HC Deb 12 December 1977 vol 941 cc30-9
The Secretary of State for Energy (Mr. Anthony Wedgwood Benn)

With permission, Mr. Speaker, I should like to make a statement on further energy conservation measures.

Existing policies have contributed to energy savings approximately estimated to be worth £2,000 million over the last four years. As was recognised at the London Summit meeting in May, energy conservation must play a major rôle in our future energy policies. I therefore set in hand a review of action to bring about a significant reduction in the future growth of energy demand, following recommendations made by my Advisory Council on Energy Conservation, and with which my hon. Friend the Under-Secretary of State, the hon. Member for Whitehaven (Dr. Cunningham), has been closely involved. Today I am announcing a substantial package of decisions.

First, the Property Services Agency will extend its existing programme in the civil and defence estates, at a cost of £5 million per year. This will make possible continued progress towards the eventual target of saving 35 per cent. of the fuel used at the start of the programme in 1972. This represents around £30 million a year at today's prices.

Second, as part of a long-term programme for installing thermal insulation and heating controls in National Health Service buildings, it is planned to invest an additional £5 million in 1978–79 and £10 million in each of the succeeding three years.

Third, as part of a similar programme in educational buildings it is planned to make available an additional £10 million in 1978–79 and £20 million in each of the succeeding three years.

Fourth, the Government will discuss with local authorities the very substantial opportunities for energy savings in their non-domestic buildings, other than schools. We propose to make additional funds, of up to £7 million a year, available for the necessary staff to secure efficient energy management and for the installation of heating controls. The precise sums to be spent will depend upon the discussion with local authorities.

Fifth, the Government are launching a 10-year programme to bring public sector dwellings up to a basic minimum standard of thermal insulation. This will involve treating over 2 million dwellings and will have major social benefits. Spending for this purpose will be made eligible for central Government housing subsidies. Provision is being made for expenditure over the next four years at an annual rate of L281 million. In addition, £2 million a year will be spent on improving the insulation of Ministry of Defence dwellings.

The Department of the Environment has for some time been consulting outside interests on proposals for building regulations to prescribe thermal insulation standards in new non-domestic buildings, and regulations resulting from this consultation are expected to be made shortly. The Government have now decided on further steps in this area.

Sixth, the introduction of building regulations requiring the provision of appropriate controls on heating systems is under consideration. The regulations would apply to the installation of heating plant in new non-domestic buildings and to its replacement in existing non-domestic buildings. A consultative document will be issued as soon as possible.

Seventh, to promote efficient energy management in non-domestic buildings, a new Government advisory and training service will be set up. Half a million pounds a year has been made available for this purpose.

Eighth, in addition the Government have allocated £4 million in 1978–79 and £5 million in each of the next three years to expand information and advisory services to industry.

Ninth, the Government have allocated an additional £2 million in 1978–79, rising to £8 million in 1981–82, for an expanded programme of demonstration projects.

Tenth, more efficient motor vehicles could make a significant contribution to containing the growth in demand for oil for transport. The Government have opened discussions with the motor industry on possible targets for raising the average miles per gallon achieved by new cars and on methods of achieving those targets.

Eleventh, the Government have allocated an additional £500,000 a year over the next four years for an information and publicity campaign aimed at persuading motorists to see that their cars are well maintained and to drive in more economical ways.

This reinforcement of our policies will require additional staff on energy conservation. In the Department of Energy I am establishing a separate division, responsible solely for energy conservation. Conservation will now rank with the energy-producing industries as an essential element in our energy policies.

The measures which I have described will involve additional public expenditure on energy conservation in the United Kingdom estimated at some £65 million gross in 1978–79, rising to over £80 million a year gross in the following three years. This will be spread over a number of programmes and will be financed as far as possible from savings elsewhere in those programmes, including in later years savings on energy consumption resulting from the investment made in earlier years.

These programmes will take up to 10 years to complete and will involve expenditure, in the first four years alone, of some £320 million at 1977 survey prices. They offer satisfactory returns on the expenditure involved, even at today's energy prices, and they could lead to savings of up to 10 million tons of oil equivalent a year at the end of the 10-year period worth some £700 million a year at current prices. They will also provide jobs in the construction industry. But energy conservation is not a matter for the Government alone. To achieve the potential savings in full will depend in large part on how far the private sector matches the steps we have embarked on in the public sector. Higher energy prices make conservation good sense for everyone.

Our programme is a continuing one. We shall be bringing forward further measures in other areas, as and when necessary. We shall need to decide how far any further reinforcement of our policies should be achieved by mandatory measures, by fiscal action, or in other ways. However, the measures I have announced today represent an important stage in the development of our energy conservation programme. Despite Britain's ample energy reserves, conservation is just as important here as in other countries less fortunately placed.

