15:18 Mr Laurence Robertson (in the Chair)

It is a pleasure to serve under you, Mr Robertson, albeit remotely. Apologies if I am improperly dressed. I thank the Chairman of Ways and Means for allowing the debate to take place, because it was postponed as a result of Prorogation happening a day earlier than previously planned. I am grateful for that flexibility. I am moving the motion because, as Chair of the Environmental Audit Committee, I have a particular interest in energy efficiency and the contribution that it needs to make to enable the country to meet our net zero obligations.

It is hard to overstate the scale of the challenge presented by the need to improve the energy efficiency of our homes. The UK has one of the least efficient housing stocks in Europe. Domestic properties account for almost a fifth of the UK’s carbon emissions. There are 29 million homes across the UK, 19 million of which do not meet the energy performance certificate C rating. Even those that do, in many cases, do so without effective insulation and so could do better. The Climate Change Committee has said that the UK’s legally binding climate change targets will not be met without the near-complete elimination of greenhouse gas emissions from UK building stock by 2050.

Failure to address, with urgency, the energy efficiency of the country’s homes could seriously jeopardise our emissions, now enshrined in statute to be net zero by 2050. The Government know that, having been elected on a manifesto that allocated £9.2 billion to be spent during this Parliament on improving heat in buildings, only a third of which has been allocated now that the green homes grant scheme has been ended. The funding needs to be deployed in new, more flexible, more enduring and more realistic schemes, as I shall touch on when I conclude my remarks.

This replacement scheme will need to endure for several years and be free of bureaucratic obstacles. Alongside that, an overhaul of energy performance certificates is needed to make sure that progress towards decarbonising our homes is not penalised. The Government’s recent response to our report frankly raises the stakes for the heat in buildings strategy, which is due to be published; it has been much delayed, and we would like to see it published as soon as possible. We very much hope that we will not be disappointed by that strategy, and that tangible action to implement it, backed up by Treasury funding, is taken as soon as possible after its publication.

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15:38 Darren Jones (Labour)

Today’s debate is a timely one, not just because of its necessary focus on the failures of the green homes grant scheme and the lessons we should draw, but because of the foundational importance of energy efficiency to the success of our net zero targets. It was therefore a pleasure to sponsor the debate application, and I commend the right hon. Member for Ludlow (Philip Dunne) on his and his Committee’s leadership on this issue. His Committee was instrumental in highlighting concerns about this scheme earlier this year, and I am grateful for the seriousness and detail of their ongoing work in this area, not least in opening today’s debate.

We on the Business, Energy and Industrial Strategy Committee are nearing the end of a major inquiry looking directly at how Britain can meet the challenges posed by decarbonising heat in our homes, in addition to monitoring our overall progress as a country in meeting our net zero targets at home as we seek to lead abroad by example at COP. There is little point decarbonising the heating in our buildings if those buildings are not energy efficient, and we will not meet our net zero targets if we do not decarbonise how we heat our homes, so these issues are inextricably linked. Those decarbonisation targets present huge opportunities for citizens right across the country, from reducing our energy bills at home and making our homes more comfortable to live in to creating consumer demand for small and large businesses in every community, and creating green jobs for the workers who will be needed to go into each and every one of our homes over the decade ahead.

Too easily, however, that experience could give way to miserablism and receding ambition, so as we interrogate the causes of the scheme’s failure, I will stress the importance of getting back on track quickly. Lifting energy efficiency standards in homes remains the key short-term measure of success in decarbonising, not only because the quality of our existing buildings is often so inadequate but because real progress is feasibly deliverable, with the Climate Change Committee putting the per-home cost at under £10,000.

In spite of that, our progress to date in decarbonising buildings has stalled, with emission reductions in the sector sitting stagnant for more than a decade. The single biggest impediment to substantial private sector investment, however—most importantly, to remedy Britain’s skills shortfall in this area, which continues to put a ceiling on our capacity to deliver—remains the Government’s hesitancy.

I am confident that we can rise to that challenge, and create a sense of hope and opportunity for the British people as we move towards our net zero target, but we must be honest with ourselves, learn the lessons and step up to meet that challenge in the first place. I hope that the debate, the work of the respective Select Committees and the preparation of Ministers to put forward a replacement for the green homes grant in advance of the Budget later this year provide the space and opportunity to get this right once and for all.

