10 May 2011 : Column 1090
On the green deal, we welcome any moves to increase the number of homes with good energy efficiency and make use of domestic microgeneration, but we have some concerns about the Government’s approach. There is talk of amendments on warm homes, and we are generally sympathetic to what they are intended to achieve. However, I wish to mention a point made by the Federation of Master Builders in its briefing on the Bill. It quotes the Minister as saying that the Government’s aim is to have 14 million homes transformed by 2020, and states that that
“would require work to be completed at the rate of 1.5 million homes per annum which equates to almost 30,000 homes per week or put another way 4,274 homes per day!”
There is nothing wrong with such an ambitious target, but to achieve it we need to ensure that there is a veritable army of installers to take on the work.
I fear that, because of the way in which the green deal is being set up, it might be dominated by a few large companies, as my hon. Friend the Member for Na h-Eileanan an Iar (Mr MacNeil) said to the Secretary of State. The Minister may remember that I have previously raised with him the concerns of SELECT, which represents the Scottish electrotechnical industry, about the microgeneration certification scheme, which it feels works against small firms in several ways. It drew up an alternative scheme, which should be acceptable under the relevant EU directive and is consistent with the Scottish Government’s building standards system, but DECC would not agree to that system being put in place.
I understand that under the current scheme, it is difficult for firms to become certified. For them to qualify, the equipment that they install must be MCS-certified and installed by an MCS-certified installer. The difficulty for small firms, particularly those in rural and island areas of Scotland, is that many are unable to obtain certification because they cannot provide the required number of installations. Nobody is likely to want such installations unless they are certified. I fear that that problem will be transferred from the MCS to the green deal scheme if it is carried out by larger companies.
Gregory Barker: I am listening carefully to the hon. Gentleman, and I am aware of and responsive to his concerns, but which technology in particular is he talking about? The MCS covers a whole range of technologies, and some providers are perfectly happy with the scheme whereas others have specific problems.
Mr Weir: The Minister says that, but firms involved in a range of technologies have approached me. Scottish Renewables has raised problems with the scheme, and it covers all sorts of microgeneration technologies that will be important in providing renewables in future, particularly in remote rural and island areas. We hope that those technologies will be financed partly under the green deal. Unless the problem of not allowing small firms to install equipment is solved, smaller communities in rural areas may not get the benefits that could come from the green deal. They may not get the jobs that the Secretary of State talked about.
Gregory Barker:
The MCS is quite outside the scope of this Second Reading debate, but I take the hon. Gentleman’s point entirely. I have had concerns about it
10 May 2011 : Column 1091
myself, or at least about some parts of it, and I have been considering how we can improve it. If he would care to come to see me, I would be very happy to sit down and talk to him about it to see whether we can address his concerns in more detail.
Mr Weir: I thank the Minister very much for that offer, which takes two pages out of my speech. I will certainly take him up on that. It is an important point: although we support the aims behind the green deal, it must benefit all areas of the country and not just the B&Qs of this world—not that I have anything against B&Q.
I note with interest clauses 80 to 89, relating to offshore petroleum and gas and particularly to the difficulties of a common carrier arrangement. The Select Committee on Energy and Climate Change considered that matter back in 2009, when I was a member. We heard evidence on the issue, and it is fair to say, and hardly surprising, that there was a great deal of difference of opinion on the need for a common carrier arrangement for North sea infrastructure.
With specific reference to the future development of fields west of Shetland, which may or may not proceed given the Government’s tax grab, the Committee noted:
“We understand the Government’s argument for not wanting to interfere in a heavy-handed way in the establishment of a common carrier arrangement for oil and gas west of Shetland. But two things are clear: west of Shetland resources offer enormous potential—possibly a fifth of our remaining oil and gas resources; and putting in place a shared infrastructure to exploit those resources is expensive and complex. The Government should continue its dialogue with industry and agree a timescale for the establishment of such a shared infrastructure and the arrangements governing its use. If progress does not meet that timescale the Government should be prepared to take a more active role, probably through regulation but not precluding assistance with funding.”
The all-party group on the British offshore oil and gas industry recently heard from a representative of small companies working in the North sea, who talked about the difficulties that exist. The problem with the common carrier arrangement is that many of the fields in the North sea are now smaller fields that have been sold off by the majors and redeveloped by smaller companies. However, to bring the oil and gas ashore those companies need access to the infrastructure, which is generally owned by the majors. There are sometimes difficulties in gaining such access.
The group was told that there is a legal process known as a determination, whereby if negotiations on access to infrastructure fail, DECC can be called on to set terms and conditions and a tariff price. A determination has never been effectively used, and although DECC is making efforts to address that shortcoming, a determination is a backstop that comes too late in the process. Oil & Gas UK set up a voluntary agreement, but it says that it is difficult to get much of the information it requires, particularly on tariffs and previous commercial deals. It is therefore difficult for smaller operators to gain access to infrastructure.
The Bill continues the existing arrangements and does not address that difficulty. I recognise the difficulty of Government action, but such action is necessary to ensure that small companies that currently work fields
10 May 2011 : Column 1092
that would otherwise not be worked can access that infrastructure. Currently, the Secretary of State can make a decision, but it is difficult to see how he could do so unilaterally without referral from one or other party.
On an allied matter, RenewableUK notes that the Crown Estate currently gives oil and gas developers leasing priority over offshore wind farm developers if supplies are found, with no compensation payable to the developer. It says that the existence of that measure leads to insecurity and uncertainty in development at a time when offshore wind is rapidly expanding. The Minister needs to consider that matter in more detail, although the obvious solution is to devolve the Crown Estates to Scotland and we will sort out our own solution.
That brings me to my final point, on offshore transmissions, which is allied to my shared infrastructure concerns. Ofgem makes the point in its briefing that
“the Bill contains provisions to facilitate the next stage of the enduring offshore regulatory regime, allowing wind farm generators to build network assets before transferring their ownership to the successful winner of the tender.”
However, how will the energy be brought onshore from those offshore wind farms? There is a lack of joined-up thinking on how offshore energy is fed into the national grid. To illustrate, there are three wind farms off the coast of my constituency. I have asked their developers how they intend to bring the energy to land, and each has its own proposal. We are in danger of running into public opposition to offshore wind farms not because of the wind farms themselves, but because of the on-land infrastructure needed to bring the energy ashore, especially if there are myriad onshore connections within a small distance of one another.
I have urged those developers to speak to one another about linking up offshore so that they can bring one cable on to land, but that does not seem to be happening. The Government need to look at that to ensure that we do not run into the difficulties with offshore wind that we ran into with onshore wind.
If the Minister gives me some assurance on those points, I might remain quite happy to recommend supporting the Bill to my hon. Friends. The Bill has many good measures in it, so the little clause on swapping bits of our continental shelf is odd. That gives us cause for concern, particularly given actions by previous Governments on the continental shelf that mean that I look out from my constituency on to an area of water that is English for fishing purposes.
Madam Deputy Speaker (Dawn Primarolo): Order. A very large number of Members still wish to speak in this debate, and we will not get everybody in at this rate with a 12-minute limit on speeches, so I am taking the time limit down now, from the next speaker and for the remaining Back-Bench speeches, to 10 minutes. If hon. Members can use less than that, we should comfortably run up to the period for the wind-ups. If not, I shall have to revisit the limit.
7.15 pm
Mr Steve Brine (Winchester) (Con): Thank you very much, Madam Deputy. I shall be speedy.
10 May 2011 : Column 1093
It is a great pleasure to contribute to this debate and to be part of the Government who have brought this landmark—I do not use that word lightly—Bill before the House. I am sorry to return to this point, but I agree with the shadow Secretary of State on one thing: climate change is too important to be kicked around. That is why her kicking it around was so very disappointing. I support the Bill, and I hope the Opposition come through the Lobby with Government Members this evening. They are very welcome to do so.
I wanted to speak on Second Reading because the Bill has the potential to be truly transformative. Let me make it clear, however, that I am not writing a blank cheque. The Bill is seriously radical and very welcome, but it could be better, and I shall try to explain how.
I was adopted to fight the general election in Winchester back in November 2006—a long time ago. At that time, Al Gore’s Oscar-winning film, “An Inconvenient Truth”, was absolutely everywhere except Winchester. One of the first things I did was to get it shown at the excellent small, independent Screen cinema in Winchester. The response to the film was overwhelming, proving once again to anybody who does not know the great city of Winchester just how important the green agenda, the fight against climate change and the drive for a low-carbon economy are to my constituency and the people whom I now represent. I should declare an interest in that I have long since been signed up to that agenda, but I love the commitment of many of my constituents to handing a cleaner, greener and better environment on to the next generation, and I back it wholeheartedly.
It was therefore hugely to my satisfaction that in opposition my party developed plans for the green deal and many of the measures in the Bill. I remember welcoming to Winchester my right hon. Friend the Member for Arundel and South Downs (Nick Herbert), then the shadow Environment, Food and Rural Affairs Secretary, to help to explain the green deal to the good people of Hampshire—and a good job he did of it too. He described the policy as a game-changer, and he was not wrong. He is not alone in using that expression, as we have heard in the debate.
The Conservative manifesto was succinct on the subject, stating that:
“we will create a ‘Green Deal’, giving every home up to £6,500 worth of energy improvement measures…paid for out of savings made on fuel bills”,
and the coalition agreement reaffirmed the two parties’ shared commitment to the policy. I am pleased that that part of the coalition agreement will not be reopened.
The green deal was a positive policy to sell as a candidate in the general election. It was one of those rare beasts in politics, because everyone who heard about it saw the logic of it, and no doubt thought, “Why didn’t I think of it?” including the Labour party, which might explain its reaction to the Bill.
I outlined the policy at a special hustings meeting purely on the environment—we had only 12 hustings meetings. The meeting was organised by Winchester Action on Climate Change, to which I pay great tribute. As I said at the meeting, what I like about the green deal is that it replaces the stick with the carrot. All too often, changing behaviour to reduce our carbon footprint is about what we must stop doing, and about how awful we are for living our lives, having children and so
10 May 2011 : Column 1094
on—finger-wagging at its worst—but the green deal is different. Yes, it is a game-changer, but I would prefer to describe it as a no-brainer. To my mind, it changes behaviour and reduces carbon footprints the easy way.
Ian Lavery (Wansbeck) (Lab): Does the hon. Gentleman agree that the introduction of the green deal in its current form will hit the poorest hardest?
Mr Brine: I do not agree, and I will come on to why not.
On the economic case for the green deal, I am clear that the Bill is about growth as much as it is about saving energy and reducing carbon emissions. As we heard from the Secretary of State, the Bill, and the green deal it ushers in, will create in legislation a whole new market, which, as we know, does not happen every day. We heard from him about the tens of thousands of new jobs in the green economy that these measures will create. We should remember that these are new jobs in the private sector, many of which will, we hope, be in small and medium-sized enterprises. I hope therefore that Ministers will keep SMEs at the forefront of their minds at all times as the green deal is developed and rolled out. The industrial opportunities that the green deal presents for some of the big guys, such as John Lewis, B&Q and Asda—I have nothing against them—are great, but I am keen to ensure that the small guys are centre stage and can use the new marketplace as a springboard from which to grow their businesses and employ new people as the green deal comes on line.
In addition to the jobs that I hope will be created as the green deal develops, we will undoubtedly see a fast-growing industry for training. I am fortunate to have one such training company in my constituency—New Career Skills on the Chandler’s Ford industrial estate. The Prime Minister visited NCS while he was Leader of the Opposition and rightly praised its work in training and retraining college graduates and career changers alike in the green profession. The company offers insulation training as well as training in renewables, and is exactly what we need to make the green deal a reality on the ground. I am told that NCS receives thousands of new inquiries every week via its website, but can enrol only a limited number of new students. The Government need to help that business to grow and to up its operation significantly if the green deal is to have the skilled technicians needed to make it work and credible.
NCS told me, as it told the Prime Minister, that many students struggle to raise the funds necessary to take the course and gain the qualifications. As a provider of this key training, it provides finance, but as a small business it is obviously limited in the number of loans it can underwrite on behalf of those students. The Government have urgently to consider the support available, because this sector needs to grow, and if we are to train enough skilled people—legitimate concerns have been expressed in the Chamber about who they are and where they will come from—to ensure that the green deal reaches critical mass and matches Ministers’ obvious ambition, companies such as NCS will be important.
I want to say a word about the third sector and local councils. There is an organisation in my constituency called GreenWin, which sits as part of Winchester city council’s climate change programme, and could be a lean and highly efficient vehicle to drive the green deal
10 May 2011 : Column 1095
in the area I represent. I pay tribute to a constituent of mine, Rob Veck from Colden common, who lives in a house we could call “green deal-plus”—although even that would be an understatement—and who is doing so much to make GreenWin happen. Critical to GreenWin’s success is building a district-wide network of affiliated suppliers and installers. The idea is simple: to build a database with moderated customer feedback that acts as a quality check on the delivery of the green deal. It is 100% community based and is big society-plus with bells on. However, GreenWin has been extremely frustrated by funding issues. I urge Ministers to engage with such groups, which is why I appreciate, and will take up, the Minister’s offer to meet GreenWin through me.
