggested that loans could be as much as £10,000, which I hope is a sign that the Government finally recognise that there are inadequacies in the Bill, but that higher sum will be more off-putting to the poorest households whose homes are often the most expensive to improve.
On the golden rule, I was interested to hear the Secretary of State’s version of things—perhaps this is a new addition to the Bill—which was that “money today is worth more than money tomorrow”. That shows a level of financial literacy that clearly bodes well for the Bill. We also face the question of whether the banks will be interested, and the only banker that he could cite is a former Tory special adviser—he would be in favour, wouldn’t he? We need the banks to be on board if the Government’s model is to work.
Secondly, this Bill contains no assurances about who will conduct all the assessments and repairs. Who will accredit the legion of assessors—the 100,000 people that the Secretary of State talks about? Where will this army of assessors come from? We all know that the Government are doing their best to create a vast pool of newly unemployed nurses, RAF pilots and other skilled workers who need a new job, but even at the rate that this Government are destroying our services and putting manufacturing firms out of business, there will not be enough skilled people to do the job on the scale required.
The Secretary of State has been asked today, as Ministers in the other place have been, which measures could be put into a home under the green deal. Again, we have heard lots of words—for example, when he talked about double glazing—but he simply does not know the answer, and neither do suppliers, householders and landlords. Hard-to-treat remote and rural homes that are off-grid provide particularly big challenges, but the green deal, as it stands, does not step up to deliver on them. When the Secretary of State talks about success that will be determined by word of mouth, we know he has a great plan that will certainly deliver the results he sets out. [Hon. Members: “Hear, hear.”] Clearly Government Members do not understand irony.
Thirdly, and most shamefully, the Bill—[Interruption.] I think that Government Members ought to listen to the detail. I say that for those who have perhaps not followed it as closely as some of us. Thirdly, and most shamefully, the green deal fails the basic test of fairness, as the poorest households will get the least help. The constituents of mine who, like some of your constituents, Mr Deputy Speaker, and those of other hon. Members, shiver under blankets every winter will not be reassured by the coalition placing the responsibility for tackling fuel poverty with the energy companies. Those households,
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who have the most to gain from decent insulation and lower bills—I do not doubt that Members across the House are committed to solving this problem—should be the Government’s first priority, but instead they have been left until last.
Finally, I come to an important question on which we have not been given enough detail: what about consumer rights? If the work under the green deal is botched, how can consumers get redress? If the projected savings do not add up to the value of the loan over 20 years, who will pay the shortfall? What guarantees can Ministers offer consumers that they will not be saddled with debts, especially when they buy a house with a green deal loan already in place?
The Secretary of State talks with passion about stopping cowboys getting in on the deal, but his Government have abolished Consumer Focus, the watchdog that has successfully taken up consumer issues with the energy companies. No detail on consumer redress is available to us as we debate this Bill on Second Reading. People are rightly asking these questions and even where Ministers are coming up with answers those answers are not very reassuring. We simply need more detail. We are expecting about 50 pieces of secondary legislation after the House has made its decision on the Bill tonight, on Report and on Third Reading.
Stephen Gilbert: The hon. Lady seems to be “doing a Hillier”, snatching embarrassment from the jaws of defeat. We have heard real detail from the Secretary of State today on minimum energy efficiency standards for the private rented sector. Is it not a bit churlish of her not to welcome the detail that we have heard on the private rented sector, which has been called for by many external organisations?
Meg Hillier: That tells us all we need to know about the relationships in the coalition. If the hon. Gentleman, a Liberal Democrat, believes that what we heard from the Secretary of State today is detail, he perhaps needs to look again at the Bill. The detail is missing. The Secretary of State is keen to talk about the Bill with passion but he is not giving the answers. We are waiting for detail on the 50 pieces of secondary legislation, but we have seen none at all. I lay this marker down for the Secretary of State that in Committee we will seek further detail on many of these important issues and others—
The Minister of State, Department of Energy and Climate Change (Gregory Barker): As usual.
Meg Hillier: The Minister of State says from a sedentary position that that is unusual in Committee—
Gregory Barker: It’s irony, love.
Meg Hillier: I’m not your love, matey, and I suspect someone else might find that surprising, too.
It is important that we get the detail in Committee and I make that point for a good reason. The Government have form on not giving answers in Committee. The Bill has been in the other place and so we might have expected it to be better. We gave it a fair wind and we would still like to see it succeed, but we need more detail before it can do that.
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There is a yawning gap between Ministers’ rhetoric and their actions and it grows day by day. In public, Ministers talk about being the greenest Government ever, so why have they called the Climate Change Act 2008 “red tape” and placed it in a review of what they call “burdens on business”? Ministers might huff and puff and say that the Act is safe in their hands, and I do not doubt the commitment of the DECC team, but why then is it in the red tape review? Perhaps they need to talk to other members of their Government.
Why have Ministers ended the commitment to zero-carbon homes? That fact caused the WWF to resign its place on the working group as the decision was so out of the blue. Why will the green investment bank not be up and running for two more years? Allegedly, the money to fund it is coming from Britain’s stake in a uranium enrichment company, URENCO, which the Financial Times suggests is in doubt.
There is an elephant in the room and we all know what it is. The Energy Secretary has had his eyes on a prize other than reducing carbon emissions. I know that he has had to pull himself away from the detail of the Bill in recent days to attack his coalition partners by article, letter and leak, and it is a shame that he has had to do so because—to give him credit—it might be a better Bill if he had applied himself to it. We also know that the demands of the alternative vote campaign have, for some reason or another, taken up much of his time when he might have been meeting with green groups, consumer groups or businesses that would have told him what a mess the Bill was and how to improve it. There is still no excuse, when he is backed up by the gold-standard civil service of this country, to come to the House with this dog’s breakfast of a Bill. It is weak on specifics, clouded in uncertainty and built on such shaky foundations that few can have confidence in its standing up to scrutiny. We want the Bill to succeed, but we have no detail and no plan from the Government about how it will be implemented.
Debbie Abrahams (Oldham East and Saddleworth) (Lab): I agree with my hon. Friend that there is still much to do before the Government can claim to be the greenest ever. There are also significant gaps in the Bill. One example from my constituency concerns a community hydro project in Saddleworth that might not go ahead because of the anomaly in the current legislation, which is not addressed by the Bill, that prevents it from securing the higher feed-in tariff rates. Surely that is something we should be encouraging.
Meg Hillier: That is another example of the Government’s dither and delay in making decisions that can have perverse effects on the ground.
