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Energy: Green Deal and Energy Company Obligation

Volume 742: debated on Wednesday 30 January 2013


Asked By

To ask Her Majesty’s Government what estimate they have made of the impact on energy saving in the home of the Green Deal and the Energy Company Obligation.

My Lords, following its successful launch on Monday, I expect the Green Deal to revolutionise energy saving in our homes. It will transform the energy efficiency market, giving consumers real choice and control over how they can improve their properties. The new energy company obligation will ensure that those who struggle most to heat their homes affordably will get the help that they need. The reaction of industry and other groups has been more than encouraging. I am pleased with the warm reception from the party opposite for the Green Deal.

My Lords, I thank my noble friend for that reply. I agree that the Green Deal and the energy company obligation are innovative schemes, and I hope that they are very successful. However, there is one aspect that I am a little concerned about—the rate of build-up at a time when fuel poverty is still increasing. There may be a lapse before these schemes get fully under way. Would my noble friend care to comment on that aspect? In that connection, would she also comment on a number of reports that have come out on the fact that there have been some lay-offs in the insulation sector?

I begin by thanking my noble friend for his very warm welcome. The Green Deal targets energy efficiency schemes and is one of the most effective ways in which to tackle fuel poverty. That is why the minimum of 40% of eco will help to support low-income households. The eco-affordable warmth and carbon saving community obligations will support around 230,000 low-income households each year. The insulation sector as a whole has a real opportunity to grow from the success of the Green Deal, and we estimate that overall jobs in the sector will increase from the 26,000 recorded in 2011 to about 60,000 in 2015.

My Lords, interest rates for loans for home improvement under the Green Deal appear far higher than can be obtained on the high street. Both Homebase and the RBS, for example, offer loans at below 5% interest, whereas the Green Deal base rate starts at 6.9%. Can the Minister please explain why the Government have failed to negotiate a more attractive offer? Could she also inform the House how many people have signed up since the launch on Monday?

My Lords, this is a market-based deal. To be quite frank, it is really important that we allow consumers the choice of finding where they want to go for their finance, but this offer from the Green Deal Finance Company is available to 80% of the population. So it is a competitive rate, but if people want to source elsewhere it does not stop them from doing so. We also think that the energy company obligation with the extra £540 million attached to it will help those families who are not always able to access and source competitive rates. As for commenting on how many people have signed up, it was launched only on Monday, so it would be very predictive of me to be able to predict a figure for the noble Baroness at this stage.

Could I first congratulate the Minister on her colour co-ordination for this Question? She will recall that the Prime Minister made a promise in the other place that everyone would be guaranteed the lowest rate for their energy supply. Does that mean the end of competition?

First, I congratulate the noble Lord on his observation. It was not intentional. As always, the noble Lord is resplendent in his attire, too.

The Government are very much focused on ensuring that consumers get the best possible deal that they can source out in the market. It is not the end of competition —it is actually more encouraging of competition. I hope that the noble Lord, when he accesses the Green Deal, as I very much hope that he does, will see how easy it is for consumers to be able to take control of their own destinies by being able to control how much they spend on their energy bills.

My Lords, while the Green Deal may or may not help the poorer sections of our community, the huge subsidies paid for the installation of wholly inefficient wind turbines, which will make no measurable effect on world CO2 levels, are making British industry uncompetitive and, as the noble Lord, Lord Ezra, said earlier, putting millions of households deeper into fuel poverty. Surely it is time that the fiasco of some parts of the energy-saving programme inherited as it has been by the present Government were reviewed.

My Lords, I think that the noble Lord’s question is slightly away from the Question on the Order Paper. I remind him that, as a country, we need a mixed source of energies, and wind is one of those sources.

My Lords, I know that the noble Lord is very keen on voltage optimisation. I remind noble Lords that it is an area that we have looked at, and continue to look at.