Heating Rural Homes

– in the House of Commons at 5:53 pm on 13 June 2023.

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Motion made, and Question proposed, That this House do now adjourn.—(Scott Mann.)

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection 5:56, 13 June 2023

It is a great pleasure to be able to address this important issue. We all want to beat climate change, cut emissions and leave the planet in a better condition than we found it, so we do need to address the challenge of heating rural homes. It is perhaps ironic that we should be discussing this topic during a heatwave, but

“pleasant as it may be to bask in the warmth of recovery… The time to repair the roof is when the sun is shining”.

As North Herefordshire is a rural constituency, I urge the Government to ensure that there is an equitable solution for heating rural homes. Around 1.1 million homes in England are not connected to the gas grid and currently use some of the most carbon-intensive heating fuels, such as oil and coal. Some rural homes do not even have the option of an electricity supply.

In the past year, we have seen the price of fuel fluctuate wildly due to Russia’s illegal and brutal invasion of Ukraine. In the wake of the invasion, heating oil hit an unprecedented 110 pence a litre, well over double the regular cost.

Photo of Neil Hudson Neil Hudson Conservative, Penrith and The Border

I congratulate my hon. Friend on securing this important debate and on highlighting how different rural areas are from urban areas. As he mentioned, so many households —up to 76%—are off grid and on things like heating oil. Does he agree that decisions made in urban Whitehall need to understand that rural areas are different? Some well-intentioned schemes, such as the sustainable warmth scheme, have not worked well in practice. There needs to be flexibility in these policies so that, when we talk about phasing out heating oil or, indeed, phasing out petrol and diesel vehicles—things that are so vital to rural areas—we can make sure the Government listen to rural areas.

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

My hon. Friend is a rural champion, like myself. With his background in animal welfare, he feels the beat of the countryside in his veins. He is absolutely right about having that rural priority for vital things such as climate change, where we all want the right things. We all want to do the best we can for our constituents, but what works in inner London is so different from that which would affect his constituents, those in Brecon and Radnorshire, or the wonderful people of North Herefordshire.

As I said, the fuel price hit an unprecedented 110 pence per litre, double the regular cost, or even more. The Government moved commendably quickly to help secure our energy supply and to protect consumers through the energy price guarantee. However, for those off grid, that support was not forthcoming. The energy price guarantee ensured that gas and electricity bills were capped at about half of what they could have been, but those using alternative fuels received a £200 payment and there was no cap on the price. As a result, they were subjected to massive price increases, with little to safeguard them from factors completely out of their control. During this period, I received emails from people in Herefordshire whose houses are off the mains grid and who were deeply concerned by the rapidly increasing price of alternative fuel.

With the UK target of reaching net zero by 2050 in mind, the Government are pursuing a heat pump-led approach to secure energy independence for the UK. Their well-meaning boiler ban, set to take effect in 2026, will force homeowners to replace their gas and oil boilers with low-carbon alternatives. Although that ban may be well-intentioned and appears to align with the target of reaching net zero by 2050, we have forgotten the impracticality of such a ban for those people living off grid. With 75% of rural properties off the gas grid, these homeowners rely on alternative heating methods. Of all the off-grid homes in the UK, 55% are heated with heating oil, just 18% with electricity, 11% with solid fuel and 10% with liquid petroleum gas. That means that 76% of off-grid households will soon have to replace their heating systems.

Photo of Greg Smith Greg Smith Conservative, Buckingham

I congratulate my hon. Friend on securing this important debate for the 15% of households in my constituency who are off the gas grid. Does he agree that the best way the Government could rise to the challenge he is powerfully making is to adopt the proposal from my right hon. Friend George Eustice to permit the use of hydrotreated vegetable oil and other sustainable fuels in existing oil burners and indeed new oil-burning boilers, so that customers and residents of all our constituencies are not forced to spend tens of thousands of pounds on a technology that may not actually work?

