§ Order for Second Reading read.
§ 11.36 a.m.
§ The Minister for Housing and Construction (Mr. Reginald Freeson)
I beg to move, That the Bill be now read a Second time.
This relatively short Bill marks another significant stage in the development of the Government's overall energy policy. Until recent times, we were accustomed first to coal and then to oil and natural gas being available in plenty to power our economy. Oil, in particular, was treated as available in almost unrestricted amounts and at low or falling prices. Despite the few voices calling for better and more co-ordinated use of fuel the efficiency with which energy was used was treated as of little importance.
Then came the dramatic effect of the fivefold increase in oil prices in 1973–74. In comparison with many other countries we may be relatively well placed, with substantial reserves of oil, gas and coal, but we are not immune from the difficulties of energy supply which will develop towards the end of the century—only 20 years away.
Following the energy crisis in 1974, the Government adopted an active energy conservation policy and have reaffirmed its importance in the response to the First Report of the Select Committee on Science and Technology and, more recently in the Green Paper on energy policy presented to Parliament earlier this year.
More efficient use of energy benefits both the individual user and the whole nation. Considerable savings have already been made through a programme of education. The "Save It" campaign has increased our awareness of the importance of energy conservation and has offered advice on appropriate measures, but there is a limit to what can be achieved by propaganda and exhortation alone.
Last December the Government announced a major package of measures to encourage energy conservation. It included a 10-year programme to establish a basic level of insulation in existing public authority housing where it is lacking. 952 This programme will run at the rate of about 200,000 homes a year. Now, in this Bill, we are turning our attention to privately owned houses.
Their energy consumption accounts for almost one-fifth of the total national consumption. About half total domestic consumption is for space heating and about 20 per cent. for water heating. The last 30 years or so have seen a general improvement in the efficiency of domestic appliances and a major shift in the distribution of consumption between different fuels. Oil and electricity consumption have risen more than fivefold; solid fuel consumption has fallen. Because of increased efficiency in energy consuming appliances overall domestic fuel consumption has risen relatively little but the amount of useful heat supplied has grown by 75 per cent.
This increase in appliance efficiency has not, however, been matched by an increase in the thermal efficiency of much of our housing. New houses have to conform to specified standards of loft insulation. Almost without exception they are fitted with insulating jackets on hot water tanks. Many of our older houses, however, have the heat-retaining characteristics of an upturned colander. Up to 5 million non-local authority dwellings have no loft insulation at all, so losing up to 25 per cent of heat straight through the roof. An unlagged hot water tank can cost up to £1 per week in wasted energy.
For some people, particularly the elderly on limited incomes, the result of such heat losses is that they simply cannot afford to heat their houses adequately. For them, insulation may bring social rather than financial benefits, and, although they will save little energy, basic insulation will make life more comfortable and healthy during cold weather.
But for many people basic insulation measures such as those included in the programme for local authority houses can offer real energy and cash savings. The most cost-effective measures are a reasonable level of insulation in the loft space and a suitable jacket for the hot water tank. The Government have decided that the first priority must be to apply these basic measures to the whole of the housing stock. We have considered several possible methods to achieve this objective, and have concluded that direct 953 financial help to individual householders would be the most effective.
We considered carefully whether to add these insulation measures to the existing house improvement grant system, but many of the rules and conditions under which house improvement grants are given would not be relevant to the specific insulation works we wish to promote. Given a potential market of about 5 million householders, we want to keep the administration of any grant scheme as simple as possible.
It is also important that the new scheme should come into effect quickly. The longer the gap between its announcement and its introduction, the greater the difficulty for the insulation manufacturing industry, with which we have been in close consultation.
§ Mr. Cranley Onslow (Woking)
The right hon. Gentleman said that he and his colleagues had considered several possible schemes in addition to the present one. He specifically mentioned another form of grant. Can he tell us the nature of the other schemes that were considered and rejected?
§ Mr. Freeson
I cannot do so in detail, but I can say that they were mainly variations of the grant system that we already operate. We also considered tax help and various other forms of help. I do not think that time allows me to go into all the details. If necessary I shall provide them in Committee or write to the hon. Gentleman. Essentially, we examined variations on the present improvement grant system.
Having had the consultation and considered the alternatives, we have brought the Bill before the House as quickly as possible. In this way basic insulation work in private houses can go hand in hand with the work in local authority housing that is now being introduced. We aim to get this effectively started in time for the coming winter.
I have said that the Bill does not stand in isolation but is part of the Government's overall energy policy. Another important part of that policy on which we have drawn in bringing the Bill forward is the research and development work carried out in the Department of the Environment both by the housing development 954 directorate and the building research establishment.
We have a comprehensive programme of work under way to identify the extent of the energy conservation measures required in housing in the next decade and the priorities for action. The programme will explore possible changes in building construction and heating and ventilation entailed in further energy conservation measures. These changes are being tried out in actual building projects to identify and resolve practical issues, such as the usefulness of heat pumps, well ahead of their general application. We are also examining failures in existing estates, not merely technical problems but the decision-making process in designing and building. All of this will be important to future fuel efficiency and thermal standards.
Meanwhile, as I believe that there is broad agreement with the Government's policy on both sides of the House, I hope that we shall see the Bill through all its stages before the new insulation season starts in the autumn. Certainly, the Government will aim for this.
In essence, the Bill provides for payment of grants by local authorities to individual householders according to schemes prepared by the Secretary of State. Local authorities will be reimbursed by the Government for the full amount of grants which they make. The Secretary of State may also contribute to meeting administrative costs incurred by local authorities. I want at this point to pay tribute to the help and co-operation that we have had from the local authority associations in working up this scheme quickly.
The Bill is short and its provisions are intentionally simple. Clause 1 requires local authorities to pay insulation grants according to schemes made by the Secretary of State. These will be laid before Parliament. The Bill provides that the first such scheme will be for insulating lofts and water supplies. Details of the works eligible for grant will be included in the first scheme, but essentially they will be the same as those included in the public sector programme announced some months ago.
§ Mr. Peter Rost (Derbyshire, South-East)
Can the Minister tell us why even in the first scheme nothing is being done for the 5 million homes which have no 955 lofts or loft access, and why he has taken no account in the first scheme of the fact that more heat is lost through walls than through roofs?
§ Mr. Freeson
The answer to the hon. Gentleman's last point is that it is simply not true. Otherwise, we should not have been introducing the scheme that we are introducing. We have based what we are doing on available knowledge about the greatest loss of heat experienced in domestic dwellings. There is no doubt that the main source of loss, economically and in terms of social and environmental conditions, lies with the lack of loft insulation—
§ Mr. Freeson
May I complete at least a sentence? Available information is that the greatest loss of heat, the greatest cause of energy consumption, lies through lofts and not through walls.
§ Mr. Rost
I am sure that the Minister would not wish to mislead the House. In his own answers to my Questions he has confirmed that in the average building 35 per cent. of the loss is through walls and 25 per cent. through roofs. The Leach Report of the International Institute for Environment and Development, "Energy Conservation in United Kingdom Dwellings", and many other reports from within the Government's own Department of Energy confirm these figures.
§ Mr. Freeson
We had better pursue this further. Our information is—and the insulation programme which is already operating in the public sector and which was accepted by the House some months ago is based upon this—that the quickest and biggest benefit that can be gained in this area is by having lofts insulated.
§ Mr. Freeson
That is the point that I have been making. The biggest and quickest benefit to be gained in conserving energy and heat in homes is by having lofts insulated. I see no difference between saying that and what I said a moment or so ago.
§ Mr. Tim Sainsbury (Hove)
The Minister was perhaps right in his second statement, that the biggest, quickest and perhaps 956 easiest benefit can be obtained through loft insulation, but in his Department's own publication "Warmth Kept In Keeps Heating Costs Down" the section "Where Does the Heat Escape?" shows clearly that 35 per cent. goes through the walls and 25 per cent. through the ceilings.
§ Mr. Freeson
It is not our intention at the percentage figures. I am saying that the most economic way of getting the biggest savings in this area is by loft insulation. There is no question about this. I said at the outset that we were talking about financial, economic and environmental factors. If we take account of those, we see that loft insulation is the quickest way of getting some satisfaction in this area. That is all I am saying. It is not a contradiction of the figures. Perhaps we can pursue the matter in greater detail in Committee.
I repeat that the quickest and most economic way of handling this matter is by getting lofts insulated. If we pursue the matter, we shall find in Committee that this is not a contradiction of the percentage figures. It takes account of the economics of the matter and the speed with which one can do the job. That is what I said. [HON. MEMBERS: "No."] If hon. Members read the Official Report, they will probably find that I have said it about six times in about two minutes.
§ Mr. Rost
I do not think that we need to develop a quarrel on this matter, but the Minister clearly contradicted my figures showing that more heat is lost through walls than through the roof. I accept his reply that it is more cost-effective to insulate the roof than to insulate walls, because it is cheaper. Nevertheless, more heat is lost through walls than through the roof.
§ Mr. Freeson
I shall try to deal with that point once more. The hon. Member for Derbyshire, South-East (Mr. Rost) interrupted and asked why the Government were choosing to proceed in the way that I have outlined. I think I said before he intervened that environmentally and financially the way in which we have chosen to proceed is the best way. There ensued a series of exchanges. The hon. Gentleman and the hon. Member for Hove (Mr. Sainsbury) have quoted the 957 percentages from the Department's publication. Those percentages are not a contradiction of what I have been saying, which I have since repeated four times, five times or even six times. No doubt the record will be read and it will be clear how many times I have said it. We shall go over these matters in Committee and the point will be established. I gather that Opposition Members agree with what I am saying, or what I am trying to say, including the hon. Member for Derbyshire, South-East. I hope that on those grounds it will be accepted that we should operate the policy that I have outlined in the first instance.
Details of the works eligible for grant will be included in the first scheme, but essentially they will be the same as those included in the public sector programme already announced. There is one difference. We are not proposing to include draught-stripping in the first scheme under the Bill. That is not because we doubt the effectiveness of draught-stripping, but because it is almost impossible to define it for grant-aid purposes. However, its cost in the average house is very small.
The Bill refers in detail only to the first scheme, but under its powers it will be possible to introduce further schemes. This is a longer-term provision to avoid having to introduce primary legislation again if it were decided to promote further insulation in future. That is not at present intended. Indeed, it will take some years to achieve nationally even the basic insulation that we now propose to grant aid.
I have heard that since the Government's proposal to introduce this legislation some people have wondered whether to cancel orders for measures such as cavity-wall filling and double glazing because grant aid may be forthcoming under the Bill. That is not so. Those wishing to instal such insulation should not be held back on that ground. The financial help forthcoming under the Bill for loft and water supply insulation could enable some people more easily to undertake further insulation measures, such as those to which I have referred.
§ Mr. Peter Viggers (Gosport)
Is the right hon. Gentleman saying that the enabling Bill, which has one scheme brought under it so far, is not to be followed in the foreseeable future by any 958 further scheme? Is he saying that the Government have no intention in the foreseeable future of bringing forward any other scheme?
§ Mr. Freeson
It is not our intention at present to introduce further schemes. Let us get this scheme operating. As I shall seek to show, the present objective is quite a considerable national task. When we have achieved that, we can return to other matters.
The initial scheme concentrates, as I have indicated, on loft and water supply insulation. That is because in that way we can get as quickly as possible the greatest economic and social benefits from the limited resources available to achieve a basic level of insulation within the whole of our housing stock. Once we get that we can consider further measures, but that which we are proposing is the quickest and most effective way financially, environmentally economically and socially of getting something done.