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15:43 David Johnston (Wantage) (Con)

The debate is an important one, because when we talk about climate change, we tend to focus a lot more on transport than we do on buildings, and yet buildings are our second biggest cause of emissions. Domestic buildings are 30% of our energy use and 19% of our emissions overall.

Ultimately, I would like to see more of what I have in my constituency, from Greencore Construction, which has built homes that are net zero in both build and use. It sold them to housing associations at the same price they would pay for other houses. It has continued to innovate and, with recent modifications, reduced the carbon emissions by a further 40%. Those are now carbon-positive homes. I have taken the Secretary of State for BEIS and others to see them, because what the company is doing is really impressive. In July, it will be talking at my pre-COP summit for Wantage and Didcot constituents.

Fourthly, there is a broader issue—not just for this scheme but for our strategy as a whole—relating to historic listed buildings. I have four towns in my constituency, but 64 villages. The homes that are built in Didcot are of varying quality, but they are new, whereas the homes in the villages are often protected in various ways and face a whole bucket of issues. Many of the people in those villages are keen to make their own contributions to combating climate change, but there is a range of things that we have not yet got to grips with, from the fact that some of those homes can use only oil for their heating because they are off the gas grid, to whether they are allowed to have solar panels. There is also lime rendering, which was something about which I did not know very much, but which certain types of home need as part of the insulation process. That can only be done at certain times of the year, and there are not many tradesmen who can do it.

We will probably still spend a lot more time talking about the cars we drive and the plane journeys we take, but unless we can make the progress we need to make on buildings, we will continue to hamstring our ability to tackle our net zero goals.

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15:49 Mick Whitley (Birkenhead) (Lab)

We should not be surprised. The scrapping of the scheme is just the latest in a long line of Government failures to live up to promises on climate change—failures that have left the UK widely off course to meet both our fourth and fifth carbon budgets. If we are serious about tackling climate breakdown, we need urgent action to reduce household emissions. However, this is not just about the environment. The retrofitting of homes and the transition to low-carbon heating systems such as heat pumps and hydrogen boilers also has a vital role to play in delivering on the Chancellor’s promise of a green jobs revolution and creating badly-needed jobs in towns such as Birkenhead, which for far too long have suffered a chronic shortage of work and training opportunities.

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15:51 Duncan Baker (North Norfolk) (Con)

With every good intention, the Government launched this scheme to a fanfare, as we have heard, in September 2020. Of course, one has to applaud the efforts to help households improve their energy efficiency, placing them at the centre to decarbonise our homes. However, there is no doubt that the scheme has been beset with problems. The take-up has been well short of any expectations, but then, as they say, hindsight is a wonderful thing.

I welcomed the drive to create jobs with the scheme, especially in the construction and property renovation sector that drives a lot of our economy. The drive to improve the energy efficiency of low-income households, reduce fuel poverty and work to phase out high-carbon fossil fuel heating is all laudable. Decarbonising our homes is a key priority in the race to net zero, and through the 10-point plan for a green industrial revolution and the energy White Paper, the Government have set out how they plan to decarbonise our buildings. However, I want to make a point here about a preoccupation with retrofitting, which has led to my Environmental Audit Committee inquiry into the sustainability of the build environment. The green homes grant is focused on reducing carbon emissions in the operating efficiency of an existing home, but we have hardly touched on the build environment. The materials that we use in the construction sector account for 11% of emissions that contribute to climate change. Concrete and steel production is dreadful for the environment. We need to look at more sustainable materials such as engineered wood and other more organic materials, which are far more prevalent in Europe. It is my hope that my inquiry will shine a light on that.

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15:56 Fleur Anderson (Labour)

In total, 40% of UK carbon emissions come from UK households, with over half coming from heating and electricity. As the Committee on Climate Change has made clear, those emissions need to be reduced by 44% by 2030 if we are to meet the UK’s fifth carbon budget. As was said earlier, that is a huge challenge.

