The next item is the debate by individual Members under Standing Order 11.21(iv) on energy efficiency, and I call on Huw Irranca-Davies to move the motion.

Motion NDM6283 Huw Irranca-Davies, Jeremy Miles

Supported by Lee Waters, Simon Thomas

To propose the National Assembly for Wales:

1. Notes the £217 million Welsh Government investment over the last 5 years and further commitment of £104 million for the next 4 years to improve home energy efficiency and tackle fuel poverty.

2. Further notes that investment in home energy efficiency needs to be dramatically scaled-up if Wales is to achieve its aims around decarbonisation and reducing fuel poverty.

3. Calls on the Welsh Government to consider a broader range of investment approaches for energy efficiency including innovative finance, putting public sector pensions to good use, and tapping into private sector funding.

4. Notes the proposal to establish a National Infrastructure Commission for Wales and calls on the Welsh Government to ensure that the long-term energy infrastructure needs of Wales and the opportunities for energy efficiency are included within its remit.

5. Believes that such investment would dramatically boost efforts to tackle fuel poverty in some of our older homes, providing warm and cosy homes, improving the health and well-being of all and particularly the vulnerable.

6. Further believes this would help tackle climate change, reducing the carbon emissions through energy efficiency, reducing energy consumption and reducing the number of new power stations we need to build.

7. Recognises the potential for economic growth, creating many thousands of jobs in every community throughout every part of Wales.

Motion moved.

Diolch, Llywydd. I’m delighted to introduce this debate, and could I thank colleagues—Jeremy Miles, Simon Thomas, Lee Waters—who’ve also put their name to this debate today, and others who might be speaking? But could I also thank those hidden servants of the house in the research unit as well, because, in preparation for this debate, anything that I say that sounds good will be because of them? Anything lousy will be me.

So, I want to first of all explain why we’re speaking to this motion today, which is seeking to get the real formal, hard-headed recognition of energy efficiency, particularly domestic energy efficiency, as national infrastructure. But also, we say within this motion that the scale needs to be dramatically scaled up. That doesn’t simply rely on Government. We look at innovative ways of doing that. So, for example, within the motion, we talk about the use of pension schemes and other innovative financial models to scale-up that dramatic scale-up in investment that we want to see. But, most importantly, there’s the inclusion, as national infrastructure, and in Wales’s case in particular, within the national infrastructure commission for Wales remit—. That is emerging. It’s there in the background and going along. We want to see this come forward and be written down in black and white—that domestic energy efficiency is part of their remit. Why? Well, I’m going to begin by talking about the 2015 report by Frontier Economics, ‘Energy Efficiency: An infrastructure priority’. It made the case for classifying domestic energy efficiency as infrastructure. They noted that traditionally the term ‘infrastructure’ brings to mind projects like roads and rail and energy supply initiatives, but the report explored a wide range of definitions of infrastructure, covering two aspects.

The Deputy Presiding Officer (Ann Jones) took the Chair.

The first is the characteristics, that infrastructure is generally described as ‘capital’ or ‘involving physical structures’. But, secondly, the functions, and they referred to the two most recent definitions from the UK Treasury and the London School of Economics Growth Commission, which described infrastructure as an input to the production of goods and services and the requirement for the operation of the economy. And the report goes on to suggest that domestic energy efficiency constitutes infrastructure investment because it frees up energy capacity for other uses, just as investment in new-generation capacity would, and also that such investments provide public services by reducing carbon emissions and improving health and well-being. It also goes on to say that it fits with the way that energy efficiency is considered by a wide range of international organisations, such as the European Investment Bank and the International Energy Agency. And it is also consistent with the current and ongoing roll-out of the smart meter programme, which is one of the UK Government’s top infrastructure priorities. It works across the board. It should be national infrastructure.

Let’s turn to the benefits of energy efficiency. Within that particular report—I’ll start there—they point to the two key things that investment in domestic energy efficiency does. One: it reduces energy use. By doing so, it reduces bills, it frees up energy sector capacity to be used elsewhere in the economy, and it reduces the need to invest new energy system capacity. This reduces carbon emissions and decreases the exposure of consumers to volatile fuel prices. Far from the argument that putting money into this is actually a burden on consumers, for many of the poorest and most fuel-poor households, it actually protects them against that volatility in gas prices and oil prices and everything else. And, in addition, these investments provide option value. Because they involve multiple small incremental investment, the scale and the focus of the programme can be adjusted up and down over time. And also, they point out, it results in warmer, more comfortable homes. It increases health and well-being, and may also increase, by doing that, labour productivity—if we want to look at the social engineering side of this as well. So, there are a number of benefits, but they also point to economic growth and job creation.