Clause 1 provides that the rate of grant under the initial scheme will be 66 per cent. of the cost of qualifying works or £50, whichever is the less. Therefore, the maximum qualifying expenditure will be £75. These figures are based on information provided by the insulation material manufacturers. It is our information that £75 will be sufficient both for materials and reasonable labour costs for the average house.
Although details of work, eligible dwellings and so on are to be defined within the scheme, the percentage rate of grant and the maximum grant for the first scheme are prescribed in the Bill itself. For subsequent schemes they must be prescribed by order.
Insulation technology continues to develop. New products are already coming on to the market. It seems sensible, therefore, to give flexibility to the administration of the grant system subject to parliamentary control on the rate and limit of grant.
Administrative details of the new grant scheme are still being worked out. Grants will probably be paid out on the basis of a combined form of application and declaration completed by the householder, whether he is an owner-occupier, tenant or landlord. The applicant will have to certify that his house is not already insulated and that he has incurred specified 959 amounts of expenditure in carrying out works under the scheme.
The application form will be supported by receipts for materials purchased and for work carried out, and the applicant will agree to permit the local authority to carry out checks if it so wishes. It is intended that all dwellings that lack loft and water supply insulation will qualify.
I turn to the way in which the scheme is to be financed.
§ Mr. Bruce Douglas-Mann (Mitcham and Morden)
Do I understand from what my right hon. Friend has said that it will be possible for the applicant to make application after the work has been done? My right hon. Friend refers to the applicant producing receipts. If it is to be possible for the applicant to make application afterwards, the scheme is a welcome step forward. At present many people are deterred from applying for improvement grants, or they discover that they have made their application at too late a stage. That is a greatly inhibiting factor. Do I understand that my right hon. Friend will have a different system for the grants for the scheme?
§ Mr. Freeson
The details are still being worked out. My hon. Friend raises the example of the improvement grant system and suggests that part of its operation is a greatly inhibiting factor, but that is not my experience. I am aware that some individual problems arise when works are started before application for grant has been agreed, or in some cases even made. However, there is some discretion allowed in certain circumstances to handle that sort of situation. However, it is not my information that it has significantly inhibited the use of the improvement grant system.
My hon. Friend's intervention leads me to stray a little outside the scheme with which I am now concerned. We have not yet concluded the precise details of the administration of the scheme.
§ Mr. Onslow
If applicants are not to be able to claim on the basis of receipts for work done after some starting date, everyone will wait until the Bill becomes law. That will mean that there will be a tremendous rush. Would it not be much to the advantage of the Minister's cause 960 that work should begin as soon as possible? Is it not essential that the matter should be cleared up at this stage? It seems fundamental to the whole scheme.
§ Mr. Freeson
The point that the hon. Gentleman is raising on the timing of the Bill is not valid. It may seem valid superficially, but if people are aware that we are to introduce a system of this sort, subject to the Bill passing through Parliament fairly promptly, I doubt whether there will be much inhibition on the part of those now preparing to have works carried out in their homes this autumn in readiness for the winter.
We must recognise the more important fact that we are not dealing with a Bill that will have an initial effect this coming summer or autumn. We are dealing with a Bill that will be operative for years to come. Whatever marginal hiccup may occur this year—I do not accept that there will be one—will cease thereafter because the Bill will be operating over the years to come. Therefore, the hon. Gentleman does not raise a valid point.
From experience I do not accept that the fact that someone has had to apply for and get approval of grant before improvement work has started has been a significant factor in inhibiting applications. Of course, I accept that there have been individual problems. My inclination—this is a detailed matter that no doubt will be discussed further in Committee—will be to stand by the policy and practice that has been established, that public expenditure is not authorised until full information has been processed by normal application by the applicant to the local authority.
I have already said that there are about 5 million uninsulated houses. Therefore, it is essential to regulate the rate at which grants are given if we are to maintain a stable demand on public expenditure and on the insulation industry.
Clause 2, therefore, provides for the Secretary of State to make expenditure allocations to local authorities within which grants can be paid. Provision is made for total capital expenditure of £15 million for this year and for £25 million in 1979–80 and in later years.
The objective is to grant-aid the insulation of about half a million houses a year 961 —that is a 10-year programme similar to that already announced for local authority houses. If that number of uninsulated dwellings are insulated each year, it is estimated that fuel savings of up to one million tons oil equivalent per annum will accrue after that period, valued at about £70 million per year. That is net of any improved environmental or social conditions that arise from insulation—the point there being that we do not necessarily get an immediate financial benefit because heating standards and environmental standards are improved, although people are often prepared to pay for them. This is a broad calculation of what will arise after we take account of that factor.
The financial provision will also cover payment by the Secretary of State to local authorities for expenses in administering the Bill. A grant scheme which affects so many individual householders will mean additional work for the local authorities who run it. Therefore they should be reimbursed for the expenses they incur. We are discussing with the local authority associations the basis on which this should be done. It is probable that authorities will be able to claim a fixed fee per grant paid. The amount of the fee will be agreed with the associations and will be based upon average costs likely to be incurred in processing grant applications.
Predictions about future energy supply and consumption are notoriously hazardous and this is not the occasion on which to venture into that field. But, whatever the future, energy conservation must be a priority objective. It makes good sense for the individual consumer. It makes good sense for the country as a whole. It buys us time by extending the life of our own resources.
The Bill is another stage in the Government's overall strategy. It offers incentives to householders to invest relatively small amounts of their own money in insulation measures and will bring significant economic and social benefits. I ask the House to give it a Second Reading. I urge that it should proceed through its stages quickly so that consumers may start to benefit before next winter.
§ Mr. Rost
Will the Minister consider the question I put to him, bearing in mind that a quarter of the housing stock or dwellings in this country have no loft 962 or loft access but nevertheless have uninsulated ceilings? Some of the people in those dwellings may be in greater need of help than those requiring loft insulation. Could they be given the equivalent provision for ceiling insulation?
§ Mr. Freeson
I assume that the hon. Gentleman is referring to dwellings in blocks of flats of one size or another. There might be some odd circumstances of which I cannot conceive at the moment. I will take on board the question of insulation of the total building, but at this stage, given that the scheme is designed to deal with two particular kinds of insulation, I do not consider that it would be appropriate to undertake floor insulation which would be involved between different levels of accommodation. I am speaking off the cuff, but I feel that it could raise a wide range of varying circumstances, from purpose-built blocks of flats to houses which have been converted into flats, where there have been building regulation waivers so that insulation of one kind or another did not have to be applied.
I repeat that the objective here is to get the quickest financial and environmental benefit that we can out of a grant-aided system. We can look at other measures later when we are able to see the full effectiveness of the scheme that is at present proposed. But I will take on board the question of the top-floor insulation in circumstances in which lofts would in many case be involved, where blocks of flats have been so designed.
With the permission of the House, I shall reply to any further points at the end of the debate. My hon. Friend the Member for Durham, North-West (Mr. Armstrong), the Under-Secretary of State, who would have wound up the debate, has had to go to hospital for attention to an injury which most hon. Members are aware that he has suffered.
§ 12.3 p.m.
§ Mr. Michael Morris (Northampton, South)
The Opposition welcome the Bill in principle. We regret that illness prevents the Under-Secretary of State from joining us this morning.
It is appropriate first to review the background before we look at the specific proposals of the Bill. It is disappointing that it has taken five years, since the oil crisis in the autumn of 1973, for us to get 963 really substantive action out of the Government. My hon. Friend the Member for Hornsey (Mr. Rossi), who is not with us this morning, has consistently over the years sought action from the Minister. The Minister has ignored my hon. Friend's requests on more than one occasion, but, perhaps more surprisingly, the Minister's Department started its own programme for better insulated houses in 1973, to discover the energy savings which could be achieved if wall and roof insulation were substantially increased. I think that we should have been able to expect some action by 1975, or at the very latest by 1976, because the preliminary data was available by then.
The Bill's modest proposals—I think that the Minister would accept that they are modest—have to be seen in the context of what our European partners are doing in this area. I am very much indebted to my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) for his very persistent questioning of the Government. Probably the most illuminating Question he asked was on 25th November 1977. It produced some fascinating information which indicated that other members of the EEC with similar climates to ours are taking matters a lot more seriously.
In both Belgium and Denmark there is a 25 per cent. grant for insulation expenditure. As the Minister will know, in Belgium it is a means-tested benefit. In France there has been concentration on the pre-1948 dwellings, with special subsidies for thermal improvement. In addition, there are tax credits for insulating the main residence, and there are plans to extend this by further tax incentives.
In Germany there are substantial tax allowances for older buildings, and there is a proposed 20 per cent. grant for insulation and modernisation. In cost terms it is substantially more generous than that what is being offered in this country. The proposed assistance in Germany is in the range of DM 4,000 to DM 12,000.
Each of these schemes is, I accept, totally different from ours and probably attuned to the housing stock in each country, but the key point is that each is considerably more generous than has been offered this morning. Certainly the other schemes have been driven forward 964 with a greater degree of purpose than we have seen to date in the United Kingdom. As the Minister has said, we have to date very much relied on exhortation through the "Save It" campaign, which has cost several million pounds. We all have to recognise that it has not succeeded in this area.
Perhaps surprisingly, when we look at the Bill in greater depth than a first cursory reading we find that home owners are not being as fairly treated as the Government would have us believe. The private sector has had to wait longer than the local authority tenants. As the Minister knows, his own Circular 23/78, which implemented insulation proposals for council houses, was introduced in March this year, but the Bill was published in May and will not, presumably, be on the statute book until later in the summer.
Perhaps more importantly, the private sector will have to wait a great deal longer, as the Minister has indicated this morning, before there is a comprehensive programme of insulation for home owners. Circular 23/78 put forward, quite rightly, a global approach. It divided work into primary and supplementary categories, both of which were admissable expenditure for local authorities.
The first or primary category included roof space insulation, cold water system insulation, and hot water system insulation, all of which are common to the scheme, but in addition there was draught-stripping to doors and windows.
The second phase, which is again admissible expenditure, included expenditure on lofts—in terms of making access hatches—roof space ventilation, disused fireplace blocking, the closing off of air bricks, and door ironmongery. In some cases the point was made that repairs would be admissible. There is a contrast in emphasis between the two schemes.
Another important point is that the Government's programme for council housing, which we accept and support, calls for 200,000 public sector houses a year to be insulated at an average unit cost of £100 to £125. That compares with the Government's contribution in the Bill of £50 a house. I hope that the Minister will explain why we have this variation of financial benefit between the two categories of houses.
965 With regard to timing, as we understand it, this is the first scheme, and the Minister should recognise that there is an urgency about getting it on the statute book. We shall certainly make sure that we give all possible assistance to him in this respect. The reason for the urgency is that 90 per cent. of the industry's sales are made from the beginning of August, continuing through the winter. The industry—I am talking about insulation materials for the roof—is working at well below capacity. The Minister gave a disappointing answer to my hon. Friend the Member for Gosport (Mr. Viggers) when he said that the Government had no draft proposals for extending the scheme beyond this first phase.
Let us look at the scheme. We know that it is concerned with roof spaces and certain water installations. There is little arugment about water installations and the benefits to be gained from their insulation. Therefore, I do not propose to continent further on that aspect. But I feel obliged to look more closely at the Government's choice of roof space insulation.
It is true that in 50 per cent. of centrally heated homes the roof is probably the most cost-efficient area to be insulated first. Indeed, we now have that clearly on record from the interchange between the Minister and my hon. Friend.
But if we look closer at the non-centrally heated sector, the evidence is not so clear. We are talking primarily about a home where the living room and probably the kitchen are heated. The kitchen is more naturally heated because of the cooking. The living room is the one room that is heated, probably by some form of gas or coal fire. There is increasing evidence that a strong case can be made out for a combination of double glazing and draught exclusion for the living room.