The role of the new green deal assessors is important to the roll-out of the green deal. However, it is not clear to me, and many others, how these GDAs will make a living. Logic suggests that they should be independent—similar to independent financial advisers—but I would appreciate a lead from the Minister, perhaps in Committee, on how they will operate, and on how we can ensure that they will not be cut out of the green deal by the big boys.
I want to touch briefly on the eligibility criteria for green deal homes, and place on record my thanks to Ministers for clarifying, as they did in Department of Energy and Climate Change questions in March, that the green deal will apply to park home residents, if they have an appropriate energy meter and qualify under the normal rules. Park home residents in Winchester and Chandler’s Ford have expressed to me their grave disappointment about how the Warm Front scheme cut them out, and they are very pleased, as is their Member of Parliament, that the green deal will apply to them.
I promised to say where the Bill could be stronger, and I would welcome Ministers’ responses, either today or in Committee, to my suggestions. The Government will be aware that many, including the organisations that make up the Stop Climate Chaos Coalition, do not think that the Energy Bill is strong enough and are calling for an amendment—the so-called warm homes amendment we have heard about today—that would introduce provisions to ensure that the Government’s programme on energy efficiency, including the green deal, fits within an overarching energy-saving strategy sufficient to meet the ambition of the Climate Change Act 2008. To remind the House, that ambition is for an 80% emissions reduction by 2050 and a 42% reduction by 2020. Do the Government have any sympathy with this proposed amendment—on first reading, it seems reasonable—if only in the interests of open government and accountability? If not, why not?
People contacted me while the Bill was making its way through the other place, asking that we strengthen the role that local authorities must play. We have heard much about that today. I know that the Secretary of State and the ministerial team are aware of the local government offer on climate change, which has been signed by local authority leaders of all different political persuasions, and which supports the amendment to make climate change a core responsibility of every local authority through local carbon budgets. I appreciate that Ministers might think that at odds with the localism credentials the coalition Government rightly set out,
10 May 2011 : Column 1096
but given that we must meet the ambitious targets set by the Climate Change Act, is this Bill not an opportunity to bring local councils to the table?
Nicola Blackwood (Oxford West and Abingdon) (Con): Does my hon. Friend not think that a good place to start would be for the Government to set out exactly how the green deal will help them to achieve their climate change targets?
Mr Brine: I absolutely agree with that point. I can see the logic in setting local carbon budgets, because many council leaders up and down the country of all political persuasions believe in the growth and green agenda as much as hon. Members. However, some do not, and they need to come to the table if we are to meet those ambitious targets.
In closing, I want to place on record my genuine excitement: this could be a transformation Bill; it is true to the Prime Minister’s ambition to make this the greenest Government ever; and it is seriously helpful to the Chancellor of the Exchequer in helping to create the growth that we so desperately need right now.
7.26 pm
Mr Michael Meacher (Oldham West and Royton) (Lab): We have listened to a distinctly Panglossian rosy glow of a statement from the Secretary of State. I think that we can all support the green deal’s ostensible objectives, but there are profound problems with the mechanisms and financing necessary to deliver on the rhetoric. The Bill’s biggest flaw is the failure to address adequately the central issue in energy policy, which is to establish a target for the most efficient way of meeting the nation’s energy requirement over the next 20 years or so, and then to put in place secure and effective mechanisms to ensure that those targets are met. I think that the Bill is the wrong way around: it makes assumptions about the level of energy supply in future decades, and then proposes mechanisms, albeit—as I shall show—rather uncertain and dubious ones, to green that supply.
The Government’s draft overarching national policy statement blandly states, as a sort of unchallengeable datum, that a doubling, or even tripling, of generation will be required by 2050. That clearly puts the cart before the horse, however. If, instead of planning for X terawatts of extra power over the next two to three decades, it was practicable to reduce the figure by, say, 40%—I think that is practicable—it would make much more sense to set that reduced level of energy production as the central target, and then to implement measures to ensure that it is met in as green and cost-effective a way as possible. That is all the more the case given that energy saving is more cost effective, which is a mantra that spokesmen, including the Minister, of all three main parties have repeatedly asserted.
Why, then, are the Government still refusing to undertake a proper cost-benefit assessment of energy demand? Obviously one can see that the big six operators and power generators will be anxious about anything that might impact on their future profits, but I think that the Government, who are far too committed to accommodating the private sector, need to put the national interest first.
Then there is the question of whether the measures in the Bill will deliver what the Government purport to be aiming at. The fundamental issue, on which the whole
10 May 2011 : Column 1097
green deal hinges, is what the interest rates will be. When that was put by me and other hon. Members to the Secretary of State, he gave a studiously vague answer—a discourse, but not an answer. However, without a low interest rate, households will be paying a full, unsubsidised rate for measures such as cavity-wall or loft insulation, which were previously available at no cost or little cost under successive supplier obligations. Without a low interest rate, households will be worse off than they are now. I do not wish to be over-critical, because this should be a reasonably non-partisan debate, but it is irresponsible for Ministers to present such a major Bill to the House and yet remain silent on the intended rate of interest, when the success or otherwise of the entire Bill—certainly the green deal part of it—hinges on that point.
WWF has done a lot of research on the issue and reports that the cost of borrowing for the green deal is likely to be around 8% to 10% over the 25-year debt. Do Ministers agree? If that is the likely interest rate, the effect of the Bill is likely to be fairly minimal without much greater financial support being offered. Market research by the so-called Great British Refurb campaign found last September that even if the interest rate were no more than 6%, only 7% of households—one in 14—would be likely to take up the green deal offer. That is all the more significant when, as we all agree, we recall that the people who need help most in energy saving are those in fuel-poor and vulnerable households, who unfortunately live in the most poorly insulated and energy-wasteful houses.
Given the Government’s savage cuts to the Warm Front programme over the next two years and its discontinuance in 2013, it is perfectly clear that they are not going to lift a finger to help with repayment charges for fuel-poor households, so I ask this question. Realistically, within the parameters of the Bill, is there any reason why energy suppliers should not be required to meet green deal repayments on behalf of fuel-poor households? After all, as we know, such companies regularly report vast profits arising from adventitious rises in fuel prices. However, such a requirement would help them, because they would be able to spread the capital costs over the full length of the green deal finance arrangements and thereby be able to install far more packages in a much shorter time than under the carbon emissions reduction target.
Mark Tami (Alyn and Deeside) (Lab): Does my right hon. Friend agree that our experience of how the big companies have treated the fuel poor—with pre-payment meters, for example—does not really set a good example or give any hope for how they would look to the future?
Mr Meacher: The point about pre-payment meters is important, because, again, it is the poorest households—the most fuel-poor and vulnerable households—that are so often forced to use pre-payment meters. Their experience under the Bill would be questionable if it were left to private companies to decide how to deal with the issue. Again, that is an area where the Government need to step in and offer support.
A minimum energy efficiency standard is clearly needed in the private rented sector—a point that several hon. Members have made. There is little or no incentive for landlords to do very much to improve their properties, because it is their tenants who pay the fuel bills, not
10 May 2011 : Column 1098
them. What is needed, therefore, is an energy efficiency baseline to prevent properties with an energy performance certificate rating of F or G, or whatever the Government choose, from being re-let or marketed for rent after a reasonable period—say, five years—in which the necessary energy-efficiency measures can be installed.
Lastly—and briefly—it is regrettable that the Home Energy Conservation Act 1995, or HECA, which was a Lib Dem private Member’s Bill, is being repealed rather than extended and toughened, because it delivered more savings in domestic fuel than the entire first phase of the energy efficiency commitment.
Gregory Barker: I will address some of the right hon. Gentleman’s thoughtful comments in my wind-up, but let me put it on record that we are not repealing HECA. Rather, it will form an important part of our strategy to ensure coherent and joined-up implementation of the green deal right across the country at the local authority and community levels.
Mr Meacher: I am very pleased to hear that, and I will take that point away and look at it again. Obviously if the Minister says that, I accept that it is the case, and I am also grateful for it, because HECA is an important Act. It never had great support because it was a private Member’s Bill. Local authorities did not have statutory requirements but had to act voluntarily, so the legislation was not as effective as it could be. However, if the Government are to take it over, supporting and strengthening it, that is excellent.
Gregory Barker: The right hon. Gentleman makes exactly the right point, and although the Secretary of State did not mention it in his opening remarks, that is a new advance—which we are making today, on Second Reading—in strengthening the Bill.
Mr Meacher: I am very pleased to hear that. Clearly there is thinking going on in Government about how the Bill can be improved, which is what we all want. This is a good Bill, but there is a risk that it will not achieve its objectives, so it needs improvements.
Many people have said this, but there are still too many unanswered questions about so many aspects of the Bill, which I do not think is acceptable for a Bill on Second Reading. The Secretary of State was generous in being cross-questioned by Members from all parts of the House, but the increment of information that he was able to provide was not really satisfactory. Given that there is no cap on interest rates, how can the golden rule—that the expected financial savings will be greater than the cost—be guaranteed? Clearly it cannot. What consumer assurances are there that the green deal advisers will not be in cahoots with the green deal installers? Where is the major information campaign? I do not like saying this, but the “Tell Sid” campaign for privatisation in the 1980s was very effective. Where is the information campaign—which only the Government can provide—to support the green deal, rather than leaving it to big business, which will put its own spin on it? In the worst scenario, there is always a risk of repeating the kind of mis-selling scandal that we saw in the City in the 1990s.
I want to be positive about the Bill. Members in all parts of the House acknowledge that this country badly needs a programme for green energy, albeit one that is
10 May 2011 : Column 1099
cost-effective, with implementation measures that will ensure the objective—not hope for it on a wing and a prayer—and comprehensively address the energy saving requirements of fuel-poor and vulnerable households, particularly in the private rented sector. The Bill needs a great deal more work in Committee. I hope that the Government Whip will not reject all the helpful and constructive amendments that are suggested, as so often happens. I am glad that the Government appear to be still thinking about the matter. If we make some significant changes, this could be—I stress: could be—a good Bill.
7.38 pm
Zac Goldsmith (Richmond Park) (Con): A number of speakers have already said this, but it is worth repeating that energy efficiency has for so long been bizarrely overlooked in the energy debate, despite the fact that, in terms of value for money, it is a no-brainer. I want to give just one example. Under the energy efficiency commitment, E.ON claims to have installed measures that delivered energy savings equivalent to 2.3 Kingsnorth plants at a cost of £250 million, which is a fraction of what it would have cost to build those 2.3 plants—if, indeed, it were possible to build 2.3 plants.
There will always be debate about the best source of low-carbon energy, but everyone across the House agrees that the best plant of all is the one that we do not need to build because we have eliminated the demand for it. I therefore strongly welcome the Bill, with its focus on efficiency and its simplicity. The green deal will, very simply, enable households and businesses to invest in energy efficiency at no up-front cost, thereby removing the biggest barrier to carbon refurbishment—the up-front cost—by allowing them to repay the debt through savings.
If the green deal works, it will not only reduce our dependence on imported foreign oil but insulate our homes and businesses against rising energy prices. It will also create opportunities on a large scale for green jobs and growth. More than that, it is clear that an ambitious programme of retrofitting is a prerequisite for the UK to meet its carbon targets. That has been made very clear in the fourth carbon budget report of the Committee on Climate Change, which said that we need a major energy efficiency programme to capture what it believes could be a 74% reduction in emissions from our housing stock by 2030.
The right hon. Member for Oldham West and Royton (Mr Meacher) and other Members have aired their concern about how quickly the green deal will be taken up, how far it will go and how much demand there will be for it. The truth is that we have no idea, because it is a new scheme. There are steps that the Government could take, however, to boost the programme. For example, I would strongly urge the Treasury to introduce proposals for a stamp duty rebate for homes participating in the green deal. Given that retrofitting is always disruptive, it makes sense that the biggest incentive should be at the point at which the home changes hands. I suspect that DECC is already lobbying the Treasury on this, and I suggest that if the Treasury wants to avoid being seen as the cuckoo in the nest in relation to green policies—it said that it would try to avoid that—it really ought to take that idea very seriously, because it would have a transformative impact. Another idea is for the green
10 May 2011 : Column 1100
investment bank to have a role in helping to ensure that the necessary low-cost capital can be raised at scale. I am pleased that, as the Bill stands, it does not preclude a role for the green investment bank; at least, that is my understanding of it.