Andrew George: If the hon. Lady does not mind, I will sidestep the disappointingly partisan nature in which she has engaged in the debate. I am genuinely confused. She appears to endorse the principles behind the Bill and, quite understandably, is expressing some anxieties about the details. That is certainly a matter for debate in Committee. Will she urge her colleagues to vote for or against Second Reading?
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Meg Hillier: I think the hon. Gentleman wants to know whether he can get home early for tea tonight.
Let me reiterate: we set out that we wanted to give the Bill a fair wind, and I personally made that clear to the Secretary of State. It builds on ideas and work that were carried out by the previous Government and it needs to work to deliver the emissions reductions that we need in this country to meet our targets. It is light on detail, however.
John McDonnell (Hayes and Harlington) (Lab): I think the tenor of the argument in the House is that the whole House wants to see the Bill succeed, but there is an issue with the delegated legislation and with its range. May I suggest that those on the two Front Benches meet at some stage to discuss how that can be dealt with so that we can have a constructive debate as well as holding the Government to account? We all want the Bill to succeed.
Meg Hillier: I am in discussions with those on the Government Front Bench. When I asked to see draft secondary legislation so that we could be comforted that it would deliver the securities we have been asking for if the Bill was passed, I was told in a letter from the Secretary of State that that would not be possible until the primary legislation had been passed. I live in hope that the Secretary of State—he is a man who believes in this issue; I do not doubt his commitment—and I can continue to have a dialogue.
John McDonnell: Even if the delegated legislation comes after the Bill is passed, may I suggest that there is a discussion about evidence sessions on it and some form of progress report on the Floor of the House so that there can be a wider ranging debate?
Meg Hillier: My hon. Friend makes an excellent suggestion, which I have also made to the Secretary of State. I am sure that with the support of the House the Secretary of State will see the good sense in that suggestion and I hope he will talk to officials about how they can ensure that we facilitate it.
Overall, climate change is too important to leave to the market, and that is one of the problems with the Bill. The market and the market alone will decide. We need a strong Government to lead the fight against global warming and fuel poverty, but I fear that instead we have a Government who are at war with themselves.
5.57 pm
Mr Tim Yeo (South Suffolk) (Con): I begin by drawing attention to my entry in the Register of Members’ Financial Interests.
I would very much like to find something nice to say about the speech that has just been delivered by the hon. Member for Hackney South and Shoreditch (Meg Hillier). I listened carefully for 25 minutes and I could not really say that it made any serious contribution at all to the debate. It was extraordinarily churlish in tone and very ill-judged. If ever there was an issue that cried out for a bipartisan, long-term and constructive approach, it is energy policy and climate change. That was wholly lacking from every sentence of the hon. Lady’s speech.
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I warmly welcome the Bill, which is a big—and overdue—step in the right direction. I agree that some details remain to be filled in, but no doubt they will be addressed in Committee. I want to comment briefly on four aspects of energy policy that relate to the Bill. The first, of course, is energy efficiency. The Bill is especially welcome because of its intense focus on energy efficiency, which has always been the Cinderella of energy policy. I have always found that to be extraordinary—it is truly the no regrets policy. Even people who do not accept that climate change is a threat to the conditions of climate stability that have prevailed in the very recent history of our planet, thereby allowing one of the most recently arrived species, human beings, to proliferate in number and enjoy phenomenal and unprecedented success, and who see no advantage, either environmental or economic, in moving to a low-carbon economy can see the merits of greater energy efficiency, which has economic as well as environmental advantages. Those economic advantages accrue to households, rich and poor alike, and to businesses.
The green deal, which is the centrepiece of the Bill, is an excellent concept, even if there remain some areas of its implementation that we would like to know more about. The principle that energy efficiency measures can be financed through savings on fuel bills is a good one that is attractive to consumers. In practice, however, although most of the energy efficiency measures needed have a large and fast enough payback to meet the golden rule to which the Secretary of State referred-that instalment payments for the improvements will not exceed the cost of the savings made-there will be some measures that probably do not come into that category. I hope therefore that the Government will recognise—not necessarily in the context of the Bill, but soon—that some further incentive might be needed to improve all the housing stock in this country. I urge Ministers, as I have before, to explore more fully how discounts on council tax could be used to encourage faster progress to a comprehensive energy efficiency process. Those discounts could even be introduced on a revenue-neutral basis.
Chris Huhne: Powers for councils to do that are already on the statute book. A number of councils have introduced incentives through council tax, which have been very effective. We do not need new powers to do that, and I think that a lot of the most go-ahead councils will do it.
Mr Yeo: I am grateful to the Secretary of State for that point. I hope that means he will encourage the use of those powers in areas in which a significant number of households are not able to use the green deal measures as a sufficient mechanism and incentive to get the improvements that are needed. The same approach could be adopted for business premises by giving discounts on business rates.
Smart meters might also help. Helping consumers to understand the costs of energy and how they can better manage their energy consumption could be very valuable, but I hope that the Government will take a close interest in the roll-out of smart meters. There is a risk that the whole initiative might turn sour if the meters do not get off to a good start, if mistakes are made or if consumers become suspicious that they are going to benefit suppliers more than consumers.
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Nicky Morgan (Loughborough) (Con): Would my hon. Friend agree with a very simple suggestion that was put to me by a constituent about smart meters—that we need the information to be understandable to the average consumer who is not an energy expert? If the meter told the consumer how much energy had been consumed and its cost, that would mean a lot more than complicated numbers and figures that one cannot understand if one is not an expert.
Mr Yeo: The test of smart meters will be how user-friendly they are at giving people information that is relevant to their decisions in a manner that they can easily understand. That includes older people who might not have as much facility for modern information technology communications.
On security, I welcome the duty placed on Ofgem to report on the adequacy of future capacity. Demand for electricity will rise substantially not just because of economic growth but because several of the measures designed to reduce greenhouse gas emissions involve the greater use of electricity—for example, for transport and heat. We shall need a lot more generating capacity and the lead times for new capacity are such that decisions taken in this Parliament are absolutely crucial. A further dash for gas might be the quickest and cheapest way to expand capacity, but it would mean becoming even more dependent on gas imports, threatening a different aspect of security of supply. Even in a world in which gas can be imported from a large number of countries and in which we have the possibility of perhaps abundant supplies of shale gas from Poland and the United States, I do not think that anyone would be comfortable with our relying more on imports.
