I beg to move,
That this House
has considered energy efficiency of homes in the north of England.
It is a pleasure to serve under your chairmanship, Mr Robertson. I am delighted to bring this debate to Westminster Hall. At the outset, I declare my interest as a vice-chair of the all-party parliamentary group on housing and planning and of the all-party parliamentary group for housing market and housing delivery. I also place on the record my thanks to North Star Housing, the Conservative Environment Network, the Northern Housing Consortium and the National Housing Federation for their insightful and helpful engagement with me on this important issue in preparation for today’s debate.
Twenty-six per cent. of the north’s carbon emissions come from our homes—26%. If we are to tackle climate change and meet net zero, we have to do something about that 26%, in addition to all the other things that we are doing. Despite all the house building going on around the country, the UK’s housing stock is generally older than that across the rest of Europe. And in the north, we have a higher percentage of older properties than the rest of the country: 24% of all homes in the north were built before 1919, and 41% were built before 1944. These older homes are largely beautiful, characterful properties that provide us with the backdrop to much of our northern constituencies, but they pose serious issues when it comes to energy efficiency. Solid walls prevent the use of cavity insulation, and planning constraints require buildings to retain their character, making exterior work harder. That is alongside many other issues. Our Victorian terraces have proved particularly difficult to treat. However, we must find solutions to ensure that these homes are fit for the future. Future generations will thank us for our foresight in preserving these homes and doing our bit to save the planet.
The poor energy efficiency of homes in the north only serves to make our higher rates of fuel poverty even worse, compounding the problem. In my region, the north-east, we have the third highest levels of fuel poverty in England. Even before the price cap increased, 14% of households in Darlington and 15% in County Durham were classed as fuel-poor. Decarbonising homes and making them more energy efficient has the potential to offer part of the long-term solution to fuel poverty. Insulating homes better and reducing the reliance on fossil fuels to heat homes means less money spent on wasted energy, less money spent. It is a win-win for our homes, their residents and the environment.
I recognise the argument that the hon. Member is making about the north of England. I hope he will not mind my saying that my constituents in the north of London face similar problems and issues of fuel poverty. I am sure that all MPs here would say that emails on those issues are clogging our inbox. People up and down the country have been left uniquely exposed to the global gas crisis, because of the slashing of gas storage, the failure to regulate the market properly and the failure to invest in nuclear and renewables. Does the hon. Member think that we need a radically new approach to energy efficiency from the Government, and does he agree that they should seek to match Labour’s pledge to insulate 19 million homes over the next decade?
I thank the hon. Member for her intervention. If she is referring to homes in her constituency, I can well understand and imagine that they have the same issues as homes in the north of England. My objective in calling this debate was to have a constructive and non-partisan debate in order to raise the important issues that are relevant to my constituents and to concentrate on what the Government can do on top of what they are already doing. I am sure my right hon. Friend the Minister will do in his summing-up.
Energy efficiency also presents an opportunity to improve health outcomes in the north. Each winter, there are around 30,000 more deaths due to inadequate heating in homes. Retrofitting homes has the potential to seriously improve the health outcomes of those who currently live in poor housing. Health and wellbeing rightly have a prominent place in our levelling-up missions, and I want to impress on the Minister the real need to look closely at the benefits of retrofitting northern homes for that purpose. It is not cheap, but we all know that if you buy cheap, you buy twice.
Now, Darlington is a beautiful town, rich in heritage and filled with many traditional homes. We are, of course, the birthplace of the railways, and it is indeed the railway heritage and engineering industry that caused the expansion of our town. In Darlington, 65% of energy performance certificate ratings given to our homes are band D or below. That piles the extra cost of wasted energy on to the residents of those homes—at current energy prices. Merely upgrading homes from EPC band D to band C would cut heating demand by 20% for millions of households and would represent an estimated £2.9 billion bill saving per year in the north-east region.
However, with 62% of homes—around 4 million—in the north below EPC band C, that is a huge challenge. Currently, many stakeholders feel it is simply not financially viable to achieve. I want the Minister to know that I do not underestimate the scale of the challenge. The complexities of private ownership, private renting, and social housing in the mix make it a difficult puzzle to solve.
In the spirit in which the hon. Member framed his earlier comments, I agree with everything he has said so far. He is right both to highlight the significance of domestic carbon emissions and to link it to fuel poverty. He may be interested to know that, in Sheffield, pretty much in line with the figures he has given, 60% of homes fail the EPC band C standard. The figure across Yorkshire and the Humber as a whole is worse, at 65%.
The hon. Member talked about a win-win. Does he agree that it would be a win-win-win-win-win if we did more on retro-insulation, because it cuts carbon emissions and fuel bills, tackles health issues, reduces our reliance on gas imports and creates jobs? Does he therefore share my desire for the Government to have greater ambition on retro-insulation?
It is as though the hon. Member has read a paragraph later in my speech. It would, indeed, be a win-win if we tackle this issue. Can we afford to not tackle the issue? Can we afford to not reap those health benefits, the energy cost savings, the wasted energy usage savings, and the preservation of our built environment?
I must acknowledge the work that the Government have done so far to tackle this issue. The heat and buildings strategy was published in October 2021, setting out the Government’s planned approach to reducing emissions from heating buildings. The social housing decarbonisation fund has awarded £179 million to 69 projects.
My hon. Friend is articulating well the need for further measures to improve our housing stock. I am sure he will agree that now is an opportune moment to move ahead with this, given the pressure on household budgets. Blackpool received £1.4 million from the social housing decarbon-isation fund, and I am sure his constituency has benefited, too. Will he welcome those grants already given and support the need for further action to drive down those household bills?
Being familiar with my hon. Friend’s constituency, I well understand the situation and issues that his constituents face, as they are similar to those in my own. I was about to say that the Tees Valley Combined Authority has secured £2.6million from the social housing decarbonisation fund, from which homes in Darlington will benefit. I am grateful for that, and I welcome the contribution that my hon. Friend has secured for his constituency.
