Minister Greg Barker on cutting your energy bills

moneysupermarket.com recently travelled to London to meet with climate change minister Greg Barker and hear about his plans to cut energy bills for UK homes. Here’s the uncut interview...

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Felicity King-Evans: The UK needs to slash its emissions and people’s homes are responsible for more than a quarter of all the carbon dioxide we produce.

That’s why the Coalition Government has come up with an ambitious new plan to green and make more energy efficient all the existing homes and flats.

That’s why I have come to the Department for Energy and Climate Change, to talk to climate change minister Greg Barker and hear first hand about the new ‘Green Deal’.

Q1: So in 2012, you’re going to launch the ‘Green Deal’, can you tell me what it is and how it’s going to affect people’s homes?

Greg Barker: Yes. This is a radical, ambitious programme that could potentially involve changes to all 26million homes in the UK.

It’s going to give the opportunity for everybody to increase the energy efficiency of their property, whether they are in rented or privately owned accommodation, by paying for improvements to these homes through the savings that they make on their energy bill and that will be repaid on the energy bill over 25 years.

Its important to realise that although there will be no upfront cost, it’s not going to be a loan, it’s not going to be a mortgage, it wont affect their credit rating or their financial circumstances at all wont be taken into it, and if people subsequently move the cost of the improvements will stay on the bill of that particular property.           

Q2: So the expense will remain with people’s homes?

Absolutely it will stay with each property but it will mean that we will be able to roll out a really ambitious programme of home improvements, making them more energy efficient and capturing savings for every family then is the case at the moment.

But, what’s crucial is that not only is the fact that it’s not a loan, what is really important to realise we have a golden rule for the ‘Green Deal’ that not only should every single installation improve the property but it should also ideally result in lower bills for each person that takes it up as well. So, better homes and lower bills.

Q3: Given the cutbacks the whole country is facing, is this definitely a priority for the coalition Government?

This is a real priority, because it is not dependent on government spending, that’s the beauty of it. Before hand we were advancing but advancing very slowly because all we where using was government money to fund most of these sorts of projects.

Under the ‘Green Deal’ what we are doing is creating a new market. In a way it’s more radical than the privatisations that you saw under Margaret Thatcher back in the 1980.

We are creating a new market that allows private sector capital to come in from the likes of Marks and Spencer’s, or B&Q, or the banks, or the energy companies, to use their money to improve our homes and then the savings we generate for our fuel bills will repay the money that is spent over 25 years.

Q4: How environmentally important is it that we cut emissions from UK homes specifically?

It’s really important, because overall about 40% of our emissions come from choices we as consumers make and within that mix homes are a really big piece. So, unless we improve the efficiency of our homes we are never going to meet our climate change objectives.

But this isn’t just about saving the planet, it’s also about saving money on our bills because if you look at how much gas bills for example have gone up in recent years I think people are rightly worried [thinking] ‘How am I going to afford this in the future?’.

So, the ‘Green Deal’ is also a really good way of not only of rising to the challenge of climate change but also in a green way insulating families against rises in bills going forward and helping them balance the budget a little more easily.

In these tough economic times, people worrying about family finances, the deal really is a great solution.

Q5: Do you think the new annual energy statements that gas and electricity providers have to give consumers now go far enough to increase transparency?

Well these are very welcome steps in the right direction but it’s not enough, we want to go much further, we think that the British consumer doesn’t get the deal it should on bills.

What we would like to see is far greater transparency, so we are already talking to energy companies and if we can’t get agreement then we will bring forward legislation, but I hope we can get agreement with the energy companies that they will put the best tariff on the bills.

So, if you get your bill through you will be able to see what your bill would been if you would have used the best tariff currently available and also what your bill would be if you where using your energy in the most energy efficient way that is typical of your neighbours.

So, we want to show what you ought to be paying if you are being energy efficient and also what you should be paying if you are getting the best deal. I think a lot of people still don’t really get that information in an easy to understand way.

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