I should like to refer briefly to double glazing, which is traditionally thought not to be a cost-effective manner of insulation. Recent work by the industry and interested parties, including the Government, shows that about 80 per cent. of housing stock could cost-effectively have the living room double glazed. The point that I make strongly is that for the non-centrally 966 heated house it is probably at least as cost effective as roof insulation.
Who are the people who usually live in non-centrally heated houses? They tend to be poor people, the less well off, the older people. Should we not give first emphasis to such people, because they are in greatest need?
I turn next to the point commented on briefly by the Minister regarding draught exclusion. Draught exclusion is most likely to be beneficial in older houses. By definition, they tend to be occupied by a fair number of old people. We are talking not only about draught strips around doors, but probably about joinery work. The Minister has in his constituency a number of houses in which the joinery is probably the best part of 100 years old and allows a great deal of heat to escape.
The Government commissioned a survey by the Research Institute of Consumer Affairs on the cost of insulating old people's houses. The Government promised the report by last winter, but it has not yet been published. Where is the report? When will it be published? My information is that the report recommends that it will probably cost £250 per unit to get comprehensive draught-proofing of these older houses. That is an important dimension.
§ Mr. Toby Jessel (Twickenham)
Has my hon. Friend considered that some older houses have skylights to let in light on, say, a well-type staircase? Such skylights, in effect, comprise part of the roof. They are often composed of two layers of glass. Does he agree that they should be included within the definition of "roof" for the purposes of the Bill, because a lot of heat escapes through glass in the roof?
§ Mr. Morris
My hon. Friend has made an interesting point to which we should perhaps address ourselves in Committee, because it has relevance in different parts of the country.
After our experience with hypothermia and the problems of providing adequate heating for old people and the partially disabled, I am disappointed that the Government have not put forward positive proposals which would give specific benefit to these people, because they are in greater need than anyone else.
967 There is another category which the Government appear to have overlooked. It used to be thought that basically low-income families had a low consumption of energy. Yet the Government's evidence in their work shows, as I think anyone who thinks about it would expect, that a family with only the man going out to work and the mother staying at home with perhaps two or three small children has a high energy consumption. Such families tend not to live in centrally-heated homes. We shall look at this matter in more depth in Committee. I hope that suggestion will be received in the spirit in which it is offered.
I turn now to the financial dimensions of the Bill. I have already made the point, which I think needs to be answered, that there is a disparity in the Government's contribution between the £100-£125 for council property and the £50 grant for the private sector.
The Bill provides for expenditure of £15 million this year and £25 million next year. I hope that is not an indication of the rate of inflation. But as 90 per cent. of the market will still have to come by the time the Bill becomes law, it is not clearly evident why there should be this difference between the two years.
The Minister said that the administration expenses would come out of the budget. We welcome that the Government have recognised that the Bill will put an extra burden on local authorities and that they should be recompensed for it. That is a welcome advance. I am sure that the local authorities will also welcome it.
There are just over 500 local authorities in England, Scotland and Wales. Let us assume that, for the sake of argument, 500 of them get going on the scheme. The Minister indicated that there will probably be a repayment on the basis of a fixed fee. If each authority employs one man, which in a district is not perhaps out of court, and he is paid a modest salary with overheads of, say £6,000 a year, that will cost £3 million or 20 per cent. of the first year's budget. Put another way, it will deny to 60,000 homes the benefits that the Minister wishes them to have.
§ Mr. Morris
The £3 million expenses will have to come out of the £15 million in the first year. I think that it would be more sensible if the administrative costs of the scheme were pulled out separately and there were a separate specific budget for home insulation. The Minister may be surprised that it works out at 60,000 homes, but that is the figure. When he realises that, he may want to think again.
I think that hon. Members on both sides of the House earnestly hope that the administrative procedures will be simple. We do not want applicants to have to go through the rigmarole, as used to happen with improvement grants, of proving title and having endless visits. I hope that in Committee the Minister will be able to indicate clearly that there will be a simple procedure and maximum encouragement to people to take part in it.
I should like to conclude with what I hope will be taken as a few helpful hints if we want a dramatic improvement in domestic insulation. First, urgent attention must be given to ensure that new homes meet higher energy savings standards. Even today, there is room for great improvement in that area.
Secondly, we need to stop deterring people from increasing rateable values. The problem is that if someone installs double glazing or makes substantial changes, he is likely to have his rateable value increased. That is particularly relevant, because the Government have just announced that there is to be a further review of rateable values which is to come into force in 1982. On 9th January the Under-Secretary of State gave a particularly disappointing answer to a question on this matter. I hope that the Government will think again and issue suitable instructions to the Inland Revenue.
Thirdly, as the Minister has rightly said, there is much work to be done in the area of domestic machinery and its energy consumption. Progress has been made, but there is much more work to be done.
I confirm to the Minister that we shall do our best to give the Bill a speedy passage, though we shall feel free to iron out some of the surprising number of anomalies. But this is a new field, and anomalies are to be expected. We shall 969 want to consider them exhaustively and to try to get a simple, workable scheme that meets the needs of people who put in the insulation and is of great benefit to the country.
§ 12.21 p.m.
§ Mr. Stephen Ross (Isle of Wight)
I echo the concluding remarks of the hon. Member for Northampton, South (Mr. Morris). I agree that we should make this scheme simple and not have to go through great bureaucracy. He mentioned the question of rating, especially now that there is to be a reassessment. We know that there are great anomalies already. Central heating systems that were put in after a certain date are not to be taken into account in revaluations, but people who put them in before that date are still paying additional sums on their rateable value. I hope the Minister will consider this relevant point.
My colleagues and I welcome the Bill. It goes some way to balance the situation between the public and private sectors, although not far enough. However, if some of the representations that have been made from these Benches have encouraged the Government to bring in the Bill, we are all delighted.
One should judge the proposals on the basis of the question whether the money spent will be more cost effective in the sense of energy saving or will merely provide a more comfortable environment in which to live. I suspect that the balance will come down in favour of the latter, but it is a step in the right direction.
I wonder whether certain existing heating systems are sensitive enough to cope adequately with the new situation that will be created. Alterations may have to be made to some of the complicated heating systems that are now installed in houses where advantage may be taken of this measure. I agree with the Minister that there will be considerable savings in water heating systems. That is one of the best points of the measure.
My house is 150 years old. It is a three-storey house with an old tiled roof but with no felt lining underneath that roof. Yet I have a roof space which has been insulated. With the snow and gales of last winter, my roof space completely 970 filled up with snow. I spent the whole of one Sunday digging it all out. The snow and gales did not do much good to the insulation. I cannot claim that £50 will go very far towards getting my roof off and putting a proper lining underneath. When we consider schemes later, we should tackle this problem.
There are hundreds of thousands of houses with slate or tiled roofs without any felt lining. It is all very well to put elaborate insulation underneath, but if, following a good south-westerly gale, rain or snow comes in, it is money down the drain. My experience is not a happy one, and if the grant is increased I should like to re-roof my house.
The biggest problem is getting the work done. Although it is staged a bit with the money that is made available, it is unrewarding work for small builders, many of whom have gone to the wall over the last few years. It is dirty and unglamorous work, and there will not be a lot of money in it for them. Local authorities will have to help by quickly preparing a list of reputable firms that are prepared to specialise in this work. The local authorities can then pass the information on to those who apply. Otherwise they will be completely overwhelmed. Perhaps in Committee we can consider the matter of insurance covering possible breakage and accident.
The pensioners and disabled people, whom we ought to help more than any, could be in difficulty about the limitations on the amount available. One envisages that in many of these cases private owners will themselves contribute and perhaps do some of the work themselves. But the £50 is probably insufficient for the pensioners and the disabled. I hope that the Minister will see whether he can help them a little more.
May I ask what the position is in regard to VAT? Is this work to be chargeable to VAT? If so, that will add to the cost. If the work carried out is an improvement, as I suppose it is, it presumably qualifies for VAT. If it is new work, that would be avoided. I should like the Minister to give some thought to that matter before the Bill goes to Committee. Apart from that, I welcome the Bill and hope that it will be the first of a series of steps to deal with this matter.
§ 12.26 p.m.
§ Mr. Bruce Douglas-Mann (Mitcham and Morden)
Most of what I wished to say has been said by the hon. Member for Northampton, South (Mr. Morris) or the hon. Member for Isle of Wight (Mr. Ross).
I urge the Government to go ahead as rapidly as possible with the preparation of an extension of the scheme to allow for work on draught exclusion. Will the Minister say how rapidly he hopes to be able to extend the scheme to include draught exclusion and joinery? Many of the worst cases to which the benefits of the Bill might be applied in my constituency are private tenancies, or tenancies of the Department of the Environment on the motorway route, where the condition of the houses is very bad because of the rotting of the windows and lack of adequate means of excluding draughts. The extension of the scheme would in many cases benefit those who are in greatest need of assistance.
I greatly welcome the Bill. I urge the Government to keep the administrative scheme simple, and I should like the Minister soon to announce a date from which works will qualify. We are told that 90 per cent. of insulation work is done after the beginning of August. It is desirable that people should be able to make plans now to carry out their insulation work to avoid the initial hiccup to which the Minister referred. That could be done if, fairly soon, the Minister can announce that schemes that have been started, say, after 1st July of this year will qualify, provided that in other respects they meet the requirements of the legislation. That would ensure that the work that the Bill is likely to generate, which is another benefit, could be achieved as quickly as possible.
§ 12.28 p.m.
§ Mr. Cranley Onslow (Woking)
I declare an interest as a director of a public company which has considerable activities in home improvement and energy conservation.
The Bill deserves to be debated. The Minister somewhat oversold it in his opening speech, when he described it as a significant measure. I was depressed, when he continued, to find that certain areas of the Bill do not appear to have been carefully worked out. Some of the 972 information in the Minister's speech was useless. I do not make a particular point about the fact that he solemnly told us that the end of the century is now only 20 years or so away, beyond saying that if it is thought necessary to tell the House that, it would be as well to be precise about the matter.
I complain about the Minister's statistics on energy consumption. He has made an underestimation in suggesting that space heating accounts for only 50 per cent. of domestic energy consumption. If he took the trouble to read the recent report by the Consumers Association on energy efficiency labelling, he would find that it estimates that space heating accounts for at least 60 per cent. of consumption. I am surprised that the Minister was not able to produce more accurate statistics.
The Minister said one thing that I welcome. Although my hon. Friend the Member for Northampton, South (Mr. Morris) was disappointed with the reply which my hon. Friend the Member for Gosport (Mr. Viggers) received when he asked the Minister to clear up the question whether there were to be any other schemes, the House should welcome the news that there are no other schemes in prospect. Nothing deters private house owners from going ahead on their own more than the thought that if they do they will lose the opportunity to claim. The Government have already just about killed the solar heating industry stone dead by not responding to the Select Committee's suggestion that this should be grant-aided.
It is extremely unpractical to create uncertainty in these matters. We should be realistic enough to assess such legislation in terms of the response that it will get from ordinary householders and not in terms of how good civil servants think it is or how much the Minister choses to praise it. That is why it was unhelpful for the Minister not to have been able to tell us more about the scheme, and whether people would have to go to their town hall to get approval before they could do the work or whether they could get the work done and claim on presentation of a receipt. I hope that the Minister will consider this matter, because it will have an effect on the take-up of the scheme.
§ Mr. Freeson
I said that these details had yet to be worked out, but my inclination was that we should apply the same principle that we had applied in the past and ensure that applications should be considered and approved before work starts. Let there be no misunderstanding about that.
§ Mr. Onslow
The sooner the Committee makes up its mind on that point, the better.
The most depressing part of the Minister's speech was his reply to my intervention asking what other types of scheme had been considered. He admitted, rather reluctantly, that consideration had been given to a tax offset incentive, but that it had been dismissed. In fact, he gave a great deal of the game away.