The local authority delivery scheme is also helping to improve energy efficiency: it is expected to save households across the country more than £2 million on energy bills every year. It is welcome that nearly 40% of the households that have been upgraded under the scheme are in the north. I also welcome the decision of the former Chancellor, my right hon. Friend
Although progress is under way on decarbonisation and retrofitting, we still have a long way to go, but I want to focus on the need to tackle the huge cost currently associated with making our homes more energy efficient. We cannot achieve decarbonisation while it remains financially unviable for homeowners, private landlords and housing associations to pay for the work. We also need to ensure that we bring communities with us as we embark on this challenge. Recent research by Onward found that people think that the invasion of Ukraine means we should be moving more quickly on net zero, but retrofitting a home is intrusive work, and many people do not see it as a priority for them. We need to be clear what the benefit of this work is to our communities, and the connection between home heating and reaching net zero must be emphasised. How can the Government make it clear to communities how they stand to benefit from more energy efficient homes? That is a challenge that I hope the Minister can respond to.
As part of my preparation for the debate, I have been in contact with Angela Lockwood and Emma Speight at North Star Housing to discuss the difficulties faced by housing associations when it comes to decarbonisation and retrofitting their properties. In short, they are fully supportive of moves to decarbonise homes, but the costs involved are prohibitive. To illustrate this, they made me aware of a pilot decarbonisation project that they are carrying out on a two-bedroom, late-Victorian terraced house in Middlesbrough that they are aiming to get to EPC level A, so that they can then monitor the performance of the building.
I have the figures in front of me. North Star Housing calculates that the cost of decarbonisation work will be £45,500, with £12,000 going on solid wall insulation alone. While the work is being carried out, the property must sit empty for around 20 weeks, resulting in a void period and a loss of rental income. Given that other houses on the same street are valued at around £70,000, North Star Housing is looking at spending well over half of the value of a property in order to decarbonise it. It is simply not viable for housing associations to be spending that much to decarbonise their stock without targeted support and assistance.
Equally, private owners of those properties will face similar costs. However, although the up-front costs may be high, investing in the region’s homes now is, as Paul Blomfield said, a win-win scenario for northern communities, because it will lead to warmer, healthier homes. Upgrading a home from EPC E to EPC C would reduce bills by an average of £595 a year, whereas upgrading from EPC F to EPC G would reduce bills by £1,339 a year. These are not short-term cuts to energy bills, but permanent reductions in household energy consumption, meaning that more of people’s money will be spent in our local economy.
The Government have seen that their retrofitting schemes can and do work. Data from the Department for Business, Energy and Industrial Strategy shows that the total estimated annual bill saving for the 12,143 households upgraded in phase 1 of the local authority delivery scheme is £1.2 million. I therefore ask my right hon. Friend the Minister to outline what more the Government can do to ensure that we continue to deliver these schemes.
Retrofitting homes in the north will also play a huge part in delivering on our levelling-up agenda, with the north having the best chance to reap the economic benefits of our transition to a low-carbon economy compared with other regions of the UK. The large-scale retrofitting of homes in the north has the potential to deliver new skilled jobs in the green industries of the future—again, as the hon. Member for Sheffield Central said, a win-win.
The Northern Housing Consortium’s “Northern Powerhomes” report showed that a large-scale programme of social housing retrofitting could lead to the creation of 77,000 jobs in the north by 2035, 15,000 of which could be in the north-east. However, we have only around 1,200 qualified heat pump installers across the UK, so we clearly have a skills gap. I urge the Minister to do all he can to plug that skills gap and attract new entrants to the good green jobs that a focus on northern housing can deliver.
I also ask the Minister when the new energy company obligation scheme will begin. In the north, a high proportion of homes are fitted with insulation measures through ECO, and the support the scheme gives to low-income households is highly valuable. I understood that ECO4 was expected to begin in April. I would welcome any clarity the Minister can provide on the potential expansion of the scheme and when we might expect it.
We are now free of the bounds of Europe, and we can be bold, imaginative, creative and entrepreneurial. If we can lead the way in the north-east with carbon capture technology or hydrogen production, with vision our region can lead the way in innovating the retrofitting our old homes.
The north-east already has some innovative solutions. The Coal Authority in Gateshead is using mine water to generate heat for local homes and businesses. Will the Minister look closely at that project to see how it can be exploited at scale? Many gas boilers can already be made hydrogen-ready. As we transition away from fossil fuels, will the Minister look at what steps he can take to make every new boiler installed hydrogen-ready as soon as possible, rather than waiting for some date way off in the future?
Millions of homes across the country are just like those in the north, so the Government need both the carrot and the stick to drive this forward. We have no time to lose. I am proud of our built environment and want it to be preserved and protected for future generations, but I want my constituents’ homes to be warm and efficient too. There should not be a binary choice between two ambitions. There is a range of imaginative policy solutions and ideas to accelerate this process, including changes to stamp duty, incentives for home buyers to carry out these works at the beginning of their ownership, and creative financing through green mortgages, whereby the lender provides an initial sum on the original drawdown to fund the works, with the necessary conditions in place to ensure that the funds are not diverted elsewhere. We can even use the taxation system, through salary sacrifice. If it is good enough to fund car hire, the purchase of a bike or childcare, it should be good enough to provide improvements to our homes.
It is clear that improving the energy efficiency of homes in the north is a huge challenge. However, it can bring huge benefits to communities such as mine in Darlington. We can permanently bring down heating costs for millions of households, improve health outcomes for some of the most vulnerable in our society and level up communities that have been left behind by getting behind new, innovative green industries and delivering highly skilled jobs for our constituencies. I hope the Minister will give serious thought to all the points I have raised, and I look forward to hearing the rest of the contributions from across the Chamber.
It is a pleasure to serve under your chairship, Mr Robertson. I congratulate Peter Gibson on bringing this important debate to the House. Some of us were not sure whether the Government would be able to field a Minister for this debate, but most of us are glad to see the Minister in his place. Hopefully, he will be able to address some of our queries and concerns.
The cost of living crisis is hurting every constituency represented in the House of Commons. We have to be up front about the impact of housing on the cost of living, physical health and mental health. We have a housing crisis in this country. Many people cannot afford to rent, let alone pay the large deposit that is needed to purchase a home. We need a wider debate on the housing crisis across Britain, but particularly in the constituencies represented by northern MPs.
I agree almost entirely with what the hon. Member for Darlington had to say about the measures that the Government should take, but I will also highlight the fact that recently the standing charge for gas and electricity has increased. The unit charge has gone up significantly in the past few months, but the standing charge has doubled or increased even more in some cases, so that needs to be highlighted. Energy efficiency for a home or a house has a direct impact on the amount that people pay out for the use of gas and electricity. I appreciate that the standing charge will be the standing charge, but if we made our homes more efficient and cut carbon emissions, that would help people with the cost of living crisis.