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

All I can say is that those 15% of my hon. Friend’s constituents are lucky to have such a champion in their MP—what a hero for rural sensibility. We are truly blessed to have an intervention such as that. Later in my speech, I may touch on the subject of HVO. What he is saying is absolutely right. We need to be much broader in our outlook about what works for people, not through force, but through choice, so that the people who want to do the right thing can do so, rather than being curmudgeonly bullied—

Photo of Alistair Carmichael Alistair Carmichael Liberal Democrat Spokesperson (Home Affairs), Liberal Democrat Spokesperson (Northern Ireland), Liberal Democrat Spokesperson (Justice)

I am grateful to the hon. Gentleman for giving way. I should perhaps declare an interest, as someone who owns a house that is also heated by oil-fired central heating, however inadequately. The point he makes illustrates well what happens when Government intervene to set targets and to insist that things must be done by a certain deadline. We see that time and again. I can tell him and others now that one of the biggest problems will be the lack of available skilled, qualified labour in rural areas and in other places to install the equipment for these things. Would it not be better if on this occasion we were to use a little more of the carrot and a little less of the stick, as he and I did when we were Whips together?

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

Indeed, Madam Deputy Speaker, there is no finer advocate of the pointy carrot than the right hon. Gentleman. But he is right. Again, it is as though he has read my speech because I will touch on the shortage of qualified technicians. One of the problems that we face is that, by insisting on one technology, all those various engineers who can do different things are being forced to do the same thing and, of course, that is far from practical or ideal. I will touch on that in a moment.

Those off the gas grid may face unique challenges that will prove a huge obstacle if the ban comes in. According to the Government’s heat and buildings strategy, at least 20% of off-grid homes will not be suitable for heat pumps. Rural areas tend to have limited infrastructure, meaning that it is impractical and uneconomical to deploy heat pump installations in every home. Many rural homes, particularly older or listed buildings, are not designed to accommodate these systems. Heat pumps work best in well-insulated and energy-efficient properties, which rural homes, sadly, tend not to be.

More than 35% of rural properties have an energy efficiency rating of F or G, compared with just 2.1% of properties in urban areas. That is a massive difference. In part, that is because properties located in these areas are proportionately more likely to be older, of traditional construction, detached and potentially larger than urban properties. But it is also because the current stupid, useless and inappropriate energy performance certificate assessment is based on modern construction. More than 60% of homes were built before 1970 and before the first thermal regulations, so these properties are extremely disadvantaged when it comes to energy efficiency ratings.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office)

On the issue of the flawed nature of EPC, that is an important point. My hon. Friend will be aware that thatched buildings are often given a very low EPC rating because there is no ability to calculate the thermal quality of thatch. Thatch is a brilliant insulating material, so it is complete nonsense that thatched buildings should be given such low rating. This would be of passing interest were it not also the case that the Government are rapidly bringing forward legislation to prevent landlords from renting out properties if they have a low EPC rating. On that point, I draw the House’s attention to my entry in the Register of Members’ Financial Interests. There are also reports from the Department that it will in future be more difficult to get a mortgage if a property has a low EPC rating, with the voluntary code being suggested to the current clearing banks later to become a compulsory code. In many areas of the countryside, the net effect of that policy will be that someone will have zero chance of getting a mortgage unless these ridiculous EPC ratings and mechanisms are updated.

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

Madam Deputy Speaker, I saw you thinking that that was perhaps a bit of a long intervention, but it was pure gold. My right hon. Friend is absolutely right: these energy performance certificates are not just stupid and useless, but absolutely evil when it comes to the fundamental right of people to want to own their own homes—something in which we on the Conservative Benches believe passionately. Worse than that, if someone cannot get an EPC rating of C, they cannot rent a house either. All of this will be no different from the land clearances, when people were shipped off into the cities because they simply could not or were not allowed to live in the countryside. It is an appalling situation and my right hon. Friend is absolutely right to highlight it. I hope the Minister is trembling on the Front Bench at the vehemence of loathing that I have for EPCs, not least because, when I last got one, it said that we should have built a windmill in the garden. How stupid can you get when it comes to really mindless environmental legislation. I care very much about this because, if we are going to do a good job of saving the planet, we cannot be handicapped by cretinous legislation such as EPCs. I ask the Minister to please fix it.