If we consider the scheme in the light of the response of the average householder, he is most likely to be stimulated into carrying out energy conservation measures in his home if he knows the range of choice and is given resources to take advantage of that range. That is why the report on energy efficiency labelling is important. I hope that we shall have an indication that the Government intend to follow it up fairly rapidly. I fear that, on present form, it is likely to lie somewhere and gather dust. That is depressing, because much of the information in the report suggests that there are many ways in which people could be encouraged to take advantage of the technology of energy conservation which is developing.
Manufacturers of the most efficient devices could be given encouragement if they knew that full authoritative information was being made available as widely as possible and that ordinary people would have the resources to take up the product.
My main point is that we shall never tackle this issue successfully unless we get into the tax incentive side of it. There are a number of reasons, the most obvious of which is that this measure will do nothing for someone who has already been intelligent enough to insulate his loft. The Minister is dismissing a whole number of people who are known to be interested in energy conservation, who have spent their own money on it and would almost certainly like to do some, thing else.
974 Even the hon. Member for Isle of Wight (Mr. Ross), who has left us, presumably to remove some other weather intrusion from his roof space, could serve as an example of the extraordinary variety of needs to achieve greater energy conservation in one's home. I doubt whether the hon. Member is more representative of the rest of the country in this domestic circumstances then he is in his politics, but if he has a problem and can solve it only by the means he needs to take to keep the snow out of his roof, he should be encouraged to do so.
§ Mr. Eric S. Heffer (Liverpool, Walton)
From what the hon. Member for Isle of Wight (Mr. Ross) said, if his politics are anything like the way he runs his household affairs, I would not have a great deal of confidence in them.
§ Mr. Onslow
The hon. Gentleman has put more succinctly the point that I was seeking to make, and I am glad to carry him with me.
Many people in less peculiar circumstances than is the hon. Member for Isle of Wight will get nothing from the Bill. That is an admission of failure which the Minister should have been ashamed to make.
There is nothing in the Bill that will stimulate householders to try to make good the enormous damage to the state of our housing stock that the last four or five years of financial stringency have created. The Minister has only to walk down one or two roads in his constituency to see the desperate state to which the exterior decoration of many private houses has sunk in the last few years. It cannot be in the national interest that this should be so and it is desirable that householders should be stimulated to make good that damage in a way that will contribute to energy conservation.
I turn to the question of the employment effects of this legislation. It may do something for the small builder—I doubt that it will do very much—but there is no doubt that a wider stimulus to home improvement would do a lot more for him. If the scheme were extended to types of work at present outside the scope of the Bill, it would do much, not only for small building firms but in the significant area of moonlighting.
975 It will be known to hon. Members in many cases from personal experience, that a good deal of building and decorating work is done by men in their own time—men who are not necessarily too careful about returning their earnings for tax purposes.
If we could return to a system whereby a prudent householder knew that for the first £200 he spent in a year on maintaining or improving his house he could claim an offset in tax, not only should we get a greater contribution towards energy conservation; there would be a significant effect on the number of people registered as gainfully employed and the Inland Revenue would probably benefit in the process. I should like to see this sort of legislation extended into that area.
I was disappointed that my hon. Friend the Member for Northampton, South, in his list of helpful hints at the end of his speech, made no mention of that possibility. I hope that my hon. Friend the Member for Hove (Mr. Sainsbury), who is now on the Front Bench, will make good that deficiency, because until we make it worth people's while to pioneer in energy conservation, we shall be left with second best if we have nothing better to depend on than Government grants.
§ 12.38 p.m.
§ Mr. Peter Viggers (Gosport)
I start by putting the Bill in its energy context, which no one else has sought to do. According to the United Nations' economic division for Europe, we shall be running out of energy completely in 79 years. At the present rate of growth of energy, there is 55 years use of oil and gas left and this country's North Sea oil and gas reserves will last for about 40 years. The duration will depend on the cost of oil, because that may make it more worth while to extract more oil, and technical features which may allow us to extract more oil and gas from the North Sea.
However, we are certainly facing an energy crisis. It is not the crisis that we faced two or three years ago, when prices ran away and we found ourselves facing an energy and economic crisis, but a longer-term energy crisis which it is this generation's duty to tackle.
So far, the Government do not appear to have recognised the importance of the 976 longer-term energy crisis. The situation is worse because of the temporary glut of oil reserves throughout the world. The stirring words we heard from the Government and many other quarters two or three years ago about the need for energy conservation have all been forgotten and we seem to be living in a fool's paradise from which we shall awake in the 1990s or at the turn of the century.
For the Minister to say that the Bill represents a significant stage in the Government's energy conservation policy shows how little importance they place on energy conservation generally. A scheme for local authority housing was put forward at the end of last year and now we have this meagre scheme for private houses. It is clear from the £50 maximum, which is much less than the Government were intending to allocate for local authority housing, that the Government consider that they are giving a handout to assist the private householder and are not looking at the measure in the broader context of saving energy, which is what they should be doing.
In my view this is not a measure to assist householders; it is a measure to assist the country to save energy. I was horrified to hear the Minister say that there was no intention of introducing any further scheme under the umbrella of this enabling Bill. The Minister seriously told us that this first proposed scheme with a £50 limit and a two-thirds rebate to occupiers is to be the only scheme under the enabling Bill. Yet in his Department's Press release he said that the scheme set out in the Bill was intended to be a 10-year programme for loft insulation. Taking these two statements together, it might even mean that the Government have no proposals to introduce a new scheme within 10 years.
I fully take the obvious point that the worst thing that the Government can do now is to hint and imply that further schemes are around the corner and thus to halt the industry dealing with insulation of cavity walls and other energy saving industries. It would be a bad thing to imply that further schemes are coming because of the damaging effect on the industries concerned, but for the Minister seriously to state in such a categorical 977 way that no more schemes will be forthcoming must be wrong. He should introduce a much more comprehensive and definitive scheme, then to stick to it and sell it because it is the Government's job to give a lead and to ensure that energy is conserved for future generations.
This meagre scheme will enable a do-it-yourself expert to lag a roof space of 45 square metres, if one is metric, or 500 square feet, if one is still Imperial. I have had estimates put to me, and apparently it would cost about £58 to buy 100 mm roof lagging to insulate that space, and the spare pieces could be used for lagging pipes and tanks. I am told that the jackets can be bought for £3.50 to £6.
§ Mr. Viggers
I agree entirely. It is true that 100 mm thickness is a token gesture—it is not enough, it is too little and too late. However, it is true that the 100 mm lagging could be laid by a do-it-yourself expert for £58. If it were done by an installer it would cost about £75.
It would be possible for substantial savings to be made if there were a comprehensive system of roof insulation. I see no reason why the Government should not now give the kind of lead that they have a duty to give, by setting up and encouraging the kind of scheme for the insulation of lofts that was used for the conversion of gas heating systems and gas cookers. There was a substantial nationwide scheme to convert from town gas to North Sea gas, and the British Gas Corporation rolled through the country with information caravans. There was a wide campaign of information distribution to the public. This is the kind of scheme which is needed. It would reduce the costs of insulation and would have a substantial effect on energy saving.
The insulation of a roof has an estimated pay-back time to the person who does the insulation of one and a half to two years. In other words, it takes a maximum of two years to get one's money back if the insulation is done properly.
Wall insulation has a longer period of pay back—about four to six years. The 978 Minister tried to extricate himself from what he said earlier. He made an elementary error which I am sure was a lapsus linguae. He said that the largest amount of heat was lost through the roof. That is not true. Of course there is a substantial amount of heat lost through the roof—about 25 per cent.—but 35 per cent. is lost through the walls.
It may be thought necessary for the Government to give some kind of lead to encourage people to insulate their roofs and lofts, but with a pay-back of one and a half to two years it should be easier to persuade them to insulate their roofs than to insulate their walls. Therefore, the Government should concentrate more money on encouraging people to insulate their walls where, in the long run, a larger amount of energy saving can be achieved. The Minister should not have turned his back on this, and for him to say that there is no prospect of wall insulation being considered is very sad.
Very early in the schemes of insulation of cavity walls there was a suspicion that damp could be caused by cavity insulation. But there has been a considerable amount of investigation into this in recent years and I understand that 20,000 houses were checked recently and only 0.3 per cent. were found to have suffered any kind of damp. Therefore, cavity wall insulation now can be encouraged cheerfully by the Government.
It is disappointing that only roofs are to be insulated under this scheme. There are many other schemes which should be encouraged. What about flat roofs on extensions of buildings? If one has a flat-roofed extension it is possible to insulate the roof by external methods, but there is no way one can get a grant for this.
There is also the question of draught-stripping. In the kind of flats in which many older people live draught-stripping is the best and most effective way of stopping 15 per cent. of heat loss through draughts. But again, there is no prospect of a grant being made in that area, and similarly there is no prospect of grants being made for the insulation of floors, which account for another 15 per cent. of heat loss. Neither will grants be provided for the installation of better controls for radiators.
My hon. Friend the Member for Northampton, South (Mr. Morris) made the 979 point about the £15 million which is to be allowed under the scheme this year as opposed to the £25 million which will be allowed subsequently. This deserves to be amplified. Orders for insulation materials are normally placed by wholesalers and retailers through August into September and the market is virtually over by February. Some 90 per cent. of the market is in that period. If the Government are serious in wishing to implement this scheme, they should be selling it hard and expecting a take-up of the full £25 million in the first year.
If the administrative costs are £3 million a year, it looks as if one-fifth of the first year's £15 million will be going in administration, leaving only £12 million as aid to encourage people to insulate their lofts.
It is quite clear that the Government have not the enthusiasm about and drive behind the Bill that they should have. I was disappointed in not hearing a firm date for the commencement of the scheme. The industry would like to have a firm, anticipated date. My hon. Friend the Member for Northampton, South indicated from the Front Bench that this Bill has the support of Opposition parties. Therefore, it should be possible to give a target date for the beginning of the scheme.
There is a further detailed point. Any houses with any insulation in the loft space already cannot benefit from the Bill at all. It deals only with the 5 million completely uninsulated houses in the country, and it is a major disappointment that there is no incentive to those who have a limited amount of insulation. They should be encouraged to top up their insulation to modern standards.
It is quite obvious from hearing the Minister that the Government believe that their record is moderately good on energy saving. The truth is that the Government have allowed the conservation campaign to lose momentum. In the hands of the Government this exciting opportunity to save precious energy has become becalmed and boring, and conservation, which has the longest running trailer in this country, has not become a main feature of our economy. It is time that it did.
§ 12.50 p.m.
§ Mr. Robin Hodgson (Walsall, North)
I join my hon. Friends in giving modest congratulations to the Government on the Bill. There has been a lot of talk about the need for improved insulation, and it is to the Government's credit that they have taken a small step in the right direction. However, the Bill is patchy and idiosyncratic in its effect, and my hon. Friend the Member for Woking (Mr. Onslow) has pointed out trenchantly some of the more curious effects which may result from it, I want to develop at least one of the points that he took up—the question of the general scope of the Bill.
When I first saw the Title of the Bill, I was extremely pleased because I thought that the Government were at last beginning to take on board a point that I have been pressing them to do something about for some time. As I read the Bill, however, I saw that it was confined to thermal insulation. I do not see why this restriction should be allowed to continue. Why should it not cover noise insulation as well?
The problem with noise at airports is well known, and no doubt my hon. Friend the Member for Twickenham (Mr. Jessel) will want to say something about that. My hon. Friend the Member for Newbury (Mr. McNair-Wilson), who is not present, unfortunately, would also, I have no doubt, want to say something in the light of the proposal to reopen the USAF base at Greenham Common. We have no airport in Walsall or its environs, so I shall concentrate on the question of motorway noise, because the M6 divides my constituency and the effects have been considerable not only in my constituency but in the constituencies of other hon. Members representing seats in the West Midlands conurbation.
