New Clause 10 — Green deal installation apprenticeships

Part of Oral Answers to Questions — Prime Minister – in the House of Commons at 2:15 pm on 14th September 2011.

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Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change 2:15 pm, 14th September 2011

I know that the hon. Gentleman is not quite an unreconstructed, planned-economy socialist, but he is confusing means with ends. The purpose of the green deal—our starting point and our end point—is to meet our carbon budgets and fulfil our legal and statutory obligations under the Climate Change Act 2008, which was introduced with the support of Members in all parts of the House. For decades, we have singularly failed to drive effective home energy efficiency and, come to that, energy efficiency in the business and industrial sectors. Given the size of the deficit and the burden on the public purse, we are living in cloud cuckoo land if we imagine that we would drive down carbon emissions and transform home and business energy efficiency if we left the private sector untapped. We will achieve our objectives only if we harness effectively the power of the private sector. Of course, people will make profits, but provided that that is transparent and fair, I do not have a problem with it. It is called job and wealth creation, and spreading that widely. We do not have enough wealth creation in the UK—we need more—and the green deal will be an incredibly important vehicle in helping us to rebalance our economy and making us more efficient.

We should not ignore that, but it does not detract from the fact that the central aim of the legislation is to allow us to meet our stretching carbon reduction targets. The coalition is absolutely committed to doing so, and the green deal is the means to that end, so we should not confuse the two as the hon. Gentleman did.

Amendment 28, which was tabled by the hon. Member for Manchester, Withington and my hon. Friend the Member for Brigg and Goole, seeks to ensure that we have powers to place restrictions on interest rates that can be offered as part of the green deal plan. I understand the concerns that my hon. Friend the Member for Brigg and Goole articulated in his thoughtful speech, but I can assure him and other hon. Members that clause 5(1)(b) already provides the power—we accept the point that the hon. Gentleman is making—to limit interest rate structures that can be applied to green deal plans. It will not be possible to create a valid green deal plan, unless it specifically complies with the conditions contained in, or made under, clause 5.

The green deal is a market mechanism, and the golden-rule principle will create a natural incentive to drive down costs, so the Government do not intend to place restrictions on the level of interest charged. However, we are considering broader restrictions to ensure that green deal plans are equitable not just for the first but for all subsequent bill payers. This could mean limiting interest rate structures offered to domestic customers to those with the greatest likelihood of the golden rule being met in the first and subsequent years, and we will be consulting on what is quite a complicated area, not just with stakeholders in the financial services sector, but with all concerned stakeholders.

I would certainly welcome the thoughtful input from Members on both sides of the House into this important area of how we ensure we get the most competitive interest rate for the consumer. I invite my hon. Friend the Member for Brigg and Goole, the hon. Member for

Manchester, Withington, and other hon. Members who have spoken in the debate and expressed legitimate concerns, to meet my officials so that we can ensure that we take notice of their concerns and take advantage of some of their ideas. I hope that I have been clear throughout proceedings on the Bill that we do not have a monopoly on the best ideas. As we develop the fine detail of the green deal, I am more than happy to work with them.

We recognise that the interest rate is only one of the drivers of affordability. We do not want unnecessarily to focus just on the interest rate. The actual cost of the products, particularly things like solid wall insulation, will be a key driver. Replacement windows are in a very exciting place. For the first time, because of technical innovation and the increased thermal value of new glazing, and because prices are coming down, we can anticipate that we will be able to include glazing in windows. Consumer-facing home improvements will come within the remit of the green deal, and make it much more attractive. The green deal will not just be about out of sight, out of mind, hidden interventions in a household, but about things that people will really value on a day- to-day basis.