The UK Green Building Council argues that the home energy efficiency market can stimulate both construction and manufacturing industries. It points out that, currently, over 135,000 people are employed in the energy-efficiency industry, but it quotes figures from Consumer Focus that suggest that major investment—bigger investment—in energy efficiency could almost double the number to 260,000 people by 2027, and it goes on to say that installing energy efficiency measures usually requires local labour, often from small and medium-sized businesses and microbusinesses. And because of this, investment has the potential to boost local employment. We’ve talked previously about the need to do this and about innovative ways of thinking to do this. This is exactly the foundation economy approach there. And this is supported by figures contained within the Welsh Government’s infrastructure investment plan, which I’ll turn to in a moment, which states that over 80 per cent of the businesses that delivered phase 1 of the Arbed programme, under the Warm Front programme, operate primarily or solely in Wales. It’s a win-win right across the board.

Let’s talk about energy security. The UK Green Building Council report states that reducing domestic energy demands through energy efficiency is vital to ensuring that there’s a sufficient supply to meet the UK’s energy needs. It goes further: it says that investing in energy efficiency is not only more cost-effective in meeting the UK’s growing demand for energy than building additional energy generation infrastructure—stop building so many power stations and actually invest in this as the better substitute.

Data from the Sustainable Energy Association show that energy-saving measures cost less on average per unit of power than large-scale power generation. And 2012 figures from the Department of Energy and Climate Change show that, through cost-effective investment in all forms of energy efficiency, the UK could be saving 196 TWh in 2020, equivalent to 22 power stations of energy. So, meeting energy needs to demand reduction will also reduce the UK’s dependency on fossil fuels and gas.

Let me turn to the reduction in carbon emissions. We’ve made our commitment in Wales, as has the UK, to reducing carbon emissions. In 2014 the residential sector in Wales accounted for 8 per cent of emissions. The sector is dominated by emissions from residential stationary and mobile combustion of fuels from activities such as heating and cooking, which account for 97 per cent of emissions in this sector. I think I’ve made the point that if you invest in energy efficiency here, in this sector, you will deal with carbon emissions in a major way as well.

In value for money, the Frontier Economics report compared, interestingly, the net benefits and benefit cost ratios of an energy efficiency scheme of scale with four other major schemes, showing that an energy efficiency programme compares very well to the alternative investments, including Crossrail, HS2 and the roll-out of smart meters. They reckon the benefits of an upscaled programme of energy efficiency in the residential sector would be equivalent to £8.7 billion of societal benefits. And, of course, as we’ve mentioned, it reduces energy bills and helps to combat fuel poverty.

According to YouGov research, rising energy bills are the No. 1 financial concern for householders. Some in this Chamber—a few—would say that that’s the very reason not to invest in this stuff because you’re loading it onto people’s bills. I’ve already dealt with the volatility of oil and gas issues; this is actually protecting consumers. But a DECC paper on fuel poverty from 2012 states that policies that improve the efficiency of the housing stock are more cost-effective and have longer term impacts on tackling fuel poverty than energy price policies or capping or income support policies. Those may be useful—this is the most useful way to do it.

On improving health and well-being, let me turn to the Hills fuel poverty review, which found that low temperatures in homes can create conditions that increase the likelihood of cardiovascular events—some of which may result in death—exacerbate the risk of respiratory disease and cause physical discomfort, which can contribute to mental health issues as well. We know this; we’ve seen it before through hard winters. DECC has undertaken modelling to value the health benefits associated with energy efficiency investments and it concluded that these can be significant across the board.

So, let me turn in my concluding remarks to where we are in Wales. The Government has done so much and I’ll leave the Cabinet Secretary to outline that. I’m not going to do that in my report and I know she’ll do it well and I could have done it as some of my preamble: the investment we’ve put in Arbed and Nest and the Warm Front programme and many other ways. We’re doing so many good things and, in fact, the motion notes that. But if we look at the Wales infrastructure investment plan, which is the plan that informs and co-ordinates investment decisions, it’s intended to maximise the impact of the Welsh Government’s major infrastructure programmes. Back in 2012, the most recent iteration, it states there:

‘Investment to support energy efficiency and the development of new energy sources is…an important part of the strategy.’

And it goes on to say:

‘Energy efficiency through the refurbishment of housing and other estates and the introduction of energy standards for new buildings have an immediate impact on employment since these activities require many work hours. Investment in these areas therefore will have unusually large effects in employing complementary labour.’

There have been sustained calls now from stakeholders—WWF, National Energy Action, Community Housing Cymru, Energy Saving Trust, and many, many more—to make energy efficiency now an explicit infrastructure priority for Wales. We are doing so much, but let’s see it there in the remit of the national infrastructure commission for Wales. The evidence is there. I know the Cabinet Secretary knows it’s there. She will say all the good work that the Welsh Government is doing—and it is—but let’s take it to the next stage. Let’s scale it up and make a difference to people’s lives, to their communities, to their homes, and also deal with all those myriad of other issues that we want to see dealt with.