Many of our constituents have been denied help with insulation under the Land Compensation Act 1973 and under the 1975 noise insulation regulations that append to it, because great sections of the motorway in the West Midlands and other parts of the country were opened on or before 17th October 1969. As a result, our constituents have been precluded by the provisions of the Act from getting any assistance with insulating their houses. The choice of that arbitrary date has had two results. First, the question 981 whether householders receive help for insulating their homes is linked to the chance date of the opening of the motorway concerned; secondly, it has refused help to those who have been in need the longest. If someone has a motorway built past his home now, he will get help for insulation at once, but if a person has suffered a motorway going past his house for 10 or more years he is denied any assistance. That is completely illogical.
I shall give chapter and verse with a particular example in the West Midlands. The M6 north of junction 9 was opened on 20th December 1968 and north of junction 10 on 15th September 1966, both dates falling outside the qualifying period under the Land Compensation Act. However, in the early years the problem of traffic noise was not so bad, because the motorway at that stage came to an end at those junctions. The total link had not been built. As a result, traffic, in order to avoid coming off the motorway at an exit situated in the middle of a conurbation, turned off earlier and used the main arterial roads skirting the conurbation as a means of avoiding having to drive through heavily congested urban areas.
But from 24th May 1972, when the whole complex was completed and what is familiarly known as Spaghetti Junction was opened, that situation no longer prevailed and traffic volumes began to build up very considerably. The date of the opening of the whole motorway—24th May 1972—is, of course, after the date for compensation, even though the stretches I have referred to were opened before that date.
I shall give the Minister an idea of how bad the situation now is. It is well demonstrated by a survey carried out by the metropolitan borough council in Walsall. On 4th May 1977, one year ago, the survey showed that over an 18-hour period, from 6 a.m. to midnight, the equivalent of 126,000 passenger car units are using the M6—and that is equivalent to 7,000 cars an hour, 117 cars a minute, two cars a second. That goes on 24 hours a day, seven days a week, 52 weeks a year. The effect on social life, families and marriage can be imagined. This is one of the reasons why the Bill should be enlarged to allow people to get some assistance in these circumstances.
982 Earlier this year I was lucky enough to be able to introduce a Ten-Minute Rule Bill to remedy this idiosyncrasy, but I am afraid that the Government decided to oppose it. They are not prepared to see the modest sums expended that would enable people to take advantage of some help with insulating their properties against motorway noise.
This is not just a problem of the West Midlands. It is a problem at Watford, on the southern end of the M1. I have had complaints from Manchester, Richmond, and all parts of the country about this problem. I see no reason why the scope of the Bill should not be extended to allow the £50 grant or the 66 per cent. of the cost to be given for help with insulation against motorway noise of the sort I have described. In any case, the Minister should bear in mind that much of such work on noise insulation will also have beneficial effects on the level of thermal insulation, so it is not as though we would not be doing something to remedy the thermal insulation problem even though the primary objective might be to do something about noise.
My other main point concerns priorities among people to be helped. Here I draw attention to the special needs of the elderly and the handicapped. Unfortunately, many elderly people are also handicapped, suffering disabilities on both counts. We are faced with an increasing number of elderly people. The number of males over the age of 65 and females over the age of 60 will rise from the current level of 8 million to approaching 9½ million by the turn of the century, and this is a section of our community that has been badly disadvantaged, requires special assistance, and should get it through this Bill if it is properly redrawn.
The special needs of the elderly and the handicapped are well understood by the Government. Indeed, they have produced a number of pamphlets, including "Keeping Warm in Winter" by the Health Education Council, designed to help elderly people with advice on how to keep warm. It contains a long list of other leaflets issued by the Government, such as "Help with Heating Costs", from the Department of Health and Social Security, "All About Keeping Warm", from the Solid Fuel Advisory Service, 983 and "Easy Ways to Pay" from the Electricity Council, and so on. There is also a heating addition available from the DHSS for single people, couples and married people generally. So the Government do understand that there is a need here, and I should like to see them show evidence of that concern and understanding by amending the provisions of the Bill. The handicapped, of course, have many problems similar to those of the elderly in this respect.
Apart from any moral duty that the Government have to help these vulnerable social groups, there is a practical application as well, because the costs of the heating additions, the information services and so on all have to be met by the taxpayer. The Government's scheme for a 25 per cent. deduction from the electricity bill in the winter quarter—although again idiosyncratic because it does not cover solid fuels, gas and so on—is to be welcomed but it nevertheless is costing, according to a recent parliamentary Answer, between £11 million and £12 million a year, and if we were able to concentrate some of the assistance contained in this Bill on the elderly we would surely be able to make corresponding savings in the discounts and subventions that we are giving currently to old-age pensioners for their winter quarter electricity bills.
"Help the Aged" has said that 2 million pensioners are living in heating conditions which, if they were working, would require instant prosecution under the Offices, Shops and Railway Premises Act 1963. A 1972 survey showed that 55 per cent. of pensioners' rooms were below the minimum temperature required by that Act. A significant number of elderly people suffer from hypothermia in winter. They often have to be hospitalised at a cost of about £100 a week or more. Thus, the indirect cost to the State is enormous. So I hope that the Minister will not just say that it is a question of the amount of money that will be spent under the provisions of the Bill. If we concentrate our assistance on those who really need it, such as the elderly and the handicapped, we shall be able to make savings elsewhere. We shall be able to make savings in hospital costs, heating additions and discounts on electricity bills.
984 I turn to the question of the type of insulation. My hon. Friend the Member for Northampton, South (Mr. Morris) mentioned the joint research project the results of which have not yet been published. The Minister should bring that forward as quickly as possible. It was set up two years ago and the DOE has been deeply involved. We are entitled to see the results of that survey before we discuss the details of this measure in Committee. I understand that the project has been completed and, indeed, an article "Insulation and Energy Advice" published by the National Consumers Council last November foreshadowed some of the points that are made in the survey. We should have it on the table officially before we start the Committee stage.
In conclusion, I return to the question of priorities. We have all been affected by fuel price rises. But most of us have been able to adjust our lives to take account of them. We have been able to reduce, consumption, install insulation or change to cheaper or more effective heatting systems. But the vulnerable social groups do not have those options. For them, there is often a brutal choice because to spend more on heating may mean going without a main meal. A choice between such necessities cannot be described as a choice at all. So I urge the Government to give further detailed consideration to the possibility of giving priority in this scheme to these vulnerable groups, who would so benefit from an improved standard of heating in their homes.
§ 1.2 p.m.
§ Mr. Peter Rost (Derbyshire, South-East)
I was once described by a Government Member as "the hon. Member for thermal insulation" because of my persistent lobbying for improved insulation. But I can assure the House that I have no financial interest in this subject. Indeed, I stand to lose from this legislation because I have already insulated my home. My concern is motivated by the shameful waste of national resources continuing unnecessarily in the context of the global energy problems that inevitably face us in the long term. More particularly, I have been motivated by the shameful and unnecessary hardship, suffering and damage to health which is unjustified in our society today.
985 Needless suffering has been particularly evident this winter in all our constituencies among the low-income groups, the pensioners, the disabled and the housebound who need to use more fuel because they spend more hours in their homes. They are the people who can least afford to insulate and consequently suffer the greatest hardship. The disabled, the elderly and the pensioners cannot afford to do the job themselves.
This brings me to the first criticism of the proposals. A flat contribution of a maximum of £50 might be fine for an active handyman who can do the job himself, as I have done. But it will not help the pensioners much because they will have to have professional or voluntary help to instal insulation.
My hon. Friend the Member for Walsall, North (Mr. Hodgson) was on the right theme. I support everything that he said. The suffering and hardship has continued unnecessarily. The Government could and should have set about this programme three or four years ago. There is no excuse for having delayed for so long getting off the ground an energy conservation programme with particular emphasis on insulation.
We must put the proposals in their right perspective. The Minister was inclined to be self-congratulatory and complacent about the Government's energy conservation programme. My hon. Friend the Member for Gosport (Mr. Viggers) rightly took him down a peg or two. What this measure can achieve in the overall energy conservation potential is very small indeed. Dwellings use 30 per cent. of the primary energy used in the country. Of that 30 per cent., two-thirds is used for space heating. In other words, 20 per cent. of our primary energy consumption goes into space heating our domestic buildings.
We could save at least half of that with effective insulation. We could achieve a saving of 10 per cent. of our primary energy consumption by the effective insulation of domestic buildings. That puts the proposals in perspective. I have made some calculations. I do not expect a response immediately but I hope that when the Minister has had time to look at the figures properly he will contradict my calculations. I calculate that the Bill, 986 even when taken over a 10-year period, will save only 1 per cent. of that 10 per cent. potential saving of primary energy.
If we were to launch a time incentive scheme for thermal insulation in domestic buildings, we could save about 10 per cent. of our primary energy. That would reduce our fuel bills by about £1 billion a year, which would produce savings in the economy as a whole.
I concede that to achieve that 10 per cent. saving with a proper insulation programme would cost about £5 billion. I am sure that no one from these Benches would suggest that we should promote such Government expenditure at present. As enthusiastic as I am for such a scheme, I do not suggest that. I am simply putting the Government's programme in perspective. The expenditure proposed over 10 years is to be only £250 million compared with the £5 billion that will have to be spent either by private individuals or with the aid of incentives to achieve a proper insulation programme. I am talking not only about thermal insulation which is proved to be cost-effective.
The average house requires at least £250 to be spent on it to make it thermally efficient. The proposals in the Bill are woefully inadequate. Even over the 10-year programme that is proposed the savings achieved will be only about 1 per cent. of our primary energy consumption. Much is being left undone or will have to be done by individuals and paid for out of their own pockets.
The reality is that the Bill will help only a small percentage of domestic householders. It will provide only a basic minimum standard of insulation. It will not help those who have already insulated their roofs and who could use some assistance in insulating the walls, whether solid and requiring internal insulation, or hollow and requiring infilling. The Bill will not help those whose homes suffer a major heat loss through the floors and windows.
The scheme could have been drawn more flexibly to incorporate the choice of a lax allowance or £50 grant to allow the individual to direct the money to the most beneficial and cost-effective thermal insulation for him. If the roof has already been insulated, why should an owner-occupier be penalised for having taken 987 the initiative? He is still faced with paying several hundred pounds for other cost-effective insulation, and a £50 grant towards that additional expenditure would be in the national interest.
With over 5 million dwellings having lofts which cannot be insulated because there is no access to them, it is unsatisfactory that the £50 is not to be made available for internal ceiling insulation which is a source of major heat loss equivalent to the loss of heat through a normal loft.
We had an argument at the beginning of the debate with the Minister about whether the heat loss through walls is greater than through the roof. It would have been perfectly feasible for the scheme to provide a grant for wall insulation. That omission is an admission by the Government that they have failed so far to tackle the root of the problem. They are going round in circles. They are providing funds to encourage minimal insulation of 300,000 to 500,000 houses a year when 300,000 dwellings are being built every year with totally inadequate thermal insulation standards.
The Minister cannot claim that he has not had adequate time to consult the industry and to propose stronger mini-thermal insulation standards for domestic buildings. The time is long past when we should have been constructing to higher standards which would avoid the extra fuel cost, plus the waste of fuel due to ineffective insulation, at the time of construction. I hope that the Minister will deal with this point, because if we grapple with the problem from the start and build to the sort of standards that for years other countries have accepted as a basic minimum, we shall not be faced with so many inadequately insulated houses.
