Tackling excess winter deaths and fuel poverty

MQT on 2013-12-18
Session date: 
December 18, 2013
Question By: 
Jenny Jones
City Hall Greens
Asked Of: 
The Mayor


What impact will the Government's decision to scale back the Energy Company Obligation have on your plans to tackle London's energy inefficient and hard to treat homes?


Answer for Tackling excess winter deaths and fuel poverty

Answer for Tackling excess winter deaths and fuel poverty

Answered By: 
The Mayor

Boris Johnson (Mayor of London):  Thanks, Jenny.  This is a very reasonable question.  We think that there is a great advantage in extending the Energy Company Obligation (ECO) from March 2015 to March 2017.  We think that this will give the boroughs and housing associations that are retrofitting their housing stock a lot more certainty and will allow us to do more.  I must tell you that I have some concerns about some of this, particularly as it affects London’s housing stock.  We have many more, as you know, solid-wall buildings, so the emphasis on cavity-wall buildings may be something that we need to correct.


Jenny Jones (AM):  I have not understood your answer. 


Boris Johnson (Mayor of London):  The answer is I think the impact will be beneficial.


Jenny Jones (AM):  Thank you.  All right.  You have told us before that you had agreed with British Gas that they would spend 25% of their ECO obligation, which comes to £320 million, in London on insulating homes.  The aim of this whole process is to lift hundreds of thousands of people out of pure poverty.  Is that going ahead?


Boris Johnson (Mayor of London):  It is.  The RE:NEW programme, the domestic sector retrofit, has done about 99,000 homes to date, saving about 25,000 tons of CO2, and we have a further 60,000 homes, as I have said before here, in the pipeline.  We are going to blast on with that programme.


Jenny Jones (AM):  You are guaranteeing that British Gas is actually going to spend still that £320 million on insulating homes in London?


Boris Johnson (Mayor of London):  I have absolutely no reason to doubt that, Jenny, but what I can tell you is that we are confident we will be able to continue with the ECO-funded programmes and to continue to retrofit homes.  Clearly, this is now spread out over a longer timescale.


Jenny Jones (AM):  That will be through RE:NEW?


Boris Johnson (Mayor of London):  Through RE:NEW, yes.


Jenny Jones (AM):  The problem for me is that your target for 2012 was 200,000 homes.  As you have just said, you have only managed to insulate 99,000, so you are underachieving on this.


Boris Johnson (Mayor of London):  Look, we did set a very ambitious target, but to do 99,000 is pretty good and we are going to continue to keep our foot to the throttle and do another 60,000 more.  Do not forget that London is difficult.  There are many more homes in London that are hard and expensive to retrofit, but we are determined to do it.  As I said in my answer - and I am sorry if it was opaque - was that what I worry about is that at the moment we have to go into some talks about this because the cash seems to be steered towards cavity-wall insulation rather than helping the more difficult homes which have solid walls.  Many, many homes in London’s housing stock have solid walls, as you know.  That is problem we need to fix.


Jenny Jones (AM):  Your Executive Director of Housing [and Land] says that your target is likely to increase to 230,000 in the next three years for insulating homes.  Is this a new figure?


Boris Johnson (Mayor of London):  No.  Keep going.


Jenny Jones (AM):  As you are already underachieving, you have said you have set an ambitious target, but the whole idea behind ambitious targets is that you actually do reach them or get close.  You did not even get to half of your previous target.


Boris Johnson (Mayor of London):  You are being a little bit hard on us.  It is your job to be hard on us.  London’s housing stock is very challenging to retrofit.  We have done 99,000.  We are in discussions with the energy companies about how we are going to take forward the ECO programme following the Government’s announcements and you will be hearing more about what Richard [Blakeway, Deputy Mayor for Housing, Land and Property, GLA] has got out of them in the new year.  We think that the extension of the scheme through until 2017 will actually be beneficial because it gives more confidence and more certainty and gives everybody a clear sense that there is a long timescale in which this funding will be available and they can get on with retrofitting.


Do not forget that, partly thanks to the retrofitting that we have been doing in London, you have seen these big reductions in CO2 output in our city and you are seeing big reductions in nitrogen oxide (NOx).  Most of NOx, as you know, comes not from vehicles but from domestic boilers.  It is the work we are doing to retrofit homes in London that is helping to reduce that kind of pollution.


Jenny Jones (AM):  When the energy companies - very selfishly, I would argue - kicked up a fuss about paying the green levies, you said you thought they were right not to pay green levies.  What it has done is throw all the burden onto the taxpayer instead of the energy companies that are, quite honestly, raking it in.  Do you still stand by that?


Boris Johnson (Mayor of London):  There is a separate argument and the question is whether you can fine the energy companies and squeeze them of cash.  To a certain extent I agree with you, by the way.  That is why I think it is right that they should pay the ECO levy.


Jenny Jones (AM):  That is not what you said before.


Boris Johnson (Mayor of London):  What I worry about is extra levies, extra charges and extra price freezes of a kind that we have not seen for decades that economically contraindicated but do impair their ability to invest in supply.


Jenny Jones (AM):  No, that is not something I have mentioned.  What I am asking you about is the fact that you think it is right that energy companies should not pay a green levy.  Have you changed your position on that?