Last week, I hosted and spoke at the launch of the cross-party group on fuel poverty and energy efficiency. I was a member of the energy watch cross-party group during the second Assembly and chaired the cross-party group on fuel poverty during the third and fourth Assembly terms. We worked together to establish the Fuel Poverty Coalition and to launch the fuel poverty charter in 2009, and to secure the Welsh Government’s revised fuel poverty strategy in 2010. Working with Fuel Poverty Coalition members, the new cross-party group will campaign to place fuel poverty at the heart of action to tackle poverty, with strong emphasis on all sectors taking responsibility together. NEA Cymru—National Energy Action—is keen to engage with Assembly Members in their work on fuel poverty and through the new cross-party group on fuel poverty and energy efficiency, and I urge any Members who have not completed their short survey, which has been sent to you by e-mail, to do so.

In 2012, almost 30 per cent of Welsh households were estimated to be in fuel poverty, spending 10 per cent or more of their household income on fuel to maintain heat adequate enough to safeguard comfort and health. Investment in home energy efficiency improvements via Welsh Government and UK Government schemes, combined with changes in household incomes and fuel prices, saw this fall to 23 per cent in 2016. That still represents 291,000 households in Wales, including 43,000 in severe fuel poverty. As the Bevan Foundation and the Joseph Rowntree Foundation told the Assembly’s Communities, Equality and Local Government Committee two years ago, fuel poverty should have a higher profile in the Welsh Government’s tackling poverty action plan because it’s a fundamental human need to have a warm home. There is no realistic prospect of achieving the 2018 target of eradicating fuel poverty in Wales and, as Age Cymru state:

‘many of the mechanisms and measures contained within the 2010 Fuel Poverty Strategy are now out of date or no longer applicable.’

They add that ‘the time is right’ for Welsh Government to refresh its fuel poverty strategy, with a clear programme and timescales, credible evidence base and an ambitious new fuel poverty target rooted in delivery, rather than being a hostage to energy price movements.

As NEA Cymru stated at Wales’s annual fuel poverty conference in March, we drastically need a new fuel poverty strategy, adding that, whilst the Welsh Government’s investment in energy efficiency schemes through its Warm Homes programme is commendable, we need a step change in ambition.

They’ve asked Assembly Members to call on the Welsh Government: to designate domestic energy efficiency as a key national infrastructure priority at the heart of the national infrastructure commission for Wales’s investment priorities; to develop a new long-term strategy for addressing fuel poverty as a matter of urgency; to set a new fuel poverty target; to improve homes to a minimum energy efficiency, backed up with the data needed; to invest in a well-resourced, well-targeted energy efficiency programme for fuel-poor households in Wales; to save lives by implementing the NICE guidelines on tackling excess winter deaths; to fund independent advice services to support people in fuel poverty; and to protect vulnerable households with a crisis fund for emergency heating when their health is at risk.

At last month’s rural north Flintshire community hub launch by the North Wales Energy Advice Centre, we heard that this tackling fuel poverty project, including Flintshire’s affordable warmth crisis fund, should be a model for spreading across communities in rural Wales. NEA deliver projects to assist fuel-poor households in Wales, including a health and innovation programme. In March, with NEA Cymru, I hosted the Assembly launch of Calor’s rural Welsh energy advisorship programme 2016-17 to assist fuel-poor households. The independent, charitable British Gas Energy Trust helps around 25,000 vulnerable households each year, and Centrica, their parent company, has charity partnerships with StepChange Debt Charity—I declare that one of my daughters works for them—CLIC Sargent and Macmillan, and works closely with Action on Hearing Loss, RNIB and Mind. E.ON add value to their energy company obligations support for communities in Wales through locally funded projects, community engagement and job creation schemes.

Well, with almost one in four households in Wales still unable to afford to heat their homes, it’s clear that we need to maintain the political focus on fuel poverty and energy efficiency at this National Assembly. It’s essential that the Welsh Government works with Fuel Poverty Coalition members to place fuel poverty at the heart of action to tackle poverty, engaging with all sectors and so maximising the opportunity presented by working together.

I want to start by thanking the AMs for Ogmore and Neath for tabling this motion today. As the motion succinctly notes, ensuring Welsh homes are energy efficient is vital environmentally. This is in terms of tackling climate change and also reducing consumption, but it is also vital economically, too. If we want to look to a common thread uniting communities across Wales, it is the potential to create jobs and grow the economy based on ensuring that the homes these communities possess are energy efficient. Cambridge Econometrics have suggested that every £1 invested in energy efficiency measures would achieve £3.20 in growth.

Moreover, tackling the fuel poverty that can be both cause and effect of energy inefficiency remains a key challenge for us in terms of tackling social justice. It is this aspect of the motion that I want to focus my remarks on today, expanding on ideas and concepts contained in my short debate last week on poverty in Wales.

The motion notes a Welsh Government commitment of £321 million over nine years to improve energy efficiency and tackle fuel poverty. This is to be welcomed, as the current Cabinet Secretary and previous Ministers have ensured these remain political priorities. Indeed, although the ambition to eliminate fuel poverty by 2018 is unlikely to be met, I am proud to support a Welsh Government that has not shied away from the challenge.

