§ Order for Second Reading read.9.34 am
§ Mr. A. J. Beith (Berwick-upon-Tweed)
I beg to move, That the Bill be now read a Second time.
I have never been very good at winning raffles; even the talcum powder and oven glove which are usually the 32nd prize in one's constituency raffles usually elude me. The same is true of the ballot for private Members' Bills, which many people outside the House do not realise is also in the nature of a raffle.
I have been a Member of Parliament for 20 years and this is the first time I have been successful in the ballot at any level, let alone the No. 2 slot. So accustomed had I become to my lack of success that I had taken to telling people who wrote to me before the ballot to ask me to take up various causes that their requests were academic, that there was little point in my making any commitment, because I had never been successful in the ballot. This year, however, I won second place and was very pleased to do so.
I have received the usual shoal of inquiries and importunings from hon. Members and from friends in organisations pursuing various causes, but I quickly concluded that having the second slot meant that it was worth trying to introduce a measure that had a chance of being passed. However, having the second slot, and therefore a reasonable amount of time, meant that it was possible to try to put on to the statute book a measure about which there was some controversy rather than one which was so innocuous that even the Government would welcome it with open arms.
I shall discuss later whether the Government welcome the Bill with open arms or with a limited blessing. All will become clear when we hear from the Under-Secretary of State for the Environment, the hon. Member for Banbury (Mr. Baldry). I hope to encourage the Government to believe that the Bill is so much in everyone's interests that they should be enthusiastic about it.
One of my first thoughts was to try to legislate for the payment of debts to small businesses. The late payment of debt is such a serious problem that I offered the Government the opportunity to pursue it. It had been mentioned by the Chancellor in the Budget, but the Government wanted to take the issue to wider consultation, which I fear may make them more reluctant rather than more enthusiastic to do something that I still hope they will 1142 do. It was clear that any Bill would be blockable on those lines, so I felt free to introduce a Bill for which there is extremely widespread support.
Few Bills have had such widely declared support. Three hundred and twenty-seven hon. Members have signed an early-day motion in favour of a Bill of this type, and 167 local authorities have called for it. As local authorities will be directed to act under the Bill, that is both surprising and welcome, and it proves how important they believe the issue to be.
I have received letters from a number of hon. Members who could not sign the early-day motion because they are members of the Government and from some who could not be here today. I do not want their absence to console potential opponents, because many will be here during the day to support the Bill.
Some hon. Members who have been associated with the matter have also written to me. For example, the hon. Member for Bury, North (Mr. Burt) who is a member of the Government, has a record of supporting energy conservation, and introduced a Bill to that effect. The right hon. Member for Mitcham and Morden (Dame A. Rumbold) is one of many who have expressed their support.
The Bill has the support of the Association for Conservation of Energy, Neighbourhood Energy Action, the Institute of Environmental Health Officers, Age Concern, Mencap, the Spastics Society and many other organisations that represent the disabled and believe that it is especially important to help the people for whom they care, whose need for warmth is sometimes greater than we realise because they are often trapped in their homes.
The list includes Greenpeace, Help the Aged, the World Wild Fund for Nature, the Gas Consumers Council and the Body Shop. The list of organisations and commercial concerns which have given their support is large, and I am grateful for the support of hon. Members of all parties, not only those who are among the Bill's sponsors but those who have arranged to be present today in case there is a Division and the many who have written to assure me of their backing.
The Bill is about energy, and there is a cruel irony in that fact because, as I speak, a meeting is being held about Ellington colliery in my constituency. It is the last pit in the north-east, and we fear that the meeting may lead to a closure announcement while we are debating the Bill. Closure would be a bitter blow for more than 1,000 families in my constituency and neighbouring constituencies, and it would be a betrayal by British Coal of the loyalty shown by the Ellington work force.
It is only weeks since we were told that there was a plan capable of allowing the pit to continue to operate for some years. With the prospect of a private buyer taking it on because of its close link with Alcan, anything that might jeopardise that prospect worries me. I know that the Minister will convey that view to his colleague in the Department of Trade and Industry with whom I discussed the matter late last night.
The aim of the Bill is to enable people to keep warm in their homes affordably, by reducing the amount of energy that they need to use, thereby securing reduced emission of greenhouse and other gases and conserving natural resources. Energy conservation makes sense, whether one views it from the perspective of global warming or from that of pensioners struggling to keep warm.
1143 With greater energy conservation, we could cut fuel bills and fuel poverty, and that is all the more important if the application of VAT to fuel goes ahead. We could reduce cold-related illnesses. More than 7 million households are affected by fuel poverty, and it is estimated that 40,000 people die each winter because their homes are not adequately heated.
The domestic sector is responsible for about a quarter of carbon dioxide emissions. The country is pledged to reduce those emissions to 1990 levels by the year 2000.
Energy conservation work is especially valuable in promoting local employment. It promotes self-employment and small businesses because of the nature of the tasks involved. It can be a valuable agent of local economic regeneration, for energy conservation work provides jobs, and work for small local businesses, which, as we all know from our constituencies, are of immense importance to the local community and the large economy.
The Bill, as a private Member's Bill, does not make large open-ended commitments to public spending. It ensures that we take an essential first step to work out what the energy efficiency of our housing stock is, both public and private, and where resources could most effectively be channelled to improve it.
The requirement that energy audits be carried out by local authorities is the heart of the Bill. There is also a provision for timetables to be set for work to be carried out as a result of the surveys, but the collection of the data is the vital first step, because that will reveal how cost effective investment in the field could be—cost effective for investment not only of public funds but of private funds, by owners of rented housing and by owner-occupiers.
We need to know where money can most usefully be spent. It is quite easy—perhaps fatally so—to misdirect resources in that field into expensive measures that may have a disproportionately weak effect on energy conservation when compared with cheap and effective measures.
We need to know more about the housing stock to know where the work should be directed. If that information is produced, it will guide not only local authorities in dealing with their housing stock but private owners of housing. It will also provide guidance to the Government, and will help us to use resources effectively.
The Bill gives the duty to local authorities because they are the people who already have responsibilities and expertise in the field. The duties will rest on district and borough councils under the present system—it would be unitary authorities, wherever they are created, in future.
It is rather a tricky task at the moment to define local authorities in the statute when they are being changed significantly in England, Scotland and Wales. The Government have thought up some rather intriguing definitions in legislation that they have brought forward. The object is understood, however; the powers should rest with the authorities that take over the housing function, currently mainly exercised at the district level.