Furthermore, unabated gas emissions are so much higher than the target for emissions that the Committee on Climate Change quite rightly set for 2030 of 50 grams per kWh that a dash for gas could lead to expensive stranded assets in the 2020s unless we achieve carbon capture and storage, which is by no means a certainty. Yesterday, in its excellent review of renewables the committee reminded us, as it helpfully and regularly does, that nearly all new generating capacity must now be low-carbon. After all, electric cars and electrically heated houses are not going to cut greenhouse gas emissions if the extra electricity is generated by coal. The committee’s review is welcome as a common-sense judgment on renewables. It reaches the unavoidable conclusion that even with an enormous increase in offshore wind and solar power there remains an absolutely essential role for nuclear. We therefore need from the Government today, and regularly in future, an assurance that as soon as any safety issues raised by Professor Weightman have been addressed, every possible assistance will be given to ensure that new nuclear capacity comes on stream as soon as possible.
In the context of how more low-carbon electricity can be produced, a more explicit acknowledgment is needed of the risks of blithely assuming that carbon capture and storage will work viably at scale. With the abundant availability of coal in many countries, lots of coal is going to be burned in the next few decades. It is beyond doubt that the single technological breakthrough that the world most urgently needs is carbon capture and storage. There is huge potential for it, but I have not been encouraged by the fact that when the UK Government
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offered £1 billion in a competition, there was only one bidder at the end of the process. I therefore urge that more attention be given to issues such as waste-to-energy, which could provide a renewable source as some unrecyclable waste will be always be produced by a growing economy.
Mr Brian Binley (Northampton South) (Con): Will my hon. Friend give way?
Mr Yeo: I am running out of time, I am afraid, and I think I get only two goes at giving way. I am sorry.
It is clear that whatever the precise mix of our portfolio of electricity generation, the cost of secure, low-carbon electricity will be higher in future—possibly much higher—although the Government have rightly pointed out that reliance on fossil fuels might turn out to be even more costly by 2030. Last week, in an evidence session held by my Select Committee on Energy and Climate Change, I asked Ministers what the Treasury’s assumptions about oil prices would mean if they were translated to gas prices, and they were a bit reluctant to explain what they thought gas prices might reach. Clearly, fuel poverty is going to be a key challenge in the next few years and the solution is not to divert investment into cheaper but higher-carbon power stations, but to ensure that household incomes are sufficient to meet unavoidable increases in fuel bills.
Equally important is the need for more low-carbon capacity. Tinkering with UK or European Union targets for the exact proportion of energy to be achieved from renewable sources by this date or that date is of little relevance. The only real question is how Britain, in an increasingly energy-hungry world in which China and the other BRIC countries—Brazil, Russia, India—will be consuming huge amounts of energy, can attract the funds needed to finance massive new capacity in all kinds of low-carbon electricity. The Intergovernmental Panel on Climate Change has reported today that £15 trillion will be needed in the next two decades to develop renewable energy. To attract our share, we must make sure that returns on investment in electricity generation in Britain are high enough and reliable enough. I urge Ministers to recognise that every policy change runs the risk of raising the cost of capital because each switch increases uncertainty in the minds of investors. Individual decisions such as the revision of feed-in tariffs for large-scale solar projects are understandable and perhaps unavoidable, but their impact on investors is harmful and will prove to be expensive in the long term. It is vital that the electricity market reform package promotes stability in the framework of incentives that are designed to promote low-carbon electricity. I urge Ministers to recognise in all policy statements the danger that investment in new capacity in this country is not an entitlement. We live in a genuinely global economy. Investors can easily migrate to places where returns are more secure, where planning delays are shorter and where policy is predictable.
There is a lot more in the Bill, not least the green investment bank. The bank’s contribution to funding some of the investment needed could be considerable if the Treasury allows it. In view of the imminent decision about the fourth carbon budget, I want to close by
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making a strong plea to the Government to accept the Committee on Climate Change’s recommendations. The Government’s credentials as the greenest Government ever will be enormously strengthened if the carbon budget put forward by the committee last December for the 2023-27 period is accepted. A budget for a period more than a decade away might seem a remote concept, but carbon budgets are much less susceptible to last-minute tinkering than financial ones. Carbon emissions in the middle of the 2020s will be affected by decisions about new electricity generation capacity taken during this Parliament.
Our accepting the committee’s fourth budget will show that Britain wants to lead the way to a low-carbon world. I understand the anxieties about our competitive position, but I believe that those risks are relatively small and are confined to the short and medium term. If the world really means to decarbonise by 2050, and I believe that it does, the countries that lead the way will not only be doing the right thing environmentally, but will reap a huge financial reward.
Let us look east at what China is doing in making huge strides towards a more sustainable, low carbon transport infrastructure and energy system. In the international climate change negotiations in the 2020s it might be China that takes the hawkish stance on greenhouse gas emissions and the measures needed to reduce them, and it will do so from a position of greater strength than many countries in the west. It would be tragic if Britain, one of the first places where the science of climate change was properly understood, were not in the vanguard of the world’s response. I urge the Prime Minister to overrule the reported resistance of the Secretary of State for Business, Innovation and Skills on this point, and I commend the Bill to the House.
6.10 pm
Joan Walley (Stoke-on-Trent North) (Lab): I shall start exactly where the hon. Member for South Suffolk (Mr Yeo), who so ably chairs the Energy and Climate Change Committee, just finished. The whole debate on the Bill is underpinned by the Climate Change Act 2008. Reference was made earlier to new legislation. It was the previous Government who passed that Act.
I agree that the fourth carbon budget is critical. I do not know whether I believe reports in The Guardian, but if the Government are to have any chance of being the greenest Government ever—there is some doubt and dispute about that—the Cabinet must accept in full the recommendation from an independent body that was set up for that purpose. When the statutory instrument comes before the House in June or whenever it comes, that must be agreed, or much of the debate on the Bill today will be irrelevant. So I hope the right Cabinet decision will come out next week or whenever it is made.
It is crucial that the Bill succeeds, but it is very short on detail. Given the comments of my hon. Friend the Member for Hayes and Harlington (John McDonnell), proper parliamentary scrutiny is needed and there can be a role for Select Committees to examine the cross-cutting aspects of the Bill, particularly in relation to the issues that have been mentioned, including the role of the Department for Business, Innovation and Skills. That should be borne in mind when we get to the Committee
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stage. We have seen what happened to amendments in the other place. They are not before us now for our consideration. A huge amount of work needs to be done very quickly.
My test of the Bill is whether it will reduce fuel poverty around the country in constituencies such as mine, Stoke-on-Trent North. In my constituency, 59% of people in private rented sector housing, 44% of owner-occupiers and 75% of pensioners living in private sector accommodation are in fuel poverty, despite the huge benefit derived from the Warm Front programme. It is crucial that the detailed measures in the Bill deal with that and the implications for public health.
