My Lords, in debates such as this, from listening to the excellent contributions from my noble friend Lord Jones, and the noble Lords, Lord Carrington, Lord Vaux of Harrowden and Lord Oates, more questions come up as we go along. I look forward to the Minister’s response on some of the technical details.
I go along with the general response in welcoming the purpose behind the scheme. The ambition is clear. Obviously, the context is the imperative to decarbonise for our net-zero targets and energy security is absolutely at the forefront of everything we are discussing at the moment, but perhaps we have not dwelt enough on the link with the cost of living crisis and the real concerns we have about people being able to afford to heat their homes, as well as all the other challenges for people bringing up families, in particular, and older people, who are also making terrible decisions about heating or eating. There is a very complex background to this, as we have heard.
The main question we have running through this is whether the amount of funding available—I thank the Minister for the detail on the background to the upgrade scheme—realistically has a chance of delivering the number of conversions laid out in the proposals.
I go to personal experience. I have talked to people over the past few days who have been considering upgrading their boiler and heard clearly the reasons why, at this moment, they have decided not to go down that route. Of course, the fundamental one is cost, but efficiency is also a major concern. Noble Lords know my background in local government; I know that the Minister visited Leeds to look at a scheme for retrofitting housing. The biggest challenge we have is retrofitting and suitability for purpose.
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Another area of work I am involved in is trying to establish specific apprenticeships to deliver training for green skills. It is incredibly difficult—it does not exist at the moment. Apprentices learn the different elements from across the board; no one is coming up with a bespoke scheme to make sure that the skills will be in place. From my experience of the complexity of retrofitting generally and then from working on this upgrading scheme, I worry whether we will have the capacity to deliver the ambition.
My questions to the Minister are, first, that we know the trajectory that is being proposed, but what further steps will be taken if it is not met, and how and when will it be evaluated? Will the upgrade scheme continue for three years afterwards if successful, or is three years of pump-priming expected to be enough? Is there a next phase, and when will the Government make a decision on that? If we look at the number of properties we are planning to upgrade, we are left with 500,000 to deliver over three years. Is that realistic and achievable? I question that.
My other concern is with new buildings. Of course, we have the introduction of the future homes standard to bring in heat pumps, et cetera, but that involves around 200,000 homes a year. How many new builds are being built at the moment with traditional gas boilers that will need to be replaced within just a few years? The question concerns deliverability, capacity and recognising the gap.
Will the Government commit to a regular review of grant levels, based on the experience of rolling out the programme: whether there is adequate take-up or whether the concerns with the programme are just too high for people to take on the risk? Is there a technology price trigger point at which grant levels will be reviewed, or will that be only at the end of the three-year period, if the scheme is to be extended?
In fairness to the Government, they recognise the risks of the scheme, which I presume is the reason why it has now changed to an installer-led two-stage voucher system. I was very struck by the comments of my noble friend Lord Jones about protection for the consumer. That is an area where I hope the Minister will be able to give us further background.
Also, can we have some clarity on the scheme itself? How will the grants be distributed? Will it simply be on a first come, first served basis for installers? Will larger installers with greater capacity for additional paperwork be at an advantage? What if demand outweighs the funding available? Will there be time-linked limits in place for the number of vouchers to be issued?
I sincerely hope that the scheme will be successful, as part of a wider toolkit, but the issue of flexibility, which was stressed by the noble Lord, Lord Carrington, is something that we need to focus on. I am certainly interested in being involved in the attempt to explore the possibility of hydrogen in future. I hope that, given the systems that people have in their properties, an alternative source of fuel could present a significant step in how we move this incredibly challenging agenda forward in a relatively short period of time.