Treasury blocked insulation cash boost, minister admits

An energy minister has admitted that the Treasury blocked further spending on energy efficiency in this week’s security strategy.

Speaking in the House of Lords on Thursday (7 April), Lord Callanan expressed regret that more money had not been found but said the government is already spending billions on insulation programmes.

Responding to a question from shadow Lords environment spokesperson Baroness Hayman, he said: “We are already spending a lot of money on energy efficiency programmes.

“It would have been good to go further but, regrettably, that was not possible in this case.”

Pressed later by Labour peer Baroness Blackstone to provide more money for insulation programmes as “a matter of urgency”, Lord Callanan defended the government’s support for energy efficiency.

He said: “We are spending something like £6.6 billion over the term of this parliament on insulation schemes. It would have been good to have gone further, but the Treasury would not support it.”

The minister’s comments follow reports in the run up to the strategy’s publication that the Treasury had resisted a £200m injection of public money into the industry-funded Energy Companies Obligation energy efficiency scheme.

Lord Callan, a junior minister at the Department for Business, Energy and Industrial Strategy, also admitted that it will take “a number of years” to develop any of the eight new nuclear projects heralded in the energy security strategy.

“This is about the UK’s long-term energy security policy; a mix of policies will be required.

“Of course, it will be a number of years before new nuclear comes on stream.”

Responding to concerns by Liberal Democrat peer Lord Fox about the risk consumers will have to pay more for the use of the RAB (regulated asset base) model to finance nuclear power stations, permitted under legislation passed last week, Lord Callanan said the impact on bills will be “relatively small”.

Baroness Hayman criticised the strategy’s focus on long-term solutions, like nuclear power, rather than measures that would have a more immediate impact, like energy efficiency.

“In the week of the IPPC’s most frightening warnings yet on global warming, and when customers and consumers face horrifying energy bills, it is deeply disappointing to see a set of policies outlined that concentrates on the expensive and the long term and fails to support what would work immediately and help both consumers and the climate.

“We have some of the worst housing stock in the world, and that is an absolute no-brainer to reduce demand, so we should support it.”