To go back to the speech in hand, we have covered traditional features in old homes. Indeed, it is even more troublesome and expensive to retrofit a listed building, of which there are around 500,000 in England. They have solid floors and walls and are much more difficult to rectify. The House will be aware of the debates I have held on environmental standards for listed buildings and the most welcome progress that was made to allow double glazing by Historic England—a small step, one might think, but to have 500,000 houses in this country banned from having double glazing just reinforces why I rage at EPCs. There are all the other environmental steps that we want to take but are banned from taking.

Photo of Greg Smith Greg Smith Conservative, Buckingham

I am very grateful to my hon. Friend for giving way twice. Does he agree that many of the houses that are challenged by the EPC regime simply cannot have the retrofitting he talks about, such as those built out of cob or witchert, a form of cob unique to the Vale of Aylesbury—to declare an interest, my own house is partially made out of witchert—where the walls need to breathe? Therefore, people cannot put in place the measures that would allow a higher EPC rating or allow a heat pump to work in the first place.

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

I feel for my hon. Friend. When we buy a washing machine or dishwasher and look at the energy rating on it, it is a helpful guide to what we should expect our fuel bills to be. However, the EPCs for houses are off the scale in their inability to provide anything useful and I am mustard-keen for the Minister to tackle them.

My fear is that Historic England, that wonderful body that has been trying to make Leominster a nicer place, may go back on its guidance on double glazing and on the curtilage of listed buildings. That would be a shame because, while there is an industry built up with secondary glazing, it is really important that as a Government we help people to do the right thing. Something that saves energy, improves fuel efficiency and makes houses nicer places to live in is obviously a sensible step.

I am sure the Minister does not find it hard to see why the boiler upgrade scheme has been such a disappointment. Tragically, £90 million-worth of subsidy is being given back to the Treasury due to the difficulty of uptake. The Government’s latest scheme offers households grants of between £5,000 and £6,000 for low-carbon heating systems such as heat pumps—kind, well-meaning and hopelessly inappropriate. Ofgem figures show that fewer than 10,000 installations were completed under the scheme between its launch in May last year and March this year.

Households with a broken boiler could wait up to six months to source a certified installer, as Mr Carmichael said, receive a grant, if they are lucky, purchase the heat pump, if it is available, and have it installed, by which time they may have suffered without heating during the coldest months of the year. That is never going to deliver on our ambitions, not least because every broken boiler is a missed opportunity. It means people will go out and buy another fossil fuel boiler because the option to buy a heat pump was just too difficult.

We cannot afford to drop the ball like that. Every time someone needs a new boiler, surely the right thing is for them to say, “Thank goodness for the Minister! She made it so much easier for me to get a super-efficient, clean boiler, which is not just keeping me toasty in the winter, but saving the planet for my children and grandchildren.” That is where we need to get to, and I know the Minister is listening and smiling with delight because that opportunity is opening up before her.

While the Government may have set the ambitious target of 600,000 installations of heat pumps per year by 2028, it will not be achieved unless they address the extortionate cost and impracticality of installation. A poll by Liquid Gas UK discovered that more than two thirds of people living in off-grid rural homes fear that they would not be able to afford a heat pump if required to install one. The average cost of installing a low-carbon heating system such as a heat pump is estimated to be between £15,000 and £30,000. That probably includes the £5,000 grant, as installers are not going to ignore the subsidy, either. For many families, that is an expense that they simply cannot afford. Twelve per cent of houses in rural areas are in fuel poverty—a rate 43% higher than on-grid homes.