If we look at the 15,500 successful applicants to the scheme in the six months that it was running, and if we look at the 10 million owner-occupied homes that need to be retrofitted and brought up to environmental standards, we can see that at that rate it will take us 323 years to deliver the change we need. In a climate emergency, we simply do not have that time.

It is absolutely critical that we act fast. Whatever comes next, we must, as a minimum, include the following. First, as has been said, the scheme must last a minimum of 10 years, to allow industry to develop the necessary skills, provide investor confidence and meet objectives over a sustained period. Those skills could be built up and delivered by local colleges such as mine, which would love to be part of the green jobs revolution that this could bring about. If the Government committed to a 10-year grant programme of home insulation and renewable energy improvements, suppliers could expand to meet that demand, knowing that there was time to invest.

Finally, it is vital that the Government work with the building industry right from the start of the scheme’s creation. They did not do that last time. It has been suggested that they could easily work with the industry through the Construction Leadership Council. They must also work with financial services, including mortgage companies, to ensure that the system is deliverable. This must include providing financial incentives to homeowners, for without the grant, decarbonising a home is very expensive. Some of my constituents in Putney received quotes, as required by the scheme, of up to £20,000 to properly decarbonise their home. Financial support needs to be made available to deliver that, and more financial support needs to be made available to people on low incomes. That could involve grants or personal tax relief, although that would not incentivise all households. We need to invest in public engagement to raise consumer awareness of the additional benefit of reducing heating bills.

I would like the Minister’s assurance that he will listen to the voices of the building industry, environmental groups and potential consumers—householders, lease- holders, landlords and local authorities—when designing whatever scheme comes next. We were all desperate for the green homes grant scheme to succeed and were desperately disappointed at its closure. We simply will not achieve net zero without green homes. COP26 will provide the perfect opportunity to announce a viable, long-term approach to reducing greenhouse gas emissions from homes. The Government must not miss this opportunity.

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16:05 Dr Alan Whitehead (Southampton, Test) (Lab)

We have had an excellent debate, with a very high degree of agreement among those taking part, not only about the failings of this particular scheme but about the imperative at the heart of what we have been talking about this afternoon. That is the imperative of ensuring that, within a very short time, we have secured in this country a massive uplift in the energy efficiency of homes across all sectors of housing—not just the easy-to-treat homes but the ones that have single cavity walls, for example, and are difficult to treat. We have to put into those homes different forms of heating to go along with the energy efficiency uprating, and the reason why we have to do that is of course to decrease very substantially the emissions from buildings, which contribute so substantially to CO 2 emissions overall, which could lead us well away from our target of net zero by 2050. Indeed, buildings in the UK emit some 19% of emissions overall, and the vast, and a substantial, majority of that is in residential homes, so the targeting of schemes to uprate energy efficiency in homes is vital.

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16:19 The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Paul Scully)

It is really important that as we discuss the future of the green homes grant scheme, we also discuss the wider future of decarbonising our country’s 30 million buildings to meet our target of net zero carbon emissions by 2050. As hon. Members know, the Government’s aim is to reduce emissions by 78% from 1990 levels, which is one of the most ambitious targets in the world and is supported by our sixth carbon budget, which limits the volume of greenhouse gases emitted over a five-year period from 2033 to 2037, taking the UK more than three quarters of the way towards reaching net zero by 2050.

The carbon budget will ensure that Britain remains on track to end its contribution to climate change while remaining consistent with the Paris agreement temperature goal to limit global warming to well below 2° C and pursue efforts towards 1.5° C. In the energy White Paper, as has been mentioned, we set out our ambition and approach to get as many homes as possible to energy performance certificate band C by 2035, which includes our aim to deploy 600,000 heat pumps a year by 2028. We need far more households to heat their homes without burning fossil fuels such as oil and gas.

Other ways and means of tackling climate change are outlined in the Prime Minister’s 10-point plan for a green industrial revolution, which sets out how we will mobilise £12 billion of Government investment, and potentially three times as much from the private sector, by 2030. That will level up regions across the UK and support up to 90,000 highly skilled green jobs across the UK in this Parliament, and up to 250,000 by 2030. The UK is committed to taking advantage of the huge economic opportunities that the transition to a green economy offers, including large-scale job creation and even more jobs being supported in the green economy.

