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Make Shale Pay For A Warmer Britain

21/11/2016 07:58 | Updated 21 November 2016
Christopher Furlong via Getty Images

The nights darken and we all turn up our central heating.

Most of our homes depend on gas. But shale gas (fracking) divides opinion. The latest polls show one in three of us would ban onshore gas. Some, myself included, want tougher regulation of shale gas exploration.

And if shale gas wells get the green light, then most of us would welcome every community having a dedicated fund for local use; plus 1% of revenues from each well.

But the Government has gone a step further, consulting on a proposed Shale Wealth Fund taking ten per cent of tax revenues from shale gas exploration.

This week in Parliament, I will argue for that fund to be used in the national interest, helping to meet our environmental goals. A fund dedicated to driving energy efficiency. A Warm Britain fund, one might say.

3.2million home owners benefitted from the Labour government's Warm Front programme. Millions of social homes were insulated under the decent homes programme, also delivered when Labour was in power.

More recent energy efficiency schemes, have been less successful. The Government's Green Deal was cancelled after only two years, an embarrassing failure. Intended to fund energy efficiency in 3.5million homes, it financed just 14,000.

The Government's Energy Company Obligation, which like many energy initiatives, is funded via a levy on the nation's energy bills, is another scheme that has been cut back.

Energy efficiency has reached a cross roads in the UK. Now is the time to boost, not reduce, the UK's programme of saving energy. Unlike most of the Government's green policies, the Shale Wealth Fund, which is forecast to raise about £1billion over twenty five years, is a new source of revenue coming directly from the industry.

It's not a quick win. We are some years from receiving significant taxable profits on shale. But creating a defined wealth fund is a start, clearly separated from the general revenue pot.

What better use for the proceeds of shale gas than to reduce our energy consumption and our future reliance on fossil fuels?

The case for energy efficiency is simple. The cheapest energy is the energy we don't use.

The Competition and Markets Authority concluded that 70% of energy bill payers are paying over the odds. Even if Ofgem's latest measures reduce bills for a few, it is very likely that even by 2020, energy bills will be as high, if not higher than they were in 2010.

A Shale Wealth Fund could help to reduce those bills, enhancing a large-scale retrofit of the UK's housing stock, literally insulating millions from future energy price increases.

80% of Britain's homes will still be standing in 2050. The UK building stock is a long way from the low energy housing stock we need.

The challenge is still huge. Green Deal advisors compiled over 620,000 home energy reports. Nine out of ten were given an energy rating of D,E, F, or G.

The Government's own statistics for 2015 (the latest available) reveal that:

* Around five million homes still require cavity wall insulation;
* Around seven million with lofts do not have loft insulation; and
* 95% of the eight million homes with solid walls have had no solid wall insulation.

Britain needs to finish the job. A dedicated Shale Wealth Fund could make a huge contribution.

This fund should not be the only energy efficiency programme. I see a Warm Britain Fund underpinning a Government-led programme, but delivered locally. When energy companies wanted to complete work for the ECO programme, they soon found that many householders didn't trust them. If they had a trusted independent partner, such as a local council acting as the face of the project, they were more successful.

Nor should we under-estimate the significance for local economies. Home insulation is a skilled job, requiring high standards to achieve the desired energy savings. But these are jobs delivered locally.

This programme wouldn't rely on Chinese investment, Danish manufacturing or German technology, like many energy projects. There are many UK small and medium sized firms ready and capable of delivering this work. There are training providers to skill up apprentices. This is an ideal opportunity for trades people to retrain, to adapt a small business. Jobs for people in every town in Britain.

Cavity wall, loft insulation, insulating render - these are products stamped "Made in Britain". This programme would support jobs for installers, supply chains and for British manufacturers nationwide, stimulating growth and innovation.

I will never shirk from holding the Government account, pressing for fair energy prices, for renewable energy; for shale gas to be produced responsibly, and for communities to benefit from the local funds.

But a fund devoted to the common good could unite politicians and public alike.

A fund to help more of us spend less keeping our homes warm for many winters to come.

Caroline Flint is the Labour MP for Don Valley, and formerly Shadow Secretary of State for Energy 2011-15

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