Under the Housing Acts, local authorities are obliged to consider housing conditions in their districts annually. Under the housing investment programme, the Under-Secretary of State has announced that local authorities should 1144take fuller account in their Housing Investment decisions of the need to improve the energy efficiency of their stock and to reflect this in their annual HIP submission.Local authorities want to do that job and they have shown that it need not be expensive. Two pilot studies have shown that it could be done at modest cost. Newark and Sherwood district council showed that it could be done for a set-up cost of £46,000, with annual costs of about £4,500. The city of Derby produced a set-up figure of £48,700, with annual costs of abut £8,000. That is in a city with a total housing stock, public and private, of 93,000 dwellings, so it is a substantial authority. That shows that, especially with the aid of modern computer technology to assemble information, it can be done efficiently at a relatively modest cost.
I have said that local authorities are keen to do that, and they are, but I nevertheless believe that it needs to be a mandatory requirement, not a permissive power as the Government seem to be suggesting.
The Secretary of State went to Newcastle on Wednesday and opened offices for Neighbourhood Energy Action, an excellent organisation which has done some good work in my constituency and others in insulating pensioners' homes especially, and I commend its work. I am glad that he supported it in a radio interview while he was there. He said that he supported the idea of the Bill because it was a good idea, but preferred it to be permissive rather than a requirement on local authorities.
It is important to place the requirement on the local authorities. In these times of stringency, things that are not statutory obligations are the first to go under budget pressure. Any hon. Member who has taken part in, or observed, budget discussions in a local authority knows the position in which a committee chairman so often finds himself when he has to make cuts or contain expenditure. The statutory services and statutory requirements are protected, so he has to consider anything that is optional. The local authorities want to be given the lead by being told it is something they have to do, especially when it is so small in financial terms in relation to their overall budget.
§ Mr. Gyles Brandreth (City of Chester)
The right hon. Gentleman mentioned £46,000 in Derby as a cost. Is that a one-off cost in the first year? Would it be an on-going cost? It sounds as though three people would be in charge of the audit. For the audit to have value, it would have to be monitored over a series of years. Has the right hon. Gentleman extrapolated from what the costs would be in Derby to what the costs would be nationwide, if that were to become a statutory order?
§ Mr. Beith
The figure that I quoted for Derby was about £48,000 for the set-up costs, with an annual cost, which I also quoted, of £8,000. The set-up costs include the costs of setting up all the necessary computer software. I have not done an extrapolation for the country, because the figures are based simply on two pilot studies. It was a serious and effective attempt to give an idea of what it would cost in an authority of that size.
Not only is it important that local authorities should be under the obligation, because of the budget pressures on them, but the idea of the Government's setting a timetable and requiring plans to be submitted goes with the grain of what the Department of the Environment is doing in other fields. In relation to waste management, for instance, the Department tells local authorities that they must by a 1145 certain date submit a plan to improve their waste management to reduce landfill. That technique seems to be effective, and one which can lead to a proper discussion of how the work can be carried out.
Our former colleague the noble Lord Moore, who chairs Energy Saving Trust Ltd., said in a letter to the Secretary of State:As you know, my usual inclination is to favour 'advice over duties' and certainly there are a number of councils which will perform the activities described in the Bill of their own volition. However, previous experience suggests that these councils will be the exception rather than the rule. Without some form of 'stick' being applied, we could again end up preaching to the converted and therefore I support the relevant clause.That is a pretty good political pedigree of support for the mandatory nature of the Bill for Conservative Members, and it comes from the noble Lord, with his understanding of the need to get some action in that field.
§ Mr. David Nicholson (Taunton)
I tend to agree with the right hon. Gentleman that, unless local authorities are given a pretty good steer in that direction, the duties will be discarded at some stage. Does he agree that the Government's Deregulation and Contracting Out Bill might have potential for relieving local authorities of some of the fussy duties that especially their environmental health officers have undertaken in recent years? I find in my dealings with them that they are so busy going around messing about with shops and small businesses that they cannot even ensure that neighbours can live in peace and be protected from the noise and havoc of next-door neighbours that make their lives agony.
§ Mr. Beith
I have much sympathy with the idea that we should get rid of the unnecessary regulations that local authorities have to enforce. One of the problems with the mechanism proposed in the Deregulation and Contracting Out Bill is that we are not convinced that it will enable authorities to distinguish between necessary and unnecessary regulations. There will be quite an argument about that aspect of the Bill, but I support its objective of cutting unnecessary regulation. The Institution of Environmental Health Officers takes the view that the work described in the Bill is important, and it wants to get on with it.
I can offer some support to the hon. Member for Taunton (Mr. Nicholson). I have never known anything so absurd as constituents of mine being threatened with prosecution because they weighed out nuts in bags measured in pounds and ounces before customers arrived in the shop. Environmental health officers were required to threaten them with prosecution because nuts can be sold in pounds and ounces only if they are weighed in front of customers. Otherwise, they must be sold in grammes. We have allowed such absurdity into our system.
§ Mr. Bob Cryer (Bradford, South)
Before the hon. Gentleman goes too far down that road, may I suggest that the Bill is not a quid pro quo? Whatever the circumstances of other legislation, the benefits of implementing the Bill would be so widespread that it stands on its own merits.
§ Mr. Beith
Of course. The Bill is not regulatory at all; it does not impose massive requirements. It merely makes local authorities carry out the feasible activity of assembling data and producing a plan for the most efficient use of resources in energy conservation. It proposes no new powers to interfere with people's lives, and no new means of extracting information from anybody who does not want to give it. It relies on existing, available and adequate 1146 means of collecting information on the subject, most of which already exists and more of which can be put together and obtained by fairly simple processes of inquiry with the help of outside bodies such as estate agents and voluntary organisations. There is tremendous scope for voluntary co-operation on this work.
§ Mr. Simon Hughes (Southwark and Bermondsey)
The other great benefit of the Bill is that, in placing duties on local authorities, it establishes what is important. If local authorities are persuaded of the importance of energy conservation, that will transfer to the community at large. I hope that my right hon. Friend regards that as one of the key consequences of the Bill's placing a duty on local authorities, rather than an option or something about which a local authority could say, "We would love to do this, but we will not do so."
§ Mr. Beith
Absolutely. What a privilege it is to have my speech improved as it goes along.
The Bill contains much that was in the Bill introduced by the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) in the last Session. I pay tribute to the effort that he has put into this matter, and to his continued support. I look forward to hearing him speak later in the debate. I have encouraged him, given his knowledge of these matters, to speak towards the end of the debate to deal with the more complicated inquiries that might arise during it.
The Bill does not include provisions that were in the hon. Gentleman's Bill—for example, the system of regional boards or the levy system, which his Bill proposed. We should concentrate on the immediate task of securing information, carrying out audits and making plans as the basis for moving energy conservation work forward rather than creating an elaborate new apparatus for the work.
The means of doing the work is more readily to hand than the assembling of information. I am filling in what I think is the gap, and I am sure that existing mechanisms are adequate to do the work once we have indentified what it is and have built up the commitment that will be necessary at all levels to ensure that it is made a priority.