What will the Bill do to deal with the effect of the comprehensive spending review of October 2010? We have already heard about the major reduction in Warm Front funding, and the intention that the programme will be phased out by 2012-13. Will the measures in the Bill offer a fair and proportional replacement strategy? I am conscious that the shift from the Warm Front programme towards the green deal has put many installer jobs at risk as the scheme is wound down. I ask the Secretary of State to give some attention to that. I refer to installers in my constituency and the fact that the Warm Front scheme closed and then started again this year. That has serious repercussions and needs to be addressed.
There are concerns about the green deal. We need greater clarity and certainty about the scale of ambition, the take-up and the long-term nature of the green deal so that businesses can feel confident about investing in the capacity and the infrastructure necessary to deliver it. Reference has been made to the interest rate. That will be a key driver in take-up of the deal. The lower the interest rate, the more attractive it will be. When my own Select Committee went to Germany, we saw how that had been addressed. I am disappointed that so far there does not seem to be a direct link between the green investment bank and the green deal. If interest rates are not at about 2%, difficulties will arise.
Another important topic is energy efficiency measures. I chair the all-party lighting group. We need to consider not only energy efficiency in the traditional sense, but issues such as lighting. Windows are another aspect of industry that has been referred to. A briefing that I received from Wolseley sets out other technologies linked to jobs and to insulation, heating controls, energy pumps and water management. All these contribute to the wider agenda that we need to address. I am not sure whether the detail of the Bill takes account of that.
Citizens Advice has flagged up concerns, particularly in relation to clause 18, which would empower the Secretary of State to modify the energy supply licence to allow an energy company to disconnect a customer for non-payment of green deal payments. Currently, 8.8 million energy consumers in the UK rely on pre-payment meters. Citizens Advice is worried that those consumers have received little consideration in the development of the Bill. It must clarify how green deal payments will be collected from people with pre-payment meters, who are among those at highest risk of fuel poverty. It is not clear how customers’ meter credit will be allocated against green deal payments and arrears, fuel arrears payments and payments for ongoing energy supply. That is another cross-cutting social consideration that the Bill must address.
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I shall deal briefly with the private rented sector and chapter 2. It is an important part of the Bill and there have been many interventions referring to it. Research commissioned by the Chartered Institute of Environmental Health, of which I remain an honorary vice-president, shows that the annual cost to the NHS of private rented homes with excess cold is £145,335,000 nationally. In my region, the west midlands, the cost is high, and we need to consider how we are addressing that, linked to the new proposals for public health and those in the Localism Bill. This is a further aspect of the cross-cutting agenda.
I am concerned that making regulation conditional on a review increases the likelihood that landlords will not act voluntarily before 2015. I am not sure that the Government have got that right. Further consideration is urgently needed. The Bill provides for a minimum standard for commercial rented properties. The Government have not explained why that is appropriate for the commercial sector but not for the domestic sector. MPs, including me, have had a briefing from the Green Building Council on the issue, which needs to be addressed before Royal Assent.
The bottom line for me, which has been referred to in interventions, is that the Bill must set a deadline of no later than 2016, after which it will be an offence for a landlord to re-let or market for rent a property where the energy efficiency rating is band F or G. It is vital that we ensure that properties that do not meet energy efficiency standards are not rented out.
On the energy company obligation, the Government should show that they will be able to deal properly with the gap between what the green deal delivers and what is needed. We do not have the detail of the energy company obligation, and clear information is needed. The coalition agreement was clear that there should be no public subsidy for nuclear. One of my concerns relates to clause 102, whereby, if anything unexpected happens, such as an accident at a plant or problems with stored waste, the Government could become liable for the additional costs. The coalition agreement stated that there will be no public subsidy for nuclear, and it is incumbent on the Secretary of State to set out exactly what that means, because my concern is that clause 102 could represent a hidden subsidy. There must be total transparency on that.
On low carbon budgets, no amendment was made in the other place, but that needs to be considered again. There is some support for the memorandum of understanding with local councils, but we are nowhere near getting on the face of the Bill what we need in relation to local carbon budgets. There is wide support from more than 60 organisations for a warm homes amendment, which must be addressed and brought forward in Committee.
I genuinely want to see Parliament play a role in the whole climate change agenda. I desperately want to see action that does what it says for those experiencing fuel poverty. I want the parliamentarians and Select Committees of this House to play a real role in cross-cutting and hope that as the Bill proceeds, despite its many shortcomings, there will be an opportunity to make at least some improvements.
6.22 pm
Martin Horwood (Cheltenham) (LD):
I welcome the opening remarks made by my right hon. Friend the
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Secretary of State, particularly the non-partisan tone in which they were made. I have to say, ever so gently, to the hon. Member for Hackney South and Shoreditch (Meg Hillier) that when I was an Opposition spokesman on energy and climate change I took the time to praise her right hon. Friends the Members for Lewisham, Deptford (Joan Ruddock) and for Doncaster North (Edward Miliband), when I thought that the legislation they were promoting was good, and when they were honestly trying to pursue climate change objectives. I do not think that making relentlessly partisan and negative speeches is terribly constructive. I will just let her reflect on that.
The hon. Member for Brent North (Barry Gardiner) made a much more constructive speech and asked an important question about meeting carbon reduction targets in future, particularly the acceptance of the fourth carbon budget recommended by the Committee on Climate Change—a theme taken up by other hon. Members as well. I am sure that my right hon. Friend the Secretary of State was just displaying his notorious tact and reticence by not stating more fully that he was going to press for the acceptance of that carbon budget. It is absolutely crucial that we accept the carbon budget and make it clear that we are on a clear trajectory to meeting the ambitious climate change targets that all parties agreed to in the Climate Change Act 2008.
I warmly welcome many aspects of the Bill, which will deliver an important part of the Government’s green agenda. The ministerial team is to be congratulated on 95% of it. The green deal is a radical, imaginative and ambitious plan. It could deliver energy efficiency not just haltingly to a few thousand homes, as previous energy efficiency programmes have done, but to millions of homes, and perhaps even tens of millions. That will represent a step change in energy efficiency in this country and make a substantial contribution to reducing the UK’s carbon emissions. The additional measures on smart meters and offshore electricity transmission regimes are also very important and much to be welcomed.