On top of the expensive cost of heat pumps, there is a lack of skilled engineers available to install and manage them. I recently received an email from a heating engineer who works in an off-gas grid area of Herefordshire. They are deeply concerned that the Government’s proposals are impractical because it is so expensive and difficult to install heat pumps. In rural areas, it will therefore be extremely difficult to source a nearby engineer to install a heat pump when one’s current oil boiler breaks.

Homeowners should have the freedom to choose their heating systems based on what suits their needs, preferences and budgets. Rather than installing an expensive heat pump, they might find it more suitable to have a hybrid or cocktail of alternative energy sources, such as biomass boilers, which are eligible for the Government’s renewable heat incentive—

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

My right hon. Friend mutters “not any more”. That renewable heat incentive for domestic properties would be a wonderful step forward and would encourage biomass in all its different forms.

The Government already provide financial incentives such as grants for reducing the up-front cost of solar panels, making solar power an affordable choice for many households. I welcome the Government’s encouragement of rooftop solar by cutting VAT on solar panels, which saves households more than £1,000 on installation, in addition to the £300 annual saving on their energy bills. Now that we have left the EU, the Government have been able to remove the 5% VAT charge on energy-saving materials, including solar panels, heat pumps and insulation. However, a bigger tax break on UK-manufactured environmental solutions is needed to encourage people to do the right thing when it comes to heating their homes.

Photo of Jake Berry Jake Berry Minister of State (Cabinet Office)

It is absolutely within our power to encourage people to install solar panels, but does my hon. Friend agree that another thing that the Government could do is to bring solar panels within the permitted development regime? Often, the expense of a planning application and of delays puts many people off.

Photo of Bill Wiggin Bill Wiggin Chair, Committee of Selection, Chair, Committee of Selection, Chair, Committee of Selection

I cannot think of a reason why putting solar panels on the roof of a house should not be permitted development, but it is not. That is a simple step that would really help. I remember when the onshore wind debate started. The then Labour Government refused to allow even the smallest electricity-generating windmill on the side of people’s homes in case it made the electricity meter go backwards. We lost the public at that point. They wanted to do the right thing, but they were prevented from doing so. Solar panels on rooftops should be a natural step forward. They should be permitted development and part of the planning permission for every new build.

If we are to embrace the technology of solar panels, let us ensure that they are made in Britain. Let us stop making the Chinese richer because we want to do the right thing for the environment while they build coal-fired power stations. Bigger tax breaks on UK-manufactured environmental solutions are needed to encourage people to do the right thing.

As solar panels are not always suitable for certain types of building or locations across the country, alternative options should also be supported. Hydrotreated vegetable oil, for example, is a sustainable fuel that can, at a small cost, be used in a conventional boiler. HVO has been trialled in over 150 homes across the UK in the last 18 months, yet it has been given no special tax treatment to encourage its usage. Bringing HVO fuel duty rates in line with kerosene—paraffin, or “heating oil”—would significantly lower its cost.

It is also clear that we need a better solution to incentivise both the take-up and production of UK-made heat pumps. Currently the boiler upgrade scheme subsidy is merely pushing up prices, when supply-side reforms and intelligent incentives would clearly be better options. Stimulating a home-grown heat pump industry similar to our natural gas boiler industry, which produces 90% of all gas boilers in this country, will increase supply and bring down costs for consumers.

A number of British businesses are already striving to make renewable energy cost-effective and affordable, such as Caplor Energy in my constituency, which provides a full range of renewable energy solutions nationwide. We should encourage British-based companies through big tax breaks, rather than continuing to import heat pumps from abroad and filling the pockets of Chinese companies. A holistic approach to rural home energy systems that involves a mixture of technologies would allow homeowners to transition to a fully electric product once the correct thermal efficiency levels have been reached. They could then avoid having to make drastic changes to the fabric of their house all at once, with or without the local council’s intervention.