Clause 1 defines energy conservation and the local authorities that will be energy conservation authorities.
Clause 2 is the meat of the Bill. It gives local authorities the duty of preparing a plan or statement of the works needed to achieve various levels of energy saving in the various types of public and private residential accommodation in its area. It requires the authority to determine how priority can be given to householders suffering from financial hardship. A specific provision in clause 2 requires a local authority to indentify how priority could be given to those suffering from financial hardship.
Clause 2 requires an estimate of financial savings that could be made by energy-conservation measures, which of course will be of particular interest to tenants, owners or occupants of properties, and it requires an estimate to be made of the CO2 emission reductions that could be achieved by given energy savings. There will be a wider national and international interest in what emerges.
Clause 2 requires consultation with interested organisations and the public. It tries to build on some of the experience of inner-city initiatives, which have shown the merit of building local consensus as the basis for an energy-saving strategy. The energy action cities during the 1147 Energy Efficiency Year of 1986 were, in part, the model for some of what is in the Bill. They included Cardiff, Edinburgh and Norwich.
I hope that the hon. Member for Norwich, North (Mr. Thompson), who was personally involved in the initiative in Norwich, will tell us about that. Much good experience came from it; one of the things it showed was that a co-operative approach can be taken, drawing in all sorts of bodies and organisations to achieve positive results.
Clause 3 places on the Secretary of State a duty to set a timetable for plans to be submitted and to make timetables to encourage the completion of the works proposed. It gives him the power to contribute to the cost.
Clause 4 is a money clause. I was advised by the House authorities that it had to be included, even if the Bill were confined to clause 2, which requires only a limited amount of local government expenditure, apparently because of the high proportion of local government expenditure that now derives from moneys voted by Parliament.
It appears almost impossible to get by without a money resolution these days, but I trust that the Government, in accordance with normal practice, will provide us with the appropriate money resolution to enable us to discuss all these parts of the Bill, even if they try at some stage to trim any part that has financial implications. The clause is included because I am advised that even the most limited parts of the Bill make it necessary.
§ Mr. Jack Thompson (Wansbeck)
I support the Bill, but it may have some financial implications in the sense that we shall have to take a long-term view of the design of domestic, commercial and other buildings. It may be appropriate for the Secretary of State to have some small function—perhaps offering a cup of tea and a biscuit—which may incur some expense to encourage architectural organisations to consider the design of buildings in the long term.
Scandinavian countries use a different design from us for residential accommodation because of their weather conditions. The part of the world that the right hon. Gentleman and I represent, and Scotland, experience different weather conditions from other parts of the country. Buildings in my constituency that have been constructed according to the Swedish design are working efficiently in terms of energy conservation.
§ Mr. Beith
Far be it from me to add to the Government's burgeoning entertainments bill, which has been the subject of much controversy, but the hon. Gentleman is making the important point that the Government should do all in their power to encourage energy efficiency in new building. I know that they have taken a number of initiatives for some of their own buildings, but it is a much wider issue.
I have regularly visited Sweden and Norway over many years, and have always been amazed by how far behind we have been in the normal standards of construction. Perhaps those countries were impelled to adopt such standards because of the generally lower temperatures, but temperatures are cold enough in my constituency and that of the hon. Member for Wansbeck (Mr. Thompson), my constituency neighbour who shares my concern about Ellington colliery. In our part of the world, it is plenty cold enough for such things to have been justified years ago, 1148 before rises in energy prices and VAT on fuel. Much could be done with the architectural profession and the construction industry.
Energy conservation sometimes means higher capital costs for buildings. We have often made mistakes—this is fairly true of Government and public buildings—by trying to make savings in the initial capital cost of buildings, which have led to enormously higher revenue costs in terms of heating. That has often led to faster deterioration because the deficiencies that lead to inadequate energy conservation also contribute to water penetration of a building or other damage, thereby shortening its life.
Clause 5 extends the Bill to Northern Ireland. I am grateful for the support for the Bill that I have had from Northern Ireland Members on both sides of the House and for the interest in energy conservation that is being shown in Northern Ireland, where it has strong backing. I am glad that the Bill will extend to Northern Ireland.
Those are the broad terms and objectives of the Bill. It is fairly straightforward, and a little time in Committee will iron out some of the details. I am willing to discuss with the Government how the provisions can be cast in a form that will make the job as straightforward as possible for the Department and for local authorities.
It is essential, however, that the Bill retains the requirement that the work be done. We do not want such matters to dribble along for years. We are so far behind in the work that we must take the initiative now. I hope that, if recovery eventually comes, we shall enter a period when more of the work can be undertaken and the private and public sectors will have the means to carry it out. Let us be ready with the information, knowledge and clear guidelines on how resources can be best used.
§ Mr. Gary Waller (Keighley)
I agree with the right hon. Gentleman that, although the audit is important, it is action that counts. Does he accept that one of the great difficulties is that, in drawing up their budgets, local government and Departments of central Government tend to consider a project worth while only if it produces some tangible benefit for them? That is why it is so important to have a strategic approach that takes into account the benefits for the country and individuals.
§ Mr. Beith
I agree with the hon. Gentleman. The Department has opportunities, which it has used in the past, to build in an advantage for local authorities when it comes to calculating how work can best be done. It can give encouragement by providing special help to regions that come up with particularly good schemes. The Department has taken that approach widely to spread good practice. Assistance can be given—even where there are a few pilot projects—which will be to the advantage of those authorities that take a lead.
Many such ways have been developed. A great mixture of carrots and sticks can be employed. One problem is that, sometimes, those who need to make the capital expenditure are not those who benefit directly from it, and those who most desperately need energy efficiency and warmer homes are in the weakest position when it comes to achieving that.
Some tenants on low incomes living in poorly insulated housing do not have the money to make improvements. Sometimes, the local authority, the housing association or 1149 the private landlord do not give such matters high enough priority and do not see a direct revenue benefit for themselves.
The problem therefore persists; the tenant remains cold in the property, the amount of energy used remains higher than necessary and the property probably deteriorates quicker as well. We need to change that process. The sort of information that we can assemble under the scheme will make that possible.
The Bill is an essential step towards cutting the amount of energy needed to keep people warm in their homes. It will show us how to use resources effectively for that purpose, helping in particular those in greatest need. It will help us to save our precious and threatened environment. I commend it to the House.
§ 10.3 am
§ Mr. Patrick Thompson (Norwich, North)
I am grateful to you, Mr. Deputy Speaker, for the opportunity to speak in the debate on a subject in which I have tried to maintain an interest during my 10 years as a Member of Parliament. I congratulate the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on using his winning place in the raffle to introduce the Bill.