In addition, as we have heard, 2021 is one of the most important years for global Britain as we host the G7 presidency and the UN climate change conference, COP26, in Glasgow in November. We know that the world is watching as we lead the way in reducing carbon emissions from homes, businesses and public sector buildings.

I welcome the news from my hon. Friend the Member for Wantage (David Johnston) about his pre-COP26 conference in his constituency. It is excellent that as well as doing the countrywide conference that brings global attention to the UK, and Glasgow in particular, we all do our bit as champions within our constituencies. I congratulate him on that.

We are making excellent progress across much of that investment; substantial sums have already been spent on schools, hospitals and social housing as well as in privately owned or rented homes, particularly in partnership with local authorities. Just one part of that is the green homes grant voucher scheme, which was launched to help householders offset the cost of installing energy efficiency measures in their homes. Despite the fact that the scheme received many applications, as we heard, it did not deliver at the rate and scale that we originally hoped. As a result of that, and because the Government remain committed to reaching our ambitious goals by 2050, we had to look again at how best to support householders in decarbonising their homes at a rapid pace. We took stock and considered our approach. We reviewed our options and made a decision to close the voucher scheme, which ceased taking new applications at 5pm on 31 March.

The Government will of course reflect on the lessons learnt from the closure of the green homes grant voucher scheme. In response to the hon. Member for Putney (Fleur Anderson), we will learn those lessons, but our ambition is not diminished and we will very much listen to everyone who will be involved with us in the collective drive towards net zero, especially on decarbonising homes, which is so important. Other elements of the work on decarbonising homes have seen great successes. The local authority delivery element of the green homes grant scheme, for example, aims to support measures such as insulation and low-carbon heating. Of around 50,000 low-income households, both privately owned and rented, it is important, as we have heard, to make sure that we can address and support the people who cannot otherwise go about this very easily.

To date, the scheme has allocated £500 million of funding across the English regions. That investment is already being felt in constituencies across the country. For example, Bristol City Council has been awarded £2.6 million to retrofit 275 homes, reducing energy bills and creating warmer homes for low-income households. That project plans to install solar and solar thermal panels and underfloor insulation to keep residents warm through the winter months. The scheme, alongside the social housing decarbonisation fund, has now seen the Government commit an additional £300 million to green homes upgrades. The hon. Member for Birkenhead (Mick Whitley) talked about “only” £300 million, but we cannot dismiss telephone number figures of investment. I think that in most contexts many people in this country would look askance at “only” alongside £300 million.

I was pleased to hear from my hon. Friend the Member for North Norfolk (Duncan Baker) about the work that he is doing on sustainable materials. Yes, we can decarbonise homes and have retrofitting, but it is important that we plan for the future. We are embedding new practices with new materials, or newly purposed materials, because wood is hardly a new material, but it is very sustainable if we get it right. My hon. Friend’s contribution is important to our thinking and to our drive to net zero, so I thank him and congratulate him on his work.

As the world looks to recover from the impact of coronavirus on our livelihoods and our economy, we have the chance to build back better and invest in making the UK a global leader in green technologies. I thank my right hon. Friend the Member for Ludlow once again for securing this debate. I appreciate all the comments that have been made, and we are listening. My colleagues, the Energy Minister and other Government Members, will reflect on the words said today as we redouble our efforts to make sure, as I have said, that we keep to our ambition as we drive to net zero by 2050.

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16:28 Philip Dunne [V]

I want to start by thanking the Minister, my hon. Friend the Member for Sutton and Cheam (Paul Scully), for his wind-up speech and for undertaking to listen to the contributions in this debate, and indeed to the submissions made by the Committee that I am proud to chair. Before I respond to the points made, I also want to thank others who have participated, particularly the hon. Member for Bristol North West (Darren Jones), the Chair of the BEIS Select Committee, who co-sponsored this afternoon’s debate with me. We work closely together on climate change issues, and it was good to see his characteristically measured and impressive contribution to the debate. We look forward with great interest to the results of the inquiry that is being undertaken into energy efficiency measures.

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