[Frank Cook in the Chair] — Home Energy Efficiency

Part of the debate – in Westminster Hall am 9:56 am ar 3 Mawrth 2010.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Danny Alexander Danny Alexander Shadow Minister without Portfolio 9:56, 3 Mawrth 2010

I am sure that my right hon. Friend is right. An extension of the principle behind the boiler scrappage scheme to other technologies over a fixed period would provide an incentive, which would encourage industries to flourish and the training of technicians. That would make a big difference to the availability of such support.

Before I move on to another issue, I should say that I would be interested to hear the Minister update hon. Members on the status of the renewable heat incentive. I have big concerns about a scheme that is based on adding to the costs faced by those people who already have the highest costs-people who use oil, gas and coal-to fund improvements that are necessary to reduce those costs. The financial burden of those sorts of improvements should not fall most heavily on people who are already facing the highest costs. The Government were consulting on and considering that issue, so I would be grateful for a status update and an assurance that the Government do not intend to place extra financial burdens on users of heating oil and LPG, whatever the environmental merits of the schemes that will be paid for.

I also want to ask the Minister one or two questions on another form of fuel that can help to deal with such issues and provide an alternative to healing oil: wood fuel. Wood fuel is renewable, available and, very often, local. For example, in a housing development where I live in Aviemore, a district heating scheme warms 100 homes and is fuelled by a wood fuel boiler that uses wood material sourced from the sawmill 7 miles down the road. That has reduced costs, had significant environmental benefits and is an example of the sort of thing that could be done more often with wood fuel.

A very good European co-operation programme is going on between people in Scotland and other European countries. It has been set up by an organisation called Highland Birchwoods, which is considering how the use of wood fuel can be encouraged and how wood fuel boilers on a domestic scale can be pushed forward.

I would be grateful for the Minister's help on the issue of the VAT regime on wood fuel. Hon. Members will know that VAT on fuel is charged at 5 per cent. As wood has a wide variety of uses, however, suppliers of wood fuel face a VAT charge of 17.5 per cent. at wholesale level. The Government provide very little information proactively to suppliers of wood specifically for fuel uses-whether to providers of pellets, wood chip or anyone else who might be taking wood on a wholesale basis and converting it into wood used specifically for fuel-about how to reclaim the VAT difference.

In my constituency, for example, log suppliers have in good faith understood that they were required to charge VAT at 17.5 per cent. on logs when, in fact, they should have charged 5 per cent., which would have made a big difference to relative costs, principally to the consumer. Government should try to make clear the VAT rates on wood fuel and ensure that information about how to reclaim the difference is made easily available to small suppliers. That would make a big difference to promoting wood fuel.

More skilled technicians who can install wood fuel boilers as part of a domestic or district heating scheme are also needed. I commend to the Minister the work being done at Inverness college in my constituency to train up such technicians. As the technology becomes available and is more widely promoted, and the supply chain for domestic wood fuel builds up, it is important to ensure that there is a network of people who can install the technology.

I shall end on the same point with which my right hon. Friend the Member for Gordon concluded. We are just coming out of the depths of the worst recession that this country has experienced for 60 years, and there is a significant need to create jobs. We have the opportunity to move the economy in a more environmentally sustainable direction. However, we need to ensure that any changes operate on the basis of the overriding principle of fairness that I certainly believe in and that is so well established in this country.

An effort to enhance support for measures to tackle fuel poverty-particularly home energy efficiency and home insulation-and to bring people in remote and rural areas who use much more heating oil and LPG within the reach of those measures, would have a dramatic impact on jobs, on the financial burdens on families who are struggling to make ends meet, and on ensuring that our society is fairer. For all those reasons, I urge the Minister to take any steps that he can to ensure that people in remote and rural areas who rely on off-gas-grid heating sources are given a much higher priority than they receive currently in the Government's thinking.