The Warm Homes programme has seen Welsh Government funding go to improve the energy efficiency of over 27,000 homes. Households have been able to heat their homes at a more affordable level and reduce their energy bills. Twenty-five thousand homes will similarly be improved over the next four years. Equally important is the Warm Homes on Prescription pilot, under which Care and Repair have been awarded a £0.25 million grant by the Cabinet Secretary for Communities and Children. This aims to prevent the admissions and readmissions to hospital of older people with poor health caused by extreme cold. Our investment in housing should also be linked to efforts to reduce or eliminate fuel bills. Taken together, these measures have had an impact.

Fuel poverty levels in Wales have declined from an estimated 29 per cent of households in 2012 to 23 per cent in 2016. However, this figure still represents nearly one in every four households in Wales. It starkly illustrates the scale of the challenge to eliminate the problem, and it is just unacceptable that 291,000 households in Wales are unable to afford to adequately heat their homes. Furthermore, as National Energy Action Cymru has identified, 3 per cent of Welsh households are estimated to be in severe fuel poverty. This means that they need to spend at least 20 per cent of their household income on energy to achieve an adequate level of warmth.

The Trussell Trust has recognised the link between use of its food bank networks and fuel poverty. To tackle the problem, it has developed a system of fuel banks, which allows food bank users on pre-payment meters to receive vouchers so that they can keep their heating on for two weeks. Merthyr Cynon Foodbank in my constituency is part of this project.

Fuel poverty can have an impact across all areas of Government, in terms of not just housing or energy, but also health, economic performance and, indeed, education. Children growing up in cold homes have poorer attainment levels than their peers. So, we must take a whole-Government approach to this issue. We must also recognise the context that we do not have access to all of the levers needed to eradicate this problem. For example, the cost of fuel itself, but also initiatives like the winter fuel payment. Perhaps the retention of that is the silver lining in May’s alliance with the DUP. But we must ensure we do all that we can.

NEA Cymru have suggested a range of practical solutions to help meet the challenge: ensuring there is a single-point-of-contact health and housing referral service for people living in cold homes; asking the new public services boards to outline how they intend to address cold homes and fuel poverty in their local well-being plans; and the development of a new long-term strategy for addressing fuel poverty, bringing all threads together. I also support the measures outlined in the motion relating to the national infrastructure commission, and exploring innovative finance models. I commend this motion today.

Can I begin by saying that UKIP will be supporting this motion? Indeed, I myself have argued for the emphasis to be on reducing carbon output by using the sort of strategies outlined in the motion proposals, rather than concentrating on so-called carbon-free energy production. Because there is, of course, no such thing as carbon-free energy production because the production of, say, solar panels or wind turbines themselves causes high degrees of carbon output, especially when you consider the long-distance transportation of these products. As my colleague pointed out in a previous debate, sea-going vessels are some of the most polluting agents on earth, and we know that the vast majority of solar panels, et cetera, are produced in China.

Will the Member give way?

Of course.

Thank you very much. He started so well, and I just want to save him from himself, because, of course, it’s not an either/or, is it? There’s no need to get hung up on your usual tirade against renewables; we need both.

Well, I welcome that intervention. Of course we do. We need both things to work in harmony. What we’re talking about here, though, of course, is where the emphasis should lie, and I’m in agreement with this motion, where the emphasis should lie.

Whilst agreeing with point 2 in the proposals, I have to note here that there is more than a little irony in the proposal to reduce fuel poverty, when we consider that much of this fuel poverty is the result of high fuel prices caused by decarbonisation levies. According to the Office for Budget Responsibility, the extra fuel costs were £327 per household in 2014, rising to £875 in 2030—these costs being disproportionately felt by the poorest in society. So, if we are to have these levies, let’s make sure that they are used in the best possible way.

I also note in these proposals that energy efficiency is understandably mentioned several times, but I have to point out that there seems to be some confusion here, because the most energy-efficient methods of electricity production are often high-carbon producers. Coal-fired power stations are far more efficient, with anything up to 45 per cent and running at 85 per cent capacity, as opposed to solar panels, which are as low as 12 per cent with 20 per cent capacity. Now, I am not calling for coal-fired power stations—please understand that. So, calling for energy efficiency to be on the national infrastructure commission’s remit could have the opposite effect to that desired in this motion.

However, yes, let us commit to all of the proposals outlined in this motion, but perhaps we should go even further and call upon the Welsh Government to support the industries that are the cutting edge of energy-efficient technology, and there are many here in Wales. As the motion states, this is a huge opportunity to create long-term sustainable industries and jobs. Wales can and should be at the forefront of these exciting technological advances.

I also welcome this debate by my fellow Labour Members, Huw Irranca-Davies and Jeremy Miles. It highlights the pre-existing good work of the Welsh Labour Government in practice, and challenges us to continue and further this work as a national priority for Wales.