Boris Johnson (Mayor of London):  No, I think it is only fair that they should support retrofitting and that is why we are glad that we have the cash from British Gas and so on.  What I am opposed to are vindictive campaigns against the energy companies that actually will impede their ability to invest in supply.  We are going to come to this question ‑‑


Jenny Jones (AM):  Look, Mr Mayor, please focus.  Please focus on what I am asking you about.


Boris Johnson (Mayor of London):  ‑‑ later on because, as you know, one of the key determinants of price is supply.  It is also true that the unit cost of gas in this country is actually low, comparatively, by European standards.  What is high is the massive consumption ‑‑


Jenny Jones (AM):  Mr Mayor, you are off the topic.  Please focus on this.


Boris Johnson (Mayor of London):  No, this is completely germane to your question.


Jenny Jones (AM):  What I am asking you about is actually lifting hundreds of thousands of people out of fuel poverty.  You have supported the energy companies that are actually cutting back on insulation.  You talked about insulating single solid-wall insulation.  That does cost £9,000 per house, roughly.  That is an expense, but I think still the energy companies that are ripping us off should actually be paying for some of that insulation.


Boris Johnson (Mayor of London):  Yes, I agree and they are.


Jenny Jones (AM):  It appears you now agree with me.  That is fantastic.


Boris Johnson (Mayor of London):  I agree, Jenny, and they are paying and we are going to go on with it.  I agree with you about insulation because what I was going to say before you came back in there was that, actually, the problem is not so much the unit cost of the gas.  It is also that householders in London are losing such prodigious quantities of heat.  The consumption ‑‑


Jenny Jones (AM):  That is the point of the programme.


Darren Johnson (Chair):  Let him continue his answer because the Green group is running out of time now.  Be very quick.


Boris Johnson (Mayor of London):  Our consumption of gas is very high by European standards.  That is because we need to insulate better.  That is why ‑‑


Jenny Jones (AM):  This is The Ladybird Book of Energy, Mr Mayor.


Darren Johnson (Chair):  No, Assembly Member Jones, you are out of time.  Thank you.


Jenny Jones (AM):  The Ladybird Book of Energy is not useful.


Nicky Gavron (AM):  Yes.  Mayor, you are very confident, it seems, that the cuts to the green levies are not going to affect your RE:NEW programme, but I just want to point out to you that your officers do not seem to share that view.  If one looks at the December papers for the Housing Infrastructure Group meeting, one finds that there the officers are really understanding the gravity of the situation and are suggesting that you lobby for a regional target so at least you get a fair share of the money for London.  Are you going to lobby?


Boris Johnson (Mayor of London):  I am certainly happy to discuss that with the officers concerned or discuss their desires.  What they tell me is that overall between 2013 and 2017 as a result of these changes there will be a net increase in the carbon savings achieved through ECO.  There are swings and roundabouts here.  The thing I am worried about, as I was telling Jenny [Jones, AM], is the skewing against solid-wall insulation.  That I want to try to fix.


Nicky Gavron (AM):  I do not know if you are aware, but the regulator has said that ECO goes to three different targets.  In fact, solid wall may be one of them, but the other two are for people who are vulnerable.  We have a cold homes crisis.  You argued for a regional target before so you would a fair share from the Big Six [energy suppliers],  but in fact you failed, so I do not see you winning this again.  What is your plan B when we have a cold homes crisis in this city?  You have failed lamentably so far at actually meeting your own targets.


Boris Johnson (Mayor of London):  Hang on.  Can you just remind me how many homes were retrofitted under the previous Mayor?  About three.


Nicky Gavron (AM):  We only began the retrofitting programme at the beginning of 2007.


Boris Johnson (Mayor of London):  Come off it.  Do you mean to say there was not a cold homes crisis before?  Was there no cold weather in the eight years in which you sat vegetating?


Nicky Gavron (AM):  Would you like to tell me what your plan B is?  You are going to get less money.


Boris Johnson (Mayor of London):  I seem to remember hearing about 3,000 or 4,000 homes altogether in eight years.  We have done 99,000 homes so far and we are going to do a further 60,000, as I have just said.  We are confident that there will be a net increase in the carbon savings that we are going to achieve.  I take your point about wanting to get a fair deal and I do believe London should get the proportion we are owed from the ECO.  I will fight for that and I have fought for that and we will continue to get a good deal for London.  I have been very candid with you about my concerns, but this remains an area where there are huge potential wins for London and huge potential opportunities to protect Londoners from cold weather and high energy bills.


Nicky Gavron (AM):  I just want you not to be hoodwinked, Members around this horseshoe.  In fact, the money has been cut for ECO.  Even if we get to the regional target - which we have never got to before - and get a fair share of that, it will be a smaller amount and it will be from a smaller pot.  There is less money now for dealing with the cold homes crisis.


Boris Johnson (Mayor of London):  There is a net increase in what is available and we have had the programme extended and that is good news.  I am determined to continue to retrofit homes on a prodigious scale unlike any previous administration.


Darren Johnson (Chair):  Thank you.  We will then move on to the next question on the order paper.