I sympathise with the right hon. Member's reference to raffles and lotteries because I went through the first 35 years of my life without ever winning a raffle. It was only when I became involved in Conservative politics that I discovered that I was able occasionally to win raffles. Since then, I have occasionally won them—sometimes to my embarrasment. Unfortunately, I have never won the private Member's Bill raffle or had a Bill highly placed. I doubly congratulate the right hon. Gentleman: first, on winning the raffle and, secondly, on choosing to introduce the measure, in which I have a genuine interest—one which I have tried to maintain since becoming a Member of Parliament.
The good news for the Bill is that there clearly is a high level of all-party support for its main objective. I suspect that that will be reflected in the speeches during what I hope will be an interesting debate today. After all, Fridays often generate the best debates in the House of Commons. People talk about the standard of debate in the House and the quality of the work of hon. Members, but I only wish that the press in the Gallery would report more fully our Friday debates. Those debates are worth while, and I make no apology for taking up a few moments to say that Friday debates are worthy of more and better coverage. [HON. MEMBERS: "Hear, hear."] I am glad that I have the support of Members on both sides of the House. I shall not be tempted to talk about the Jopling report, which I also support, because I should be straying from the subject of the Bill.
There is all-party support for the Bill. That has been proved by the large number of names that have been put down in support of various early-day motions and other measures. I am pleased to see in his place the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis). Although his Bill was not identical in every respect to the one that we are debating, I think that he would be the first to agree that it was a precursor of the subject of today's debate. I am pleased that he is able to be with us, and I am sure that he will speak later.
During what I hope will be a not-too-lengthy speech, I shall not talk about the Bill clause by clause in detail, 1150 because, as I have learned during my time here, my lack of experience in the law has singularly disqualified me from taking a Bill apart clause by clause. I hope that the House will forgive me if I do not discuss the Bill in that son of detail. I want to show why I support the Bill and why an energy strategy for this country is so important. I regard the Bill as a step on the road to a long-term energy strategy in the United Kingdom. I want to base my remarks on that argument.
My support is obviously based on my interest in science and engineering. As a physicist and during my earlier academic career teaching sixth forms in schools, I spent a great deal of time talking about the conservation of energy. It was probably the most important principle that I tried for 20 years of my life to impart to pupils in classrooms in Manchester and Norfolk.
I remember discussing in great detail the way in which various forms of energy can be converted from one to another. Hon. Members may think that I am getting carried away and am going to give a physics lecture, but I shall not do so. My experience is relevant because the importance of conserving energy is even clearer to those of us who have studied physics or science than it is to other people.
I remember talking about the way in which mechanical energy can be converted to an equivalent amount of heat energy. It is remarkable how much physical energy one has to put in to obtain what appears to be a comparatively small amount of heat. A lot of energy is needed to provide what might appear, on the surface, to be a smallish amount of heat. I remember discussing how heat is the most chaotic form of energy and I remember discussing the work of James Prescott Joule and how he established the equivalents between heat and energy. I promise that the physics lesson will end shortly. However, I noticed that the European Community has a programme of support for research and development and I was delighted to learn that it was called the Joule programme, until I discovered why it was called that.
I have a total abhorrence of acronyms and even the excellent Select Committee report, which is relevant to the debate, but from which I do not have time to quote in any detail, mentioned the Joule programme. I was horrified to discover that there are so many acronyms, even in this area. I kept reading about HEES, EST and EEO and having to look up what they were. I discovered that, as my hon. Friend the Under-Secretary of State will know, that EEO is the Energy Efficiency Office. To my horror, I discovered that the Joule programme is an acronym for the joint opportunity for unconventional energy. I must protest at the absurdity of acronyms such as that. The Joule programme should have been named after the work that James Prescott Joule did for physics and energy, not because it is an acronym for the joint opportunity for unconventional energy. I hope that the House will support that despairing appeal for a reduction in the number of ridiculous acronyms.
My membership of the Parliamentary Group for Engineering Development links to the work of the Engineering Employers Federation and others. The federation has recently pressed for a balanced energy strategy leading into the next century. I see the Bill as part of such a strategy and that is why I clearly think that it is worthy of full support in the House and beyond.
In putting forward the strategy, the Engineering Employers Federation gave figures for population growth and energy requirements in the coming year. I was 1151 horrified to learn that there will be a doubling of the energy requirement in the world by 2020. The figures have Government backing so perhaps my hon. Friend the Minister may wish to comment on that later.
To that, one can add the projections of the fuel mix. At present, 74 per cent. of our energy is produced by carbon dioxide-producing fuel. That is bad enough, as I am sure that will be mentioned later. According to Government figures of present trends, which I hope will not be continued, by 2020, when the energy requirements have doubled, the proportion of energy produced by carbon dioxide-producing fuels will have risen from 74 to 92 per cent. The implications of that for global warming and other issues which are of concern do not need to be spelled out.
I remember saying in a debate on global warming that it was basically benign and this is my opportunity to say that I was certainly misunderstood by certain characters in the Gallery. As a physicist, I was trying to make the point that we needed the greenhouse effect or we would freeze to death. To that extent, it is benign, but, clearly, not in the sense in which we normally debate it in the House. Ever since, I have been saddled with the quotation that global warming is benign and have been castigated in the Observer and elsewhere for not being green in my attitudes, so I shall take the opportunity to say that global warming is benign, but only to the extent to which it keeps us all warm, and not if it goes too far.
The point of the strategies proposed by the Engineering Employers Federation and others is the need for a long-term view, as the right hon. Member for Berwick-upon-Tweed said. I am sure that my hon. Friend will pick that up. I agree with the EEF that there are three components of that strategy.
First, but not to be debated this morning, is the review of the nuclear industry. Nuclear power is not carbon dioxide producing. I hope that my hon. Friend will take on board the urgency of concluding that review in discussions with his colleagues. I do not need to spell out the implications, but it is an important point which be cannot evaded by the House.
Secondly, there is the question of the diversity of fuels and, thirdly—and what the Bill is really about—there is the question of energy conservation and increased efficiency. The EEF says that a long-term strategy, the conservation of energy and energy efficiency are important.
The EEF conducted a poll of Members of Parliament. I am suspicious of polls and whenever anybody telephones to say that they are conducting a poll, I say, in the nicest possible way, that I never take part. Apparently, most of my colleagues do the same, so I am baffled as to how even the worthy EEF has managed to get a sensible sample of Members of Parliament. Most polls of MPs are totally nonsensical and in preparation for an equally nonsensical article in some tabloid or more serious newspaper.
As there was a poll, I shall share the result with hon. Members and they may decide whether to take it seriously. It said that seven out of 10 Members of Parliament wanted the Government to take a more strategic approach to energy. I hope that my hon. Friend will take that seriously.