My hon. Friend the Member for Woking (Mr. Onslow) was right to highlight the inequitable nature of these proposals. Those who want to insulate other than the roof will be deprived of assistance. Suprisingly, the Minister has not touched on a further anomaly in the Government's energy conservation strategy, a strategy of which he seems so proud. We have here a proposal for spending public funds on a minimum degree of thermal insulation, but householders are still lumbered 988 with disincentives to conserve energy. Why are they still penalised by the imposition of VAT on do-it-yourself insulation materials? Why should those who buy double glazing or a more efficient central heating system be penalised by a higher rateable value and a subsequent increase in rates? That is a nonsense, and there is the further nonsense that those who wish to invest in solar panels, which will obviously greatly contribute to energy conservation, are also penalised by higher rateable value. Replies I have received from the Department of Energy and the Department of the Environment give little encouragement for us to hope that the Government are taking that aspect of energy conservation seriously. I have been told that discussions are taking place with the Inland Revenue valuation department, but what is the point of talking if there is to be no action?
If we are to approve the expenditure of public money to encourage insulation, at least we should remove the disincentives. We should give a real encouragement to people to take these energy-saving steps as well as helping them with public funds.
My hon. Friend the Member for Northampton, South (Mr. Morris) referred to a reply I had to a parliamentary Question concerning the higher standards of insulation that operate abroad and the more adequate incentives that back them up. It is a pity that the Minister regards this Bill as the end of the story when he has to admit that we have a lot of catching up to do if we are to match other countries in the EEC on both building and insulation standards. It is a pity he has not taken on board the fact that other countries have taken energy conservation far more seriously and have for some years offered stronger incentives through tax allowances and grants to encourage better standards of insulation.
In the long run, higher building standards will come only if the consumer demands them. Just as people today buy a new car only if the petrol consumption is to their liking, the time cannot be far off when a house purchaser will want to know the fuel running costs of a house before he buys it. In the meantime, one cannot blame the building industry for not building to higher standards. The Government could do more to encourage this trend by, in addition 989 to improving the basic minimum insulation standards, helping to condition the public into understanding that it pays to buy a house that costs more because it has been properly constructed because running costs will subsequently be lower.
I regard this measure as a token admittedly it is better than nothing, but it is too little, too late. There is far more to do in this respect than in other countries, yet we are doing less. The fundamental weaknesses of these proposals have already been exposed by some of my colleagues, but one of the fundamental weaknesses is the fact that it fails to tackle the root of the problem—namely, that we are still building to inadequate standards. Furthermore, the Bill fails to offer flexible incentives to help those who wish to benefit.
Moreover, even if these proposals go ahead as proposed over 10 years, they will still produce only one-tenth of the potential energy savings which we can now expect—savings which other countries are achieving by insulating all domestic buildings to higher standards. The admission that no further schemes are proposed under this legislation is totally unsatisfactory. I hope that in Committee we shall be able to persuade the Minister that there is a great deal more to be done and not much to be complacent about.
§ 1.22 p.m.
§ Mr. Toby Jessel (Twickenham)
I wish to pursue the points made by my hon. Friend the Member for Derbyshire, South-East (Mr. Rost). Before I do so, I shall take up the point made by my hon. Friend the Member for Gosport (Mr. Viggers), who said that we should look at the Bill in the broader context of energy saving.
We are all implored to save energy in every way—that is, energy from fossil fuels and electrical energy. This Bill is designed to save energy by giving people public money to put insulating material under the roofs of their houses, yet if material is put on the other side of the roof to save possible fuel and electrical energy in the form of solar panels, extra rates are charged on the house. That amounts to a tax on energy savings.
I hope that the Minister in reply to this debate will try to explain why that is the case. I hope that he will not try to argue his case by drawing an analogy with other forms of central heating, such 990 as oil, gas or coal, leading to an increase in rates. That is not a true analogy in the context of the purpose of the Bill, which is to save energy. It is against the national interest to put oil, coal or gas central heating in a house., because more fossil fuel will be used, but it is surely in the national interest to put solar panels into a house because it saves energy.
My hon. Friend the Member for Wallsall, North (Mr. Hodgson) referred to noise insulation. That subject interests me greatly, because my constituency is close to Heathrow. I very much hope that the Bill's provisions will be extended to apply to windows, which cause great heat losses. If windows are double-glazed, one can combine heat insulation with noise insulation. I sometimes wonder what co-operation, if any, takes place between Government Departments. The Department of Trade, which is responsible for noise insulation grant against aircraft noise and which from time to time considers extending the system—a process that I seek to encourage—is beavering away on that aspect, and the Department of Energy or the Department of the Environment is examining the matter from the point of view of heat insulation. One wonders whether they will ever get together to see whether they can co-ordinate their activities. I rather suspect that that will never be the case.
My hon. Friend the Member for Derbyshire, South-East said that he had already put heat insulation in his roof and therefore would not qualify under the Bill. It is extraordinary that those who have shown initiative and independence in putting in heat insulation without the aid of a grant will be worse treated than the rest of the population who have waited for a Government bribe before they take action. That seems unfair. I hope that in the interests of fairness the Government will be prepared to consider paying those who have already installed heat installations of the sort envisaged in the Bill.
§ 1.25 p.m.
§ Mr. Roger Moate (Faversham)
I begin by congratulating my hon. Friend the Member for Derbyshire, South-East (Mr. Rost) on his campaign. Over the years he has been one of the most persistent parliamentary questioners on this subject. 991 I suspect that, despite his misgivings about this Bill, he sees it as some response to the campaign he has conducted in recent years.
Despite misgivings, I welcome the Bill in principle. It seems strange that in these islands which can be very cold and frosty during the winter, we are so much more careless about warming our homes than are other nations. Our houses sometimes seem to have been designed to let out the maximum amount of heat and to let in the largest number of draughts, and to ensure that pipes freeze at the slightest opportunity. Therefore, we welcome legislation that will encourage the nation better to insulate homes, perhaps to save energy, and to allow people to enjoy greater comfort in their homes.
I gather that in international terms we come off rather badly. If I may be allowed to express rather a bad pun, in the lagging of pipes and tanks, as a nation we lag behind other countries. This Bill may help that process forward just a little.
I wish to question the priorities in the Bill. I should like to examine whether, in relation to the improvement grant programme, it is right to give £15 million in the first year and £25 million in subsequent years for roof insulation. I am a great believer in the importance of the housing improvement programme generally. I should like to see this Government and any future Government give far more priority to home improvements than to new house building. There have been significant steps forward in recent years in increasing the level of grant for home improvements, but I am speaking as a member of a constituency which now faces problems because of the shortage of money to be spent on essential home improvements. On behalf of my constituents—perhaps there are other hon. Members in a similar position—I am entitled to ask whether it is right to spend £15 million on these proposals when we are not receiving the moneys we need for other projects of equal importance.
Let me try to illustrate the point. My hon. Friend the Member for Walsall, North (Mr. Hodgson) mentioned the legislation on land compensation and the need for noise insulation grants. I could take him to some homes in my constituency 992 which are situated alongside a road that was started after the critical date. Those homes have double glazing, but for those homes it is very much harder to obtain indoor toilets than it is to install double glazing. We face the anomalous situation in which there are unimproved homes which gain other sorts of benefits. Not only can we now obtain double glazing for homes that have toilets at the end of the garden; we are able to obtain for them roof insulation before we can obtain grants to install toilets inside them. What an illogical situation it will seem to the occupants of those homes.
No doubt the outside toilets can be double glazed, possibly with roof insulation to keep them warm, but we cannot obtain the few thousand pounds we need to improve the homes themselves. That is the situation as it will appear to many people who cannot obtain money this year, next year or for several years hence in order to undertake essential improvements.
Let me refer to my own constituency, the boundaries of which are coterminous with Swale Borough Council. Last year we had a generous upgrading of improvement grants. The figures rose from a maximum of £1,500 or £1,600 to £2,500, plus extensive loans and extra allowances for repairs. Therefore, individuals can claim very much more for home improvements. Broadly speaking, I welcome that move as a step in the right direction.
At the same time, new housing action areas have been designated to take up much housing improvement money. In one the district wants to give priority to improvement grants. That money is already earmarked for other priorities. Where does that leave the rest of the programme? The situation is so critical that already the borough council has been forced to stop all future discretionary grants. We should be grateful for a share of this money to get on with the ordinary improvement programme.
The local authority asked for £540,000 for improvement work in the private sector and has been granted £360,000. It has had to announce an end to applications for discretionary grants. The Government have encouraged more generous provision, and their intentions are welcome, but they have based these responsibilities on local authorities without providing the resources. Ministers have given 993 a sympathetic response to a deputation from the borough council, which has been assured that any overspending on statutory grants will be met by the Department. But that does not help with discretionary grants.
As for public housing, the local authority asked for £1½ million for the coming year to improve 216 homes. It was allocated £320,000, which is enough to improve 40. A total of 1,255 houses need repair and improvement in the borough. The authority now has to board up some of its houses because it has not the funds for improvement. Houses needing improvement are about 20 per cent. of the housing stock.
This critical situation is not wholly the Government's fault, but they have got their priorities wrong. I would much rather devote resources nationally to home improvement schemes than to new house building or municipalisation. Apart from 40 houses in my constituency, over the next year the stock will continue to deteriorate. Is it right to approve a Bill that will allocate this money to loft insulation in the light of these desperate needs?
We all know how personal and human those needs can be. Many houses are damp, and are without a bathroom or inside toilet. This money will often go to people who can afford it themselves, since it is not means-tested. Should we give £50 to someone who might be comfortably off while someone who is not continues to live in poor conditions? The Bill is more a public relations and cosmetic exercise than anything else.
Even in this context, is the Bill the right approach? A separate Bill with a small maximum limit will minimise the benefit and maximise the bureaucracy. The grant will be separate from all other improvement grants, and £50 is relatively little today.
We are told that one extra employee per housing authority may be required—about 500 people. That could cost several million pounds. Is it sensible to give £15 million and spend £2 million or £3 million on administration? This has gone sadly wrong and complicated an essentially simple operation.
I am also sceptical of the statement in the Explanatory and Financial Memorandum: 994It is not thought that these measures will require any additional central Government staff; if they do these will be met by offsetting savings.That is a little deceptive. Either it will require manpower or it will not. If it does, that must represent additional staff. Others might cease to be required, resulting in a net saving, but one cannot say that one is entitled to take any natural wastage to offset these bureaucratic requirements and conclude that no extra employees have been required. This is not important. If we had been told that a few people would be needed, we should have accepted it, and it would have been the more honest approach.
I urge the Government to heed what has been said about allowing people to spend the money before they get approval. The Minister thought that it was right to follow the principles for general housing improvements, but there have been many problems in that respect. Some people have been refused grants because they have authorised work to start before getting local authority agreement.
I shall not argue whether that is right or wrong in that context, but here we are talking about a grant of £50. That is a maximum, but I suspect that it will turn out to be a minimum. It is a simple operation; the production of dated bills showing the work done and the fact that it cost more than £75 should be sufficient. It could streamline the procedure and remove some of the irritations and doubts which have been described.
Having welcomed the principle of the Bill, I still doubt the efficacy of this approach. When my hon. Friend the Member for Derbyshire, South-East started his campaign, the figures were much lower. It cost £15 or £20 to line a roof, but people did not do it.
§ Mr. Moate
Yes, even under this Government, in their early days. Nevertheless, people did not respond. I wonder whether we shall get the response that we all want when people are asked to spend £25 for these purposes. If that is so, even at the rate suggested by the Government, it will be the turn of the century before we have all insulated our roofs. But if we combine the Government's 995 approach with a degree of apathy by the British public it will be long after North Sea oil has been totally exhausted before we get round to insulating our homes properly. How much worse it is if we are today still carrying on building houses without the elementary provisions that the Government are now encouraging for older homes!