Emissions reduction targets are clearly important, and I want to take this opportunity to urge the Treasury again to accept the recommendation of the Climate Change Committee for a 50% reduction from 1990 levels by 2025. That is important on so many different levels, but they have already been covered in a number of speeches so I will not dwell on them. But, to return to my original point, irrespective of the targets that we set, they will be worth absolutely nothing unless we also develop the mechanisms for delivering and achieving them.
Claire Perry (Devizes) (Con): Does my hon. Friend agree that one of the new and interesting things about the green deal is that it will work with human nature? One of the big impediments to greening up homes, beside the cost, is a distrust of cowboy installers. If we put together a package, working with household names, it will help to overcome that consumer distrust and give us a much better chance of achieving the targets.
Zac Goldsmith: I agree with my hon. Friend 100%. One of the great aspects of the green deal is that it overcomes the obvious barriers that exist without it. The green deal is very much part of the delivery in meeting the targets, but so too is the next energy Bill. Clearly, this is not the end of the energy story for this Government.
Ian Lavery (Wansbeck) (Lab): The hon. Gentleman mentioned how imperative the emissions reduction targets are, and I entirely agree with him. The Committee on Climate Change has suggested this week that we should be looking at more nuclear power, rather than at offshore wind power. Taken in context, that means that there will be a shortage of energy supply that can be bridged only by gas, which would increase emissions levels rather than reducing them.
Zac Goldsmith: I am on record as being sceptical about the possibilities of nuclear power, partly because it will take so long for us to generate the new capacity that it will not address our immediate concerns. Nor do I believe it possible that we will see new nuclear power plants being built under a regime that says “No subsidies for nuclear”. I might be wrong—a number of people in the sector have told me that I am—but my hunch is that we will see new nuclear power plants only if the definition of “subsidies” is stretched beyond all recognition. But we will see; we will set the right framework and allow the market to decide. That is a party policy that I am happy with, as long as we reach a clear definition of “subsidies”.
Returning to our attempts to meet the targets that I hope will be accepted by the Treasury, one aspect of the second energy Bill—I am not sure that it is legal for me even to talk about it—is important for providing a context for this Bill. That is the concept of “negawatts”, which effectively puts energy saved on a par with energy generated. This is absolutely crucial, and represents a hugely exciting change. My understanding—although I will probably be corrected by the Minister in the wind-up—is that under the proposed reforms to the electricity
10 May 2011 : Column 1101
market, companies will be allowed to pitch for energy contracts and then to fulfil them by reducing energy use, rather that simply by providing more energy. That in itself will transform things in this country on a very exciting scale. It is useful to consider that future Bill alongside the one that we are considering today. Even so, we are going to need more.
If the Government are really serious about energy efficiency, they need to be willing to push for much higher standards in our everyday appliances. One example that I discovered this morning is that we spend £2 billion a year powering washing machines, tumble driers and dishwashers, and a further £2.2 billion a year powering fridges and freezers. If everyone in the UK upgraded their cold appliances to a recommended energy-saving product, energy waste would be cut by two thirds. If we apply that across the board to all the appliances that we use, it is clear that this is one area in which we need direct Government intervention. We need higher levels of regulation, and we need to see standards improving on a rolling basis.
The Bill represents a significant first step in the right direction, and I strongly support it. I congratulate the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) on his involvement in it. It is clearly part of a big journey, however, and there are many more steps to come.
7.46 pm
Dr Alan Whitehead (Southampton, Test) (Lab): I am pleased to follow the hon. Member for Richmond Park (Zac Goldsmith), who has made a thoughtful contribution to the debate. He has underlined a number of the issues that I want to raise in connection with the Bill and the green deal. It is extremely important that the green deal should work well, so it must be as good as it possibly can be when the Bill completes its passage through Parliament. That is important because of the ambition that we must have for energy efficiency, whether through “negawatt” arrangements or other forms of energy management and energy saving. We must have the best and most energy-efficient housing stock that we can bring about. That is an essential part of our climate change action, and our action on energy management and the achievement of the CO2 emissions targets set out by the Committee on Climate Change.
Achieving that will involve an ambitious programme, and as a mechanism, the green deal is certainly ambitious. Indeed, the Minister himself said last summer that by 2050, as a result of the green deal, houses would not have to be visited more than once to assess their energy efficiency. That is the kind of ambition that we need for the green deal; we need to make it work as well as it can. My worry is that as matters stand, many things are missing from that ambition. That is what we need to concentrate on in Committee, so that when the Bill is enacted, the import of the 50-odd pieces of secondary legislation that have yet to be written, let alone enacted, will be much clearer. We shall also need to ensure that that secondary legislation provides the mechanisms to make the green deal work well.
I was pleased to hear this afternoon that among other things, the Government are not now intending to proceed with clause 105, which at the moment proposes the
10 May 2011 : Column 1102
repeal of the Home Energy Conservation Act 1995 in its entirety. I would welcome an intervention from the Minister to confirm that that entire clause will now disappear and not go forward into Committee or beyond. Is that right?
Gregory Barker: I cannot comment on the detail, but I can assure the hon. Gentleman, as I assured the right hon. Member for Oldham West and Royton (Mr Meacher) earlier, that we have looked at this matter in the round. Having listened to a number of experts in the field, we think that we can breathe new life into HECA. It effectively became redundant under the previous Government, but we think that it could be revitalised and become an effective tool that could allow us to avoid imposing new regulation on local government.
Dr Whitehead: I thank the Minister for that clarification.
When we are talking about energy efficiency in homes, we need to understand just how big the task ahead of us is. The SAP—standard assessment procedure—rating of UK homes went up considerably under the last Labour Government. To be precise, the average SAP rating, which measures the energy efficiency of homes, went up by 11 points between 1996 and 2010—from an average of 42 up to 53. Over the last five years, the SAP rate increase went up one a half times as fast as in the previous five years and the five years before that. That shows how measures such as Warm Front and CERT—carbon emissions reduction target—which are going to disappear when the green deal comes in, were having some success in ensuring that homes were more energy-efficient.
In order to get anywhere near the sort of targets that hon. Members have suggested that the Government should consider introducing in an amendment to align energy efficiency with climate change targets—which I hope will happen in Committee—we need to move the SAP ratings much further up over the next few years, perhaps to 70 or more on average at band C by the end of the decade. That means making progress getting on for twice as fast as we have over the last few years. That is the sort of ambition that the Bill needs to encompass. My concern—hon. Members have already mentioned a number of concerns—is that it remains unclear whether that ambition can be achieved under the current mechanism, despite the claims for the efficacy of the green deal.
Mark Tami: Other Members have mentioned the problem of poorer homes, and private landlords are a particular problem, because they have no vested interest in doing anything about them. I am sure we have all had people coming to our surgeries with horrific stories about windows that do not fit, damp all over the place and so forth—yet the landlord often does not care at all.
Dr Whitehead:
Indeed. I welcome what I understand to be a change of heart by the Government about the extent to which compulsion can be used to get landlords to improve their properties. Sanctions on landlords with F and G-rated properties have been mentioned; we could argue about when those sanctions might be introduced, but compulsion to prevent landlords from letting properties below certain minimum energy standards is right. The standards are well below the sort of average
10 May 2011 : Column 1103
rating that we have talked about this afternoon, but they are nevertheless minimum standards. If that is indeed a change of heart reflected in this part of the Bill, I welcome it.
I am sure that the detailed provisions affecting landlords can be sorted out effectively in Committee—but first we have to find the landlords. It was not a good sign that when this Bill was being discussed, another Department helpfully removed the idea of having a landlords register as the responsibility of local government. Without that, it will be more difficult to find the landlords who should carry out these arrangements. I trust that the Minister will have a word with his counterpart in the Department for Communities and Local Government and perhaps think again about that particularly destructive act.
The problem of finance has been mentioned. It is essential to making the green deal work. It is not just a matter of suggesting that the market will sort the finances out one way or another and that competitive interest rates will be charged. We can be fairly clear about how finance for the green deal as it stands, without changes, will turn out, because that is how the market works in respect of the sort of return that can be expected at different interest rates. The rate may well be around 9%, or perhaps a bit less. If we look at what can be got under the golden rule with finance at 9%, we find that it turns out to be very little in terms of improvements for properties to which the green deal and the golden rule apply. Loft cavity wall insulation and draft-proofing are probably the only things that work out at that sort of level. With interest rates at 7%, we get draft-proofing, some glazing, some internal wall insulation. With interest rates at 5%, we may get loft cavity wall insulation, glazing and a condensing boiler. If the green deal comes in at 9%, hardly any of the properties that need that sort of level of serious work—glazing, condensing boilers, perhaps microgeneration—will be touched by the mechanism. We must have a better mechanism for making the green deal work.
The energy company obligation exists as a back-up for fuel poverty and hard-to-treat properties. Hon. Members might have noticed that with interest rates at about 5% or so, solid wall insulation, which is present in about 7 million homes up and down the country, will not be touched. The ECO programme might touch it and might have a substantial hand in dealing with those in fuel poverty. Perhaps they should have their green deal underwritten by the ECO so that they can join in the benefits that other people get.
If we are thinking about how the ECO might underwrite the green deal, it is important to understand whether the ECO will exist to any great extent as a financial mechanism. What greatly concerns me—I hope the Committee will be able to look at the problem in much greater detail—is that as matters stand, DECC has signed up to a Treasury-based cap on levy-based arrangements. Under the present financial arrangements—for the spending round up to 2015—DECC has signed up to a cap on renewable obligations, feed-in tariffs and warm homes discount. That cap is set at £11.8 billion over the whole period, but there is also an annual cap.
The Treasury says that any new initiatives that come in the form of a levy must be financed within that cap. If the Department wished to undertake an ECO programme
10 May 2011 : Column 1104
and it proved to be a levy as defined by the Office for National Statistics, it would have to be found under the present cap. That means either that the Government will have to go slow on renewable obligations and reduce the amount of renewable energy, or that the ECO will prove to be so small as to make it impossible to produce the sort of mechanism that many people hoped for—one for adding value to the green deal, getting on with the hard-to-treat properties, dealing with people in fuel poverty and homes off the grid that need extra assistance to make the green deal work, and so forth.
Unless we get the mechanisms right and have the right finance in the system—and, I would suggest, among other things, unless the ECO works properly—the green deal will not work. I am the last person who would want to see the green deal fall. Because a great deal of work has to be done to make our country as energy-efficient as possible, the green deal has to work. The task of making it work properly is the task of the Committee. I hope the Government will be generous in taking on board those ideas, which will make the green deal work as well as it can to bring our energy efficiency targets as close to realisation as possible.
7.58 pm
Mr Brian Binley (Northampton South) (Con): I congratulate the hon. Member for Southampton, Test (Dr Whitehead) on his typically thoughtful speech, which I thought made an important contribution to the debate and was delivered in a helpful tone. I say to the Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker) that I greatly welcome the general thrust of the Bill. I believe it will be a major advance, provided we get it right, but there is a lot to do to help it become a better Bill. I hope that Ministers will approach Committee with that thought in mind. I think that, in general, the House wants the Bill to succeed and considers it important, and we should be able to tap into the House’s collective knowledge of an issue that is so important to the future well-being of our country. Knowing the Minister as I do, I am sure that that will be his approach.
Gregory Barker: My hon. and very wise Friend is absolutely right. We want to try to capture some of the positive cross-party engagement that ensured that the Climate Change Act 2008 was scrutinised and improved during its passage. We will seek to draw on the wisdom that exists on both sides of the House to improve this Bill, and we will be open-minded. We are extremely ambitious for the Bill, and we do not want to rule out good ideas just because they were not invented in our Department.
Mr Binley: I am sure that the whole House will welcome the Minister’s generous remarks, and I hope that we can set the stage for a consensual approach to this important matter. I was going to say something about limp lettuce leaves, but in view of my desire for that consensual approach, I shall refrain from doing so.
Mr Deputy Speaker—the change is slightly off-putting, but it is good to see you in the Chair—we all know that improvements in energy efficiency are a vital part of the wider picture of our energy policy, for a number of
10 May 2011 : Column 1105
reasons. They are central to the success of our economy, and to the well-being of the environment that we want our children, grandchildren, and those who come even later to enjoy. They are extremely important to the jobs market. However, they are even more important to consumers, particularly those who are less privileged than many other people in the country. I believe that the Government are genuinely willing to ensure that the benefits of the Bill spread to the sections of the community that we know need help because they suffer from fuel poverty, and I believe that those people would be particularly grateful to the Government if we managed to pull this off.
The Bill provides a welcome opportunity for us to consider the wider question of the direction of energy policy, which chapter 4 of part 1 and chapters 1 and 2 of part 2 refer to in no uncertain terms. Issues such as future generation and supply, low carbon innovation and investment and energy security are vital to the overall picture, and I was pleased to learn that the Minister envisages a review and report in the coming years that will deal with those vital issues more widely.