The only realistic way in which to achieve energy efficiency is by the systematic insulation of the nation's buildings, to which the right hon. Member for Berwick-upon-Tweed referred, and by the systematic 1152 education of the occupants of those buildings. On 17 June last year, Viscount Mersey rightly talked about the boring truth of energy efficiency. We all get excited about wind power, to which even the syndrome of NIMBY applies. I shall be careful what I say, but, in Norfolk, people are beginning to protest because windmills are erected next to their houses. Concepts such as wind power, wave power, hot rocks and fuel cells are exciting, but, as my noble Friend said, the truth about energy efficiency is that it is boring, as it really only concerns property insulation and design.
§ Mr. Cynog Dafis (Ceredigion and Pembroke, North)
Does the hon. Gentleman agree that it is worth mentioning the developing furore over wind power? One of the reasons for objecting to the development of wind power in Wales is that we do not have the proper energy efficiency policy in place. Does he not accept that that kind of development will not be attempted unless the Government show that they are serious about energy efficiency? If we accept that, set it up and take it seriously, it will be more possible to obtain public support for development in other directions.
§ Mr. Thompson
That is one of the debates in which everyone seems to agree. The hon. Gentleman's remarks seem only to be common sense and I that hope that my right hon. Friend the Secretary of State takes the point about the need for a long-term strategy and policy so that there can be proper discussion about wind power and other forms of energy production.
§ Mr. Brandreth
I disagree with my hon. Friend about energy efficiency being boring. I find that when I talk to people in my constituency about cost savings, they recognise that it is a case of enlightened self-interest and that they can help save the world, while improving the quality of their home life and enhancing their bank balance. Far from being boring, it is exciting.
§ Mr. Thompson
I am delighted that my hon. Friend the Member for City of Chester (Mr. Brandreth) is a convert to the view that energy efficiency is exciting. If he, as a communicator, is excited by it, we can all become excited about it. That is what we have been waiting for; it is very good news indeed. I am making a serious point here, because energy efficiency and the insulation of buildings —I may even refer in passing to the imposition of VAT on fuel—are most important. My hon. Friend is right that those who are concerned about the cost of their fuel will get excited about better home insulation. I agree with both hon. Members who have intervened.
The Bill is a vital step towards returning our emissions of greenhouse gases to their 1990 levels by the year 2000, which is a commitment that we have made, while ensuring sustainable growth and safeguarding our economic interests. If the Bill is enacted, it will be the start of a real commitment by local authorities and Government to back up with co-ordinated action and funding the education and advice that are already being given. The right hon. Member for Berwick-upon-Tweed made that point in his speech.
The ten-minute Bill introduced by the hon. Member for Ceridigion and Pembroke, North was similar in many respects to the Bill that we are debating this morning. Interestingly, it included a fuel levy—a concept which has sometimes been the subject of somewhat more controversial debate. I have no difficulty in supporting the concept 1153 of some kind of taxation on fuel and energy in the interests of encouraging conservation, although the manner in which it is done is a matter of greater controversy.
The hon. Gentleman included a fuel levy in his Bill, with all that that implies in terms of the Government's policy of imposing VAT on fuel, while ensuring that anyone who has difficulty with heating bills gets the appropriate help. I am delighted to say that the Government have provided adequate support. I have even had letters from pensioners' organisations saying that they are pleased with the measure of help that the Government have provided to people who are likely to have difficulty paying their heating bills.. The concept of a levy on energy or fuel to encourage efficiency and home insulation is good, and it is interesting that the right hon. Gentleman included it in his Bill.
I had a letter from the president of the Norfolk Energy Forum on 11 October last, which stated:Having considered the question of VAT on fuel, it is the view of this forum that this is acceptable provided a significant part of revenue raised was devoted to the implementation of energy saving measures.I suspect that that is common ground between the parties —and the Norfolk Energy Forum clearly has support from all the political parties. Et is fine for the Government to raise money in that way if, at the same time, serious consideration is given to investment in energy saving and energy-efficiency measures.
The Government have made good progress in energy efficiency. It would not be right for me to go into too much detail. After all, my hon. Friend the Minister will have an opportunity to spell out the position. If, reverting to my old profession of schoolmaster, I made out a report on the Government's progress, it would not be a eulogy—I would not give them an alpha-plus or anything like that.
I hope that my hon. Friend the Minister would be satisifed if, as one of his supporters, I talked in terms of a beta or a beta-plus. [Interruption.] Clearly, he is not wholly satisfied with that, but I assure him that there are many worse marks that I could give—beta-minus, gamma and so on. The Government are taking the issue very seriously.
§ Mr. Thompson
I am happy to give way to the hon. Gentleman, especially if it gives me a further opportunity to expand on my point.
§ Mr. Hughes
The hon. Gentleman is marking the Government somewhat generously. Intentions may have been good, but practice has been poor. The best example that one can cite is that when the Government set targets for their own buildings, energy use increased rather than decreasing. I hope that the hon. Gentleman will not be too generous, because that might encourage the Government to think that they can ease up and not be too tough on themselves. They need to be tougher on themselves in their own interest, just as we hope that people outside will be tougher on themselves in their own interests.
§ Mr. Thompson
Bearing in mind the fact that the Government have made more progress than any previous Government and are improving all the time, I shall stick with beta-plus, in spite of my feeling that they could do 1154 even more. We at least agree from our different vantage points that the Government need to be urged even more strongly in that direction.
I praise the efforts and cost effectiveness of the Energy Efficiency Office of the Department of the Environment and the intention behind such initiatives as "Making a Corporate Commitment". The downside—the hon. Member for Southwark and Bermondsey will understand this—is that that initiative, which is a good one, has achieved savings of only 0.2 per cent. during the past two years. I think that we would all agree that more energy needs to be put into the campaign.
§ Mr. Brandreth
Does not that illustrate the central concern that some hon. Members have about the nature of the Bill, which is that it takes a top-down approach? 'The Government have already done an audit. They know that they wish to reduce energy use by 15 per cent. in their own buildings. But, despite great expenditure and an understanding of the problem, they have still only achieved a saving of 0.2 per cent. The Bill says, "Here is the problem and the audit," when what we really need is action. Perhaps we should concentrate more on delivering the action than on analysing the problem, which is already quite widely recognised.
§ Mr. Thompson
Once again, my hon. Friend for City of Chester has provided me with great encouragement. Rather than taking a top-down approach, we must get across the idea of people wanting to make commitments. I do not think that anyone would disagree with that. Once again, if my hon. Friend could help to communicate that message, it would be most helpful. I am not sure whether that is a criticsim of the structure of the Bill—I said that I would not analyse the Bill in great detail—but, no doubt, the Standing Committee will have the opportunity to go into that point. I am sure my hon. Friend will understand that I am seeking to get right behind the basic principle of the Bill, which is to achieve the objectives that I know we both support.