The Bill is right in principle. I am very sceptical about it in practice. I am not sure that it will be a major step forward. What I question very much is that we should be spending improvement money in this way when I would rather see it directed towards improving some of the sub-standard homes in my constituency, where we have been deprived by the Government of the necessary money in this financial year.
§ 1.40 p.m.
§ Mr. Tim Sainsbury (Hove)
It was not long ago that the Minister brought before the House for Second Reading a Bill to help home purchase. He introduced it with a certain amount of pride, but after he had listened to the debate, that pride was a little dented because then, as now, almost every speaker, while saying that the Bill did no harm, emphasised how little good it would do in relation to the scale of the problem. That is the verdict on this measure. It is a very small step.
The success that we have in this country on conservation will depend primarily on the extent to which we give that issue priority and emphasis in all aspects of Government. There is here an opportunity for Ministers in various Departments to give real leadership and improve public understanding in a way that will bring about a response. We have not seen it yet.
The Minister spoke of making sure that we had the quickest benefit. That is an entirely desirable objective, but it has taken the Government an astonishingly long time to introduce even this modest measure to improve and encourage a conservation programme.
My hon. Friend the Member for Gosport (Mr. Viggers) made very clear the scale of the need in the context of the problems of energy supply towards the end of the century. My hon. Friend the Member for Derbyshire, South-East 996 (Mr. Rost), to whom we are all indebted for his probing on the subject of insulation, brought out very clearly what could be done in a total context.
In a recent speech my hon. Friend the Member for Bridgwater (Mr. King) emphasised the importance of the role of Government in leading a national effort on conservation. He said:There can be no question but that the first priority for policy must be the encouragement of energy saving. It is surely indisputable that whatever view we take on future energy supplies there is no possible case for wasting any at all.I hope that that at least is something on which we can all agree.
The Friends of the Earth have done much more in improving public knowledge and awareness and in encouraging conservation than the Government have so far succeeded in doing What we have had is a slow response to a very apparent need, a lack of leadership and on occasions, it appears, interdepartmental or even intradepartmental muddle.
There are a number of examples that one can quote. For example, there is part F of the building regulations. My hon. Friends the Members for Derbyshire, South-East and Faversham (Mr. Moate) have said how absurd it is that we go on allowing houses to be built to inadequate standards of insulation. This is probably best illustrated by the fact that in Sweden, where the climate is much worse than ours and the cold is very intense in winter, less energy is used for heating per house than we use. That is an indictment of the standards we have allowed and the standards we are now, for want of ministerial progress, departmental progress, allowing to continue.
There is a lack of response by the Government to the comments of the Select Committee on Science and Technology on solar heating, the value of which was mentioned by my hon. Friend the Member for Twickenham (Mr. Jessel). We must make progress on it, and the Government have a role to play in that.
There is the Research Institute report on the cost of insulating old people's homes, which we all await with considerable interest. My hon. Friend the Member for Walsall, North (Mr. Hodgson) spoke particularly eloquently of the importance of this programme to 997 elderly and disabled people. I also have a particular concern for the elderly, of whom there are many in my constituency. If a report is commissioned—and that is entirely welcome—why can it not be brought out as quickly as possible? What is happening? Where has that report got to? When may we have an opportunity of seeing it? My hon. Friend the Member for Northampton, South (Mr. Morris) asked the question, and I hope that we may have an answer.
My hon. Friend the Member for Woking (Mr. Onslow) referred to the report on energy efficiency labelling, another important area in which we want to see progress.
Then there is the matter of cavity wall insulation. Nearly every hon. Member who has spoken has referred to this. To make sure that the record is straight on this matter. I hope that I can speak with accuracy if I quote from a leaflet prepared by the housing development directorate of the Department of the Environment. The figures which a number of hon. Members have mentioned—the loss of 35 per cent. of the heat through the walls and 25 per cent. through the roof—refer to the heat escape from a typical between-the-wars semi-detached house. To avoid misunderstanding, we should be clear that in a bungalow or any home with an above-average roof area a greater percentage of the heat will be lost through the roof. From a two-storey detached house or any property with an above-average wall area, as opposed to a semi-detached house, there will be an even greater loss of heat through the walls.
However, the figures that have been quoted—25 per cent. through the roof and 35 per cent. through the walls—are a good average indicator for the majority of properties. This puts in perspective the importance we should attach to cavity wall insulation.
Several of my hon. Friends have pointed out that those who have shown initiative on insulating their homes, the people who have made sure that their hot water tanks and roof spaces are insulated, just the sort of people who would be most likely to turn next to the advantages to be gained from wall insulation, will feel very hard done by as a result of this legislation. There is nothing in it for them.
998 My hon. Friend the Member for Woking asked why the Government could not let individuals use their initiative and be encouraged rather than almost discouraged. There is enormous scope in cavity wall insulation. It is estimated that there are about 10½ million homes with a cavity wall, of which roughly 8 million would be suitable. Yet, because of the Department's excessive caution, the bureaucratic controls that have resulted from that excessive caution in putting cavity wall insulation under the building regulations, the present progress is less than 30,000 houses a year, when about 8 million properties could be treated. The work is being carried out at a third of the 1974 rate, and employment in the industry is a third what it was then, because of the Government's bringing the work under the building regulations. Yet the Under-Secretary, whose absence we all regret, wrote to me in a letter dated 11th May 1977:The failure rate which I quoted related to all the houses in the survey … However, accept that the incidence of rain penetration in houses up to three storeys, which were insulated well after construction was only 0.2 per cent.Surely that is the risk that we could readily accept. Even if there is failure for the 0.2 per cent.—that is two houses per 1,000—that is not an irreversible failure. It is a matter that may be put right. However, because of our fear on that score we seem thoroughly to have discouraged cavity wall insulation.
The Government seem to be in a muddle between Departments. For example, the Department of Education and Science, in a reply to me of 18th January 1978, implied that cavity wall insulation was not a priority and was not something that it was planning to deal with in educational buildings. In a reply to me on the same day the Under-Secretary of State for the Department of the Environment wrote:Cavity wall insulation is not included among the basic measures being undertaken under the first stage of the Government's energy conservation programme for local authority, new town and housing association dwellings."—[Official Report, 18th January 1978; Vol. 942, c. 248.]However, the other Under-Secretary of State for the Department of the Environment, the hon. Member for Manchester, Gorton (Mr. Marks), told me on the same day, when referring to the work of the 999 Property Services Agency, that about 20 per cent. of its planned expenditure on the civil and defence estate is on cavity wall insulation.
Does the Department believe in cavity wall insulation or does it not? It appears that some parts of the Department of the Environment think that it might be a good thing while others are not so sure. That is a good example of the lack of leadership and what appears to be the muddle within the Department, which is leading to such poor progress on energy conservation.
There are a number of questions that we shall need to ask and consider when we discuss the Bill in Committee. An important matter was raised by my hon. Friend the Member for Northampton, South—the date of operation. We are all aware of the seasonality of the work. Insulation work is normally concentrated into the winter period. That may be because those who might do it themselves are digging their gardens in the summer or mowing their lawns. However, there is a high degree of seasonality and for that reason it is important that the date of operation is as early as possible to avoid discouraging those who might be thinking of doing the work but who will hold off until the grant is available.
The non-inclusion of draught proofing has been referred to by a number of my hon. Friends, including the hon. Member for Mitcham and Morden (Mr. Douglas-Mann). That would be an important feature for the elderly. The elderly are more vulnerable to poor insulation and inadequate heating than any other group of society. They are especially vulnerable to draughts. That is because they tend to move around less and because in many instances they have to spend much of their life in only one or two rooms. The value to them of draught proofing is especially high. When we consider the Bill in more detail I hope that we shall be able to do something on that account.
I am not clear whether tenants have the right to apply for the grant or whether it goes only to owners or long-lease holders. I hope very much that tenants will have the right to apply for grant.
The linking of noise prevention and insulation was taken up by my hon. Friend the Member for Twickenham. 1000 That is another matter that we shall need to explore in Committee.
Another matter that will have to be discussed in Committee is the thickness of insulation that will qualify for grant. I hope that the thickness will not be kept to too low a figure. If anyone is to qualify for grant I hope that he will be required to use material of a thickness of at least 80 millimetres or three inches. Preferably it should be 100 millimetres. Even that sort of standard may not be enough to meet the scale of the problem.
Will the grant be sufficient for those who are pensioners? They will have to depend upon a contractor. I agree that in some instances it may be possible to get the work done for £75, but in many cases I fear that it will not. In that event we must ask whether there will be any additional help available. Will those who are on supplementary benefit be able to obtain a special grant to cover the balance of the expenditure on an approved scheme? I hope that the Minister will consult his right hon. and hon. Friends in the Department of Health and Society Security on that score.
If a scheme is approved and it cannot be carried out because the applicant is on supplementary benefit and does not have the resources to pay the balance, that should not stop the scheme and grant being made available.
Administrative procedures are a worry. It is a matter that concerns my hon. Friend the Member for Faversham. If there are grants as small as £50, there is a risk that administrative costs will be excessively high. These are all issues that we shall need to consider in Committee.
I emphasise again that we support the Bill, small measure though it is. We very much support a more energetic programme of energy conservation. We regret that when it comes to moderate and sensible measures the Government seem to bring them forward extremely late in their programme. Not only that, they introduce them in a very small way. Judging by the number of Labour Members who have been present in the Chamber, it does not seem that there is great support for enthusiasm on the Government Benches for such measures. If the Minister's time was spent less on trying to work out how he can delay 1001 revealing to the House his review of the Rent Acts or bringing before us the report of the Economic Intelligence Unit on land availability, which might be of interest, he could devote more of his time to the worthwhile subject of energy conservation.
There are questions that need to be asked and will be asked in Committee. I assure the Minister that the Opposition will do all that they can to deal with them speedily so that we may put this modest measure on to the statute book as quickly as possible. The question that remains in our minds is whether the Government are committed to a programme of energy conservation and when they will do more to demonstrate that commitment.
§ 1.57 p.m.
§ Mr. Freeson
I shall try to pick up as many as possible of the points that have been raised during the debate, the general as well as the specific, in the time that is available. It will be appreciated—this was reinforced by the hon. Member for Hove (Mr. Sainsbury)—that a number of the issues raised will be better pursued more fully in Committee.
Much of the discussion that has taken place today was unintentionally wrongly aimed. Much of the comment has been critical of the Bill for not doing things that it could not do anyway. The Bill could not be designed to deal with all the energy conservation matters that have been raised in our debate; as well as matters that have not even been touched upon. It is a significant ingredient, but it is not a major piece of legislation covering all the many matters that have been raised today.
The specific objective of the Bill is to enable a large number of privately owned houses to have their lofts and water supplies insulated and to provide powers to the Secretary of State, subject to parliamentary approval, subsequently to introduce other measures directed to better insulation.
It is as well to get the psychology right. A Bill designed for one purpose does not cover all the interests involved. It does not mean that the Bill is justifiably to be criticised on that ground. There are more generalised matters that may be dealt with elsewhere. The Bill is one part of a general package of action announced 1002 last December by my right hon. Friend the Secretary of State for Energy.
That package was not a final and conclusive statement. It included insulation by the Property Services Agency of its properties. The package includes National Health Service buildings, education buildings, local authority non-domestic buildings, and public sector housing, which I touched on briefly in my opening remarks. It also includes Ministry of Defence houses, in respect of the control of heating systems which are now the subject of building regulation revision. It covered advisory and training services in thermal insulation, information and advice to industry, demonstration projects, the study and discussion of the more efficient use of fuel in cars, and a range of other information and publicity matters.