I think we all agree that a low-carbon energy future offers the strong economic opportunities to which I have referred, but energy can be saved only if there is energy to save. The whole process of generation has become even more delicate and important as a result of happenings on the other side of the world, and the future of energy policy is now a very pertinent matter to which we need to devote serious attention. I do not think that either this or the last Government have embarked on that process to the extent that would satisfy me and, I believe, a number of other Members.
Low-carbon energy provides a tremendous opportunity for us to create new jobs, improve energy security and reduce fuel poverty, and making existing energy supply go further is a positive concept that we would all support. The green deal programme is one of most startling and innovative policies that I have seen during my time in the House. As I have said, there are ways in which we can improve it, but it is a gem of an idea on which we can build, and which will have a massive impact on the people whom we serve. I hope that the rest of the House sees the Bill in the same way. I know that the Builders Merchants Federation will be interested in it, but the federation is only one organisation that will be interested in the possibilities for job creation, let alone improvement of our housing stock and help for those who are less fortunate than many of us in this country.
I am delighted that there will be a focus on the sectors to which I have referred, and I am delighted that those sectors will help to provide the growth that we need to ensure the success of the whole Budget strategy. The Bill is at the heart of that Budget strategy, which is one of the wider considerations that we need to bear in mind in Committee and on Report. However, it poses some difficulties that I think worth identifying from the perspective of a friendly supporter. I find its tone more than a little prescriptive, and I feel that it could have been more flexible at this stage, not least because so much of the detail is yet to be supplied. I hope that my hon. Friend the Minister will take that point on board.
I believe that we should make the green deal more attractive to domestic and commercial energy consumers. In that context, I pay tribute to my hon. Friend the
10 May 2011 : Column 1106
Member for Richmond Park (Zac Goldsmith). I agree that we need to use fiscal drivers such as council tax rebates and changes in stamp duty. Although the green deal is tremendously exciting, it must be sold carefully and honestly, and the marketing process must contain incentives to change the minds of the many people who may be suspicious about phrases such as “Everyone’s a winner”. Whenever I wanted extra money to spend at the local fairground where the guy cried out “Everyone’s a winner”, my grandmother warned me to be wary of catchpenny deals. I do not want that sort of marketing to be part of this process; the deal must be marketed in a sensible, mature and honest way.
Nicola Blackwood: When deciding on a marketing strategy, should we not think about how to attract those who are most vulnerable, most likely to be subject to fuel poverty and, in general, least likely to access the support available to them?
Mr Binley: That is an important point, and I note from one or two nods from Opposition Members that there is agreement on it across the House. If we are to attract those who are at the bottom of the poverty chain, our marketing must be subtle. It worries me that the House often does not think about the management of the projects suggested by the Executive. We have seen that in the context of support for small business, and I should hate the same thing to happen to an idea as good as the green deal.
My time is quickly coming to an end. Before it does, let me say a little more about the need to reduce our carbon need. That is particularly relevant to what has happened on the other side of the world, which has changed the way in which some countries think about the production of energy. I therefore want to refer briefly to the vital role carbon capture and storage will play in ensuring we have the energy supply that we need in order to be able to save energy. The Government claim to recognise its importance, yet the levels of uncertainty that have beset progress of late are concerning. I welcome the Minister’s recognition that CCS is the only home-grown energy source technology that can help to reduce significantly CO2 emissions from fossil fuel power stations—indeed, by as much as 90%. I also recognise that the Bill as it stands does not deal with this issue, but there are serious discussions going on about the future supply of power in this country. Doubt has been created as a result of the Government giving £1 billion for the first test model of a CCS facility but then saying we are doing away with the remaining £9 billion and we are going to deal with this from a general tax perspective. That has worried the marketplace and could hold back CCS development. I urge my Front-Bench colleagues to take this on board. There are 300 years of energy requirement under our feet and we have an opportunity to help coal communities. If we do not make progress with CCS, others will and we will miss massive opportunities.
8.11 pm
Caroline Lucas (Brighton, Pavilion) (Green): I am grateful to have the opportunity to speak in this important debate. Let me say straight away that I welcome the Bill as I think it has enormous potential. The green deal could play a hugely important role in ensuring that we
10 May 2011 : Column 1107
reduce greenhouse gas emissions from our homes and take serious steps towards meeting our climate change targets. The potential economic impacts could be almost as important as the environmental ones. At a time of economic crisis, one of the fastest ways of getting people back to work and stabilising the economy is precisely through a major programme of investment in energy efficiency and renewable energies. Retrofitting all our buildings would create well over 100,000 jobs over the next 10 years. If we were to have the right policy incentives, we could create many thousands more jobs in the renewables industries.
The Bill also has a crucial role to play in tackling the economic and health scourge of fuel poverty. Fuel poverty overall has risen steadily since 2004, and according to the latest Government figures, dating back to 2007, it now affects about 4.5 million UK households. National Energy Action—the national fuel poverty charity—estimates that the figure is in fact closer to 5.4 million households.
We can bandy figures about, but they tell only part of the story. My constituency has one of the largest private-rented sectors in the UK, and many of my constituents have shared with me their experiences of living in cold, damp rented property, and are happy for me to highlight them here today. Jack writes:
“I am currently living in a flat with no central heating and rotted wooden single glazed windows. Needless to say over winter my flatmate and I were horribly cold, and we were both very ill due to the weather.”
“You know those thermal blankets paramedics use? Even with central heating, I had two of those on my bed, two duvets, four blankets, and I still had to wear jeans and hoodie to bed, and I was still shivering in my sleep.”
It is beyond doubt, therefore, that there is both a great need for improved household energy efficiency and a great opportunity to address fuel poverty, but in order to realise the full potential of the green deal, some significant changes to the Bill will be needed. My overall concern is that I am not convinced that the measures and mechanisms proposed in the Bill will be ambitious enough to meet the scale of the challenge we face. The Minister has talked both in the press today and at a seminar in my constituency yesterday about the aspiration for 14 million households to be insulated in the first phase of the green deal. I support that aspiration, of course, but it is hard to see how it will be achieved through the current proposals, and that is made even harder by the fact that so much of the detail of the green deal is, unfortunately, being left to secondary legislation.
However, as the hon. Member for Angus (Mr Weir) has suggested, what we do know is that retrofitting 14 million homes by 2020 amounts to over 1.7 million homes a year, or about 145,000 homes a month, or about 4,800 homes a day. That will be a massive step change, which will require an extraordinary ramping up of the supply chain, of the training of engineers and so forth. Even the leading programme in Germany is only achieving 100,000 retrofits a year, and it is doing so by offering publicly subsidised interest rates of 2.65%. The green deal before us today is based on market interest rates, which will be a lot less attractive.
Therefore, although it is very welcome that Ministers are sounding ambitious, those ambitions need first to be stated firmly in the Bill and, secondly, to be backed
10 May 2011 : Column 1108
up by a far-reaching delivery system that will roll out the green deal in a much more comprehensive manner. It is not enough simply to state that a number of homes will be treated, since it is clearly far easier to make minimum energy efficiency improvements to 14 million homes than it is to deliver the whole-house, comprehensive retrofits, including micro-energy generation measures, that are needed. That is why we need to have stated in the Bill not just the number of households to be treated but, crucially, the minimum level of emissions reduction to be achieved.
Maximising the take-up of the green deal involves looking again both at the finance mechanism itself and, crucially, the way it is delivered. Given that we know the most effective agents of change are likely to be local community-based organisations working alongside local authorities, the Bill needs to be clearer about the role of local authorities, and more explicit about the important role of co-ops and mutuals, such as Brighton Energy Co-op in my constituency. I believe that a national, publicly funded, street-by-street, comprehensive energy efficiency improvement scheme would deliver the greatest and quickest financial and CO2 savings, while also providing the largest boost to the development of a green economy. The effectiveness of such schemes has been seen at a local level across the country, driven by local authorities. Indeed, it was at the heart of the “green new deal” that a number of Greens and others put together some years back. That was a more ambitious forerunner of the Government’s green deal and other proposals here.
The Local Government Association has called for much greater clarity on the role that local authorities could play within the green deal, and the New Local Government Network argues for social landlords to have a prominent role in co-ordinating green deal measures across their estates on an area-wide basis, given that pilots suggest that costs can be reduced by as much as 20% per home when whole streets are improved collectively at the same time. That could be facilitated by ensuring that the energy company obligation fund is paid into an open pot that all green deal providers, including local authorities and registered social landlords, can bid into, in order to ensure that the green deal delivers on fuel poverty.
I am very glad to hear that the Home Energy Conservation Act 1995 measures will now not be repealed, and I hope we will link that to calls for local carbon budgets. More than 40 council leaders have called for councils to be given a duty to set a carbon budget for their area, and to meet it through locally agreed and appropriate measures, with the support of central Government where needed. These two things should be going hand in hand.
Local authorities have a unique role to play. They are a trusted brand, and they know where their hard-to-heat homes are and where many of those in fuel poverty live. Their knowledge, experience and reputation will be key to the success of the policy, and I think the Bill needs to be clearer about their central role.
Even with local authorities and local community groups driving forward the delivery of the green deal, we will need to do much more to incentivise people to take it up. Part of the answer lies in getting the financial package right. I support proposals that would include looking at ways of incentivising that through reductions
10 May 2011 : Column 1109
in stamp duty, and as the right hon. Member for Oldham West and Royton (Mr Meacher) said, it is crucial to get the interest rates right. The success of a home efficiency improvements programme in Germany has shown the value of using publicly subsidised lending. With Government backing, the KfW development bank raises triple A rated bonds for its energy efficiency household loan programme. The Government then subsidise those loans, which are offered to the consumer at a rate of 2.65%. With the support of some further grants and regulation, Germany is achieving 100,000 retrofits of residential homes each year. The current understanding is that green deal providers in the UK will only offer the loans at market interest rates, which prompts this question: where exactly is the “deal” in the green deal?
To meet the ambitions stated by the Minister today of treating 14 million homes by 2020 it is clear that the Government have to go well beyond what is being offered and achieved elsewhere. They have to introduce something like 0% interest rates, linking this to the green investment bank. Unless we cut the cost of the up-front capital for the green deal, we risk limiting the measures that can be implemented under the golden rule.
As I have said, fuel poverty is a crucial issue when it comes to ensuring that the energy company obligation works. I am deeply concerned that there is not enough money in the pot for the ECO and I am also concerned that it has two functions. On the one hand, we are asking for it to address those in fuel poverty and, on the other hand, we are asking it to address those in hard-to-heat homes. People in hard-to-heat homes may be able to pay, so if we provide them with funding from the ECO pot, we are using money that could help people in fuel poverty in order to subsidise residents who are able to pay. Such an approach does not make much sense. We also need to be mindful of the fact that the ECO will be funded through a levy on all bills, as that risks pushing more people into fuel poverty than it takes out of it. If we use a regressive mechanism, such as a levy on all bills, we run a real risk of it putting more people into poverty.
The warm home discount is welcome but, again, there is a problem, because it is paid for in the same way—it is a levy on the bills of all consumers—and it tackles only the 50% of the fuel poor who are of pensionable age. There are plenty of fuel poor people who are not of pensionable age. So we need to make many changes to the Bill, but I repeat that overall it is very helpful. I hope that we will be able to improve it and that we really will have the kind of policy that we can be proud of in this country.
8.21 pm
Tessa Munt (Wells) (LD): It is an honour to follow the hon. Member for Brighton, Pavilion (Caroline Lucas). She made many of the points that I would wish to make, so I shall briefly address the issues of particular concern to my constituents.
I welcome the green deal, in particular the potential for green jobs, the energy-saving capacity measures, the potential savings for those who most need the money and the emphasis on the benefit to individuals. The first thing I wish to focus on is that we should be setting targets on an annual basis. An annual report should be
10 May 2011 : Column 1110
given to Parliament on the progress made, not only on the number of homes that have been dealt with, but on the carbon saving.
I am concerned that there will be no separation between the assessor and the supplier. As such, there will have to be a strong resolution capacity for those who have disputes and grievances. I wish to see something similar to a green ombudsman put in place, as that would help to keep consumer confidence high—we saw what happened in Australia when confidence fell.
Local authorities have been mentioned, and I particularly wish to know the Government’s view on including housing associations and some of the larger estates, possibly the Duchy of Cornwall, the Grosvenor estate and many others, in the Bill’s arrangements. Would they have the capacity to become green deal providers? The economies of scale that would, thus, be brought in would, of course, have to benefit individual consumers. The idea of introducing schemes so that individual roads, villages, neighbourhoods or districts are dealt with in that way—in a fairly consistent way—is an interesting one.