Since 2011, the Welsh Labour Government has invested more than £270 million in the Welsh Government’s Warm Homes scheme and improved the energy efficiency of more than 39,000 homes. In January, the Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths, announced an additional £40 million to take direct action to reduce people’s energy bills and improve the energy efficiency of up to 25,000 more homes. So, why is this initiative, and this debate, so important? Well, official findings, published in April in the fuel poverty health data linking report, evidence that there was actual lower health service use among people who had benefited from the Welsh Government Warm Homes Nest Scheme. This study used NHS data to compare the health service use of people who had benefited from Nest home energy improvements, and a control group who were eligible for improvements but were still waiting for these to be completed. The research found that GP events for respiratory illness fell by almost 4 per cent for those who had benefited from Nest improvements, while those rose by almost 10 per cent in the control group over the same period. A similar pattern was found in relation to asthma events, with a 6.5 per cent decrease in the recipient group and a 12.5 per cent increase in the control group for the same period. So, this is clear, undisputable evidence of the value and worth of Welsh Government investment in home energy improvements in health.

Moreover, fundamentally we have a moral and ethical obligation to ensure that low-income households and communities are assisted in ensuring their homes are energy efficient and the attendant benefits that are a consequential outcome delivered. I would agree, therefore, with the call for the Welsh Government to consider how it can further expand these programmes and on a national infrastructural platform.

There must surely be a consensus across this Chamber that providing funding for energy-efficient improvements to those living in deprived communities across Wales is a no-brainer, because it helps to counter ill health, reduce climate change—although there is dispute from some as to whether climate change exists—helps eradicate fuel poverty and the poverty premium, and it boosts economic development and regeneration in Wales, as has been stated, on both a foundational and productivity platform.

Deputy Llywydd, as the debate notes, the proposal to establish a national infrastructure commission for Wales must have energy efficiency within its remit for the holistic and evidenced well-being for all the people of Wales and, in particular, our most vulnerable. Thank you.

May I thank Huw Irranca-Davies for bringing this debate before us this afternoon, and for the opportunity to contribute to it? I’d like to thank Huw for his commitment in this area, which is well known to us all. At this point in the debate, my contribution will be on the basis that if you can’t come up with a new argument, at least you can reiterate good points made by others.

In another language. [Laughter.]

In another language. But there are plenty of valid points that have already been made.

Ategaf y pwyntiau roedd Huw Irranca-Davies yn eu gwneud, yn arbennig ynglŷn â gwneud effeithlonrwydd ynni yn fater o flaenoriaeth seilwaith cenedlaethol. Yr hyn sy’n mynd gyda hynny, ar un ystyr, yw’r ymdeimlad o genhadaeth genedlaethol ynglŷn â maint yr her y mae ef ac eraill wedi’i nodi.

Rydym wedi amlinellu ac wedi siarad eisoes am fanteision amgylcheddol ac yn hollbwysig, yr effaith ar ein nod o leihau tlodi tanwydd. Rwyf am gyffwrdd yn fyr ar y budd economaidd arall y mae rhai wedi sôn amdano, sef cryfhau ein heconomïau lleol, sy’n un o’r amcanion y mae llawer ohonom yn y Siambr yn eu rhannu. Mae nifer o siaradwyr wedi crybwyll mater yr economi sylfaenol, sy’n chwarae rhan yn ein heconomi genedlaethol, ac mae’n ymddangos i mi fod ôl-ffitio tai at ddibenion effeithlonrwydd ynni yn enghraifft berffaith o’r mathau o sectorau a gweithgareddau yr ydym yn edrych arnynt pan fyddwn yn siarad am y math hwnnw o weithgaredd economaidd lleol, gyda’r galw parhaus, sy’n gallu cefnogi, fel y mae eraill wedi dweud, cyflogaeth leol yn y cynllun Arbed, a oedd yn un o fanteision sylweddol y rhaglen honno. Yn wir, o’r 51 o gwmnïau gosod a oedd yn rhan o’r cam cyntaf, mae 41 ohonynt yn gweithredu yng Nghymru yn unig. O’r 17 o gynhyrchion a gâi eu defnyddio, pump yn unig ohonynt a gâi eu cynhyrchu yng Nghymru, sy’n dangos maint y cyfle yno ar gyfer cynyddu cynhyrchiant lleol rhai o’r cynhyrchion hyn yn ogystal.

Er bod hon yn alwad genedlaethol, rwyf eisiau siarad yn fyr am y ffaith na ddylem golli golwg ar y budd cymunedol a ddaw o effeithlonrwydd ynni. Mae peth o’r gwaith a wnaed ar ôl-ffitio yn y gymuned, sy’n symud y tu hwnt i dai preswyl ac yn edrych ar adeiladau busnes, seilwaith trafnidiaeth, mannau gwyrdd ac yn mabwysiadu ymagwedd lawer mwy cyfannol tuag at effeithlonrwydd ynni—credaf fod llawer o werth yn y math hwnnw o ddull. Cafodd ei dreialu mewn rhai cymunedau. Mantais hynny yw eich bod yn cael cyfle i ddefnyddio eiddo a diddordeb a gallu masnachol a phreswyl, a fydd yn ystyriaeth bwysig pan fyddwn yn edrych ar fodelau ariannu gwahanol ar gyfer cyflawni hyn. Hefyd, mae’n galluogi pobl i ymgysylltu ar raddfa lawer mwy, sy’n dwyn nifer o fanteision eraill yn ei sgil. Felly, byddwn yn annog Llywodraeth Cymru i fyfyrio ar y model hwnnw. Cafwyd enghreifftiau da. Ceir enghraifft enwog iawn ohono yn Swydd Rhydychen, lle mae model cydweithredol wedi cyflwyno cynhyrchiant adnewyddadwy yn y gymuned a hefyd wedi defnyddio’r cyllid ohono i ariannu effeithlonrwydd ynni. Mae’n ymddangos i mi fod y cysylltiad rhwng creu ffrwd refeniw drwy ynni adnewyddadwy yn y gymuned, a modd o dalu am rai o’r mesurau rydym yn eu trafod—mae’r cysylltiad hwnnw i’w weld yn rhan gwbl sylfaenol o ddarparu ystod o fodelau cynaliadwy ar gyfer cyflawni’r amcanion y mae’r cynnig hwn yn eu nodi.