The Government always talk about the progress that they have made in improving the efficiency of homes over the last 12 years, but the reality is that schemes are often poorly thought out and badly delivered. On that note, I will highlight a case from my constituency.
A constituent contacted me regarding the cavity wall insulation scheme. In 2013, he had cavity wall insulation fitted in his house for free through a Government initiative. He says that the work should not have been carried out because his house was not suitable, but the Government were funding this scheme so, in his words, many “cowboy firms” signed up to do such work and made an enormous amount of money.
Unfortunately, my constituent has not been able to let out the house where the work was done, or use it himself, because there have been lots of problems as a result of that work. He took the firm to court and was awarded £37,000 to repair his property, but he has never received that money because the firm that did the work has ceased trading.
My constituent works full time as an electrician, working between 46 and 50 hours a week, and he is facing serious financial hardship. That is having an effect on his mental and physical health, and he is in a lot of debt. He contacted my office and he feels that the Government have let him down badly. I have highlighted that case and I will write to the Minister after the debate, and I hope that he will be able to respond with something positive for my constituent.
The second case that I will highlight is that of Ms Phoebe Spence. I visited her a few months ago. She feels that it is very troubling that the Government are not making any effort to insulate homes effectively, are lacking in a strategy and are not addressing fuel poverty. I visited her home, which is a three-bedroom former council house that was built in 1920 on the first council estate in the Borough of Stockport. She had it retrofitted with external wall insulation and she has also had an air source heat pump installed. I was lucky enough to visit her and have a cup of tea with her, and she took the time from her day to show me all the changes that she has had carried out on the property. She said that she was able to fund that work because she had received a redundancy pay-out and also some savings, but unfortunately not everyone can afford such work.
I was elected in 2019, but in the years since I have submitted several written parliamentary questions on this issue. Parliamentary question 87882 was tabled on the health inequalities that exist as a result of inadequate housing in Stockport, Greater Manchester, the north-west and England. The Minister who responded was the now infamous right hon. Member for Tamworth (Christopher Pincher), but his answer did not really address the question. I hope that the Government will listen to Members on both sides of the House and that the Minister will be able to respond with something positive for both the constituents I have mentioned. Thank you for calling me early in the debate, Mr Robertson.
It is a privilege to speak in this important debate, Mr Robertson, and it is a pleasure to serve under your chairmanship.
I begin by congratulating my constituency neighbour, my hon. Friend Peter Gibson, on securing this important debate. Although energy efficiency has always been important from an environmental standpoint, the significant increase in energy costs that the UK is experiencing has made it more relevant than ever. Cost of living pressures, and the changing economics of gas and green energy, have significantly increased the opportunities provided by energy efficiency. The cost of gas has increased dramatically, but the cost of installing a heat pump or something similar has not moved. However, the economics are changing massively, in terms of how this will play out.
Sedgefield surrounds Darlington, and it has many villages, from Hurworth to Ferryhill, and from Wheatly Hill to Piercebridge. It has a variety of different properties. Given that the constituency also covers almost 240 square miles, it has many farmhouses and outlying buildings that present energy efficiency challenges.
According to statistics from the Department for Business, Energy and Industrial Strategy produced in April, the north-east has one of the highest rates of fuel poverty in the country. Energy efficiency is one of the three factors that cause fuel poverty, according to the End Fuel Poverty coalition. Although improvements to energy efficiency in households that are struggling with energy costs will not solve the problem on their own, they are certainly a welcome step.
Durham County Council estimates that improving energy efficiency in homes in former mining villages could save households around £250 a year on bills. I think that figure was calculated before the current inflationary price increases, so it is probably much more than that now. The Government have a role to play in enabling residents to make their homes more energy efficient. Although it was not perfect, the green homes grant voucher scheme was broadly popular in providing a substantial subsidy for those who wanted to make their home more energy efficient, but could not cover the entire cost of doing so. The local authority portion of the scheme, which awarded councils funding to upgrade homes for low-income families, was particularly necessary, given how expensive such upgrades can be. For example, the tradesperson site My Builder estimates that insulation work starts at around £200 per external cavity wall. Such work on a two-storey terraced house would cost about £400, but the price increases steeply for buildings built before the 1920s, which usually have solid walls. In that case, internal wall insulation starts at £4,000, but can cost much more depending on the size of the house. Solid wall insulation is even more expensive, starting at around £7,000, and without some help, it is likely that many households in need of insulation would not be able to afford it.
To make rural homes energy efficient is a particular challenge, because they are often, or rather always, somewhat isolated and not connected to gas mains. To enable those properties to have a low-carbon heating scheme was one of the measures covered by the green homes grant. To be fair, Durham County Council took full advantage of it, using more than £5 million of Government funding to install more than 100 low-carbon heating systems in rural homes across the county. It also used to funding to install insulation in villages such as Chilton and Ferryhill. I was pleased to join Lord Callanan when he visited to inspect the properties and to see how delighted the residents were with the scheme, and how much it had improved their situation.
Another barrier to making homes energy efficient, which was mentioned by my hon. Friend the Member for Darlington, is absentee landlords. We may have a terrace of low-value houses and while it is all well and good for someone to insulate their own house and the two walls adjoining the other properties, if the house next door is empty, there will be a great deal of leakage from the heating system. That situation does not incentivise people to make their properties energy efficient. Similarly, a tenant whose landlord has refused to make their house more energy efficient has no option but to pay more for their energy.
My hon. Friend the Member for Darlington has also referred to the fact that the cost of updating a property compared with its value is a major problem in the north. In some of my villages, property can have a value as low as £40,000 or £50,000. If someone has to spend between £5,000 and £10,000 on insulation, even at a basic level that represents a substantial amount of the value of the property. Neither the individual, nor a social landlord or private landlord, will see value in trying to do that. However, it is important for that work to be done so that householders have a better economic base for paying their ongoing fuel costs. We need to make sure that we support them in that endeavour.