Heather Wheeler: The hon. Lady raises an interesting point. I recall that when I was serving on Wandsworth council 20-odd years ago we looked at regenerating areas such as the Battersea triangle. I remember writing out a cheque for £4 million for one year. We took over and regenerated entire streets, and the economies of scale involved were superb. When I think of what Battersea is like now compared with what it was like 20-odd years ago, I realise that she is hitting on an interesting point. Perhaps the Minister might be able to wrap this up later.
Gregory Barker: I can do that now. I am very happy to say that we want to make the green deal as permissive as possible. These sorts of ideas, which encourage housing associations and other community groups to come together to be green deal providers, alongside the big boys, demonstrate exactly the sort of innovative approach that we want to see.
Tessa Munt: I thank the Minister for that answer.
I wish to return to the issue of fuel poverty. I cannot say how strongly I feel about the fact that the Government must instruct the companies or the regulator, or whomsoever else we are able to instruct, to ensure that we operate a rising block tariff, rather than a falling block tariff. That would be the most green measure we could implement. Leaving things as they are would be a disincentive. It is bonkers not to make energy cheaper for the first units and more expensive as people use more. This measure would be so green and would provide such an incentive to use less energy that I make a plea for the regulator or whomsoever is able to deal with that to be instructed to do so.
The other issue that I wish to return to is that of the pre-payment meters, as it is very unfair to penalise the less well-off through higher charges for pay-as-you-use gas and electricity. I accept that those with arrears must pay them off, but they should not be penalised after that by having to pay more for their power.
Will the Minister clarify something on the issues of fuel poverty and ill health?
10 May 2011 : Column 1111
Andrew George: Before my hon. Friend moves on, will she take one brief intervention?
Andrew George: My hon. Friend has mentioned the manner in which the utility companies charge for their power. One further disincentive for those on low income is the advantage that is given to those who can pay their bills by direct debit, as those who live on the margins of credit clearly cannot take advantage of the various deals available to those who have no difficulty in that regard. If we are to wrap up a set of policies that help the less well-off, I would hope that this issue would be addressed as part of it.
Tessa Munt: I thank my hon. Friend for his intervention, and I ask the Minister to add that suggestion to my list.
I assume that it is Government policy, but I am unable to see where it is explicitly stated that all new homes and buildings should be carbon neutral and that that might in some way be reinforced by building regulations. I would like to be given some clarification on that point.
I also believe that it is crucial for assessors to have a duty to ensure the best for the individual customer. I am talking not about the best financial deal or the best deal for the provider, but about the best deal for the individual consumer. We should not be dependent on any one organisation to carry out those assessments, be it B&Q, Marks & Spencer or anyone else; consumers must have some protection and various options.
I would like the Minister to address one particular issue. Park homes have been mentioned and in my constituency there are quite a lot of mobile homes as well as 11-month homes, which are homes, perhaps on the coast, where people are able to live for only 11 months of the year. Do those buildings have any different arrangements? I am concerned about Airey homes and prefab homes, which are definitely not energy-efficient types of building in the first place. Are there special arrangements for them?
I am keen that there should be a tougher stance on private landlords. Private homes, certainly in my constituency, are often occupied by people who are unable to have social housing because there is so little of it. About 2,600 people are waiting for social housing in my constituency and as they have little hope of obtaining a social home of any sort, they move into the private rented sector. I would prefer it if a private landlord could not reasonably refuse any request to be part of the scheme as a huge group of tenants would be affected.
I was interested to hear about appliances, the need to replace many of them and whether that could be done more efficiently. I wonder whether the Government might consider some sort of scrappage scheme.
As I understand it, the Secretary of State has the ability to override offshore wind leases if requested by oil and gas companies. I want a clause that prevents that from happening or, if it is going to happen, provides a clear compensation mechanism for early termination. Otherwise, we will move away from having any investor security.
Finally, I ask the Government to accept the recommendations of the Committee on Climate Change. I hope that this scheme will achieve much more than any previous scheme has before.
10 May 2011 : Column 1112
8.30 pm
Barry Gardiner (Brent North) (Lab): The Bill is debated under the shadow of the report published this Monday by the independent Committee on Climate Change. The committee has been clear and it is authoritative: in order to achieve our 2050 target of at least 80% carbon reductions, we must adopt a 2025 target of at least 50% emissions reductions. That is the shadow that hangs over the debate today. The Business Secretary has clearly rejected that advice and his Liberal colleague, the Secretary of State for Energy and Climate Change, would, one hopes, wish to accept it. That is the split at the heart of the Government’s decision making on where to go with energy policy.
This is entitled the Energy Bill, but it is really a financial services Bill drawn up to enable energy supply companies to act as long-term finance providers for energy-efficiency measures with repayment coming from the anticipated savings on future energy bills. I have changed the speech that I brought into the Chamber this afternoon, partly because of the excellent speeches made by my hon. Friend the Member for Southampton, Test (Dr Whitehead) and the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Richmond Park (Zac Goldsmith). I thought they made excellent contributions and addressed very serious points.
It was, however, the hon. Member for Northampton South (Mr Binley), with whom I do not normally find myself in considerable agreement, who struck me as injecting a note of realism into the debate. We must consider carefully what the Government expect people in the country to do. It is generally accepted that on both sides of the House we would like the Bill to be effective. We would like to see it achieve its objectives in energy efficiency and energy savings. We all know the McKinsey cost curve and it is clear that it is far better to start at the left hand side and achieve the savings in the negative cost element of the curve before we go up to forestry, carbon capture and storage and so on at €60 per tonne.
Of course, we wish the Bill to be successful but we must have a note of realism about the likelihood of people taking on the loans that are on offer. Under the deal, a householder would engage an independent energy assessor to advise on the level of savings that could be made by efficiency improvements. The householder would then take out a loan by entering into a contract with an energy company that paid for a provider—it could be the energy company itself—to fit those energy-saving measures. We know that the energy companies have said that they have serious reservations about the effect that that would have on the rented sector. My hon. Friend the Member for Southampton, Test made some very apposite remarks in relation to that sector.
Are we being realistic in expecting citizens to take out loans to make anticipated savings on future bills which are, by their very nature, uncertain? Let us look at DECC’s own projections. It has calculated the green deal financial costs as being cheaper than a “market personal loan”, but they could be as high as 11%. My hon. Friend showed a range of interest rates between 9% and 5% and the differential that one might achieve for those rates, but why would a householder take out a loan at 9% to make the changes when it would be cheaper to put it on their mortgage over 20 or 25 years?
10 May 2011 : Column 1113
Nicola Blackwood: I share the commitment to creating the best incentives possible within the Bill but I think the hon. Gentleman is rather underselling the citizens of this country. Citizens in Oxford West and Abingdon are certainly committed to tackling climate change and I feel that they will undertake some of the financial commitments suggested within the Bill—indeed, many of them already have. Amazing examples have been set by community groups such as Low Carbon West Oxford.
Barry Gardiner: The virtue that the hon. Lady’s party usually claims for itself is that it adopts a hard-nosed business approach to things, so I offer her a hard-nosed business approach. If a householder were offered a deal at 9% over a period of 25 years, why would they take that up if they could take out exactly the same capital amount needed to fit the elements required to achieve the savings that the policy is designed to achieve but at the rate they are getting on their mortgage, which might be 4%, 5% or 6%? The simple point is that householders can already make the changes we are discussing at a lower cost than is offered in the green deal that her Government propose.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): Has my hon. Friend seen the YouGov poll that was released today in which only 7% of the people polled said they would take up the green deal if the interest rate was set at 6% or more?
Barry Gardiner: I am grateful to my hon. Friend. I want to assure the Minister and all hon. Members present that I have no intention of talking the measures down. What I want is realism about their likelihood of success. Polls are polls—they are what people say about their future action, but I am not trying to present such evidence. I am simply asking hon. Members to look at what people are doing at the moment. They have the opportunity now to take out money on their mortgages and do exactly what the green deal is offering but at a lower rate of interest, and very few people are doing that. I do not want to talk this down, but I do want realism.
One has to look at this issue in the context of the Government’s overall policies. Of course, it is right that we should look at efficiency savings and energy reduction, but look at the cuts to the Carbon Trust: they do not sit easily with a Government policy of rigid focus on energy reduction. One of the premier schemes, which has been in place for a long time, is being cut. Look at the carbon reduction commitment—a very good scheme that was initiated a couple of years ago to incentivise businesses to lower their carbon emissions, which was welcomed by the CBI and the Institute of Directors. A billion-pound saving was going to be made and then recycled into those businesses. It was revenue neutral.
What did the Government do? They came in and said, “Thanks very much. We’ll have that billion pounds. We won’t recycle it into business.” They did two things: they destroyed the incentives that the businesses had in the first place to reduce their carbon footprint, and they also destroyed the trust that business had in the Government not changing the goalposts. One of fundamentals that we have heard throughout our debate today is the importance of maintaining a stable investment framework going forward. I appeal to the Government to think about everything they said in opposition about stable fiscal regimes and the need for certainty for business. Their actions in government have gone against that.
10 May 2011 : Column 1114
The hon. Member for South Suffolk (Mr Yeo), the Chair of the Energy and Climate Change Committee, made the point forcefully when he talked about the changes to the solar PV scheme. The important thing is not the changes themselves. It is understandable why those changes were made. The Government did not wish to see businesses profiting from the scheme that was intended primarily to be a domestic or small-scale scheme. That is not the issue. The issue is that they changed the goalposts and destroyed the confidence that business investors had in that area. That is what the Government are doing.
The Bill calls itself an Energy Bill. I am afraid that does not sit well with a coherent energy policy. If this were an Energy Bill, it would address energy much more in terms of electricity market reforms—again, those were referred to by the Chairman of the Select Committee. We should be looking at what sort of structure there is to the energy market in this country. We have a vertical integration of generator and supplier that is destroying the attempts to bring renewables into the mix, yet the four pillars of the Government’s proposals leave that market intact. It is not a reform of the electricity market; it is tinkering around the edges.
What is needed is a genuine reform of that market. That is what the Government are not doing. What is needed is a move to a pooled supply where it can be seen that companies are selling in a transparent and liquid market. At present it is an illiquid market which lacks transparency. That is why the big six are able to rip people off. The Government must do much more to claim that the Bill is an Energy Bill. They must have an energy policy, and the Bill shows that they do not. They are tinkering. Nero fiddled while Rome burned. The Government are fiddling while the planet does.
8.43 pm
Oliver Colvile (Plymouth, Sutton and Devonport) (Con): Thank you, Mr Deputy Speaker, for calling me to speak on Second Reading of the Energy Bill. I declare an interest, as I retain shares in a communications company that specialises in regeneration and development.
Over the past 15 years I have seen first-hand how the green agenda has risen up the political agenda and how developers have reacted to increasing environmental demands. Whereas most businesses are keen to keep their costs down and avoid regulation, I have noticed that the moves to improve environmental code levels have come about only because politicians have challenged the development industry to meet these improvements. To encourage private inward investment in this new sector and for developers to include windmills, solar photovoltaics and other energy-efficient schemes, it is important that we do not send a confused set of messages to potential investors.
As an aside, I recently received correspondence from a developer in Plymouth who is concerned that the decision to reduce the higher feed-in tariff from 29.3p to 8.5p by 1 August this year could make his business model unviable and waste his original investment. That would be an enormous shame. I have written about this to the Minister of State, my hon. Friend the Member for Wealden (Charles Hendry), and look forward to receiving his reply.
10 May 2011 : Column 1115
The Stern report, which the previous Government commissioned, clearly set out the global implications of collectively taking no action. The increasing incidence of floods and storms in some of the poorer parts of the world will have a significant impact on helping third-world countries. I welcome the measures set out in the Bill, which will help us to play our part in reducing CO2 emissions by saving energy. Specifically, I welcome the creation of a new manufacturing industry. My constituency of Plymouth, Sutton and Devonport is very dependent on the public sector and needs to use this initiative to help rebalance its economy. As one of the major global players in marine scientific research, it is well placed to help deliver the Government’s green deal by becoming a manufacturing centre for renewable products.
In the 1990s, Cambridge university set up a series of research companies that specialised in genetics. The companies were then sold to the likes of SmithKline and Glaxo to develop pharmaceutical products that helped to build the biotechnology industry we have today.
I have argued for some time that Plymouth needs to develop similar clusters of renewables industries within our travel-to-work area, which will help us to turn the tide in this low-skills and low-wage economy where 38% of the work force are dependent on the public sector. Our university, with its fine reputation for marine science research, should be the catalyst for this economic regeneration. However, to achieve this, we need the Government’s help across a number of Departments.