I hope that my hon. Friend the Minister will recognise that one problem for the Government is the whole question of departmentalism. I have come across it before in connection with deregulation and the Government's desire to make a bonfire of regulations, which we are not debating this morning. Problems arise because communication between Government Departments is sometimes not as good as it should be. That has a bearing on the point raised by my hon. Friend the Member for City of Chester.
There is a resistance to progress because the Government Departments are not communicating adequately with each other. We need more co-ordination between Government Departments to overcome bureaucratic departmentalism. I know that I am not alone in thinking that: a Select Committee report last year made the same point.
I welcome the doubling of the home energy efficiency scheme grants as a response to the imposition of VAT on domestic heat and fuel. That is very good news and is an example of the Government acting quickly and rightly along the lines that we all want. The home energy efficiency scheme should be extended to cover cavity wall insulation and heating controls, again in line with the Select Committee's recommendations in its report of 3 November last year.
1155 I was interested in the remarks of the right hon. Member for Berwick-upon-Tweed, who is promoting the Bill, about building design and regulations. My father was an architect, and therefore I have an interest in good building. I am glad to see that the right hon. Gentleman has returned, because I want to pick up on his point about design, architecture and so on. I support all his remarks, and those of my namesake the hon. Member for Wansbeck (Mr. Thompson).
Proposals for the reform of building regulations were put out to consultation by the Government a year ago. I hope that my hon. Friend the Minister will take the point that the result will be—I hope—an improvement in building regulations on insulation. That should be given priority in any revised proposals. I hope that my hon. Friend will refer to that point.
Section L of the building regulations needs serious upgrading with regard to energy considerations. Although I studied thermal conductivity during my time as a physicist, I never had time—the House will be pleased to know, otherwise my speech would have been longer—to study U values in the building regulations. The good news for the Chamber is that I have not done so and therefore cannot elaborate on them. But I am reliably informed that the present system leads to unsatisfactory energy efficiency levels. Again, there is agreement that something should be done on the building design and regulations front.
§ Mr. Beith
I am grateful for the hon. Gentleman's support, and the fact that he has been able to spell out the matter much more thoroughly than I was able to do. I hope that he will accept my apology for having to leave early when he was speaking, because the pit closure, of which I warned in my remarks at the beginning of the debate, has since been announced, with the loss of more than 1,000 jobs in my constituency.
§ Mr. Thompson
I shall stick to the subject of the debate, but I am glad that the right hon. Gentleman was able to return just in time to hear my remarks on building design, the role of the architect, building regulations and so on, as they are of vital importance. I am sure that he will accept that I rest my case on that point.
The right hon. Gentleman referred to the Norwich energy action programme. I want to say a word or two about the local aspects of it. Local authorities generally have responsibilities in that area. The good news about the Bill is that it will confirm and extend, as I understand it, these responsibilities. That is good and is one of the reasons why I feel that the Bill is on the right lines.
In the late 1980s, Norwich was one of the forerunners of the programme. The Bill is relevant to Norwich, because my constituency and other parts of Norwich have large council estates, which need—for good reason, not least for the occupants—good insulation. One of the activities of that programme, which was supported by the Governments of the day, was to improve home insulation. As a supporter of that programme, I remember going around my constituency and I was involved in physical acts of insulation, whether it be draft proofing, loft insulation and so on. I suspect that many other hon. Members quite rightly involved themselves at that time.
It is important to those housing estates that building regulations, home insulation and energy efficiency are 1156 taken seriously. Norwich has usually been in the forefront of that and certainly was during the period of the energy action acheme. That scheme came to an end towards the end of 1989. It was so successful that it was extended for an extra year. Out of it was born a reorganised Norfolk Energy Forum. The forum has had to rely on the remaining funds of the energy action scheme and sponsorship and help from the Energy Efficiency Office.
The forum is doing as good a job as can be expected in the circumstances. I should like to thank its secretary, Peter Coward, for providing me at short notice with an outline of the activities that it is currently involved in, such as the promotion of energy efficiency and conservation by holding seminars on efficient lighting, domestic heating, energy use in business and industry, labelling of buildings, participation in the Royal Norfolk agricultural show, attending schools, preparing a conference centred on the Rio agenda and so on. It is engaged in good, worthwhile activities. I pay tribute to that work.
Unfortunately, the forum is having some difficulty with its funding; it is piecemeal. I mentioned the support that it gets from the Energy Efficiency Office, but it does not appear, if I am informed reliably, to have much support from local authorities. I hope that, if enacted, one of the effects of the Bill will be to get local authorities once again more involved. I am not making a party political point, because Norwich city council has been good in this respect in the past, but I was a little surprised by its lack of knowledge of the present work of the Norfolk Energy Forum. If the Bill does nothing else, I hope that it will get the local authorities on board on energy conservation and efficiency. They need stimulus.
I have indicated my support clearly enough and do not wish to take up the time of the House any further. However, I do not often quote Jonathon Porritt in support of a speech, because, on occasions, he has taken views with which I have not agreed, but in a recent article he said that the benefits of the Bill would be very great indeed and that it would create'Tens of thousands of new jobs, massive reductions in carbon dioxide, huge savings on consumers' energy bills (particularly among the less well-off), lower maintenance costs for local authorities and private householders, and dramatically lower health-care costs. Only a small proportion of the projected revenue from VAT on domestic heating would be required to make it all work.Even allowing for some slight exaggeration there, that sums up well why so many hon. Members, on both sides of the House, support the principle of the Bill.
I close by saying that I hope that the Bill is successful, not only in the votes in the Lobbies today, but in its progress through Committee and beyond. I wish the right hon. Member for Berwick-upon-Tweed every success with it. I must say to my hon. Friend the Minister that, in spite of the beta-plus, which he felt was not quite as much as he might expect from one of his loyal supporters, the Government have done a lot of work in this area. They do not get all the credit that they should. I congratulate my hon. Friend on the work that the Government are doing, and hope that the speeches that he hears this morning will give him extra energy to proceed further.
§ Mr. Andrew Robathan (Blaby)
I shall not detain the House long in supporting the speeches of the right hon. Member for Berwick-upon-Tweed (Mr. Beith) and my hon. Friend the Member for Norwich, North (Mr. 1157 Thompson). I congratulate the right hon. Gentleman on his success in the ballot. I won the first ballot that I put in for in the House. It is probably the only raffle that I have ever won. Because I shall never win again, I thought that I had better come in and support measures such as his, which are thoroughly worth while.