Mr Gregory Campbell (East Londonderry) (DUP): The hon. Gentleman and the Secretary of State have talked about step changing and game changing. Does he not agree with a number of Members on both sides of the House, but particularly Opposition Members, that a crucial element about which we are not yet clear is the interest rate that will be payable? We need to know that in order to ensure that the change is as significant as he claims it will be.
Martin Horwood: I am sympathetic to the hon. Gentleman’s point, which is important, but the genius of the green deal is that it will use market mechanisms and a competitive arena in which providers will compete to provide the best deal, which I hope will help drive down the interest rates offered by different financers and providers.
Barry Gardiner: Does the hon. Gentleman accept that the Department of Energy and Climate Change has predicted that the interest rate would be 11%, which has to be factored in, particularly when dealing with the fuel-poor?
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Martin Horwood: The hon. Member makes an important point, but we cannot always predict those interest rates, because we do not know what the situation will be. We must look at the situation in the round.
The additional measures in the Bill are very welcome, but there is one that disappoints me in clause 102, which the hon. Member for Stoke-on-Trent North (Joan Walley) has already mentioned. It deals with the vexed question of the decommissioning and clean-up of nuclear power stations. Cleaning up the last generation of nuclear power stations costs the taxpayer £1.5 billion a year, and it would be a great shame if we were to risk repeating any part of that mistake. This reopens an issue that I thought had been settled in the Energy Act 2008. I remember the Minister of State, Department of Energy and Climate Change, the hon. Member for Wealden (Charles Hendry) and I, as Opposition spokespeople, trying to outdo each other in finding the loopholes in the funded decommissioning programme arrangements in that Act, and the long-term commitments on funding decommissioning that the nuclear industry might try to wriggle out of in order to shift the risk on to the taxpayer. With all due credit to the ministerial team of the time, that was tricky because the legislation was quite tightly drawn. Section 48 even allowed the Secretary of State to amend funded decommissioning programmes, at either their own or the operator’s suggestion, to take account of unforeseen circumstances.
But lo, we have in the Bill a suggestion that the Secretary of State should promise not to amend those decommissioning arrangements in advance when the decommissioning arrangement is being set up, either “in a particular manner” or “within a particular period”. That seems a rather strange thing, because clearly the subsequent amendment of those arrangements would be a matter of negotiation. The Liberal Democrats have discovered quite a lot about negotiation in the past year, and now think, on balance, that it is not a good idea to give away the negotiating position too early in the process. I think that that applies to Secretaries of State as well.
The explanation for that provision is apparently that it is to reassure investors, but that is a rather strange statement. In a way that is a bit of a give-away by the Government, because to reassure investors they are presumably trying to reduce the risk. There are only two possible explanations for that. Either the Government are actually reducing the risk or they are trying to shift it elsewhere. The nature of unforeseen circumstances, of course, is that they are unforeseen. Although I attribute many gifts to my right hon. Friend the Secretary of State, clairvoyance is not one of them. We cannot know what those unforeseen circumstances will be, any more than the Japanese Government could. Therefore, it is only the transfer of that risk that is likely to take place. It is transferring the risk straightforwardly from the operators to the taxpayer. If that is not against the words of the coalition agreement’s promise not to subsidise nuclear power, it is certainly against its spirit.
If we need an extreme and sobering warning of what might happen in such situations, we need only look at what is happening in Japan right now. The operator of the Fukushima nuclear power station, TEPCO, has now asked formally for Government help to fund the compensation for the 80,000 people who are still evacuated from their homes in the area, which it is estimated will cost around £61 billion in total.
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Chris Huhne: My hon. Friend should recognise that the clause intends not only to provide more certainty for investors, but to recognise that there might need to be changes. Those changes would not necessarily be downwards, either; they might well be upwards, in circumstances that would have been set out clearly in an agreement. That applies to costs as well, so, far from saying that the measure would drive a coach and horses through our commitment to no public subsidy, I am saying exactly the opposite: it puts flesh on our commitment to no public subsidy for nuclear.
Martin Horwood: I did not say that the measure would drive a coach and horses through our commitment to no subsidy. I am sure that our commitment to it is absolutely intact, but the clause seems to insert a rather large crack in the edifice. The arrangement that my right hon. Friend mentions—in which the operator and the Secretary of State may agree to the necessity of some amendments, which might be upwards or downwards —is in the existing legislation. The difference between that and the clause under discussion, however, is that in the existing legislation the final decision rests with the Secretary of State, and in the clause before us the Secretary of State gives away that right in advance. That seems to represent poor negotiation.
To return to the situation in Fukushima—
Barry Gardiner: Will the hon. Gentleman give way?
Martin Horwood: I will not—or perhaps I will; I have a few minutes to spare.
Barry Gardiner: I am grateful to the hon. Gentleman. Does he accept that the DECC’s proposals for a “contract for difference” feed-in tariff are precisely the subsidy to the nuclear industry that he counsels his right hon. Friend not to introduce?
Martin Horwood: I am not sure about feed-in tariffs, but if the hon. Gentleman is talking about the floor price for carbon, that certainly risks inadvertently subsidising the new, and indeed existing, nuclear industries. Perhaps a windfall tax on the nuclear industry might help to compensate for that, because the floor price for carbon is an important policy for operators.
To return—for the final time, I hope—to Fukushima and the example in Japan, the compensation bill looks likely to be about £61 billion for the 80,000 people who have been evacuated from their homes, and for the damage to agriculture, businesses and so on in the area. That is a very extreme case, but it is not impossible to imagine much smaller disasters—natural shocks to the system, terrorist attacks or whatever—that might deliver similarly unexpected large bills.
The situation in Japan has resulted in its Government announcing today that they will examine their energy policy from scratch, with a brand new emphasis—surprise, surprise—on renewables and energy efficiency, and almost certainly less emphasis on nuclear. That seems to me a wise decision to take, in the circumstances.
I am pleased that we are emphasising energy efficiency before we are forced to do so, and it is important that the Government promote renewables and energy efficiency as cornerstones of their energy policy, but I would not want energy subsidy for nuclear to creep into that mixture, and it seems to me that clause 102 is unnecessary.
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As the Secretary of State says, it provides reassurance to investors, but it provides very little reassurance to me or to the taxpayer.
6.33 pm
Mr Iain Wright (Hartlepool) (Lab): It is a pleasure to follow the hon. Member for Cheltenham (Martin Horwood). I have fond memories of debating with him the glorious merits of the south-west regional spatial strategy, and I am sure that you, Madam Deputy Speaker, as a fine Bristol Member of Parliament, have your own thoughts on that, too.