Later this summer, my hon. Friends in the Ministry of Defence will publish the results of the base-porting review, which I hope will identify parts of the naval estate, especially in South Yard, that are not needed for defence and could be used to realise Plymouth’s full economic potential. Last week, Defence Ministers announced that Plymouth’s seven Type 23 frigates would not be transferred to Portsmouth for the foreseeable future. That is excellent news for a naval garrison city that prides itself on the role it has played in the defence of our country. The Royal Navy’s role in that part of the south-west is a key ingredient in creating this cluster of marine industries. It is part of a commercially focused agenda, working with the private sector, Plymouth city council, Cornwall council and academic partners to create a dynamic programme that can bring ocean renewable energy to the world.
Our vision in that part of the south-west is to exploit domestic and international markets for offshore wind, wave and tidal energy. That will enhance trade and industry policy and the low-carbon skills and jobs agenda and will help us to address the urgent need for climate change mitigation and adaptation. We need to develop products that can be sold not only in our domestic and European markets, but to China, India and emerging economies. That is something that we should most certainly concentrate on in a big way.
We also need joined-up thinking between the Department of Energy and Climate Change, the Department for Business, Innovation and Skills and the Treasury, and we must ensure that we give an important role to the green investment bank to create businesses that will be worth hundreds of millions of pounds in coming decades and help the UK maintain is current commercial and intellectual property advantage.
10 May 2011 : Column 1116
The MOD and the Navy are well placed to benefit from sharing physical assets in Plymouth: low-carbon energy supplies in our dockyard and the presence of service industries, such as Babcock International and Serco. We need to explore a new commercial relationship between the naval estate and potential wealth creators. Those companies and their supply chains, which are largely made up of small and medium-sized enterprises, will benefit from future enterprise zone status in Devonport and elsewhere in Devon and Cornwall. I believe that it will help us to grow defence-related and civilian businesses and marine and renewable energy to the joint benefit of the country’s future military and energy security.
The Minister of State will be aware of our increasingly unstable and insecure world, with growing threats of climate change, terrorism and economic instability, and we need only to remember what happened when Russia decided that it was going to hold its next-door neighbours to ransom, but to build greater economic, social and environmental security, as well as commercial and trade advantage, we need to ensure that the relevant Departments work together effectively. In order to realise those opportunities, I hope that my hon. Friends will be able to work with me and other interested parties to establish the UK’s first marine energy park in Plymouth and the south-west as soon as possible.
I am delighted that my hon. Friend the Minister has agreed to come to Plymouth later this year to see for himself how we can deliver that economic regeneration. I firmly believe that together we can create a series of green manufacturing businesses in the south-west and help to regenerate our economies in order to improve our skills.
8.50 pm
Tom Greatrex (Rutherglen and Hamilton West) (Lab/Co-op): I, like many other Members on both sides of the House, welcome large elements of the Bill and support its general aims. As the hon. Member for Bracknell (Dr Lee) said, the challenges we face in dealing with energy policy cannot be safely confined to a five-year term, and much of the Bill builds on the work that my right hon. Friends the Members for Doncaster North (Edward Miliband) and for Lewisham, Deptford (Joan Ruddock) did in the previous Government. I am pleased to see some of that being built on and developed in the Bill and in other aspects that the current ministerial team is taking forward, and I hope that that helps to bring some cross-party support to elements of it.
There is huge potential in the green deal, which is a significant part of the Bill, and we want it to work. The aims are laudable, and they have been lauded by Ministers. There is the potential not just for energy efficiency, for wider environmental reasons, but for a positive impact on poorer households, in particular, including people with dependants, long-term conditions and a greater need for domestic heating. Many live in properties, such as those in my constituency and in other parts of the country, that by age or design are inherently inefficient. There is huge potential, and that is why, as many contributors have said today, we want to see the green deal work.
I hope that the Minister will acknowledge, however, that some significant gaps still need to be filled, including those on how the green deal will end up working, and, as many others have said, on the crucial issue of the
10 May 2011 : Column 1117
interest rate. Its impact on what can be managed within the deal has caused concern to many within and outside the House. I hope that Ministers can provide us with further enlightenment on that, if not this evening then in Committee, so that when we return to the Bill we are able to reflect on proposed legislation that is more detailed and comprehensive than that which is currently before us.
I have listened carefully to today’s contributions, and to the Secretary of State’s responses to earlier interventions. My constituency includes many properties in which cavity wall and loft insulation are unsuitable, because they do not have lofts and their walls are too old for insulation. That is the case in many others places, too, and that is why the detail of the proposals is so significant.
I hope the fact that the Bill has been through the other place without that detail will encourage Ministers to find out how the gaps can be filled, and I hope that the work can be done in the bipartisan way that the Bill’s origins and aims naturally dictate. That is why we can support the aims of the Bill and the green deal, but we do not as yet have the confidence safely to proclaim that they will work. There is an obligation on Ministers to help us to reach that position. I am sure that I speak for most, if not all, Members in saying that we want to be in that position on this very important matter. As the Chair of the Select Committee, on which I was privileged to serve briefly at the start of this Parliament, made clear, the need for certainty also has an impact on some of the investment decisions that will help to make the most of the potential of the green deal.
As several hon. Members have said, there are problems relating to energy companies’ tariffs. The Bill includes a requirement that companies must provide information on their bills about the cheapest tariffs, if that is not done voluntarily. I am not sure that goes far enough in dealing with an issue that frequently comes to my attention in my surgeries when I see constituents who have been frustrated and confused by what they are told by energy companies. They are baffled by what their bills mean, having been told by suppliers that they would be saving money but end up paying much more. There are dozens of different tariffs for each energy supplier, and social tariffs are probably the least known about among those who need them most. Research carried out by Consumer Focus shows that many consumers not only do not understand the detail of their energy bills but do not necessarily trust the energy companies to provide them with the most accurate information.
In my constituency, we are fortunate to have Lightburn Elderly Assistance Project, or LEAP, which provides help and support to elderly people, including on energy efficiency. It does a superb job in being able to get into the detail of what tariffs people are on and whether they are the most appropriate ones for them. I am sure that other organisations in other parts of the country perform a similar role and are similarly useful and helpful. However, they will inevitably only ever touch the tip of the iceberg of people who need and will benefit from that advice and that degree of specialised knowledge. It would be much better if we were in a position where some of the vagueness and evasiveness were removed from the information that energy suppliers provide to their consumers, which often leads to mistrust and confusion, and to people who have the lowest level of financial literacy paying the highest tariffs when they
10 May 2011 : Column 1118
can least afford it. That problem needs to be addressed. I am sure that there will be an opportunity to do so in Committee, and perhaps appropriate amendments will be tabled.
It would be wrong not to refer to the role that Consumer Focus has played. That is not covered directly in the Bill, nor is it the responsibility of the Ministers in charge. Nevertheless, it is a cause of regret and concern to me and to many others that the decision to abolish Consumer Focus and roll its functions into citizens advice bureaux might leave us without the specialised knowledge that has benefited consumers by providing expert and helpful guidance.
The Bill has laudable aims. The green deal is a laudable policy and a mechanism that many Labour Members hope will work. However, I have to say to Government Members, following their earlier remarks, that it is not partisan to point out that detail is still required, work is still to be done, and confidence is still to be infused. I hope that, as the hon. Member for Northampton South (Mr Binley) said, Ministers will consider the important issues highlighted by Opposition Front Benchers and others, which need to be addressed in the attitude that the Government take to the Committee stage so that when we come to debate the Bill again—it has already been through the other place—it will be improved, it will be more comprehensive, and it will help to give Members on both sides of the House the confidence to be able to support its most significant measures.
There is an energy challenge in this country, and I have congratulated Ministers before on being adept at facing up to that. It is a shared challenge that crosses party boundaries, and it is in the interests of all our constituents that we address it. I hope that we can do that by constructively filling in some of the missing detail in Committee. As has been said, the Opposition will find it difficult to support the measures without that detail. I hope that Ministers will be constructive in responding to this debate and in Committee.
9 pm
Chris White (Warwick and Leamington) (Con): I am pleased to speak in this debate because I believe that this issue is extremely important for our country. It is perhaps the most important issue that we face. In the midst of dealing with a difficult economic situation, restoring strength to our society and empowering local people, we also face the threat of climate change and the need to move away from our dependence on fossil fuels and towards being a greener, more energy-efficient country. The UK has rightly taken the lead on this issue, and the Bill is a welcome step in the right direction.
I am also pleased to speak in this debate because my constituency has great potential as an energy hub. Major national companies such as National Grid, Calor Gas, Wolseley and AGA, and a range of smaller companies such as Encraft, are located around my constituency, providing employment and a potential source of growth.
The Bill marks a significant step forward, but no one can expect it to be the golden bullet. It can only be part of a wider agenda to create a greener energy infrastructure. It is important that we have the strongest Bill possible to build on in the years ahead.
10 May 2011 : Column 1119
I wish to discuss fuel poverty in particular. In a written parliamentary question, the Department of Energy and Climate Change calculated that about 6,500 households in Warwick and Leamington—about 14% of households —were living in fuel poverty. Across the west midlands, it is calculated that about 65,000 homes may suffer from excessive cold, which costs the NHS about £12 million a year.
I am pleased that the Bill will create a framework to tackle that problem. The energy company obligation will provide a means to support the poorest and most vulnerable households in the country, who would not be able to make their homes more efficient without help from energy companies. The green deal, which will help millions of households across the country, is a welcome development, but we need to ensure that no one is left behind. The energy company obligation will ensure that we bring every home possible into the 21st century. Moreover, the most energy-inefficient households are often the poorest. It is in those homes that the greatest impact on carbon emissions can be made, and it is right for the Government to focus on them.
I believe that the Bill should be more ambitious. If we are to see real progress on climate change and green energy production, we need to ensure that it is carried out at local level. People across my constituency are proud of the efforts that we have made to increase recycling. Many people want more to be done to make our community greener and more energy-efficient. About 80% of UK emissions are generated by local activity, from heating our homes to getting to work. This is an opportunity for councils to make a difference, co-ordinate local activity and give local people a chance to set priorities.
Like many of my colleagues, I believe in localism. I believe that the Bill is an opportunity to set ambitious targets for local authorities and enable them to focus on one of the biggest challenges that our country has ever faced. A scheme that allowed local communities, through consultation, to put together their own budgets, and bound them to reductions that they believed to be sustainable, would be an excellent way forward, and could result in considerable reductions in carbon emissions. I urge Ministers, who I know have had discussions with several organisations on this subject, to look at these proposals in more detail, and to consider amendments in Committee. We need to take action swiftly, and I believe that the Bill provides the perfect opportunity to rally people and local authorities.
9.4 pm
Julian Sturdy (York Outer) (Con): It is a real pleasure to contribute to today’s Second Reading debate. I have a long-held interest in energy-related matters, and I strongly believe that the Bill contains some really positive measures that, together, will lay the foundations for a fairer, more efficient and greener energy market across the country.
Although wide-ranging initiatives covering energy efficiency and the empowerment of the Coal Authority are present in the Bill, it is clear that it is only the first legislative part of the Government’s promised energy reform programme. Missing from the Bill—this is no
10 May 2011 : Column 1120
criticism of it—are provisions relating to the regulation of carbon emissions, the creation of a green investment bank and the security of energy supply, which I think is immensely important and on which a number of Members have touched. I see energy security, along with food security, as being the defining issue over the next decade. The decisions that we take in this Parliament will affect generations to come, so we have to get them right.
It is my understanding that, as the Secretary of State outlined earlier, a second energy Bill is planned for the autumn, to provide the missing pieces of that important jigsaw. In light of that assurance, I must confess that I am extremely optimistic about the Government’s energy ambitions, and thus very supportive of the Bill. However, I would not want to see the time scales in the Bill slip any further. Energy security must not become a political football, because it is far more important than any party politics.
I wish to focus my thoughts on the attempts in the Bill to improve energy efficiency. Such improvements must be made if we are to meet our international and domestic climate change targets—after all, energy efficiency can play a major role in cutting energy use and emissions of harmful gases. Alongside our requirements to meet international targets, we must tackle once and for all the tragic and unnecessary problem of fuel poverty here in our own towns and cities, and we must also bear in mind the often vast financial cost of energy to ordinary households. Together, meeting legal targets, tackling fuel poverty and reducing families’ energy bills make up the triangle of criteria by which we must scrutinise the Bill and judge its success.
In discussing a new approach to energy efficiency, it is worth briefly reviewing previous policies and schemes. The decent homes programme and the Warm Front scheme are two examples. I strongly believe that lessons can be learned from those programmes, particularly Warm Front. I have recently been actively engaged with Warm Front through the provider of the scheme, Eaga, on behalf of local constituents.
As hon. Members will be well aware, Warm Front offers grants to enable certain households in fuel poverty to install energy efficiency improvements such as home and loft insulation and heating measures. Unfortunately, in my constituents’ case, applying to Warm Front to get a new boiler to replace one that was broken took over 13 months. The paperwork was burdensome, and the inefficiency and bureaucracy of the system beggared belief at times. Spending on the Warm Front scheme and its predecessors has totalled £2.6 billion between 2000 and 2011, yet at national level too many homes, particularly in vulnerable communities, remain poorly heated and insulated. I urge the ministerial team to ensure that future schemes under the new proposals are accessible to more people, easier to follow and less bureaucratic in nature. Even those simple changes would, in my opinion, encourage households to take advantage of such Government-led measures.