We have many different styles of housing in the constituency, so we need a range of insulation options. The same is true about our move to green energy. The local geography provides particular challenges and opportunities. Former mining villages, where houses are close together, are suitable for district heating systems. Geothermal heating is also a possibility in County Durham due to the former mines. Some of my colleagues recently wrote in The Times that the Durham Energy Institute at Durham University has led the way on that research for a while. Support of such solutions can make a huge difference for residents and home owners, whether they are individuals or landlords. I believe that the solutions are out there, and I would like to continue to support the variety of initiatives that help, whether that is supporting insulation, addressing empty properties or promoting the transition to options that could be greener and more cost efficient in the long term, such as a district heating system—possibly even driven by the utilisation of mine water heating. Those opportunities, once in place, can be cheap to run and environmentally efficient. I am confident that we have the solutions to the north-east’s domestic energy problems, but it is a question of ensuring that they reach the households that need them. The Government have made progress in this area. I look forward to them continuing that and taking further steps.
It is a pleasure to serve under your chairmanship once again, Mr Robertson. I thank Peter Gibson for giving us all the opportunity to be here to debate and ask questions of the Minister on this vital subject. Retrofitting homes, and ensuring that new homes are built to meet energy-efficient standards, is one of the most important things we can do to meet our net zero commitments by 2050. It was only in 2019 that Parliament declared a climate emergency. To reach net zero, we have to insulate Britain and if we do not, we will miss those targets by a mile.
The challenge we have before us is, of course, immense. The UK’s housing stock, as the hon. Member pointed out, is among the oldest in the world and the leakiest in western Europe. It is thanks to the Government’s inability to build the necessary number of houses of the right tenure and in the right places that things are going at a snail’s pace. There is considerable debate about the immediate challenges facing the Government around targets, but the consensus is around the 300,000 mark, which is highlighted in the Bill currently going through Parliament. As we speak, new homes are not, in the majority of cases, being built to the standard of energy efficiency we would expect. In fact, 1.5 million new homes have not met that standard over recent years. As hon. Members across the Chamber have rightly pointed out, that contributes to the dire situation on energy costs for every family in this country. There were reports in the media today—despite lots of other things we are focusing on, particularly the Government—that those bills are projected to rise to £3,000, so this is more important than ever. The failings on residential energy efficiency must be seen through the lens not only of the Government’s failure on climate policy, but of their failure to ensure that everyone in this country has a good, safe home.
Across the north, 19% of all homes are classed as non-decent and 12% fail to meet minimum standards, posing a category 1 health hazard to residents, which means potential death, permanent paralysis or serious injury. What kind of society lets 12% of its constituents live in those conditions? The energy efficiency of homes in much of the north is below the English average, which has been rightly pointed out as being shockingly low in itself. Across the country, nearly 60% of homes are not in the top three bands for energy efficiency. The north-west comes in just under the national average and the north-east just above, but Yorkshire is falling far behind and has the lowest proportion of any English region, with only one in three houses meeting efficiency standards.
Applying regional figures on energy certificates to the number of dwellings in the two local authorities covered by my constituency of Weaver Vale gives a rough idea of the scale of the challenge more locally. Some 35,000 homes in Halton alone need to be upgraded, alongside an incredible 96,000 in Cheshire West and Chester. As well as being a huge challenge, upgrading 19 million homes nationwide is an incredible opportunity. The economic case for making homes green is clear in the levelling-up White Paper, which has been referenced. In fact, the White Paper talks about an intervention in skills creating opportunities and 240,000 jobs by 2035 for the upgrading of homes. The hon. Member for Darlington referred to 77,000 jobs in the north. It is a strong case that has political consensus.
Can the Minister outline what the Government are doing to work with businesses, schools, universities, colleges and training providers to ensure that our localities have the skills that we need? I was at an event yesterday—just as other events were unfolding—at the Royal Society of Arts. Mayor Burnham was there, as well as Mayor Andy Street. Their asks of Government at the moment are to turbocharge devolution, particularly around the skills agenda, and ensure that the budget captured from Whitehall is put into the localities, whether that is Greater Manchester or the west midlands, to drive forward this agenda. Again, it is about common sense and political consensus.
Despite the hon. Member for Darlington referring to the non-partisan nature of the debate, we are of course politicians, and we do have different values and ideas, whether we are social democrats or conservatives. At times, political choices have consequences. Certainly in the past, the Conservative story of green homes has been one of short-term thinking and broken promises. To evidence that, back in 2013, the Conservative-led Government cut energy efficiency programmes. I will of course not let the Liberal Democrats off there, because, despite much denial, they were part of that Government at the time.
I beseech the hon. Gentleman to recognise that this is a failure of Governments of all colours over many decades to sufficiently and completely resolve this problem. It is a massive problem that every previous Government have failed to tackle. I welcome the steps the Government have taken, and I have urged the Minister to invest more. If we are going to be party political in this debate, I would love the hon. Gentleman to outline what his Government between 1997 and 2010 did to tackle this problem, because these constituencies that we are talking about were largely Labour-held constituencies at that time.
The standards that were ditched would have come into play in 2015, which would have meant that hundreds of thousands of homes would be retrofitted and insulated and built to better standards. The new standards do not come into play until 2025—that is if the current Government exist over the next few months or even weeks.
There was also the green homes grant flagship scheme, which was scrapped just six months after its launch. There has been reference to the current social housing programme, which I welcome. Certainly, social housing providers in my constituency are trying to capture that investment, but again, it is insufficient, short term and bureaucratic. It could be better. That is feedback we will all get, regardless of our political persuasions.
I doff my cap slightly to the Welsh Labour Government, who have just announced £33 million in green funding for residential developers to help them deliver thermally efficient and lower-carbon homes, many of which will be available for social rent. The Government could do better on that—fewer than 6,000 homes for social rent were built last year. We need to be more ambitious.
Having spoken to developers, social housing organisations and councils, what they really need from the current or future Governments is leadership, clarity and a long-term strategy. If housing associations want to plan for the future, they need to do so in 10 or 20-year cycles. At the moment, with some schemes running for only six months, it is very difficult to plan or invest in some of the basics to do with upskilling our local communities.
In conclusion, I have three questions for the Minister. How will he respond and focus on the long term—despite the current challenges—rather than on the short term, in getting to net zero by 2050? What support will be given to the private rented sector and landlords on retrofitting? What investment is going into stimulating green hydrogen, beyond blue hydrogen, with our various projects, whether in the north-east or in the north-west, which are fantastic for energy-intensive industries? We need that investment, and we need it now.
It is a pleasure to serve under your chairmanship, Mr Robertson.
I congratulate Peter Gibson on securing this important debate. The energy efficiency of homes is incredibly important as we face the challenges of climate change, cutting emissions and the cost of living crisis, with sharp increases in energy costs that will be devastating for many of my constituents. It goes without saying, but we all know that the north is colder than the rest of the country, so I am not surprised that he chose to focus on that part of the country for the debate.