Mr. Tom King

Is the Secretary of State aware that we give a warm welcome to the conservation package that he has just announced? This will come as no surprise to him as we have been pressing him for many months to bring forward just such a package. It is only tragic that another winter has been lost and that we are the last of the major industrial countries to bring forward a conservation package along these lines. He will appreciate that we shall obviously need to study in detail the proposals that he has made, but I would ask him two specific questions.

First, he talked about possibly including thermal insulation standards in building regulations for non-domestic buildings. The domestic sector is also very important, of course. Is any thought being given to including this in domestic building regulations as well? Secondly, he referred in passing to the employment aspects. We have always maintained that insulation is employment-intensive—and all the more creditable for that. Has the Department made any assessment of the employment content of this package?

Mr. Benn

I welcome the hon. Gentleman's welcome for what he has urged and we have worked on. It is the privilege of Opposition to be ahead of Government in that the Government of the day have to prepare the actual proposals, and they have been worked on very hard. I would not accept, however, that the United Kingdom is behind other countries. President Carter's energy package is not through Congress. The Germans have published proposals which have not yet gone through. I think the hon. Gentleman will find that our record is not at all a bad one compared with other countries. But I let that pass because I think that progress speaks for itself.

The building regulations are a matter for my right hon. Friend the Secretary of State for the Environment. The hon. Gentleman will appreciate that today I have announced measures which spread over the whole of government and therefore details would have to come from others. On jobs, I, too, have long believed, as all have believed, that this insulation work, being labour-intensive, is welcome in its own right. It is very difficult to put a specific figure to the number of jobs that will be created, but it will be substantial and welcome.

Mr. Palmer

May I, too, congratulate my right hon. Friend very warmly on his most encouraging statement? It is the most far-reaching programme of this kind that we have had in this country. May I ask whether he envisages a permanent energy budget for the country on the lines suggested by the Select Committee on Science and Technology?

Mr. Benn

I am grateful to my hon. Friend for his kind comments. His Committee has played a leading part in preparing public opinion for the need for action on this matter. I think he knows that the Energy Commission, at its second meeting, in February, will be turning its mind to the concept of energy budgeting. How far we shall get in early years I do not know, but it would be sensible for a national energy policy to seek optimum returns for all investment, and there is no investment as rich in return as conservation.

Several Hon. Members


Mr. Speaker

Order. I remind the House that our first major business later is a half-day's Supply debate. I hope that hon. Members will bear that in mind in relation to the amount of time we can spend on this subject.

Mr. Patrick McNair-Wilson

In order that we may make the best use of our substantial coal reserves—the biggest of our fossil fuels—what action is the Secretary of State taking to ensure that local authorities make fireplaces and chimneys available in their housing and other accommodation, to take the strain off other domestic fuels?

Mr. Benn

This point has been regularly drawn to my attention by the hon. Gentleman, as well as by others in the trade, and indeed by those interested in coal and coal markets. It is a matter primarily for my right hon. Friend the Secretary of State for the Environment. All I can tell the hon. Gentleman is that it is a point that I have pressed. I hope that we shall make progress in getting greater coal use for sensible purposes—that is, for central heating systems and other uses in domestic buildings.

Mr. Pardoe

May I ask the Secretary of State to be a little more forthcoming about the Government's plans for private dwellings? Is he aware that the suggestion from the hon. Member for Bridgwater (Mr. King) about building regulations would affect only new buildings? What about incentives for the insulation of existing private dwellings?

Mr. Benn

It is a very fair point. The hon. Gentleman will appreciate that we have responded as a Government to the obvious economic advantages of conservation. The arguments that have led us to spend this money in the way that I have described apply with equal force to private dwellings. From that point of view, when my proposals have been looked at carefully I think that people will see that, if we are getting the return of the magnitude that I have forecast, it will make sense for others to seek to invest similarly.

Mr. Swain

Is my right hon. Friend aware that a consumer resistance is quickly developing to the use of electricity in new dwellings—both private and council dwellings—for central heating and other heating? Will he seriously look at the possibility of relaxing in some areas the smoke-control zones? In the area wheres I live, which is a very high coal-producing area, we are now suffering from the cost of electric central heating. It is costing more to the consumer, so we are having this consumer resistance.

Mr. Benn

I appreciate what my hon. Friend says, but I would rather contemplate further research on smokeless fuels than an easement of the clean air legislation, which has, as I read in a newspaper this morning, given us 70 per cent. more sunshine, at least in the urban areas, than we had before that legislation was introduce. Let us make the fuels that people wish to use more acceptable rather than lowering the environmental standards.

Mr. Gordon Wilson

Does the Minister realise that many of our constituents in public sector dwellings suffer from the miseries of condensation in their houses, due to insufficient insulation? Under his new scheme what priority will he recommend local authorities to give to dwellings suffering from such condensation?