That package is not the whole of the story. The "Save It" campaign, against the background of which we can read the December statement, has had an impact on energy consumption in this country. It is not possible, obviously to define precisely the impact of an educational exhortative propaganda campaign. I understand from my right hon. Friend the Secretary of State for Energy that there has been a saving of about 6 per cent. in primary energy consumption in this country. If we could define matters more closely, no doubt other figures could be produced, but that in itself is a useful broad indication of what is happening. I do not say that in any bland, smug or complacent way. Nothing that we do marks the end of action.
Several hon. Members have said that what we are doing here does not stand comparison with what is going on in other European countries. I appreciate that that might be an arguable point in certain respects in regard to the standards of houses and other related matters, but generally speaking there is no clear evidence that the general strategies or the efforts made by other countries are more advanced than the energy conservation campaign efforts undertaken in the United Kingdom in the last four years since the 1973 crisis. We are not yet able to evaluate the available information on a comparative basis.
§ Mr. Sainsbury
The Minister referred to a saving of 6 per cent. in primary energy consumption. I hope that he is not 1003 ascribing all that to the "Save It" campaign. Surely what has contributed most to the saving is he higher price of fuel. Does the Minister agree that much of the reduction in primary energy consumption is a direct response to market forces?
§ Mr. Freeson
Of course it is. Indeed, the point that the hon. Gentleman is making underlines my earlier point that a piece of legislation of this kind—or, indeed, the action that we took in the public sector housing field a few months ago—does not of itself provide a total solution. There are all sorts of factors on some of which we are giving a lead, depending on the particular field of activity.
I was exhorted by hon. Members to keep the scheme simple. I had already said that that was our intention. I assure hon. Members that we do not need any exhortation on that matter. The intention is to keep it simple, and this is indicated already in the provisions of the Bill.
Nearly every Opposition Member called upon me considerably to widen the scope of the grant system. This varied from one speaker to another. If I were to take all the proposals and to try to cost them, I believe that at a guesstimate it would cost about £1,000 million a year, never mind the £5,000 million that the hon. Member for Derbyshire, South-East (Mr. Rost) suggested.
At least one hon. Member said that we should be undertaking a programme of the sort that was attempted during the course of the natural gas conversion campaign a few years ago. The investment figures involved in switching over to natural gas some years ago were in the region of £1,000 million, at mid-1960s prices. That gives some idea of what might be the result of adopting all the proposals which have been put forward so far in the debate.
§ Mr. Rost
I am sure that the Minister was not intending to suggest that I was recommending that we should be advancing more than £50 per head under the Bill. What I said was that there should be a flexible application and that people should be able to use the money for whatever insulation purposes they desired.
§ Mr. Freeson
I shall come to that point later. I accept that the hon. Gentleman 1004 was referring to a guesstimate of £5,000 million to achieve a 10 per cent. saving. I accept that he was not suggesting that it would be possible to spend that sort of money. But all the different proposals that have been put forward would undoubtedly add very considerably to the total cost, and there would have to be a switch from elsewhere. That would involve competition in the use of public expenditure, unless we were to add to the total expenditure.
Coming so soon after a short season of constant attempts by the Conservatives to persuade the Government to cut back considerably on public expenditure this year, I find it difficult to accept the propositions that have been put forward today. As I have already emphasised, they would add considerably to expenditure. They would also add to the complications of administering the scheme. There would be a tremendous amount of work in checking and inspection. The criteria involved would be very detailed and difficult to establish, in seeking to assess whether certain expenditures were grant-aidable or not.
We have sought to establish a simple scheme and to do it within the context of the limits on public expenditure within which we have to operate. We are not proposing an insignificant measure. I repeat that if we achieve the objective of insulating the loft and water supply of 500,000 dwellings per year in the private sector, once the scheme gets fully under way—we hope from 1979 onwards, although it starts this year—that will not be an insignificant achievement. It will not be a solution to all our energy conservation problems—it is not designed as such—but it will be significant, and I deplore the constant reiteration of the criticism that the proposal is modest or piffling, nothing to be particularly pleased about, and virtually meaningless. That is the kind of language that we have had from Opposition Members. One gets used to it, but it is not particularly relevant to our problems.
We were criticised for the delay in introducing the Bill, as compared with our action in the public sector. A difference of three or four months is nothing to get hot under the collar about. In the public sector we do not need legislation. The powers are there and we are able to act. It is simply a matter of making 1005 the necessary budgeting and administrative arrangements with the local authorities once the policy is accepted. But in the private sector legislation is needed. We have no powers to grant aid other than by legislation, so there is bound to be some delay, but it is only a matter of months. If the Bill goes through quickly, we shall be operating the scheme in line with the local authorities' efforts. This year there is a difference of several months in the timing, but as from next year the schemes will be operating alongside one another.
My hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) and other hon. Members referred to the importance of early timing, and asked when the scheme would operate. I cannot give a date until the Bill has gone through, but if we can get the Bill quickly through all its stages, we hope that it will start to operate by early autumn. If it can operate earlier still, so much the better.
It was argued that there was a difference in equity between what has been done in the public sector and elsewhere. That is not so. The figures quoted as the unit costs in the public sector, which are the subject of Circular 23/78, and the figures with which we are dealing here are disparate figures. The unit cost relates to the total capital cost. It is not in itself the grant that is being talked about in the circular. The circular described the relationship between these kinds of works and expenditure on normal improvement work coming under the Section 105 programme.
The grant-aided system is virtually identical, in that we are providing a 66 per cent. grant in both instances, subject to certain controls. There is bound to be a difference. We can never get a precise comparison between the two. On the one hand, we are dealing with tenanted properties which, for individuals, do not involve the improvement of a capital asset. On the other hand, we are dealing primarily, but not wholly, with properties which have the benefit of capital asset valuation to which we are adding by means of public money. Therefore, there is a distinction to be drawn between the occupants of local authority dwellings and the occupants of the majority of privately owned dwellings.
§ Mr. Michael Morris
I am not sure that we would accept the argument about the difference in capital appreciation. But there is a finite difference. Draught exclusion is included in the public sector, but it is excluded in the private sector.
§ Mr. Freeson
We can go into that matter in greater detail in Committee, if necessary, but that was not done, as I made clear in my opening, as a matter of policy. It was done because it was difficult, if not impossible, to get a definition for grant-aided purposes. Indeed, some of the remarks which were made in the debate, unconsciously I think, underlined that point.
Hon. Members rightly referred to old houses with loose joinery and window frames. I have a house which has joinery of 80 or 90 years of age, so I well take the point. If we try to define that for grant-aided purposes and try to distinguish between the repair and the draught exclusion element, we shall get into a very difficult area. It is difficult to include that kind of situation for grant-aided purposes as distinct from the capital allocation-subsidy system which operates in local government and, in a somewhat different way, for housing associations. These are problems of definition, not of policy. In any case, the normal draught exclusion method is relatively cheap.
I am prepared however—indeed, I am having discussions with my officials on this matter—to look at some possible flexibility where the scheme applies to elderly, sick and disabled people. I cannot say what the answer will be. I put on record the fact that although I am not confidence that I can do it. I am prepared to consider the possibility of the greater flexibility to which the hon. Member for Derbyshire, South-East referred in connection with the application of the money to the type of work to be done. There are problems in this respect. I reassure hon. Members that we are concerned about this matter.
My Department, through its housing development division, has been looking at this problem in test cases. I do not wish to refer to reports that have been touched upon in the debate. However, we have been examining ways of assisting in the better insulation and heating of elderly and disabled persons' accommodation, 1007 even to the extent of a variety of minimum action within certain rooms in people's houses. We are looking at ways to make the improvement grant system more flexible in that connection. This matter overlaps other aspects of home improvement for people in these circumstances.
I think that in due time—not in the immediate future, but not so long from now—we shall be able to take up many of the points that have been made about the position of the elderly and the disabled, including the remarks made by the hon. Member for Northampton, South (Mr. Morris) in another context. I am looking at certain aspects in the context of the Bill. I am very concerned about this matter.
It was suggested that administrative costs would be 20 per cent. I shall pursue that matter further in Committee. The point was made strongly, and millions of pounds were quoted. I assure hon. Members that, on the basis of consultations with the local authorities so far, it is not likely to be anywhere near the figure quoted. It will be well within 10 per cent., and maybe a good deal lower than that. That is on the basis of present consultations. But we are still looking at that matter. We should not get over-worried about it.
Points were made about rateable values. The suggestion was that the impact of rateable value hits people when they make improvements to their houses. We can certainly consider whether there would be merit in practice in applying the principle applied to central heating systems, namely, that there is no immediate revaluation; one waits until the next general revaluation. We would have to consult other Departments and the Inland Revenue on that matter.
I suggest that this matter has been overstated. If we are talking of an expenditure, outside the terms of the Bill, of £250 on double glazing or on other improvements which have been touched upon, let alone the £50 to £75 average expenditure on loft insulation, translating that into an annual value. I do not think that it will work out to more than pence, except in individual cases. We are speaking not about individual cases but about the general application of the grant 1008 system and how it might affect properties. We shall look at this aspect, but, as distinct from a hypothetical situation, it is not a real issue in practice when we look at the figures.
Before I sit down, I should like to comment briefly on the points made by the hon. Member for Derbyshire, South-East, He took the debate even more widely than his hon. Friends by talking about new building standards and so on. In the course of his speech, he reinforced the points made about building regulations outlined by other hon. Members.
I am not at all bland, smug or complacent about building regulations. There is a long history of inadequate standards stemming from the many decades of cheap fuel in this country. I accept that in broad terms that has been echoed through market effects and Government action and policies stretching back over more than a century.
However, it must be remembered that it was only in recent years—in 1975—that this concept, other than health and safety, was built into building regulations requirements. Of course, it was postulated earlier. In fact, I raised the matter in the few months when I was a junior Minister at the old Ministry of Housing and Local Government in 1969–70. I asked that a review should be put in hand to widen the scope of criteria for building regulations. That has only recently come about. It takes a long time to get building regulations changed. That is another point that concerns me, but it is for another occasion. I should like us to be more selective and to foreshorten the time if we can. I recognise that many interests are concerned throughout the economy and industry. It is easy for me to say that and I should like to do it, but it is not so easy to put it into practice. I am sure that any hon. Member in my position would soon find that if he were not already aware of it.
I accept that standards are not good enough. Our first priority on the building regulations was to deal with non-domestic buildings, because they had no standards whatsover under the regulations. That was the priority. We are now looking at the possibility of increasing the standards of domestic dwellings under building regulations. There will not be an immediate revision within the 1009 next few months, but we are considering it seriously. I hope that it will not take six years, which is the normal span, before we come to conclusions about the matter, because of the consultative process.
In the meantime, standards are going up in practice. We shall seek to encourage this to the best of our ability. The standards in building regulations are minimum standards. They do not prevent people from adopting higher standards if they wish to do so. Nor will the Bill prevent people from doing many of the other things put forward in the debate. It is a contribution to a particular aspect of work which we think must be given priority for the financial and environmental reasons that I indicated at the outset. The biggest and quickest impact will be by means of the scheme that we are now putting forward.
In introducing the scheme, we shall enable people to spend that much more money, if they so decide, on other kinds of additional insulation because they will have had the benefit of certain financial assistance for the priority that we are setting down in the Bill.
I ask the House not to denigrate the objectives of the Bill. It will have the impact that I have described on hundreds of thousands of homes once the scheme gets going. It is not intended to leave the matter at that. Other measures and initiatives will be taken in the context of the Bill in due course and in other directions outside the scope of the Bill. I hope that we can all agree to give the Bill a 1010 quick passage and get it in operation well in time for autumn of this; year.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).