I am very concerned about what this winter will bring for those people on low incomes. Many Members have spoken about fuel costs and so forth. The hardship, grinding poverty and health implications should not be underestimated. One of the things that we can do, therefore, is to improve the energy efficiency in existing homes as a matter of urgency.
Citizens Advice has been in Parliament today, and it highlighted the issue. It has talked about how effectively insulated homes will help to reduce soaring energy bills by making heating our homes easier and cheaper by ensuring that heat is retained better. As my hon. Friend Mike Amesbury mentioned, however, the UK has the least energy-efficient housing in Europe.
The Government must match the ambition shown by Labour to insulate 19 million homes within a decade. That move would save households an average of £400 a year on their energy bills. I am keen to hear the Minister commit to that. In the Liverpool city region, metro Mayor Steve Rotheram, has invested nearly £60 million to retrofit more than 5,500 homes. Funding is being targeted at the most disadvantaged households, making their homes more energy-efficient and cutting their fuel bills. Many of the more than 700,000 homes across the region could be retrofitted, if the Government were to come forward with more funding. Will the Government provide additional funding to local areas such as the Liverpool city region so that more homes can be retrofitted?
Will the Minister also tell us what he can do to ensure that we see an increase in the number of apprenticeships in the building skills we need for both retrofitting old homes and building new eco-friendly homes, so that young men and women can acquire the skills we need for our housing stock, secure well-paid and skilled employment, and contribute to their communities in an incredibly practical way?
Finally, I want to say a few words about new build. My constituent Colin, who is an architect, has designed a series of ultra low energy net zero carbon homes. The homes follow the same principles of the award-winning Passivhaus that Colin designed for himself and his wife Jenny in 2013. I have visited the house on a number of occasions and it is incredibly impressive. The house is based on the Passivhaus energy design standard developed in Germany and is designed to provide a high level of comfort, while using very little energy for heating and cooling. Colin and Jenny’s home features triple glazing, LED lighting and an air source heat pump. It costs less than £70 for a year’s supply of energy for heating, lighting, hot water and cooking. It is inspirational and I think we are all quite shocked to hear that figure, but it shows that it can be done and, with political will, the Government could make that happen at scale.
The issues we are debating today are incredibly urgent. I hope that the Minister will come forward with a clear commitment and set out how the Government intend to step up to this challenge.
We have had a good and important debate this afternoon. I congratulate Peter Gibson on bringing forward the debate and on the exemplary way in which he put forward his case. I largely agree with what he said, particularly his emphasis on conditions in homes in the north of England and the work we need to do on retrofitting. He gave a number of instances of homes in the north of England and their circumstances, particularly the average age of properties, and the fact that it is rather colder up north than it is down south—I say that as the Member for Southampton, Test.
In the north of England, property stock is substantially older than the average for the UK and, as the hon. Member for Darlington mentioned, that older stock is substantially single-skinned properties, which need different forms of treatment from properties with cavity wall insulation. From energy efficiency surveys, it is interesting to see that pre-1930s properties have a median energy efficiency score of 56, according to the report I am looking at, whereas buildings built from 2012 onwards have a median energy efficiency score of over 80. So we have a huge block of properties in the north of England that have very low energy efficiency scores, and it is difficult to do anything about them other than provide whole-house treatment for the amelioration of their problems.
Bearing in mind that issue, we also have a huge gap between the emissions from new build properties and those from existing dwellings. Indeed, the north-east has one of the largest gaps between emissions from new and old properties. In the north-east, there are emissions of just over 1.5 tonnes of carbon dioxide per year from a new property, compared with over twice that amount—3.6 tonnes per year—for existing properties. So there is a huge job to be done, particularly in properties in the north of England, to help us get to our net zero targets and to retrofit properties throughout the country.
The call from the hon. Member for Darlington for much more work to be done on the energy retrofit of properties is important for climate change purposes and for future energy bills. It is estimated that £400 to £500 can be saved from energy bills in an uprated energy-efficient property. It is also important for the comfort and good living that we expect in any household in the country. The problem relating to damp and older properties is not just in his part of the world, but in the north generally. This debate is timely and important, and we must have the retrofit debate in the not too distant future.
I cannot be entirely non-political in this debate, as the hon. Member suggested we should be, although we all agree in this Chamber on what we want to do with retrofitted properties and on why it is important and relevant to climate change, fuel poverty and the welfare of citizens.
I am pleased to hear the tone of the hon. Gentleman’s speech up to this point. Although the debate is focused on the north and north-east, and on the types of housing stock in my constituency and other northern constituencies, I am sure that the type of housing stock in his own constituency—perhaps he will mention that—would benefit from some of the improvements, even though his constituency is on the south coast.
I can assure the hon. Member that I am not approaching this debate as if all the retrofit problems are in the north of England and not in the south. It is a national scandal that homes across the UK have got some of the worst energy efficiency performances of any properties in Europe. On other occasions the Minister has said that it is not such a big problem because of the way in which energy efficiency has increased in our housing overall in the last few years.
However, if we look at all parts of the country, there is a big lag between the energy efficiency, albeit under slightly different circumstances, across the country and the energy efficiency of new properties, so the figures do not quite tell the truth as far as energy efficiency improvement is concerned. Most of that improvement is because newer housing, recently built properties, are so much more energy-efficient than older properties. In fact, as we can see from the collapse of energy efficiency retrofit arrangements after 2012, there has not been a great deal of movement in the energy efficiency of properties in all parts of the country. The north of England faces even worse problems in getting its property up to retrofit standards than other parts of the country.
All of us in this Chamber have alluded to the scale and size of the problem. Does the hon. Gentleman agree that this is also a really complex problem because of the types of ownership of some of our properties? We are not talking about just one type of ownership. There are private landlords, social housing providers, absentee landlords and private homeowners, which makes the problem particularly complex. As we have so much time remaining in the debate, I would be incredibly grateful to the hon. Gentleman if he could outline some of his suggestions and proposals to tackle the problem.
The hon. Member invites me to make a lengthy speech about what my party has in mind for energy retrofit, but also about what my party has in mind for dealing with complex situations in different sectors of the housing market. He rightly says that the question of energy efficiency standards is very different in different tenures of property—social housing, private rented sector and owner-occupied housing—and the solutions that one needs to put forward have to be different for different kinds of tenure. Furthermore, as I am sure the hon. Member has noticed, those tenures are intermixed with each other in most areas, so there are very few parts of the country where there is just one kind of tenure.