Rwyf eisiau cyffwrdd yn fyr ar yr ystod honno o ffynonellau cyllid. Mae angen i ni edrych—mae maint yr her yn arwyddocaol. Mae yna wariant cyhoeddus. Mae yna faterion yn ymwneud â chyfranddaliadau a dalwyd am rai o’r datblygiadau hyn mewn mannau eraill. Mae yna rwymedigaethau cwmnïau cyfleustodau, ac nid yw’r rheiny dan reolaeth Llywodraeth Cymru, ond byddwn yn gobeithio y byddem yn gweld llawer mwy o uchelgais ar lefel y DU gyfan o ran gwireddu rhai o’r ffynonellau cyllid hyn.

Mewn dadl fer a gyflwynais yr wythnos diwethaf gelwais arnom i edrych yn llawer mwy rhyngwladol ar rai o’r enghreifftiau o lwyddiant mewn mannau eraill. Byddwn yn annog Llywodraeth Cymru i edrych ar Energiesprong yn yr Iseldiroedd—nid wyf yn siŵr a wyf wedi ei ynganu’n gywir, ond mae’n esiampl sydd wedi llwyddo yn yr Iseldiroedd, yn y lle cyntaf ar sail ôl-ffitio tai cymdeithasol, sy’n cynnig gwarant perfformiad ynni i drigolion, amserlen cyflawni 10 diwrnod, gyda’r buddsoddiad yn cael ei ariannu gan arbedion costau ynni, gan weithio ar y cyd â darparwyr tai cymdeithasol sydd wedyn yn darparu rhyw fath o gontract ynni i’w tenantiaid, fel contract ffôn symudol. Mae hwnnw’n fodel sydd wedi gweithio yno, ac rwy’n credu y dylem edrych ar y math hwnnw o fodel yn y DU, ac yn benodol yng Nghymru, wrth i ni edrych am bob math o gyllid cyfalaf ar gyfer yr amcan polisi pwysig hwn.

I’m very pleased to join Simon Thomas in supporting the motion put forward in the name of Jeremy Miles and Huw Irranca-Davies. I should commend Huw Irranca-Davies for an excellent speech, in which I agreed with every word.

We need to cut to the chase here. The Welsh Government have done much, but we need to do much, much, much more, and we must do it quickly. As the motion notes, investment in home energy efficiency needs to be dramatically scaled up if Wales is to achieve its aims around decarbonisation and reducing fuel poverty. We should follow Germany and Denmark in having targets for decreased total energy use and, as a first step, we need to take a thorough examination of how we use energy and how we can make dramatic savings from space heating, transport, crucially—often a neglected area—industry and electricity use.

We don’t treat energy as the scarce resource that it is. We are wasteful. We burn a huge amount in our cars. The majority of our car journeys are for very short local distances that we could make in more sustainable ways, and we use a lot in our homes. Our housing stock is poorly insulated. We need much better space insulation in houses and businesses. We need ground and air-source heat pumps as well as technological advances like LED lights and more efficient white goods to cut down our energy consumption. The emphasis, as Huw said, must be on reducing rather than just constantly increasing capacity. Instead of building power stations, we should first be looking at how we can save—a much more efficient way to spend our scarce resource.

We know that energy from buildings accounts for some 37 per cent of carbon emissions, so the environmental case for tackling this is self-evident, but there’s an economic case too. Two years ago, I was privileged to work with Professor Gareth Wyn Jones, who’s done incredible work in this field over decades, and with Professor Gerry Holtham, on the Institute of Welsh Affairs’ ‘An economic strategy for Wales?’ That report concluded that the economic case for making the energy efficiency of Wales’s housing stock a national infrastructure priority is strong.

As the motion notes, the proposed infrastructure commission for Wales should include energy efficiency within its remit. As Vikki Howells has pointed out, upgrading all band C homes in Wales would cost somewhere in the region of £2.5 billion to £3 billion by 2035. And, if you apply the findings of Verco and Cambridge Econometrics to that, you’d see a return of investment of about £3.20 for every £1 invested. Huw Irranca-Davies ran through a litany of projects— Crossrail, most notably—that deliver far less value for money. I would add the £1.62 return for investment in the M4, which we’re putting £1 billion into. If we put that kind of money into energy efficiency, we could see a far greater economic return to create both jobs and long-term benefits.

