Domestic Energy Efficiency (Call for Evidence)

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to issue a call for evidence relating to the promotion and funding of the installation of domestic energy efficiency measures; to require the Secretary of State to publish a response to the evidence received; and for connected purposes.

We are now firmly within the year’s heating season. As the UK braces against the cold and the media continue to be flooded with stories of people unable to pay their bills living in some of the leakiest homes in Europe, the case for domestic energy efficiency is as strong as ever. The current understanding is that insulation subsidy, and the organisation and technical details around this work, have become confusing, chaotic and in some cases costly. We need a clearer understanding of what mechanisms of subsidy and which technical solutions deliver best value for money.

The average household is facing an annual fuel bill of over £1,700, and around 2 million households are in arrears. Surging energy prices have plunged many deeper into fuel poverty, widening the average fuel poverty gap nearly twofold since 2020. The estimated number of households living in fuel poverty now stands at 6.1 million.

I welcome the Chancellor’s commitment to tackle this crisis at the Budget. Thanks to the Government, households will see an average reduction of £150 in their energy bills from April next year. We have also expanded the warm home discount, which means that in total 6 million households will receive £150 off their energy bills this winter. But if we are to protect ourselves from rising energy costs due to Putin’s terrible illegal war in Ukraine, we must reduce our exposure to high energy use. If we do not address winter peak demand through energy efficiency measures, we can expect electricity requirements to more than double.

As a GP, I know that energy efficiency is key to improving health outcomes. Cold homes double the risk that adults will develop new mental health conditions and put one in four children at risk of multiple mental health symptoms. Physical health problems caused by cold homes are common. Mould caused by cold, damp homes can cause allergic-type reactions and the development of or worsening of asthma, respiratory infections, coughs, wheezing and shortness of breath. Cold also raises blood pressure and increases cardiac failure. The Building Research Establishment has found that poor homes that expose residents to excess cold could be costing the NHS £857 million a year in treatment bills.

I would like to mention the Severn Wye Energy Agency in my Stroud constituency, which works with us in the NHS to provide help for patients whose housing is causing ill health. I particularly commend its warmth on prescription scheme as a national exemplar of the NHS and energy efficiency working in tandem. I also commend SGS Berkeley Green university technical college—a fine institution that trains its students in implementing modern energy efficiency measures. The Government are committed to creating 400,000 extra clean energy jobs by 2030, and I know that we will see many of its students taking up those posts.

Our current framework of encouraging domestic energy efficiency through subsidies is unsustainable. Dependency on subsidies can lead to disaster striking, as we saw in the solar industry 10 years ago. We must therefore look at ways to diversify our package of support for energy efficiency to prevent such disastrous impacts on the supply chain, which impact on the strength of the workforce that will be needed in future.

Schemes under successive Governments have tended to use up-front payments to deliver energy efficiency measures. Those capital grant schemes are subject to the Treasury’s five-year spending reviews and short-term political intervention, creating boom and bust cycles that undermine confidence among both investors and consumers.

Our recent experience of installation has been poor. A report by the National Audit Office found that 98% of homes with external wall insulation installed under Government schemes have major issues requiring remediation, and 6% of those homes present immediate health risks. It is therefore critical that we look again at our incentives for energy efficiency. Everyone deserves to live in a home that is warm and safe without having to go through a remediation process for a botched installation.

The Sustainable Energy Association has developed a proposal for an energy efficiency incentive that can unlock greater investment by rewarding in-use performance of energy efficiency measures over several years through a revenue-based mechanism. The proposal would lower fuel bills across the country, keeping money in people’s pockets. In-use performance can be measured through technologies such as smart meter-enabled thermal efficiency ratings. Measuring performance is likely to drive up the quality of measures, as the financiers of those measures will have a strong financial interest in ensuring quality of product and installation.

The SEA’s modelling has found that fast-yielding technologies such as cavity and loft insulation and double glazing will require a seven-year subsidy framework, while slow-yielding technologies such as solid wall insulation will require a 25-year subsidy framework. Investors have been crying out for long-term policy certainty. The long-term nature of this subsidy framework provides investors with the confidence to invest, opening up a whole host of green financing options for retrofit schemes.

Other ideas that have been discussed include green loans that pay for the up-front cost of insulation. As energy needs decrease, the loan can be paid off to the benefit of householders. Some have proposed a national insulation bank, while others back schemes that link stamp duty reductions to the amount spent on home insulation, so that the benefits of installation are not lost if we move, encouraging low-carbon energy efficiency upgrades.

A call for evidence would certainly invite other innovative proposals to be brought the table. Although I hope the Bill will be unnecessary, what it proposes is a no-brainer that would provide solutions to problems that unite us as a House: soaring energy bills, energy security and the health of the UK population. I invite the Minister for Energy Consumers—the Under-Secretary of State for Energy Security and Net Zero, my hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey)—to back my campaign and issue a call for evidence.

That Maya Ellis, Irene Campbell, Paula Barker, Andy McDonald, Cat Eccles, Christine Jardine, Paul Davies, Fleur Anderson, Amanda Hack, Luke Myer, Steve Darling and Dr Simon Opher present the Bill.

Dr Simon Opher accordingly presented the Bill.