For the time being, despite huge investment in various schemes, the simple truth is that too many properties continue to achieve very poor energy efficiency ratings. We must embark upon a new pathway, and the Bill provides us with a perfect opportunity to do so through the green deal. To coin a phrase, it is a game changer.
10 May 2011 : Column 1121
The green deal clearly has a mammoth task ahead. I am excited about the realistic tone, and the practical and flexible nature, of the policy. The current lack of investment in efficiency priorities is not only the result of poorly administrated Government schemes such as Warm Front, but because too many households have been put off by the time and money that it takes to benefit from implementing energy efficiency measures.
When tapping into the green deal, customers can take advantage of up-front money to make responsible energy efficiency improvements. Repayments will be attached to energy bills at the property, rather than the individual having an obligation to pay the money back or pass the cost of improvement on to a future owner of the property. That is an important part of the Bill, because it is increasingly clear that the younger generations move more frequently and more widely than generations before them. That simple measure will in effect encourage participation in the green deal through the flexible transfer of responsibility for repayments to whoever benefits from efficiency savings. Although I am very much in support of the principle, I look forward to more detail as the Bill develops.
I am conscious of the time, and that other hon. Members want to speak, but I shall add another note of caution, which my hon. Friend the Member for Northampton South (Mr Binley) mentioned earlier. There should be further incentivisation measures in the green deal. As the CBI has said, there is concern that the policy, which is a truly exciting one, could become a lame duck if people are not truly engaged to take it up. We must not let that happen, because the consequences are too important.
We should not understate the importance of making a breakthrough in improving energy efficiency in this country. It is therefore imperative for the Bill to win cross-party support and progress successfully. I have been heartened by many of the comments made on both sides of the House this evening. If progress is made, the framework to establish the green deal will be in place, and we can be far more optimistic about meeting our emissions targets, reducing energy bills, tackling fuel poverty and contributing to a greener and fairer energy market. I hope that Members on both sides of the House support those objectives.
David Mowat (Warrington South) (Con) rose —
Peter Aldous (Waveney) (Con) rose—
Mr Deputy Speaker (Mr Nigel Evans): Order. Two hon. Members are yet to speak. Perhaps they could divide the time left between themselves. The winding-up speeches will begin at 9.30 pm.
9.13 pm
Peter Aldous (Waveney) (Con): The Government are to be commended for introducing ambitious legislation, for thinking outside the box and for highlighting the importance of realising the potential for Britain to be a world leader in the move towards a low-carbon economy. The Bill contains a wide variety of measures that can help Britain in that aim, including the promotion of smart meters and the move towards greater transparency for energy companies.
10 May 2011 : Column 1122
The ministerial team are to be congratulated on adopting an open-door approach in explaining their proposals and listening to parliamentarians’ views and concerns. I very much hope that that approach continues in Committee, because although the Government’s ambition and strategy are spot on, we need to look closely at some of the provisions to establish whether they need strengthening so that the Bill achieves its objectives.
It is appropriate for the Government to concentrate much of their efforts on domestic buildings, because 24% of the UK’s carbon dioxide emissions come from the domestic building stock. The flagship green deal is a bold attempt to improve the nation’s housing stock, and giving it every opportunity to succeed is vital.
However, there are a variety of issues to which I would be grateful if the Minister could give further consideration. The CBI, among other organisations, has suggested that there is a need for incentives to encourage take-up of the green deal. I am aware that the Chancellor has indicated that he will look at that. Incentives could include changes to stamp duty, VAT reductions on some works, and council tax rebates.
I would also be grateful if the Minister could consider whether the green deal should include renewables and microgeneration, both of which have important roles to play in the move towards a low-carbon economy. It is also important to consider accepting the warm homes amendment, because the production of an overall plan and strategy kept regularly under review would generate confidence in the green deal and encourage its uptake.
The private rented sector requires specific consideration. Buildings in this sector are more likely to be pre-1919 properties, and thus there is a limit to the energy efficiency improvements that can be made. However, there are other significant challenges in encouraging take-up of the green deal in the private rented sector. First, there is the problem that the initial cost of the works will be borne by the landlord, with the benefits of reduced fuel bills going to the tenants. Secondly, with many tenancies being short term in nature, investment is understandably unattractive to tenants. Thirdly, there is the worry that in the past a non-regulatory approach has invariably not worked. We need to consider how the green deal sits alongside existing tenancy laws and whether legislation is required to encourage landlords to take it up. When the Bill was being considered in the other place, the Government stated that the position would be reviewed after 12 months so that it could be decided whether further legislation was needed requiring landlords to take up the green deal. I welcome the further proposals that the Secretary of State has brought forward today.
I believe that the warm homes amendment has merit, and that consideration should be given to imposing the 2016 deadline for providing minimum energy efficiency standards in the private rented sector, after which landlords will not be able to rent out the worst-performing properties. The warm homes amendment would strengthen the Bill by helping to provide a minimum standard for the private rented sector, and it would help to provide more certainty to businesses expected to deliver the green deal. It is supported by the Federation for Small Businesses and the Federation of Master Builders, and would provide a clear direction for businesses and help to drive the take-up of low-carbon skills across the construction sector.
10 May 2011 : Column 1123
Although the green deal applies to non-domestic buildings, research carried out by surveyors Cyril Sweett has revealed that the nature of many buildings, such as schools, offices, industrial units and retail warehouses is such that not enough savings will be made to pay for improvements, and that thus they will not qualify for the green deal. Although the green deal will therefore largely apply to domestic buildings, it is important that the UK’s non-domestic buildings are not overlooked as they seek to reduce emissions and energy bills. I therefore urge Ministers to consider carefully the proposal made by the British Property Federation and the UK Green Building Council, which have highlighted an anomaly concerning public sector and private sector buildings: the former are obliged to provide display energy certificates, while the latter are not. The BPF and the GBC believe that a voluntary approach to take-up in the private sector will not work and are of the opinion that it is vital for the Government to provide mandatory DECs. I urge the Government to consider their representations.
It is important that the Bill is framed in such a way as to provide opportunities for small business to play a full role in the roll-out of both the green deal and the energy company obligation, and to ensure that they are not squeezed out by energy suppliers and large companies. There are significant job opportunities for small businesses, ranging from carrying out the energy surveys to installing many of the energy saving works. There is a need for both training and the building up of capacity within the sector in the lead-up to the introduction of the green deal in the latter part of 2012, while with the ECO there is the need to avoid a monopoly situation. There is also a need to encourage banks to provide funding for small and medium-sized enterprises, so that they can get involved in this major opportunity that will help to kick-start the construction sector. With the ECO, it is important to improve access to the market for independent suppliers, and consideration should be given to earmarking a proportion of the obligation for non-obligated suppliers.
Finally, I would be grateful if in Committee the Government could consider addressing a situation that is handicapping the offshore wind sector, which has an important role to play in my constituency. Currently a clause exists in the leases and agreements for lease for offshore wind projects that allows a switch from offshore wind to oil and gas to take place should new oil or gas reserves be found. In that situation, no compensation is payable to wind developers. The existence of the clause continues to cause major problems for offshore wind projects that are seeking finance, with the result that banks view such projects as higher risk than necessary. This comes at a time when both industries are seeking to develop areas of the seabed that are close to each other or even overlap. Efforts to work together to prevent problems will be meaningless unless a fair and clear framework is established in situations where co-existence is impossible. There is an urgent need to ensure that the matter is resolved quickly, through the creation of an early termination mechanism, which would detail how compensation would be paid to the wind developer if a lease is terminated. I urge the Government to take action on the issue now. It has been dragging on for some years and it is important that it should now be resolved, at a time when the offshore wind industry in the UK is rapidly expanding and when
10 May 2011 : Column 1124
companies are looking to make investment decisions. The Energy Bill is an ideal vehicle to tackle the problem.
The Government have the ambition to be the greenest Government ever. I believe that this goal can be achieved if they take on board the helpful suggestions made by right hon. and hon. Members from all parts of the House during the debate this afternoon and this evening.
9.21 pm
David Mowat (Warrington South) (Con): It was not clear to me this evening whether I would make the remarks that I want to make, because it occurred to me that they might be more apposite to the next energy Bill. However, I want to make a few points that perhaps have not yet been made.
First, on the context and the legacy with which this legislation is kicking off, we have heard about two dates this evening. We have heard about 2050, which is the date by which we must reduce our carbon emissions by 80%, and 2020, which is the date by which renewables must account for 15% of electricity generation. However, we have heard less about another date that is equally important, which is 2017 or thereabouts, which is the date by which we will start having power cuts unless we put in place measures to stop that happening.
I have two other pieces of legacy data for the House. Currently, 0.5% of our total energy production comes from renewables. It is also true that 7% of electricity generation comes from renewables, but 0.5% is the measure of what we have to achieve over the next 40 years to meet that 80% reduction. Roughly speaking, even if we achieve a 40% reduction in energy use through such excellent measures as this Bill, we will need to scale up renewables by a factor of about 50. That is absolutely massive.
Although we have talked about fuel poverty, another thing that has not been mentioned in this debate is the fact that energy prices in this country are among the highest in western Europe. Our starting point is that our industries and our people pay more for fuel than others. In particular, those in competitor countries such as France have had cheap, plentiful nuclear power for many years, and they pay less than us. Why does that matter? It matters because we are trying to rebalance the economy towards manufacturing, and a unit of GDP generated from manufacturing requires more energy than a unit of GDP generated from services. That is a further challenge that we have to face.
Broadly speaking, Government policy has two thrusts to it, one of which is energy reduction, which is dealt with in this Bill through the green deal. Our target is to reduce total energy use by some 40%, and that can be achieved—the Royal Academy of Engineering is certainly of that view. Part of that will involve the measures that have been discussed at some length this evening, but part of it will involve, for example, smart meters and smart grids, and all that goes with that.
The other part of our strategy to meet the challenges that I have spoken about is the fact that we are about to manage the market. Why are we managing the market? We are doing so because if the market were left alone, we would end up using gas. That much is clear. Using gas would not be disastrous for our climate change objectives, given that so much energy comes from coal and oil, and that gas is 50% better in terms of carbon
10 May 2011 : Column 1125
emissions, but that is nothing like enough to meet our statutory targets. That is why the strategy on the mixture of renewables, nuclear and carbon capture is important. One of the oddest things about the whole energy debate is that we talk about nuclear and renewables as though they are competing with each other, when we clearly need both. If anything, they are both competing with fossil fuels. The default solution if we react slowly is that we will have to use gas, because that can be obtained relatively quickly.
I have a couple of observations on the Government’s strategy. One relates to urgency. We have heard numbers relating to how quickly we need to implement the green deal, but I do not believe that the 2017 deadline is being treated with sufficient urgency. I was at a meeting recently with some nuclear supply chain people in my constituency, and I was disappointed to hear that they did not believe that any effective nuclear new build would start for at least another year, although time was ticking away. An ex-colleague of mine in Shell once told me that the chief executive officers of the utility companies were quite sanguine about the fact that all this was taking so long, because they had nothing to lose from our inertia. When the time comes, what they have to offer will cost even more. It is important that the Government should take the initiative, rather than leaving this to the utilities, because it would be a perfectly viable strategy for a utility CEO to take their time over this.
Another aspect of the strategy is cost. We have not said a great deal about the differential costs of the different kinds of energy. Energy has to be environmentally sustainable, but it also has to be economically sustainable. I leave the House with the thought that the brilliant technical achievement of the Thanet wind farm, which is a tremendous thing, is going to cost £1 billion in subsidies over its lifetime. It does not produce that much electricity, and its actual cost is therefore very high indeed. Some of the hon. Members who have spoken about fuel poverty today might like to reflect on the fact that a starting point for fuel poverty is when our power costs more than that of other people in the first place.
A third element of our strategy is our approach to technology. Possibly the most impressive technological breakthrough in energy in the past 30 years is horizontal directional drilling, which, combined with a fracture technology, is enabling shale gas and coal gas to be discovered in quantities that would be of material use to the US and the UK, but I am concerned that their use is not forming part of our approach. Perhaps a wider point on technology is that I believe that we should be a fast follower, rather than being at the leading edge—or perhaps the bleeding edge, as one might say. Carbon capture and storage was mentioned earlier. Of course it is a good technology, but it is unproven, and there are other technologies out there that we need to adopt more rapidly.