I welcome the notion of the Bill, because it is difficult to oppose in principle a Bill that intends to increase energy efficiency, improve energy security and ensure greater competitiveness for energy companies in the UK, but, as my hon. Friend the Member for Hackney South and Shoreditch (Meg Hillier) said, this Energy Bill is such a wasted opportunity. It treads water so much that British industry and enterprise, in a field where we could lead the world, will be left behind by other countries, and the poorest and most vulnerable households, which face massive increases in fuel bills over the next few years, will not be helped quickly enough. I want to focus on two broad themes, and in particular on where the Bill does not provide enough detail—a recurring theme of this Second Reading—or enough ambition.
Let me outline the huge potential that we have in Hartlepool, my area, and the wider Teesside and north-east areas to lead the world in modern energy production and distribution. In my part of the world we have always been at the cutting edge of energy infrastructure and technology. The docks and the railways in Hartlepool and elsewhere in the north-east were built in the 1820s and 1830s to transport coal from the south Durham coalfields —I see my hon. Friend the Member for Sedgefield (Phil Wilson) seated on the Front Bench—to London, and the world’s first bulk oil tanker for Standard Oil, the Marex, was built at west Hartlepool docks in 1892.
My area has the potential to lead the world in energy in the 21st century, as it did in the 19th century. Our assets in the region are second to none. The largest heavy industrial area in the country is on Teesside, and we already have a cluster of world-class petrochemical, energy and industrial biotechnology plants. In my constituency I have a nuclear power station with the prospect of a replacement in the next decade, the fourth largest port in the UK, a steel industry specialising in construction and energy infrastructure, and a world-class advanced engineering industry.
The port of Hartlepool is the closest such facility to the Dogger bank, the location in the North sea of the biggest offshore wind project this century, which could provide one quarter of Britain’s energy requirements by the middle of this century. We also have a highly skilled and flexible work force who can innovate and adapt their engineering expertise to design and manufacture new forms of energy production and distribution for the 21st century.
In my constituency PD Ports has introduced the concept of “Chain Reaction”, the Teesside renewable energy supply chain cluster, where firms work together in Hartlepool and in the wider Teesside and north-east areas to provide facilities and skills for other companies that wish to invest in the energy industry.
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We have other ambitious companies determined to grow and succeed, such as JDR Cables and Heerema Hartlepool, which are located on land provided by PD Ports and supply the components for offshore wind developments. Tata Tubes in Hartlepool manufactures pipes that sit on the bottom of oceans throughout the globe, allowing oil and gas to be extracted, transported, processed and distributed to the highest possible specification.
Our region has identified a £6 billion pipeline of commercial investment for the next decade with regard to energy policy, but we have to move quickly if we want to lead the world in this field, because other nations are already stealing a march on us. The Pew Environment Group states that the UK is losing the race to be the leading economic powerhouse of the global green economy. Last year we declined from third in the world in terms of investment in green growth to 13th, behind Brazil, Mexico and Singapore.
Frustratingly, Singapore’s energy industry is similar in many respects to Teesside’s: centred on oil refining, with successful spin-offs into chemicals, oilfield equipment manufacturing, shipping and logistics. Singapore is moving much more ambitiously than the United Kingdom, particularly in new growth areas such as solar power, fuel cells, biofuels and energy management, and it aims to increase the value-added from its energy industry from $20 billion to $34 billion in four years and to triple employment in the sector in little over five years.
Closer to home, Rotterdam is pushing itself as the energy port of Europe. The city’s port authority has aspirations to become the CO2-free hub of north-west Europe, and about €6 billion will be invested in the port authority in the next few years to help realise that aspiration, with an emphasis on hydrogen production, supply and distribution.
Given what other countries are doing, the possibility of a missed opportunity is particularly frustrating, because we in this country remain very well placed to lead that global industry. Pew Environment Group estimates that $2.3 trillion could be invested in clean energy infrastructure in the next decade, and, although much of the attention is focused on the east, on China and the Pacific rim, Pew concludes that the UK, the US and India are the three countries with the most to gain from what it terms the
“adoption of aggressive clean energy, when enhanced policies are compared to current policies.”
I do not see the ambitions of my area, Hartlepool and Teesside, matched by the Government’s actions in the Bill. The rhetoric is often positive and encouraging, but the Bill demonstrates that the Government are merely providing warm words. After so much rhetoric about the green investment bank, there is nothing in the Bill to help it to move forward successfully and quickly. Businesses in the field are requesting a clear vision for the road ahead, with certainty and stability to allow for large-scale investment decisions, but that is not happening. Uncertainty about the green investment bank, one-off raids on small and medium oil and gas explorers in the Budget, and further delays to round three of the Crown Estate project to increase offshore energy generation are undermining confidence and stalling investment decisions.
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I cannot stress this enough: we would miss the opportunity of our generation if we failed to grasp the huge potential that this country, not least my constituency and region, possesses. I fear that in five, 10 or 15 years’ time we in this House will be reflecting on how we could have been pioneers of a noble and groundbreaking world industry, but are instead rueing the loss of jobs, ambition, wealth, social equality and climate stability.
The second theme that I wish to explore is the pressing need to improve the energy efficiency of much of our housing stock, particularly in the private rented sector. As the Secretary of State articulately explained, there are more energy-inefficient properties in the private rented sector than in other tenures. For instance, privately rented properties are much more likely to have inadequate loft and cavity wall insulation, and less likely to have double glazing or a condensing boiler. The landlord’s energy savings allowance, an incentive introduced by the last Labour Government, had considerable merit, but—I must be honest—a very disappointing take-up. The Secretary of State mentioned that over 40% of tenants in F-rated and G-rated homes in the private rented sector are fuel-poor, and I imagine that there is a big risk that that proportion will get worse as energy prices increase. In this context, the Secretary of State’s announcement about minimum efficiency standards is very welcome, although I do not understand why it was not announced during the Bill’s passage through the other place.
Questions still remain about certain elements of this aspect of the Bill, particularly whether big and numerous Government amendments will be needed to put in place their ambitions in chapter 2. The Bill’s impact assessment acknowledges:
“It is assumed that landlords will not act on primary powers”
provided in the Bill. It concludes that
“no benefits are expected to arise from primary legislation”.
In that case, what is the point of the provision? I understand the need for secondary legislation in this field, but why cannot we act more quickly to ensure that tenants are helped now? The powers in the Bill are very weak, and the prospect of secondary legislation is so far into the future as to be completely meaningless to tenants in my constituency.
