In Parliament in committee last month I raised several issues of importance regarding new energy efficiency measures being introduced by the Government.
Notably that the Green Deal which excludes tenants in privately rented properties from applying until 2018 unless their landlord gives them express permission to do so. The text of which is below. I have written in next weeks Accrington Observer about rising child poverty, unfair PRS rents and children arriving at the school gates hungry and unable to concentrate.
I also raised the issue of higher costs for prepayment meters and how they fit in with Green Deal repayments given they are not a fixed amount. See text at foot.
Later in debate;
Graham Jones (Hyndburn) (Lab): It is a pleasure to serve under your chairmanship, Sir Alan. Will the Minister remind the Committee of the position regarding the vulnerable households that he mentioned in the private rented sector whose landlords refuse to accept the green deal? Such tenants live in terraced properties that are hard to heat and they would really benefit from the ECO.
Gregory Barker: That is a good point. The green deal is great news for exactly those types of tenure; those people had a raw deal under previous schemes. We took powers under the Energy Act 2011 to ensure that, by 2016, no green deal could be refused by any landlord at the reasonable request of a tenant. By 2018, the deal will be mandatory as part of a minimum energy efficiency requirement.
We have taken strong powers and the year 2016 should be seen as a backstop, not a start. We have anticipated the rental cycle, when properties become empty and more ambitious measures can be installed, as well as the fact that it will take time for landlords to put all the measures in place. We certainly think that the private rented sector in particular will benefit greatly from the measures.
Pre Payment MetersGraham Jones: I am grateful to the Minister for being so generous; it is helping the debate. I wish to push him a bit further. I am thinking of people who could have PVC doors and windows, require insulation and live in terraced houses that are not historic properties. Is it right that they must wait to have their homes insulated in poor, rented private property—for either four or six winters, depending on whether the time threshold is 2016 or 2018?
Gregory Barker: Of course that is not right, but we see that as the end game; it is when we blow the whistle to signify that that the transformational change should come to an end. It cannot all be done in one year. A huge amount of housing stock needs to be renovated and we anticipate that the green deal will make huge sense for private sector landlords.
For the first time, landlords will have no disincentive in respect of upgrading their properties. They will have access to the finance. It will be good for the tenants, who will see an improvement in their properties, which will be warmer and healthier places to live. Such measures will have a beneficial impact on energy bills and there will be no cost to the landlord to upgrade the property. I expect rented private sector homes to be at the forefront among the homes that take advantage of the green deal.
We are talking about a transformational programme, so it cannot all be done in one go. However, I anticipate that within four years—by 2016—the vast majority of private sector rented homes will have taken advantage of the green deal, and those that have not done so will then be obliged to do so. For most people—for the many, not the few—this will be a great opportunity. Graham Jones: I am listening to the Minister with interest. Let us take my own constituency of Hyndburn. The two types of vulnerable householder that the Minister says he wants to protect are, first, pensioners—who I can see will benefit—and secondly, people in the private rented sector.
The vast majority of people in Hyndburn who are vulnerable live in the private rented sector in terraced stock, because 60% of the housing stock is terraced. If the landlords for those types of people say no, the vast majority of vulnerable people in constituencies such as mine will not receive help from the ECO. How is the Minister going to make that breakthrough and meet his own ambitions to help vulnerable people? In my own constituency and others, that will prove difficult while landlords are able to be exempt until at least 2016 or—probably, in reality—2018.
Gregory Barker: From 2013 to 2016 is three years. It would be very foolish indeed for any landlord to think that they would be better served by simply taking no action until 2016, knowing that they would then be obliged to take action, rather than taking advantage—particularly in terraced streets—of the street-by-street roll-out that will begin earlier.
The roll-out will be supported by the ECO, because it is not just about the green deal. In areas such as the hon. Gentleman’s constituency, I have absolutely no doubt that progressive local authorities will take advantage of the ECO subsidy and act on the beefed-up advice that I have issued about the Home Energy Conservation Act 1995. That advice obliges local authorities to draw
Column number: 8 up a plan about how they will roll out the green deal, with supporting ECO, in their areas. So it is exactly those sorts of tenant—tenants in terraced houses in deprived areas—who will be among the first to feel the advantage of ECO and the green deal.
The hon. Gentleman should talk to his local authority. If he is worried, he should convene a meeting of local landlords. He should also work with us. We will send officials—I will even come myself, if necessary—to explain the virtues and benefits of the green deal, because that is exactly where we need to see the green deal hit on the road.
Graham Jones: I am interested in what the Minister said about interest rates. That will become apparent, I presume, in the new year. An issue we discussed in Committee that keeps coming back is whether there will be a premium charge on pre-payment meters. Will the Minister update the Committee on his Department’s position on the green deal, charges for pre-payment meters and interest rates for those not on pre-payment meters?
Gregory Barker: I have to be honest with the hon. Gentleman and say that I will need to double-check, but I understand that there will be no premium for those on
Column number: 17 pre-payment meters. Obviously, they will continue to pay through that model, but I will write to him with better detail and clarification on that important point. My expectation is that there will be no penalties for those who are unable to pay either by standard credit or by direct debit.
Interest rates are important, which is why we are working with the green investment bank. If the shadow Minister is saying that interest rates should be lower, that will clearly require additional subsidy, so perhaps she should be honest and tell British consumers how much money she is prepared to put on their bills this winter to pay for that subsidy. Is it £10? Is it £100? Is it perhaps like the renewable heat incentive that the Leader of the Opposition, in his previous role, levied on consumer bills? The coalition took that levy off consumer bills before the public were stung for £178 on every bill. Is Labour going back to its old tricks and ramping up consumer bills any which way it can?