In many cases, a hybrid heat pump would be most appropriate, as they efficiently switch between renewable and fossil fuel. Hybrid heat pumps are a good middle ground; they ensure a reduction in carbon emissions without leaving people at the mercy of the weather or subject to power outages, yet the renewable heat incentive scheme no longer extends to hybrid heating systems, or any other systems that could have eased the transition to entirely electric heating.

The Government propose a “rural first” approach to the transition. They aim to phase out the replacement of fossil fuel boilers in rural homes from 2026. That is almost a decade earlier than the date for equivalent homes connected to the gas grid. That is extraordinarily unfair. It is far too difficult for the Government to phase out fossil fuel heating in off-grid homes from 2026. The Government consulted on the proposal to phase out the replacement of fossil fuel boilers from 2026 for off-grid homes in January last year, but we are yet to see their response to the consultation. When will they publish it, given that it has been over a year since the consultation? In the absence of a response, can the Minister confirm that the Government will delay the 2026 boiler ban until there are effective and affordable alternatives for heating rural homes?

To conclude, I commend the Government on their net zero policy and on our environmental agenda. We must pursue a more flexible, cost-effective and practical approach to heating rural homes that considers the unique circumstances of these areas. The Government’s 2026 boiler ban is a misguided policy that fails to consider the practical implications and financial hardships that it would impose on people living in rural communities. We must ensure that the voice of rural homeowners is heard, and that their concerns are addressed. I urge the Government to re-evaluate their strategy, drop the ban, and develop a plan that prioritises practicality, affordability and choice for rural homeowners, and ensures that those living in rural homes are not unfairly disadvantaged because of where they live.

Photo of Amanda Solloway Amanda Solloway Government Whip, Lord Commissioner of HM Treasury, Parliamentary Under Secretary of State (Department for Energy Security and Net Zero) 6:22, 13 June 2023

I thank my hon. Friend Sir Bill Wiggin for his impassioned speech. We have heard a lot from the rural champions who are here, so it is a great pleasure to be here. I point out that the issue is not in my portfolio; however, I will take back to the Department any question that I cannot answer, and will of course respond in due course to anybody I do not manage to respond to directly tonight. This is an incredibly important debate on heating rural homes. I thank my hon. Friend for our conversation earlier, in which he explained the problem.

Decarbonising off-gas-grid properties that use fossil fuel heating is a key priority for us, as they are some of our biggest polluters. The use of oil and other high-carbon fossil fuels to heat our properties also reinforces our dependence on foreign sources of energy. The Government recognise that off-gas-grid households have been particularly exposed to high and volatile energy bills, due to the impact of rising global fossil fuel prices following Putin’s illegal invasion of Ukraine. That is why we have taken decisive action to support rural households facing higher heating costs through the winter. The energy price guarantee is currently protecting customers from increasing energy costs by limiting the amount that suppliers can charge per unit of gas or electricity used. In addition, the alternative fuel payment scheme delivered £200 to households that use alternative fuels such as heating fuel, petroleum gas or biomass, helping around 2 million off-grid households across the United Kingdom.

Going forward, the Government intend to move away from universal energy bill support and towards better targeted support for those most in need. Therefore, to keep prices down for ordinary households in the long term, we need to make sure that we are relying on sources of energy that are affordable, clean and—above all—secure.

Photo of Jamie Stone Jamie Stone Liberal Democrat Spokesperson (Armed Forces), Liberal Democrat Spokesperson (Digital, Culture, Media and Sport)

The Minister is very gracious in giving way, and she is making a most interesting speech. Could I recommend to her something that would be helpful, namely whisky? In the rural community of Wick, in Caithness in my constituency, we have a distillery called Old Pulteney—it is an excellent whisky, but that is not the subject of this intervention. Old Pulteney helps to heat at least 200 houses in Wick, as well as Caithness General Hospital. It is an imaginative solution, so I suggest that the Minister looks at how that is done, takes herself on a tour of other distilleries that are not doing the same, and samples their wares for inner warmth, but also sees how they can contribute to outer warmth.