Mr. Benn

I am aware, as a constituency Member of Parliament, of the problem to which the hon. Gentleman draws the attention of the House. But I must be careful, in making a statement about a broad range of expenditure covering a large number of Departments, that I do not intervene in the specific responsibilities of the local authorities and the Ministers with whom they deal.

Mr. Hardy

Will my right hon. Friend agree that this major statement is well worth waiting for? But could he publish in the Official Report figures showing the detailed expenditure that we shall incur by the mid-1980s, and compare that with the other Western industrialised nations in a similar condition, as evidence that this country is more than pulling its weight?

Mr. Benn

I should be happy to put both our record and our policy side by side with others. I believe that it will turn out that we have done well.

I can give my hon. Friend some figures. Of the four-year programme involving £321 million, there were additional allocations of £166 million, from existing departmental programmes £93 million, and from fuel savings from the previous year's measure £62 million. Those give the total which I announced.

Mr. Forman

Is the right hon. Gentleman aware that, much as many of us on this side of the House warmly welcome his statement, it is nearly four years since the CPRS first reported on the very important matter of energy conservation? Is he satisfied with the Government's rather regrettable delay? Secondly, will the right hon. Gentleman note that the time has come to move on to another aspect of energy conservation, its more efficient production, so that it can be conserved in the actual conversion and distribution process?

Mr. Benn

I am well aware of the latter point, although, as the hon. Gentleman knows, if there is a move to combine heat and power—a subject of great interest to the House—that involves a different stategy and needs some time to develop. However, I gave the figures for the last four years. We calculate that £2,000 million has been saved, even before the announcement of the measures. [HON. MEMBERS: "Conjecture."] That may seem conjecture to hon. Gentlemen opposite, but it is worked out on the basis of calculations which are accepted internationally as being valid.

Several Hon. Members


Mr. Speaker

Despite the pressure of time, I shall call those hon. Members who have stood to ask questions, but I hope that they will be brief.

Mr. Madden

Will my right hon. Friend the Secretary of State ensure that the materials announced in his programme will not present any risk to health, bearing in mind the growing concern about the dangers of glass fibre? Secondly, will he ensure that those installing the materials are properly trained and supervised and are aware of the proper standards of health and safety which should apply to the work?

Mr. Benn

That would not be for me to decide, but I shall see that my hon. Friend's question is put to the Minister responsible.

Mr. Hannam

Will the right hon. Gentleman accept that the 35 per cent. target of energy saving that he has announced represents a much more worthwhile objective than the minimal savings which have been seen in recent years? Furthermore would he examine the situation which exists concerning local authority grants towards heating installations for elderly and disabled people? The indications are that there is total confusion among local authorities.

Mr. Benn

On the first point, the answer is "Yes." As far as the second point is concerned, we have gone ahead with the winter discount scheme, which provides some help. However, in the long term, the insulation of old people's dwellings would be a more satisfactory way of providing assistance.

Mr. Ioan Evans

I join in congratulating my right hon. Friend and his colleagues on the 11-point, positive plat.. for energy conservation. In view of the job creation aspect of the programme and the fact that a 10-year period is being considered, if there is a successful start to the programme would my right hon. Friend consider bringing it forward so that the problem of unemployment can be helped, as well as that of energy conservation?

Mr. Benn

Job creation has been a factor in all conservation discussions which I have attended here, at the IEA, the United States, the Common Market and elsewhere. The programme is intended to go ahead on a phased basis. However, that is not necessarily the Government's last word.

Mr. Rost

Does not the Minister's admission that £2 billion has already been saved as a result of a 2 per cent. reduction in energy consumption emphasise how much further he has to go? Is it not disappointing that the Minister has not included incentives for domestic thermal insulation, that he has not exempted building insulation materials from VAT and that he has not referred to the Plowden Report, which recommends that we should get on with the more efficient production of electricity?

Mr. Benn

The hon. Gentleman knows that one can always do more. However, I must say that to be able to announce a programme of £320 million should satisfy the House that we are serious. As I said, it is by no means our last word.

Mr. Michael Latham

Is the Secretary of State aware that it was in 1974 that the House passed the powers to make building regulations on insulation? Does it not indicate some slowness on the part of the Department of Environment that it is only now getting around to a consultation document?

Mr. Benn

I am told that we doubled roof insulation requirements for domestic buildings in 1975. However, the House must recognise that the introduction of new criteria of energy-saving into existing patterns of thought throughout a number of Government Departments involves a great deal of work. That work has been undertaken. There has been a ministerial committee under the Under-Secretary of State, my hon. Friend the Member for Whitehaven, and the official committee to which I referred and an advisory committee. What I have announced today represents the sum of their wisdom and is, I believe, welcome.