I shall reiterate some of the right hon. Gentleman's points. I hope that I shall not go over too much old ground, but it is important that both sides of the House make clear their support. There is extraordinary cross-party support for the measure. I am delighted to see the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) in his place, because I know that he was the starting point for the measure. Besides cross-party support, the support throughout the country, and the support of organisations such as the Association for Conservation of Energy, I have been contacted—as I am sure have many hon. Members —by my local authorities, not only Leicestershire county council but Blaby district council and Harborough district council. They actively promote and support the Bill, which says a great deal for the measure. They wish to see it receive a Second Reading. They will have to implement it and find the funds to implement it, but they and everyone who studies the cause of energy efficiency and energy conservation want the legislation.
I remember the ten-minute Bill of the hon. Member for Ceredigion and Pembroke, North. If he will forgive me, and if the House will forgive me for the pun, I do not believe that this Bill will set the world alight. It is remarkably unrevolutionary. It will not change the spendthrift energy habits of our society overnight, but it will be an excellent step in the right direction.
It is extraordinary how uncontroversial the Bill is and I hope that there will be no opposition to it. It is also remarkable how inexpensive it seems to be. We have heard the estimated cost to district councils. I hope that it will not create a great bureaucracy or a mass of regulation or legislation. I believe that it will not do that.
In 1992, the Government made major commitments at the Rio conference. The threat of climate change hangs over us all. Last week at the Banqueting house the Government set out their plans for dealing with the threat of global warming. Again. the Government's proposals are not revolutionary. I hope that my hon. Friend the Minister will ensure that we can edge up to an alpha-minus if all those measures are put in place. The proposals comprised good housekeeping and good sense.
The Bill is in the same vein. It reinforces the Government's proposals, commitments and measures and I hope that it will go some way towards changing the attitudes, culture and—dare I say it—climate of attitude in this country. I hope that it will go some way towards changing our views in relation to energy efficiency.
Hon. Members may have missed the fact that last week scientists from the university of Alabama produced evidence that the planet's temperature did not increase between 1979 and 1993. That information was based on satellite readings of global temperature and it is claimed that they are the most accurate readings ever taken. I am not a scientist or a physicist. I am an historian. I believe that I see global warming. An article in the Sunday Telegraph last weekend was entitled:Scientists pour cold water on global warmingIt suggested that we may be making too much fuss about global warming. The debate will rage, but I bet that global warming is taking place. In relation to the Bill, however, it 1158 does not matter one way or the other. Should we discover that global warming is a myth, as some people are suggesting, and it is never proven, the Bill will still be very worth while.
The Bill will reduce energy use and therefore cut pollution and pollutant emissions, power station emissions, acid rain and all the damage that that causes. It will reduce long-term costs. Thrift and good housekeeping are values which not only the Conservative party, but every party in the House, promotes. They are valuable in themselves. To encourage and assist all households to make better use of energy must make good common sense. Furthermore, we are using up finite reserves of fossil fuels. Surely we must all try to reduce the use of such resources.
At the same time, the Bill can make a great contribution towards the health and comfort of all. It is always those on low incomes who can least afford fuel. If the Bill contributes to their health and comfort, it must be supported by everyone. Who could argue against such a measure, especially if it does not increase bureaucracy?
The Bill is but one step in the right direction. As my hon. Friend the Member for Norwich, North said, it, is going down the right road. We are talking about a decent energy strategy. I want to tie that in with the measures to reduce the waste of fuel in other areas, such as inefficient motor vehicles and inefficient use of such vehicles. That point was referred to last week at the Banqueting house. We should also control pollution in that respect.
Unlike my hon. Friend the Member for Norwich, North, I am not a physicist. However, I support common sense and good housekeeping. I am also vice-chairman of the parliamentary alternative energy group, which may or may not be renamed the parliamentary group for renewable energy and the good use and conservation of fuel. I am the vice-chairman of that group because I wish to pursue policies of global and national importance. We need everyone's support. This is a national policy with global implications. Surely that is what the Government's campaign, "Helping the earth begins at home" is about. The Bill supports that campaign.
My hon. Friend the Member for Norwich, North referred to the more controversial issue of VAT on domestic fuel. The Government have been accused of imposing VAT on fuel purely to raise revenue. Of course it will raise revenue, and of course we need that revenue. However, I support the proposal on environmental grounds. The right hon. Member for Berwick-upon-Tweed and his party have been known to support energy taxes for that reason. Surely it is right to use carrots and sticks in such circumstances. We should and must be more energy efficient.
§ Mr. Nigel Waterson (Eastbourne)
Does my hon. Friend agree that it is heartening that in our policy on VAT on fuel we have essentially adopted the policies proposed by the Liberal Democrats, at least prior to the last general election, that a combination of VAT on fuel and a comprehensive package to protect the more vulnerable is the way to tackle the problem?
§ Mr. Robathan
I entirely agree with my hon. Friend. The concept of energy taxes should not only be uncontroversial; it should be supported by all parties on this country. Indeed, I suspect that within the next decade 1159 or two it will be supported by all factions and parties not only in this country, but throughout the European Community and the world.
§ Mr. Beith
For the avoidance of doubt, the hon. Member for Blaby (Mr. Robathan) was right to say that my part is on record as having supported energy taxes. However, the hon. Member for Eastbourne (Mr. Waterson) led him astray by suggesting that we agreed that VAT was a good tax to use for that purpose, when in fact we clearly and publicly decided that it was not and that a carbon energy tax on European lines was the much better way to proceed.
§ Mr. Robathan
The right hon. Gentleman defends his party, but if we are talking about energy taxes, VAT sounds like an energy tax to me. It seems to be a pretty sensible one because it goes to the root of the problem and ensures that every individual takes care of his or her own energy efficiency as part of a national policy. Currently, 30 per cent. of our carbon emissions come from energy used in domestic housing stock. As the right hon. Member for Berwick-upon-Tweed said, that is a reflection of our poor housing stock design and poor insulation.
The Select Committee on the Environment published a report last November entitled, "Energy efficiency in buildings". The Chairman of the Select Committee who, with me, is a co-sponsor of the Bill, sadly cannot be present today. However, the Select Committee stated that it wasdeeply disappointed that such little progress had been made in implementing energy efficiency since the Energy Committee's Report on the subject in 1991.That might be less than a beta-plus for my hon. Friend the Minister. The report recommended that emission reduction targets should be made for the year 2000 and beyond. It also recommended that the Government should urgently adopt some recommendations of the Energy Saving Trust. The right hon. Member for Berwick-upon-Tweed referred to that trust, which is chaired by a well-known former Conservative Minister.
The Select Committee considered the imposition of VAT on domestic heat and power. It also considered more extensive use of combined heat and power and energy labelling of buildings. The latter point relates to the Bill. The Select Committee also recommended increased use of the home energy efficiency scheme, better involvement in building regulations and a public sector campaign. All those recommendations tie in with the Bill. This Bill supports the Committee's recommendations and, indeed, the home energy efficiency scheme. Hon. Members will recall that in the Finance Bill, my right hon. and learned Friend the Chancellor doubled the amount for the home energy efficiency scheme.