Photo of Amanda Solloway Amanda Solloway Government Whip, Lord Commissioner of HM Treasury, Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)

I confess to being a whisky drinker, so I feel a visit coming on, but that might not be allowed. Of course, I will look into that.

Transitioning rural, off-grid properties to low-carbon heat will help to move us off imported oil and build energy independence; help protect consumers from high and volatile energy bills; and keep us on track for net zero. However, I want to take this opportunity to reassure my hon. Friend the Member for North Herefordshire that we recognise the challenges involved, which he has described so eloquently. Decarbonising rural, off-grid properties in a way that is fair, affordable and smooth for consumers will require a range of different technologies and policy approaches.

While we expect that most off-grid properties will ultimately switch to heat pumps, affordability is a key challenge that we need to address, particularly while the cost of installing a heat pump remains higher than the cost of replacing an oil system. That is why we are taking a range of steps to grow the heat pump market to 600,000 installations a year by 2028, and to make installing a heat pump a more attractive and affordable choice for heating a home. I acknowledge the challenge of building the skills that installers will need; I will take that point away and—with your permission, Madam Deputy Speaker—come back at a later date in a different manner. The steps we are taking include providing support through schemes such as the boiler upgrade scheme and home upgrade grant. We want to make sure that people make green choices.

As we take action, we want to ensure that the economic benefits of the transition to net zero are retained in the United Kingdom, which will create new, highly skilled jobs in the low-carbon economy. That is why we are investing £30 million in the heat pump investment accelerator, which will bring forward investment in heat pump supply chains and aim to ensure that at least 300,000 heat pumps are manufactured annually here in the UK by the end of the decade. I also take this opportunity to reassure my hon. Friend that no one will be required to install an unsuitable technology in their home or business. Heat pumps will not work everywhere—some off-grid properties are simply too poorly insulated or have certain characteristics that would make installing the technology challenging. We are therefore looking closely at the potential role of low-carbon heating solutions, such as high-temperature heat pumps, hybrid heat pumps, solid biomass or renewable liquid fuels. They could play a part in the low-carbon heating mix, particularly where heat pumps cannot be used. However, sustainable biomass is a limited resource, and we need to take care to prioritise its use in sectors that offer the greatest opportunity to reduce emissions and where there are the fewest alternative options to decarbonise.

There were some comments on the EPC, which is under a different Department, but I will take that away. However, I thoroughly believe we should always be looking at ways to improve methodology, and I am happy to have further conversations on that, if that is helpful. The forthcoming biomass strategy will review the amount of sustainable biomass available in the United Kingdom and consider how the resource could be best utilised across the economy to help achieve the Government’s net zero and wider environmental commitments. My hon. Friend also mentioned the consultation on the boiler ban. The Government have a commitment to transition to clean heat for the future. My hon. Friend asked me about a date, which I am unable to give at this stage, but I will look into that consultation and get back to him as soon as I can.

We will continue to work with industry stakeholders to build further evidence that will allow us to evaluate what roles these fuels may play in heat, especially where heat pumps cannot be used. Earlier this week, I visited Certas Energy, the UK’s largest distributor of heating oil. I thank it for supplying off-grid customers this winter. I also learned about its plans to transition to low-carbon renewable liquid fuels, and I will take away lots of points from that visit. Through the support we are providing, I assure my hon. Friend that we are acting and will continue to act to ensure that the transition to clean heat is smooth, fair and affordable for rural off-grid households and businesses.

Photo of Rosie Winterton Rosie Winterton Deputy Speaker (First Deputy Chairman of Ways and Means)

I think the Minister had finished. I am sure the hon. Gentleman will have a quick chat with the Minister afterwards—I can feel it.

Question put and agreed to.

House adjourned.