What is the point of having a review of energy efficiency in the private rented sector that is not required to report until 1 April 2014? And under the powers in clause 43, regulations relating to energy efficiency for tenants mean that improvements may come into force no earlier than 1 April 2015. We all know that energy efficiency is bad in the private rented sector; even if we did not, the Bill’s impact assessment tells us so. Why can the Government not move faster to do something about it now, instead of making somewhat vague promises about acting in three or four years’ time?
Dr Whitehead: Will my hon. Friend reflect on how landlords are going to be found under the arrangements that have been announced? Will he also reflect on the fact that the Government recently removed the secondary legislation that provided for the creation of a national landlords register for homes in multiple occupation, by which landlords could be found for energy efficiency purposes?
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Mr Wright: I remember with great affection going to Southampton to see my hon. Friend’s constituency and talking to people who lived in homes in multiple occupation. I was privileged to be a Minister with responsibility for the private rented sector in the last Labour Government. We put in place the Rugg review, which recommended to us the importance of a landlords register. It is incredibly disappointing that that important database of information will not be put in place, as it could have helped to implement this move much faster.
I welcomed the prospect of an Energy Bill in this parliamentary Session. In such a Bill the Government could have achieved so much to help British industry, particularly in my region, to become world leaders in this growing sector, and they could have been much more resolute in providing help to more vulnerable households, particularly in the private rented sector. The fact that they have not done that is deeply frustrating and disappointing. I fear that this missed opportunity is something that we will regret for decades to come.
6.44 pm
Dr Phillip Lee (Bracknell) (Con): Let me begin by congratulating Members on their contributions, particularly my hon. Friend the Member for South Suffolk (Mr Yeo), who made a very interesting speech, although he had the good fortune to follow the shadow Secretary of State, whose speech was terribly negative. If there is one thing that energy and climate change policy needs, it is some cross-party agreement. Dealing with these challenges does not fit in with five-year parliamentary terms; there needs to be agreement and understanding on policy over decades.
Barry Gardiner: Does the hon. Gentleman believe that his party should reaffirm the statement by the Committee on Climate Change that there should be a 50% reduction in carbon emissions by 2025?
Dr Lee: My view is that these targets are extremely difficult to meet, partly because the energy policy of the previous Administration was woeful; admittedly, it improved when the Leader of the Opposition took over the position that the hon. Member for Hackney South and Shoreditch (Meg Hillier) now shadows. The hon. Gentleman knows that we are in a difficult position as regards hitting these targets, and that difficulty was not aided by the previous Government’s performance.
In the spirit of the Bill, I will try to speak within the generous time limit and save some energy. I am struck by the fact that the time limit is so long, because energy and the need to secure energy supply is one of the most important strategic challenges for our generation. We cannot have more hospitals, schools, aircraft carriers or anything else provided by Government unless we have energy, so the subject matters very much. I want to speak primarily about the green deal, because that is at the heart of the Bill, but will move on to discuss energy generation and my thoughts and views on the technology of the future that, as a country, we should be backing.
The green deal is an ambitious plan, and the first of its kind in the world. I hear that Opposition Members want more detail, and of course it requires additional clarification that will no doubt come in Committee. The reality, however, is that this is the first time that such a scheme has been attempted. I am very proud of that
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and to support a Government who are introducing it. It will benefit homes and businesses, allowing them to save money. At the moment, saving money matters to individuals, to families, and, very much, to businesses. It is a tough environment out there economically, and if they can save money, all the better.
The green deal involves the introduction of a new financial framework that is subject to market forces. I say to those calling for details about the interest rates that we should wait and see and let the market dictate. We are talking about long-term energy products, particularly in the area of generation, and I would invest in that sector if I were in control of a sizeable pension fund because that would produce a return in the medium to longer term. I do not buy into the idea that interest rates will be driven higher by this scheme. It is “pay as you save”, and it will benefit people who are struggling with their bills. The loan is supposedly £6,500—I hear rumours that it may be slightly increased—and it will be made against the property, not against the individual; that is an important distinction. In the past, when we have tried to go down this policy path, we have worried about the loan going with the individual and the fact that those who are less able to afford it will therefore not take one out. The reality is that it will be attached to the property.
The second aspect is the introduction of the energy company obligation to replace the carbon emissions reduction target. As I understand it, it will target those who could experience fuel poverty and have homes that are difficult to insulate. I think that it was a Scottish Member who referred to the difficulty of insulating some homes. The idea in the Bill is to deal with those problems. In view of the fact that 25% of carbon emissions are thought to come from those very homes, it strikes me as an investment worth making.
There are estimates on the benefits of the green deal. I am always cautious about such estimates because they are always dependent on human behaviour. The Secretary of State referred to the situation of someone having a Brazilian wife, and the reality is that such estimates are not always accurate. However, it is suggested that the benefit to society will be in the realm of £8 billion to £9 billion. Fourteen million insulation measures are required, which could lead to an average saving of £550 per year on domestic bills. That will lead to an increase in manufacturing jobs. In my constituency of Bracknell, small and medium-sized construction firms are crying out for this kind of work. There will be no shortage of companies willing to do it. There will be an increase not only in manufacturing jobs, but in service jobs. If we hit 26 million homes taking up the scheme, the number of jobs in the sector may increase from 27,000 to 250,000. That is pretty good.
I welcome the changes to the Energy Act 2008 to ease the introduction of smart meters. A number of companies in my constituency, not least General Electric, will be pleased to hear about that. If smart meters function properly and are able to connect to the network—I know that there are problems with that—they will play an essential part in reducing energy usage. Ultimately, that is what this legislation is all about. I congratulate Ministers on making energy efficiency the key part of their first Bill, because that is the easiest way to reduce our carbon footprint. On a recent trip to Norway, I was struck that even though it generates huge amounts of
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energy, the first thing I was told was, “Phillip, the best thing that Britain can do is become more energy efficient.” I know that the same view is held in Sweden.
I am also pleased about the balance of powers between Government and the nuclear industry in regard to decommissioning. I am a strong advocate of nuclear power, and I found it depressing to hear yet another speech on the dangers of nuclear power from the hon. Member for Cheltenham (Martin Horwood). I remind him that, as yet, there has never been a proven death from nuclear power in the west.
Martin Horwood: Will the hon. Gentleman give way?
Dr Lee: Of course. I am interested to hear the hon. Gentleman’s response.
Martin Horwood: I have on occasion made speeches about the dangers of nuclear power, but today’s was not one of them. I actually talked about the dangers of subsidising nuclear power through the use of clause 102.
Dr Lee: Forgive me. I thought that the hon. Gentleman said something about compensation to agriculture and people moving house. However, I shall move on.