In my constituency, one of the issues is that there is a very high level of houses in multiple occupation and properties that are rented out by private landlords. There is also a substantial student population in my city, so a number of the houses are rented out by private landlords on a quick turnover, and with very little regard for the energy efficiency of those properties in the long term. Although one might say that the general housing arrangements in my city are better for energy efficiency than in some other parts of the country, there are specific issues relating to how energy efficiency might be looked at. One issue is just how bad energy efficiency is in the private rented sector and what measures need to be undertaken to get those houses to a decent level of energy efficiency in order to make them marketable rental properties.
In the past, a specific part of the legislation was on minimum energy efficiency standards. We think that needs to go a lot further by addressing the marketability of homes and the requirement on landlords to get those properties up to a decent energy efficiency level in order to rent them out in the first place. As the hon. Member for Darlington will know, there is legislation in place that requires landlords to bring their properties up to the band E energy efficiency requirement, but that is grossly insufficient for the targets that we need to set on getting the private rented sector up to scratch with energy efficiency.
I am grateful for the hon. Gentleman’s indulgence in giving way a third time, and for him talking about putting the burden of meeting those property costs on some of our landlords. We have seen examples of landlords being forced to do some of the work that is required to bring their properties up to standard. As a result, they are exiting the market—some people might say that is a good thing—and then selling the properties, which is having a deflationary impact on the value of properties in specific localities. In turn, that compounds the problem of the ratio between the cost and value of the asset and the cost and value of the investment required, which can actually have the opposite effect to the one desired.
The hon. Gentleman is admirably setting out a series of concerns about how we address the process of retrofitting, which we need to think about very carefully. One of the things that concerns me—here I get a bit political—is just how bad the Government’s overall retrofit programme has been over a long period. It is not just about the collapse of schemes from 2012 onwards. In the previous debate, somebody asked what happened in energy during the previous Labour Government. Well, a lot happened: the carbon emissions reduction target, the community energy saving programme and warm home grants.
There has been a real noticeable increase in standard assessment procedure ratings in properties over the years. From about 1990 to 1995-96, the schemes really started working, and they were publicly funded. What happened in 2012 is that the publicly funded schemes were removed, and after that the schemes were entirely market based. The green deal died a death. Recently, the green homes grant was sort of publicly funded, but it also rapidly died a death.
Significantly—I want to emphasise this point, in terms of how we treat retrofit—the only part of the green homes grant that was successful was the part that applied to local authorities. Local authorities were and are able to take some of that grant and do a lot of good work. Paul Howell said that his local authority has done a lot of public work on that, yet the Government systematically set their face against the idea that local authorities can play a substantial leading role in retrofitting.
I suggest—the hon. Member for Darlington and I spoke about this a moment ago—that the case has overwhelmingly been made for retrofit funding. We are saying that there should be a 10-year programme to retrofit 19 million homes of all tenures through a combination of loans, grants and direct local authority schemes, with two million homes retrofitted immediately. That would be a comprehensive programme of retrofitting across the country, with the emphasis on area-based schemes so that local authorities can look at where their areas are worst and at what needs to be done in their particular circumstances, and concentrate resources accordingly on retrofitting with that knowledge and those concerns at the front of their minds. How much better would that be than the sorts of schemes we have had over the years? In this case, energy companies have been asked to go around and pick out individual properties to do up to a greater or lesser extent.
I declare an interest: I am a private landlord. Does the hon. Gentleman agree that, in terms of segmenting the approach and trying to make sure it is right, we need a different approach when considering the economics of the north, for landlords and owners, in contrast to the high-value property areas of the country, to ensure that we focus on absentee landlords and people who are not doing the right thing? In parts of the north they almost walk away because the value of the property is so low. We need to ensure that does not result in the properties becoming derelict. Rather, they should either be resold or go back into the rental market properly.
I agree with the hon. Member that we need to ensure that we tailor our programmes, not just to the particular areas of the country but to the particular resources that we will need in order to deal with the arrangements in different parts of the country. Labour’s programme would not only allow that to happen, but ensure that, right across the country, we were not applying a one-size-fits-all arrangement and we were allowing local authorities in particular to tailor their programmes. We can imagine the equivalent of the old housing improvement areas or general improvement areas being applied in the form of energy efficiency improvement areas in various local authority areas. They would be chosen by those local authorities, and would be able to concentrate on different tenures in the way that the hon. Gentleman outlined. The difference is like night and day between what Labour is proposing at the moment and what the Government—albeit they have spent some money on retrofitting—continue to try to do.
I just want to take a few more minutes, because I appreciate that we will in the end run out of time—even though we have more time than we thought—and I want to give the Minister ample time to reply to the debate. I would like him to address his thoughts to three particular questions.
One of the only schemes that is doing any serious work on retrofitting at the moment is ECO—the energy company obligation. The ECO scheme is now in its fourth iteration; ECO4 was supposed to come onstream in April this year, and the hon. Member for Darlington asked, “Where is ECO?” There is an answer in the press release for the Energy Security Bill that appeared on my desk today. That press release states:
“The current ECO4 scheme came into force in June 2022 and will run until March 2026.”
That is just not true. No ECO4 scheme is in operation at the moment, because the regulations have not yet been sorted out as far as this House is concerned; we still have to discuss them and put them into being. Today, I was at a lunch where an energy management and building company guy sitting next to me was bemoaning the fact that the people there could not just get on with ECO4 because they just do not know what is going to happen with the regulations.
Therefore my first question to the Minister is this. When will that happen so that we really can get under way with ECO4? Why has he put it in the Energy Security Bill that ECO4 has already started when it has not? Can he get it started as soon as possible so that the people I have been talking to recently can actually have some security about the future arrangements for retrofit? We obviously consider that the uprating for ECO4 that has already taken place, from £750 million to £1 billion, is welcome but not enough. Certainly we would want to see that programme substantially increased in size at a very early stage in order to get this retrofit programme going as quickly as possible.
The second question is this. Why is there nothing in the Energy Security Bill—as far as I can see—that takes us beyond the level of ECO4? Certain things in the Bill suggest some amendments to ECO4, but there is nothing to take us beyond that particular scheme in the way that has been described today in this Chamber. I do not know whether the Minister—because I suspect that the Energy Security Bill is a Bill in progress even as it is published—will want to bring forward amendments, during the passage of the Bill, that allow those further things to take place, but I will be interested to know this afternoon whether that is under serious consideration.
