Caroline Lucas outline's some of the good intentions of the Energy Bill - but warns that lack of realism, PM neglect or Tory sentiment could undermine its aims.
Caroline Lucas MP is the leader of the Green Party
The Coalition’s green credentials have been firmly in the spotlight this week, with reports of a Cabinet rift over the UK’s climate change targets exposing worrying internal divisions on even the most basic foundations of green policy.
Despite David Cameron’s claim one year ago that he was to be the ‘fourth minister’ at the Department of Energy and Climate Change (DECC), there has been very little evidence to date that the prime minister is personally interested in the department’s brief.Tense negotiations between DECC and others in government who seem determined to resist even modest moves towards a greener economy have so far resulted in mixed policy messages and scaled-back aspirations.
Such tension is clearly reflected in the Government’s Energy Bill, which was presented for its second reading in Parliament by Secretary of State Chris Huhne on Tuesday. The Bill is promoted as an ambitious package to save energy and support vulnerable fuel consumers, deliver energy security and keep the lights on while moving towards a low carbon economy – although much of detail about how policies will actually work has been postponed to the “secondary legislation” phase.
The much hyped Green Deal is the Bill’s main attraction. As an idea, it has the potential to revolutionise the energy efficiency of our homes – addressing the fact that buildings account for one quarter of all the UK’s carbon emissions through an insulation and efficiency programme.
Yet, while I certainly support the level of aspiration voiced by the Secretary of State on Tuesday in his estimation that 14 million households will be insulated in the first phase of the Green Deal, it is very difficult to see how this could possibly be delivered through the current proposals.
Retrofitting 14 million homes by 2020 amounts to over 1.7 million homes a year, or about 145,000 homes a month – around 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%. As it stands, the UK’s Green Deal is based on market interest rates, which will be a lot less attractive.
If we are to achieve anything like these ambitions – ensuring that the Deal is an effective tool for reducing emissions and tackling the scandal of increasing fuel poverty, which now affects around 5.4 million households – it is essential that the Government uses the Green Investment Bank to back Green Deal loans so that interest rates can be brought right down.
Furthermore, given that one of the biggest barriers to getting home improvements like these done is the inconvenience and upheaval of the work itself, the Deal must be able to deliver whole-house retrofits, including microrenewables funded through feed-in tariffs and the renewable heat incentive.
Elsewhere in the Bill, the government states that the Energy Company Obligation (ECO) will be the source of funding for fuel poverty programmes, and is expected to provide around £2bn. But as this will be funded through a levy on consumers’ fuel bills, my fear is that it will put more people into fuel poverty than it takes out.
I welcome the assurances given by the Secretary of State that detailed proposals on Emissions Performance Standards for coal and gas fired power stations will be made clear in the Electricity Market Reform – but what a pity that the opportunity to set the enabling clauses in stone at this early stage was not taken. Not acting now risks a delay on Emissions Performance Standards until 2014.
The Bill debate was also a good opportunity to scrutinise proposals to address the dire state of housing in the private rented sector. Privately rented homes are often the least well insulated; people living in them are over four times more likely to be living in a cold home than people living in social rented homes. Half of all these properties are not considered to be of a “decent” standard by the Government.
Brighton and Hove, home to my constituency, has one of the UK’s highest proportions of this kind of accommodation. So I was pleasantly surprised to hear the Secretary of State reassure the House that new regulations will be introduced to impose minimum energy efficiency standards on rented properties through the Green Deal.
Although I’d like it to be done more quickly, from 2018 landlords will not legally be able to let properties with the worst energy efficiency ratings – G and F – which should mean improvements for around 682,000 properties.
The Energy Bill clearly has significant potential.The Green Deal, for example, could play a hugely important role in ensuring that we reduce greenhouse gas emissions from our homes, tackle fuel poverty and take serious steps towards meeting our climate change targets. But there are still significant shortcomings, and a obvious gulf between government hyperbole and proposed delivery which must now be addressed at the committee stage.
Let’s hope that coalition infighting over climate change targets – not to mention Tory anti-regulatory sentiment – will not prevent a greener energy future for the UK from becoming a reality.