The final part of my speech will be about energy generation. I commend the previous Government for their commitment to offshore wind, which was a strategically important decision. Given that we have shallow water in the North sea, I think that it was the right decision. I am not so sure about onshore wind, but offshore wind, for sure.
This country needs a sustainable energy policy. It needs sustainable sources of energy that are low carbon and, most importantly, secure. There is an increasing world population, which is going to hit the 7 billion mark earlier than projected. One does not have to be a doctor to know that that means that the 8 billion, 9 billion and 10 billion marks will be hit earlier, because that is what human beings do. That concerns me because it means that future wars on this planet will be fought over not just energy and fuels such as oil and gas, but also over food and water. This country has to get real. It has to realise that energy matters. Energy is associated with prosperity, as everybody knows. We cannot rely on how we have done things in the past, but must look to the future and work out how Britain can become as energy independent as possible.
I will mention two areas. The first is marine technology. The UK is surrounded by energy; water is just the medium that transmits that energy. Tidal power comes from the moon, and we have the Severn bore. Waves, particularly off Scotland, provide remarkable sources of energy. Why are we not concentrating on harnessing that energy? It strikes me as a no-brainer. Why is it that there are more renewables obligation certificates for tidal and wave in Scotland than in England? How is that paid for? I encourage the Minister to look at that, and I know that there is a review of ROCs at the moment. Why is solar so subsidised, and not marine? That was a decision by the previous Administration. Solar is subsidised nine times more than onshore wind. I know we are having some good weather at the moment, but I do not think that that makes sense in this country.
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I know that the Government are reviewing low-carbon technologies and that £200 million will be allocated. I hope that they look at marine technology and do their best to support it. I think that it is an opportunity for us to lead the world. If one believes RenewableUK, it is an opportunity for us to generate 20% of our energy. I recognise the capital cost and the potential local environmental impact of the Severn bore project, but that one project could provide 12% to 15% of the UK’s electricity needs. We need to look at that again.
Andrew George: The hon. Gentleman is making a number of interesting points about the renewables sector. He is right that there are five ROCs for marine renewables in Scotland and three south of the border. That does not particularly help. The wave hub off the north coast of my constituency will be the first project of that commercial scale in the world. We clearly need to find a way forward, but how does he propose that we get parity north and south of the border?
Dr Lee: I thank the hon. Gentleman for that intervention, but I do not know the answer to that question. This is just another example of how Scotland is different from England, and I am getting somewhat frustrated by that.
I will quickly move on to new nuclear technologies. First, molten salt reactors eat nuclear waste and have no proliferation concerns. That is a no-brainer, so how come we are not pursuing it? Finally, I will talk about thorium, which is found in the cliffs of Cornwall and may well be in the hon. Gentleman’s constituency. It is also found in Wales. The greatest resource is in Norway, a relatively stable country compared with the countries that we get most of our energy from. Thorium is three times more abundant than uranium and does not produce any dangerous waste. Incidentally, that is why it was not pursued in the ’50s because it does not create the plutonium needed for nuclear weapons. China is now going big time on this, as is India. How come we are not? It strikes me as an obvious thing for us to go for. Doing so may satisfy my Liberal Democrat colleagues because it is safer to produce and does not produce any nuclear waste of note. It has certainly satisfied me because we can source thorium more easily.
In conclusion, at a time when Britain has significant economic challenges, finding ways to save energy is an obvious target. The green deal is fantastic for families, fantastic for individuals, and fantastic for businesses. That is why I am pleased to support the Bill. I hope that the Minister will give some thought to what I have said about energy generation.
6.59 pm
Mr Mike Weir (Angus) (SNP): I must confess that when the Secretary of State was at the Dispatch Box and talked about a golden rule, a slight shiver went up my spine as I remembered the last person who went on about that.
The hon. Member for Bracknell (Dr Lee) asked about the Scottish system of ROCs. It is different from England’s because the Scottish Government have emphasised the importance of renewables and have a target of 100% renewable energy. They have rejected new nuclear power stations, a stance that was endorsed by the people of Scotland only last Thursday.
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I generally support the main aims of the Bill, and the Scottish Parliament has approved a legislative consent resolution in respect of some of it. I came to the Chamber intending to support the Government should it be pushed to a vote, but I listened to the Secretary of State and one or two points gave me pause for thought. In particular, when I asked him about clause 100, I found his answer very strange indeed. The explanatory notes state:
“This clause enables designations under section 1(7) of the Continental Shelf Act 1964 to be revoked, amended and re-enacted. This will provide flexibility in making arrangements about maritime boundaries with the United Kingdom’s neighbours by enabling us to swap areas which have already been designated under section 1(7).”
However, the Library research paper specifically states that the clause will
“facilitate the signing of a comprehensive agreement with Ireland about maritime boundaries. The aim is to provide flexibility in managing the UK Continental Shelf resources.”
When I asked for clarity about what was actually intended, he talked about marginal fields in the North sea. As far as I am aware, Ireland does not have a boundary in the North sea. I wonder exactly what is intended by the clause, and I ask the Minister to provide a bit more clarity. As the clause appears in the Energy Bill, I assume that it has something to do with energy resources, whether they be offshore renewables, oil and gas or whatever. We need some clarification of that point.
Barry Gardiner: If the hon. Gentleman will allow me, I will try to help him. When the six counties of Northern Ireland were established and the treaty with Eire was concluded, the land was designated but there was no mention in the treaty of the continental shelf. The Republic of Ireland has therefore always maintained that the six counties’ land is Northern Ireland, but not the area around the coast, as would normally be the case. There has therefore always been a dispute between the Foreign and Commonwealth Office and the Irish Government about exactly what the status of that area is, which is why the clause appears as it does.
Mr Weir: I thank the hon. Gentleman. If that is the case, I understand that there is a rather strange boundary in that area, but the Secretary of State’s mention of oilfields in the North sea set alarm bells ringing about what is intended. That is the point on which I seek clarification.
Mr Binley: I am grateful to my hon. Friend for giving way—he is my hon. Friend, and I am pleased to call him such. Has he read the explanatory notes, which make the point that the areas concerned are more than 200 nautical miles from the Irish baseline, and therefore cannot be included in the Irish exclusive economic zone? I believe we are talking about a matter of tidying up, and I hope that explanation is enough for him to carry on his intention to vote for this worthy Bill.
Mr Weir: I thank my hon. Friend, but again, I would refer to what the Secretary of State said. My hon. Friend may understand what the clause means, but from the answer I received earlier I am not sure the Secretary of State does. I want clarity about what is intended.