I can think of no better example, Dirprwy Lywydd, of putting into practice the aims and objectives of the future generations Act than a proper, gutsy, bold project on energy efficiency. This Welsh Government has been investing, on average, somewhere around £50 million a year in Warm Homes schemes, and that’s varied a little bit, and that’s been welcomed, but that should only be a taster. It’s shown what can be done. Now we’ve tested it, we really must put rocket boosters—energy-efficient ones, obviously—underneath that policy.

Work by Citizen’s Advice suggests that the Government needs to take a strong lead to communicate the benefits of energy efficiency. Their research suggests that governments at all levels haven’t done this well enough. They found people are most likely to respond positively to upfront, positive incentives like grants and loans at attractive rates, followed, intriguingly, by the prospect of negative incentives in the future. So, for example, we could say that, in five years’ time, we will increase council tax bandings for inefficient properties and now we will offer attractive grants and loans to help householders meet the EPC ratings and avoid that future penalty. That’s the sort of thing we should be doing.

They also point out we shouldn’t penalise those poorest, and they talk about shifting demand as a scheme that should be done alongside this. They point to the Ynni Lleol project in Bethesda, supported by the Welsh Government, which encourages residents to use energy at different times of day to take advantage of cheap generation within what is effectively, then, a local internal energy market. This kind of model, scaled up, could clearly benefit all consumers if it reduced peak loads across the grid as a whole. As I say, Dirprwy Lywydd, it’s time for us to stop testing; it’s time to start doing, at scale.

Thank you, and I call on the Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths.

Thank you, Deputy Presiding Officer, and can I start by thanking the Members for tabling this debate this afternoon and all those who’ve contributed to the debate? Much of what we’ve discussed today does chime with my energy statement of December last year around using energy more efficiently, moving to low-carbon generation, levering in more resources, and gaining economic benefit from the new technologies and business models that now are emerging from the transition. This does include our highly successful flagship Welsh Government Warm Homes programme, which has been designed to ensure economic benefits for Wales in terms of employment and business opportunities. All of the energy efficiency improvements installed under our schemes have been delivered by Wales-based SMEs.

Between 2011 and 2016, we have invested over £217 million in Welsh Government Warm Homes to improve the energy efficiency of over 39,000 homes of those on low incomes or living in the most deprived areas of Wales, and I expect to publish the 2016-17 figures next month. So, it’s significant funding, but, as Lee Waters said, we really need to see how much more we can put in. I’d love to put £1 billion into our energy efficiency programmes, but I think we have to be pragmatic. Last year, the Nest scheme delivered estimated average energy bill savings of over £400 per household. If these estimated savings were realised for every home improved through Nest, it would equate to annual energy bill savings of over £9.5 million per year.

We also recently published the findings of research on the health impacts of Nest. The research shows that the scheme is having a very clear, positive impact on the health of recipients, with a reduction in the use of the NHS by those receiving energy efficiency measures through the scheme. Those findings have supported our decision to extent the eligibility criteria for our new Nest scheme to include householders on low incomes who have a respiratory or circulatory condition. So, we are making progress in tackling fuel poverty, despite the fact that some of the levers, as Vikki Howells said, for tackling fuel poverty are not devolved. Powers over welfare reform, for instance, and the regulation of the retail energy market, rest with the UK Government. I have to say that the plans that were set out in the Tory manifesto to get rid of winter fuel payment wouldn’t help either. Overall, fuel poverty has reduced from 29 per cent in 2012 to 23 per cent in 2016, which is a reduction of 6 percentage points in just four years.

Over the next four years, we’ll invest a further £104 million in Welsh Government Warm Homes, and that will enable us to improve up to 25,000 homes of those on low incomes, or, again, living in the most deprived areas of Wales. Our investment will lever in up to £24 million of EU funding in addition to funding from the UK energy company obligation. Our investment helps provide stability and certainty for the energy efficiency supply chain in Wales to grow their business at a time when the UK Government has undermined confidence in the industry with their stop-start approach to energy supplier obligations. I’m also looking to strengthen building regulations through our proposed Part L review this year. This will look at how we can control insulation values and reduce energy usage in homes. In addition, we’ve been exploring opportunities to lever in more resources and support from energy suppliers, local authorities, pension funds, and others, to accelerate investment across Wales to tackle fuel poverty and support our decarbonisation ambitions.

I’m looking at all opportunities for innovation, both in energy efficiency products and in financial models, which can then help support the uptake of energy efficiency improvements amongst able-to-pay households as well as those on low incomes. I will be making an announcement in the autumn on my proposals.

Energy efficiency in general terms will be included in the scope of the National Infrastructure Commission for Wales’s remit, although the commission will only consider economic infrastructure. We believe a modern, efficient, and reliable energy infrastructure is important for our businesses and communities, and we’re committed to supporting the development of new, renewable energy generation.