As I think every Member present this afternoon has said, this is a pressing problem that needs to be sorted out as quickly as possible, and on the widest scale that is compatible with our net zero commitment and the duty we have towards our citizens’ style of living, energy bills and expectations of what their housing will look like in future years. Pushing forward on that is something we in this Chamber are completely united on, and I look forward to hearing the Minister’s response to that unity of purpose.
It is a pleasure to serve under your chairmanship, Mr Robertson. I congratulate my hon. Friend Peter Gibson on securing this important debate. As ever, it is excellent to have so much good representation in the north of England from our party.
This Government’s unwavering commitment to decarbonise the country’s 30 million buildings has the welfare of those who most need energy-efficient homes at its very core. Getting to net zero is not just a legal commitment; it is the right policy for this and future generations. Improving the wellbeing and living conditions of northern communities is a key part of the levelling up of all our towns, cities and regions as we build a green Britain that works for every part of the country.
Underpinning all our work in that area is the heat and buildings strategy, a copy of which I have brought to this debate, published at the end of October 2021. It explores different options for low-carbon heating, from hydrogen trials to heat networks and increased use of heat pumps, to meet the challenges of each region of our country, recognising that there can be no one-size-fits-all approach.
At the same time, we are taking a fabric-first approach to retrofit, ensuring that emissions are reduced first, regardless of how buildings are heated. That will be supported through a commitment to invest £6.6 billion during this Parliament, which is funding technology trials and capital schemes such as the home upgrade grant and the boiler upgrade scheme. In the past year alone, we have committed more than £1.3 billion to domestic retrofitting schemes, which was one of the central points raised by my hon. Friend the Member for Darlington and, indeed, other Members.
We have prioritised the worst performing low-income homes to receive measures such as external wall insulation and clean heating systems. That has already lifted thousands of households out of fuel poverty, and future phases of home decarbonisation will upgrade over half a million more. Families who would not be able to afford energy efficiency improvements for themselves will be able to face future winters knowing that they will be warm, sometimes for the first time.
Our local authority delivery scheme and home upgrade grant empower local authorities, which know their communities and housing stock best, to decarbonise local homes according to specific needs. In the north, around £226 million of funding has been allocated to local areas through the latest phases of those schemes. As many Members have said, the north of England has benefited disproportionately from the energy company obligation. Since that scheme started under this Government in 2013, over 13% of homes in the north-west and over 12% of homes in the north-east have received energy efficiency measures. Indeed, 12.2% of households in Darlington have had their homes improved under the energy company obligation, compared with an average of 9% across Great Britain.
My hon. Friend the Member for Darlington, who is vice-chair of two relevant APPGs and knows the engineering heritage of his town so well, made an excellent speech. In researching it, he sat down with local housing providers such as North Star Housing, which quoted some striking sums regarding the costs of retrofitting a home relative to the value of that home. My hon. Friend made some thoughtful arguments about how we should evaluate the cost efficiency of those different measures. He also pointed out that 64% of properties in Darlington are rated below brackets A to C on energy efficiency, which shows that despite the progress we have made on energy efficiency—particularly over the past decade—there is still much work to do. That is why we are investing £6.6 billion over the course of this Parliament.
We had an intervention from Tulip Siddiq, who is not in her place anymore, to say two things. She attacked the Government’s record on renewables, nuclear and energy efficiency. I found it startling, considering that when the last Labour Government started their period in office, they said that when it came to nuclear, they saw no economic case for new nuclear power stations in this country. That was at the start of their 13 years in office.
On renewables, we have taken the amount of energy generated from renewable sources since 2010 from 7% of the energy mix to 56%. That is an incredible increase in our renewable output as part of our energy mix.
The Minister is right that my hon. Friend Tulip Siddiq is not in her place, but would he not agree, or concede, that it was a Conservative Government that pulled the funding for solar on people’s roofs, stymying an industry and making it much more expensive for people to install solar? Precious years have been lost, and we could have had many more solar panels on our roofs.
I fundamentally disagree. Solar has done incredibly well in this country. We have a big capacity in solar—I think around 14 GW. Our ambition is to grow that to 70 GW. Part of that is thanks to the VAT reduction that we saw this year. I do not remember the hon. Lady supporting that VAT reduction on solar panels. The Government are taking active measures to increase and support solar energy.
On energy efficiency, when we took office in 2010, just 14% of properties in England were rated “energy efficient”. That has risen to 46%, which in 12 years is an incredible increase. However, that shows that 54% of our properties are still not sufficiently energy efficient, so we still have work to do, but we can only do it by making investment. The last Labour Government said there was no money left. Perhaps if they spent a little more on energy efficiency in those 13 years, we would not have been in a position where only 10% of homes were rated A to C when we took power.
My hon. Friend the Member for Darlington asked when the new energy company obligation scheme will begin. I think the shadow Minister, Dr Whitehead, also raised that same point. A three-month interim delivery phase was introduced between
My hon. Friend the Member for Darlington also asked about energy advice. Our simple energy advice service, launched in 2018 in response to the Government-commissioned “Each Home Counts” review, provides homeowners with impartial and tailored advice on how to cut their energy bills and make their homes greener. The service has been accessed by over a million users.
I will make some progress and respond to the points made in the debate. My hon. Friend Mike Amesbury raised the really important point of skills. I chair the newly established green jobs delivery group with Michael Lewis, CEO of E.ON UK. In 2021 the Government invested £6 million in a BEIS skills training competition, resulting in 7,000 more training places for heat pumps and insulation. The hon. Member for Weaver Vale also commended an event about skills attended by Andy Burnham and Andy Street. It is good to see constructive cross-party work. I only wish that the Mayor of London would follow such a constructive approach to cross-party work, as the Mayors for Manchester and Birmingham often do.
Navendu Mishra asked about using legitimate builders, not cowboys. All insulations under Government schemes, including ECO, the social housing decarbonisation fund, the home upgrade grant and the local authority delivery scheme, must be completed by TrustMark-registered businesses, adhering to the latest requisite standards. These requirements are based on the recommendation of the “Each House Counts” review, an independent review of consumer protections and standards.
If the hon. Gentleman has a specific case in mind, I would urge him to take that up with the local authority trading standards.
