4. Statement by the Minister for Climate Change: Energy Price Cap

Part of the debate – in the Senedd at 3:54 pm on 8 February 2022.

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Photo of Julie James Julie James Labour 3:54, 8 February 2022

Diolch. So, yes, I'll just run through, very quickly, some of those. So, Jane Hutt and I had a very good meeting with Ofgem. I'm sorry, each day blends into each other—I think it was Friday of last week. Late last week anyway. It might have been very late Thursday, I can't remember. But, anyway, it was a very good meeting, although it was quite tense, because we're not happy at all about the way that this has been dealt with, but we raised a number of points. The pre-payment-meter point was certainly one that was high on our agenda. There are some really technical issues about if your supplier goes down, what happens to the existing payments that you have, and whether you have to pay balloon payments or not. So, that was well aired at the meeting. We also were reassured by Ofgem that they have asked the energy companies to put in place measures that will identify people who are self-disconnecting, as in they're not using any energy anymore, because they've turned their heating off and so on. Because obviously they can see that from the meters, particularly on pre-payment meters—they can see that people aren't paying into them. So, we'll be continuing that conversation, both at the round-table and with Ofgem. There are a number of things that we need to put in place to make sure people aren't self-disconnecting, as they call it—stopping using energy.

Part of the issue about the round-table is to glean information and ideas from around Wales on what we can do, and to put those measures in place. My colleague Jane Hutt is actually in charge of the round-table and its distribution, and I'm attending as well. I will take up the point about lived experience, though; I'm sure she'll have that in hand, but I'll come back to you on that. We certainly will have National Energy Action there as the voice of the sector in representing that, so I'll certainly come back to you on that.

One of the things we are very keen to do, and we've already funded our advice agencies to do this, is to make sure that people can get the right advice. So, on the off-grid point, for example, it's not always understood that the fuel payments—. You're eligible for those even if you're on off-grid oil. You don't have to be a gas user. So, if you meet the eligibility criteria, you'll be on course for that.

You will have heard me, Delyth, a number of times in this Chamber talk about the problems we have in Wales where you can see a windfarm out of your window, but you're on off-grid oil and so on. We will be working with our energy advice services to make sure that communities that host windfarms, for example, can take community benefits that can be used to insulate their homes, and make sure that they're available for electricity heating. That wouldn't be the case until you've done quite a lot of work. Community benefits can be used for a number of things. The community themselves need to choose those benefits, but we can assist them with a menu of choices that people might be able to choose from, and encourage the use of those benefits for things like insulation, retrofit and so on, to bring the houses up to standard. It's obviously in the energy companies' interests as well, because that gives them more customers for their energy, but also you use less energy by insulating your home in that way. So, there are a number of things that we have in train to do this, but, obviously, they're longer term, they're not going to solve the immediate crisis that we certainly face, and my colleague Jane Hutt has put a range of measures in place, as I said, and a number of payments.

The last thing I wanted to say to you was that we are very keen on talking to the private rented sector—again, you'll have heard me saying this—about taking the lessons from our optimised retrofit programme and starting to introduce them into the private rented sector houses, so not the owner-occupier sector yet. As you know, we've been putting incentive schemes in place to get private rented sector landlords to give their houses across to us while we bring them up to standard. 

The depression of the local housing allowance is a really big problem for us. So, it used to be at 50 per cent, just to remind everybody; the Conservatives dropped that to 30 per cent and then froze it. In areas of Wales it's covering less than 5 per cent of the rental market at its current level, so it's a disaster, really. We'll have to find some other mechanism in order to be able to support those landlords in order to get that in place. But I cannot emphasise enough the sort of stealth measure that the Conservative Government did in freezing that allowance, and the effect that that's having on (a) people's ability to heat their home and pay their rent, but also on our ability to intervene in that market in a way that means that the private sector rented landlords can have help to bring their property up to standard, which is really important. 

The last thing I'll say, Deputy Llywydd, is that part of the ORP programme, the optimised retrofit programme, is to figure out what works, but it's also to skill a workforce. So, at the moment we're skilling people to put more efficient gas boilers in. The whole point of this programme is to work out the tech that works, but also work out the skills that are necessary to fit it, so that once we have those skills in place, we can roll out the grant programme to the private sector, knowing that there'll be the skilled workpeople there to put those provisions in place, and that isn't the case now, if you look at that. Then my colleague Rebecca Evans, who's sitting in the Chamber with me, and I have started to discuss, as a preliminary point, whether there can be incentives put into the market to reward people who bring their houses up to the energy efficiency standard A and so on, in terms of discounts and so on. Because a very interesting part of the conversation with Ofgem was about why the market itself isn't responding to that. So, if you bring your house up to EPC A it isn't currently commanding a premium in the market, which seems counterintuitive. So, we'll be looking at incentives to do that as well.