Renewable and low-carbon electricity and heat form an important element of Welsh Government’s approach to decarbonisation. To deliver secure and affordable low-carbon energy, we need that mix of different technologies and sizes, from community scale to major projects. The transition to a low-carbon economy not only reduces emissions, but brings opportunities around clean growth, quality jobs, and global market advantages. I’m committed to achieving a more circular economy in Wales and using the earth’s natural resources far more efficiently.

Energy is a key economic imperative that underpins our aims for a secure and prosperous Wales. In terms of opportunities, this means supporting large energy investments in on-shore renewables, marine, nuclear, and so on, including our two largest energy investment projects: Wylfa Newydd and the proposed Swansea bay tidal lagoon. Wylfa Newydd, for example, is estimated to create 850 permanent jobs, and thousands more for a temporary period. Arbed, too, has created more than 470 jobs and delivered more than 60,000 hours of training in green technologies to existing and new employees.

The no-carbon economy is one of the UK’s fastest-growing sectors, creating jobs and providing investment across each region. I’ve written to the UK Government on a number of occasions setting out the benefits from renewable developments. We are also committed to supporting community-led energy projects. As a result of Welsh Government’s support, 15 community schemes are up and running, providing benefit to the local area. I agree with Jeremy Miles: it’s very interesting to see some of the co-operative models that are coming forward, and I’ve been very lucky to not just visit, but to open, such schemes since I’ve been in this portfolio.

I’m also looking to set ambitious yet realistic targets for renewable energy in Wales. The evidence from the decarbonisation pathway will inform the setting of any targets and enable us to assess which pathways provide the best opportunities and outcomes for Wales. I’m committed to using all my powers to provide ongoing support mechanisms that ensure we retain the ability to deliver new-generation developments and efficiency whilst managing the cost to bill payers.

Thank you very much. I call on Simon Thomas to reply to the debate.

Thank you, Deputy Presiding Officer. I’d like to thank everyone who’s contributed to this debate, noting, perhaps, that debates such as this one aren’t as exciting as last night’s debate on the DUP and the Conservative party. However, I think we had some thoughtful contributions that have not only interpreted the problem that we have but have proposed some new ideas in this context. I look forward to further debate with the Cabinet Secretary, because, although she, too, contributed to the debate, I think she has been encouraged to do even more by some contributors, and I think there is still some work to be done in pressing the Government to go further and more quickly along the route that they are already travelling.

I, certainly, approach this with as much attention on fuel poverty as on the economy or even the environment. I welcome the fact that the cross-party group has been established with Mark Isherwood, and I look forward to supporting that. It’s true to say, as Rhianon Passmore mentioned, that there is a specific health impact here. A baby born today living in a cold home is three times more likely to suffer from asthma or similar conditions. Living in cold homes kills as many people as smoking, lack of exercise, and the misuse of alcohol—that’s the scale of the problem that we’re facing. It’s also important to say that the educational attainment of children is impacted by not having a warm place to study and to live. Therefore, there is a task for us all to tackle this issue, not only in terms of the economy, but in terms of health and well-being.

I think that one of the themes that Huw Irranca-Davies focused on in setting out the debate very thoroughly—this was supported by Jeremy Miles and Lee Waters—is the concept that we should look at energy efficiency as something that’s a national infrastructure issue and should be part of the work of the commission. I’m pleased that the Cabinet Secretary has confirmed that energy efficiency will be part of that work, but I would tell her that, if the commission is going to focus mainly on economics, the arguments made by Vikki Howells and Lee Waters show that this is a major economic contribution that the commission should not only recognise, but should take forward with gusto.

The impact on local communities is of particular interest, as Jeremy Miles outlined. We can learn from international examples by setting more focused targets, and stricter targets, that respond to the demands here, and also by looking at some new ideas that are within our powers now in terms of encouraging developments in this area. Lee Waters suggested that we use council tax. I would prefer to reward people than penalise them, but I accept the point that you made. Perhaps you’d be interested to know that Plaid Cymru suggested, as we looked at the Bill that is now the Land Transaction Tax and Anti-avoidance of Devolved Taxes (Wales) Act 2017, that we should give stamp duty relief when selling property if that property had attained a certain level of energy efficiency. Although the amendment wasn’t accepted by Mark Drakeford, a principle has been accepted in terms of discussing how we can use the legislation and taxes passed here to impact on people’s behaviours in order to encourage that investment in energy efficiency, and I look forward to that.

I’m pleased that the motion has been welcomed across the Chamber, including by David Rowlands. I agreed with the beginning and end of David Rowlands’s speech. I didn’t agree with the rationale, but at least his support is in place for the concepts in the motion.

So, thank you to everyone who has contributed to this debate. It’s been a valuable one, and I’m sure that people outside the Chamber will have followed this debate with some interest. All I will say in conclusion to the Cabinet Secretary is that you have you have now heard how much support there is for what you’re doing in all parts of the Chamber, but you’ve also heard that we need you to do a lot more.

Thank you very much. The proposal is to agree the motion. Does any Member object? Therefore, the motion is agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.