In an excellent contribution, my hon. Friend Paul Howell mentioned fuel poverty, which is actually falling in this country. Last year, it accounted for 13.2% of English households and this year it accounts for 12.5%. Obviously, that is not satisfactory, and we need to keep bearing down on fuel poverty, but that situation is improving. I am glad that he welcomed my ministerial colleague, Lord Callanan, to the north-east; he leads the ministerial team on energy efficiency.
My hon. Friends the Members for Sedgefield and for Darlington referred to retrofitting, as did other hon. Members. Our £1.8 million green home finance innovation fund, which completed in March 2022, was a key early step in supporting the lending community to design, develop and pilot green finance products for homeowners. The Government will provide up to a further £20 million to support the development of innovative green finance products and services that will diversify the green finance market and enable both owner-occupiers and private landlords to decarbonise their homes and improve thermal comfort.
My hon. Friend the Member for Sedgefield asked about VAT. We have introduced a zero-rating VAT for the installation of insulation and low-carbon heating for the next five years, which will give real certainty to the market. That will save between £1,000 and £2,000 on the cost of an air-source heat pump. My hon. Friend also raised the private rented sector, and I can tell him that we consulted on raising the standard to EPC band C for new tenancies from
Margaret Greenwood asked whether we will give money to local regions, such as Liverpool City Council, to retrofit. I can tell her that phase 2 of the local authority delivery scheme allocated £300 million to the five local net zero hubs, which will work with their local authorities to continue to deliver energy efficiency upgrades to up to 30,000 homes across England to those most in need. In this Parliament £6.6 million has been spent on energy efficiency, and a great deal of that has been assigned to local authorities via the home upgrade grant, the LAD scheme and the social housing decarbonisation fund. In LAD 2 funding, the regional allocation of £52.8 million is going to the north-west—the hon. Lady’s region.
The hon. Lady also asked about new-build homes being built to passive housing standards to create lower bills. On new build, the Government have announced that the new future homes standard will be introduced from 2025. That work is ongoing, and in the interim an improvement to part of the loft building regulations came into effect on
The hon. Member for Weaver Vale asked about training providers and businesses. As I have already said, we have invested £6 million in the BEIS skills training competition, resulting in more than 7,000 training opportunities.
The hon. Member for Southampton, Test lauded the big increase in energy efficiency across the country. I think he argued that the figures are due to the better energy efficiency of new homes. We are not looking at an average figure—the increase from 14% to 46% of the housing stock—rather we are looking at the percentage of the total number of homes that are rated A to C. The fact that a new home will be particularly, staggeringly, energy efficient will only count as one home in the denominator. The key thing is moving homes in the numerator to make sure that more new homes are created energy efficient and that older homes are retrofitted to get them into the A to C bracket.
The hon. Gentleman asked what the Government are doing to support consumer bills. The Government have acted to protect the 8 million most vulnerable British families through a £37 billion package of support to help those households with the cost of living crisis. That includes at least £1,200 of direct payments this year, with additional support for pensioners and those claiming disability benefits. Three quarters of the total support will go to the vulnerable households who need the most help.
Later this year, the social housing decarbonisation fund is due to launch its second wave of funding to 2025, from the £800 million committed in the heat and buildings strategy to install energy efficiency measures in social homes. The first wave of that funding is investing £63 million in retrofitting around 8,000 homes in the north of England.
Improving the wellbeing and living conditions of northern communities is a key element of the levelling-up agenda that we have embedded across all Departments, with the ambition that by 2030 the number of non-decent rented homes will have fallen by 50%, with the biggest improvements in the lowest performing areas. We know there are significant regional variations in emission levels and communities will face different challenges when meeting net zero commitments. The north accounts for around a quarter of the UK’s emissions, so it is well placed to make a huge contribution to UK decarbonisation.
As Government-funded energy efficiency work rolls out in the coming years, there will be a need to scale up the supply chain and build a skilled workforce, which will take time. To meet that long-term challenge, we have provided £4.7 million of funding to test how we can grow the installer supply chain and a further £2.5 billion in a national skills fund, helping to support hundreds of thousands of green jobs.
The north is in a key position at the centre of net zero innovation, growth and opportunities for green jobs. For example, the new Lancashire Energy HQ, part of Blackpool and The Fylde College provides state-of-the-art training for excellence in energy standards; it was good to hear an intervention earlier from my hon. Friend Scott Benton. Centres like that may provide job and skill development opportunities for many in communities benefiting from our domestic retrofit programmes. In fact, we expect the decarbonisation of buildings to support up to 240,000 jobs by 2035, resulting in £10 billion additional gross added value by 2035.
In my Department, we know that we need to remove virtually all emissions from buildings to reach net zero. We also know that we have a duty to protect those who are most vulnerable, and to support consumers and businesses as we decarbonise our buildings. I want to ensure that consumers will benefit from higher energy performance in homes and workplaces, from improved health and comfort and from lower emissions and lower bills. I thank my hon. Friend the Member for Darlington for proposing this excellent and well-informed debate.
It is a pleasure to follow the Minister, and I thank him for his response to today’s debate. It has been a healthy debate. We heard some great speeches from my hon. Friend, neighbour and constituent Paul Howell, the hon. Members for Stockport (Navendu Mishra), for Weaver Vale (Mike Amesbury) and for Wirral West (Margaret Greenwood), and the Opposition spokesman, Dr Whitehead, although I was disappointed to not actually hear the meat and drink of Labour’s plans to tackle the problem.
We had interventions from my hon. Friend Scott Benton and Paul Blomfield, who gave me the great line that tacking this problem is a “win-win-win-win-win” situation. We also had a deeply political intervention from Tulip Siddiq, who is no longer in her place.
It is clear that the Minister understands the challenges of our housing stock—the energy, retrofitting, disruption and lost income costs and the energy wastage—but also sees the benefits of warm homes, less leakage, improved health, skills and jobs that tackling this problem will bring. It was wonderful to hear the progress that has been made over the last 10 years, taking us from 14% to 46% of homes having an energy performance certificate of C or better, but let us accelerate that and make sure this is a win for the environment, homes, bill payers, jobs and skills.
Question put and agreed to.
That this House
has considered energy efficiency of homes in the north of England.
Order. The mover of the motion for the next debate is not here. I will give him a couple of minutes, but I will otherwise have to suspend the sitting until 4.30 pm.