This all leads me to the subject of nuclear. There is no possibility that we could come close to meeting our 2050 commitment without a massive upgrading of renewables and nuclear. In fact, they go together. Renewables are, by their nature, somewhat intermittent, while nuclear has a very high base-load. The two can be put together quite well. I support the Bill. It is innovative, it is radical and it is right. I hope that it will result in a 40% reduction in energy use, but there is no realistic
10 May 2011 : Column 1126
alternative to nuclear and if we are to meet the 2017 deadline, it is important that we move faster, because 2017 will be here a lot sooner than 2020 or 2050.
9.30 pm
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): One thing has been proved in the course of this excellent debate—that the Government’s green ambitions are lofty, but that the green reality is far less certain. Just today, we read that the Energy Secretary cannot convince his right hon. Friend the Business Secretary to support the fourth carbon budget and Ministers cannot explain why the Climate Change Act 2008 is included in the list of burdens on businesses that are currently being considered for the bonfire. Ministers are in danger of presiding over a great green betrayal. We on the Opposition Benches want to help them to meet their green ambitions.
The message we hear consistently and very loudly from consumers, industry, green groups and trade unions is that there is no clarity or consistency of policy. Green jobs are being lost; green business is moving overseas; green non-governmental organisations are becoming increasingly alarmed and frustrated. As my hon. Friend the Member for Brent North (Barry Gardiner) eloquently said, Ministers are failing to provide investor certainty from one week to the next, let alone over the next couple of years.
The threat of climate change and fuel poverty grows greater. When we look back in a decade or more at the actions of the Energy Secretary and his Ministers, we do not want to see guilty men who had a golden opportunity to secure our green future. It is not us alone that are saying this. The CBI, for example, has said that the green deal
“has clear potential to help unlock…emissions reductions…But without significant action from government to develop an attractive proposition for businesses and households, this potential is unlikely to be realised.”
As it stands, this has all the dangers of being a deeply disappointing Bill. It could be so much more effective, but warm words will not deliver warm homes.
Let me deal with some of the important contributions made by Members of all parties. I hope that they will forgive me if I fail to do their arguments justice in the short time available. The theme most constantly revisited throughout the debate was the distinct lack of detail in the Bill. As the hon. Member for South Suffolk (Mr Yeo) mentioned, it is a great concept, but as my right hon. Friend the Member for Oldham West and Royton (Mr Meacher) said, the Secretary of State did not provide a satisfactory increment of information in his responses to the many interventions he took.
The Bill is a stab in the dark. Although the Government first published it no fewer than five months ago, none of the secondary legislation has been outlined, which leaves so many questions unanswered.
Many Members asked about the incentives to be made available to home owners and tenants to encourage take-up. The hon. Member for Richmond Park (Zac Goldsmith) referred to a possible stamp duty rebate, which was raised in the press as something that might crop up in the Budget, while the hon. Member for Northampton South (Mr Binley) referred to a possible council tax rebate.
10 May 2011 : Column 1127
A number of Members raised serious concerns about the maximum interest rates on the green deal. As my hon. Friend the Member for Stoke-on-Trent North (Joan Walley) said, this will be absolutely critical. I referred in an intervention to research and polling done by YouGov, showing that more than 40% of households do not believe that the green deal is an attractive proposition for them, and if the interest rate is above 6%, only 7% of people polled said that they would take up the green deal. We need to reflect carefully on that as we go into Committee.
Another big question is who is going to come into the home to assess the situation and to what level those people will be trained. The Secretary of State said that we can get lots of quotes for the green deal. That sounds fantastic, but who is going to pay for the different assessments of the home?
A number of Members, including the hon. Members for Bracknell (Dr Lee) and for Angus (Mr Weir), referred to the opportunities for small and medium-sized enterprises to take part in the green deal. This is crucial because SMEs, co-operatives, charities and social enterprises must have equal opportunities to participate in the scheme, but the Bill does not provide the detail on that. I am also keen to know what guarantees exist that millions will not be saddled with debts that they cannot afford.
Many Members asked a crucial question: after all the work is done, by how much will our national emissions be reduced? We tabled an amendment on that very issue in the House of Lords, which was rejected. I sincerely hope that the Government will revisit it in Committee.
My hon. Friend the Member for Brent North asked what might happen if a new householder or tenant arrived and the energy savings arrangement changed as a result. The Secretary of State made a joke about a Brazilian wife, but my hon. Friend had asked a serious question that needs to be considered. [Interruption.] It was a Brazilian husband or wife.
Ministers should already have the answers to the many questions that have been asked, rather than deferring them to more than 50 pieces of delegated secondary legislation. The Secretary of State referred to a watertight legal framework. We want and need that framework, but it does not yet exist.
Another key theme that emerged was the poor deal for the consumer represented by the Bill in its current form. Several Members, including the hon. Member for Northampton South, expressed concerns about consumer rights, and my hon. Friend the Member for Rutherglen and Hamilton West (Tom Greatrex) spoke eloquently about the confusion felt by his constituents about their energy bills and the implications of the forthcoming abolition of consumer support. If the Bill is not strengthened in that regard, the green deal has the potential to be a poor deal for the consumer. Consumer Focus has warned that it could erode consumer protections rather than enhancing them, and the consumer watchdog Which? has said that Ministers have yet to provide assurances that consumers will be protected from mis-selling and dodgy cross-selling, that they will have access to redress should something go wrong, and that they will not be expected to pay hidden charges. A lack of clarity on those issues will reduce take-up of the green deal.
10 May 2011 : Column 1128
Many Members also raised the issue of fairness in tackling fuel poverty. I do not have time to go into as much detail as my hon. Friend the Member for Stoke-on-Trent North and my right hon. Friend the Member for Oldham West and Royton, who made an innovative suggestion about how green deal payments might be met for the 5.5 million households in the UK in fuel poverty, but this is an important issue that urgently needs to be addressed.
According to Ministers and others on the Government Benches, the green deal will be a game-changer for fuel poverty—we heard that phrase a number of times—but that too is not yet evident in the Bill. The new energy company obligation, which underpins the green deal, will be targeted at hard-to-treat homes, but currently no amount has been ring-fenced for the purpose. It is worrying that there are no guarantees that the ECO will be adequate to deal with the scale of the problem, not least in the light of the concern raised by my hon. Friend the Member for Southampton, Test (Dr Whitehead) about the inclusion of the ECO in the Treasury’s cap on levies, which the Minister did nothing to assuage.
The hon. Member for Bracknell rightly drew attention to the need for more investment in renewables, referring specifically to marine energy. We know from the Pew Environment Group’s report, which was released only a few weeks ago and mentioned by my hon. Friend the Member for Hartlepool (Mr Wright), that in the past year the UK has fallen from third in the world to 13th in terms of investment. Just before the last election the Labour Government published a marine energy action plan, which is currently gathering dust on a shelf at the Department of Energy and Climate Change. I urge the current Government to resuscitate it and make the necessary investment in more renewables, so that we can take advantage of the £100 billion that is expected to be invested next year alone in renewables across the globe.
In his eloquent contribution, my hon. Friend the Member for Hartlepool spoke of the experience of businesses in his constituency and their concerns about the Government having to move quickly. I have mentioned the £100 million that will be spent next year, and he referred to the figure of $2.3 trillion, which is the amount that will be spent on renewable energies over the next decade. Businesses in his constituency are asking for a clear vision from Government, but they are not currently getting one, and I urge the Government to respond.
Several Members on both sides of the House talked about the private rented sector, and there are a number of relevant clauses in the Bill. Some 40% of tenants in the private rented sector live in F and G energy rated homes. We welcome the move to bring forward the timeline, but we hope we might revise that even further in Committee.
A report last week by Friends of the Earth gave a damning verdict. It talked about the great green betrayal and conducted an examination in forensic detail. The report makes it clear who it believes is to blame for what is happening. It talks about
“Liberal Democrats, who have clearly failed to use their influence inside the Coalition to ensure a better performance on the environment.”
This is not the greenest Government; it does not yet come close. With 27% of all UK emissions coming from homes, the Bill is not yet adequate for the task.
10 May 2011 : Column 1129
It is essential that the Secretary of State gets the green deal right. He said it was the first such deal in the world, but a similar scheme was set up in Australia. Unfortunately, it was a complete disaster. After 160,000 homes were fitted with substandard insulation, four people died and the scheme was scrapped. There is also a scheme in Germany where the take-up is 100,000 a year, but it has a Government-supported interest rate, which we are not going to get under the current Bill. Such issues must be revisited in Committee.
In spirit and in principle, we want to support the Bill. The hon. Member for Winchester (Mr Brine) tried to rewrite history earlier; it was, of course, the Labour Government who began to implement a pay-as-you-save scheme. In its current form, the Bill could end up being a wasted opportunity, but we will take the Minister up on his assurances that he will work across the Chamber to make it better. We will not vote against it tonight as we support its aim, and we will work hard and positively to make it better. In Committee, we will strive to convince Ministers to give consumers the protections they deserve, to give British businesses the confidence they require, and to build into the Bill the backbone that it so desperately lacks.
9.43 pm
The Minister of State, Department of Energy and Climate Change (Gregory Barker): I am delighted to hear from the hon. Member for Liverpool, Wavertree (Luciana Berger) that the Opposition will not vote against the Bill, but I will hold her to blame if my hon. Friends now start to disappear from the Chamber during my winding-up speech. She has just delivered a very polished debut from the Dispatch Box. I think that winding up is a much harder job than opening, but she made a very good fist of it.
I do not agree with the hon. Lady’s rather gloomy scepticism about this important Bill, but she was spot on in one respect: this has been an excellent debate, with powerful and substantive contributions from both sides of the Chamber. In saying that, I gloss over the opening speech of the shadow Secretary of State, the hon. Member for Hackney South and Shoreditch (Meg Hillier), whose contribution was out of tune with the debate we subsequently had. I was genuinely pleased by the way in which Members across the Chamber engaged in scrutinising these radical and far-reaching proposals, and I have to say it is telling to compare and contrast the shadow Secretary of State’s speech with the master-class demonstration by the leader of the Green party, the hon. Member for Brighton, Pavilion (Caroline Lucas), of what can be achieved in an effective and intelligent critique from the Opposition Benches.
This Bill is only the first step in the new Government’s plans to reshape and renew our energy economy, but it is certainly a very clear and substantial demonstration of the coalition’s determination to be “the greenest Government ever”. These measures will be vital tools in helping to meet our stretching carbon reduction targets and they underpin our determination to stop dangerous global warming.
The Bill, however, is no tree hugger’s charter, nor is it a narrow response to the science of climate change; it can provide practical help to families and money-saving improvements to every home in Britain. The British
10 May 2011 : Column 1130
housing stock, which for too long has languished at the very bottom of the European energy-efficiency league table, will be transformed. Finally, government will have a game-changing policy framework that is commensurate with the huge twin challenges of improving our housing stock and eradicating fuel poverty.
That said, I am very conscious of the fact that with this Bill we are putting in place a gigantic project that will stretch way beyond this Parliament and, we hope, the next too. The green deal framework is designed to continue well into the 2020s and beyond, so I do not pretend for a moment that this Bill will be the last word on the issue or that we have anticipated every eventuality. We will continue to consider new incentives and levers to drive the programme forward as the market develops and we reach towards that very ambitious level of retrofitting 14 million homes by 2020 and 26 million homes by 2030. But the long-term direction is clear: there will be no more short-term initiatives and no more stop-start schemes. Business certainty created by the green deal will be essential to unlocking the billions in private sector investment that will be key to this programme’s success.
I am keenly aware that responsible political consensus on the green deal is particularly desirable. I very much hope that, given the shared climate objectives among the parties, we can all show the same resolve and constructive cross-party engagement that was the hallmark of the Climate Change Act 2008. I listened carefully to the thoughtful speeches made by hon. Members on both sides of the House today, and I would be happy to engage in an informal evidence-based session before the House rises for the Whitsun recess. I noted not only the shared ambition that Members on both sides of the Chamber have for the Bill, but the detailed concerns and questions that have been raised. I hope to address many of these issues now. Where I am unable to do so, I hope to deal with them more seriously, and constructively, in Committee.
Broadly speaking, six main themes have emerged from today’s debate, and I hope to hear more about them in that informal session. The first was the scope of the coalition’s ambition, the scale and pace of delivery, and how we measure success. The second was the energy company obligation—the ECO—and the challenge of ensuring that we deal effectively with fuel poverty. Thirdly, hon. Members rightly urged robust consumer protection—that is absolutely essential. Fourthly, hon. Members strongly argued the case for more ways to involve local communities and local councils, and, importantly, challenged us on the provisions to tackle recalcitrant landlords in the private rented sector. Fifthly, we debated the enormous potential of the green deal to drive green jobs and green growth, and to create new investment opportunities. Finally, we must not overlook the importance of enhancing our national energy security, as well as moving our economy beyond dependence on foreign oil and expensive imported fossil fuels.