We are going slowly—sometimes painfully slowly—down the right road. The measure proposed by the right hon. Member for Berwick-upon-Tweed will be valuable to the country. The long-term benefits will be felt by every individual. This uncontroversial measure pushes society, the country and individuals in the right direction. It should be part of a wider energy strategy—once again, I tie this in with the Government's announcement last week—and a change in our culture and the way we look at energy efficiency.
For more than 20 years, we have had the Save It campaign. We all remember the little stickers by every 1160 light switch and tap which said "Save It". Frankly, that campaign has not had a dramatic effect on the use of energy. I support the campaign and its principles, and I support the principles of the Bill. The right hon. Gentleman will not be surprised to know that I often disagree with him, but on this occasion I whole-heartedly support him. I support the principles of the Bill and I commend the Bill to the House.
§ Mr. Nigel Waterson (Eastbourne)
I am delighted to have the opportunity to speak in this important debate on what I think is an interesting and useful Bill, although I shall raise some questions about it. I join those hon. Members who have spoken in congratulating the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on winning this particular raffle and having this opportunity. It is a pleasure to follow the powerful speeches of my hon. Friends the Members for Norwich, North (Mr. Thompson) and for Blaby (Mr. Robathan). They are both very knowledgeable on this subject and made outstanding contributions.
I believe in giving credit where credit is due. The Bill is an interesting and timely piece of legislation. Knowing the pressure that is on right hon. and hon. Members to sponsor legislation when they come high in the ballot, it is a credit to the right hon. Gentleman that he has made this choice.
I hope that he will not take this as too much of a backhanded compliment, but it is pleasant and refreshing to have such a serious contribution on this issue from the Liberal Democrats, rather than the empty sloganising on value added tax on fuel, which many of us endured until the recent announcement of the Chancellor's package. It is good to see that contribution, and I do not want to sound churlish in failing to welcome it.
Speaking of churlishness, I was surprised to see the article in The Daily Telegraph on 29 January by Mr. Jonathon Porritt, which has already been mentioned. The general tone of that article was grudging, especially his suggestion that, despite widespread support—widespread support for the Bill has been shown in this debate by hon. Members on both sides of the House—some Tory Memberswill try and talk the Bill out at its Second Reading".That is a disgraceful suggestion. We have had, and will continue to have, an adult, responsible and interesting debate on the Bill. People like Mr. Porritt would do well to drop that grudging and carping approach to the Government. In many ways, the Government are leading the arguments on energy saving and energy efficiency. Undoubtedly, we will hear from the Minister that the Government welcome with open arms ideas and suggestions from all parties in the House on this important subject.
The whole issue of the Rio summit has rightly been raised in the speeches we have heard so far. Undoubtedly, we are all in favour of energy conservation and energy efficiency. The central question at the heart of this debate and similar debates is: which is the best route to achieve that object? I have some questions about the Bill which may well lead to discussion and possibly amendments being tabled in Committee—I hope that the Bill will reach Committee.
In fairness to the right hon. Gentleman, he foreshadowed that there would be some interesting and 1161 lively debates in Committee on certain aspects of the Bill, and made it clear that he was open to suggestions for amendments to the Bill, whether from the Government or, indeed, Back-Bench Members.
The other great question is what can be achieved in this area. What is the prize that this Bill or similar legislation is aiming to reach? The Department of the Environment —this may have been mentioned by one of my hon. Friends—estimates that 20 per cent. of the United Kingdom's annual £50 billion spending on energy could be saved in some way by energy efficiency and saving.
We have already heard about the Government's target of a 15 per cent. saving in public buildings and so on to 1996. As part of that campaign, I assume that we can include the somewhat sinister lighting arrangements in certain corridors in this place, whereby one activates the lights by walking along the corridor. There is something slightly Orwellian about it, but if it saves energy, so be it.
There has been criticism and an attempt to mark out of 10 or 20 the Government's performance on their efforts to, as it were, clean up their own buildings. We know that, as part of the "Making a Corporate Commitment" campaign, they have made a commitment to saving energy in Government Departments and the like. In a written answer last June, we saw the progress, if that is not too ambitious a word, that individual Departments have made in this field.
Overall, Government Departments have invested a total of more than £9 million on energy efficiency, although, to quote the words of the Library briefing on this subject,progress towards the 15 per cent. reduction appears to have been at best slight".The figure of 0.2 per cent. has been mentioned. 'That is disappointing, and I dare say that no one will be more disappointed than my hon. Friend the Minister. But at least we are moving in the right direction, as my hon. Friend the Member for Blaby said. We simply need to pick up speed. I do not know whether it is a question of a beta-minus or a gamma-plus, or simply a matter of "Stay behind and see me later". I do not want to be drawn into that sub-debate on which we seem to have embarked.
It is important for the Government to set an example. I am sure that they will redouble their efforts to reach that target. We all know, because we are so aware of it these days, the effect of CO2 emissions on global warming, and so on. The Government have made a commitment to cutting those emissions by 10 million tonnes per annum by the year 2000. We also know that one quarter of those undesirable emissions come from domestic buildings. Therefore, a reduction in those emissions is a large part of the prize for which we are aiming. Other benefits will be a better environment generally and, indeed, a more competitive British industry.
I make a plea—this has already been referred to in the debate—for those in our community who are most likely, all other things being equal, to benefit from energy-efficiency measures. In my constituency of Eastbourne, some 30 per cent. of the population are over retirement age. It is often precisely those people who live in older, more draughty and more difficult-to-heat homes who need the sort of attention that this Bill and other programmes might produce.
Energy efficiency is important for all of us, but it is dramatically necessary for the retired and the elderly in our community because the sort of savings on the domestic budget that are within their grasp with a bit of help, 1162 whether it be advice or money, is staggering and completely dwarfs matters such as VAT on fuel and the like. It may help to review some of the existing schemes for residential and other properties, and indeed the schemes for industry and commerce.
One of the questions to which I will return is whether we are in danger of having too many schemes, projects and legal requirements. The Bill rightly raises the central issues again, and that cannot happen too often, but I wonder whether we should be looking to beef up what is there already. I will return to that point, which could be developed in Committee.
We have heard about the climate change programme which was published on 25 January and which set out the Government's plans for reducing the output of carbon dioxide. We have heard also about the Energy Saving Trust. I believe that Mr. Porritt, and those like him, have been unnecessarily grudging about the trust.
The trust was established in November 1992, and it is a joint venture involving the Government, British Gas, the 12 regional electricity companies in England and Wales, Scottish Power and Scottish Hydro-electric. Its function is to propose and develop new energy-efficiency programmes, particularly in the domestic sector. It is a bit early, and a bit rich, to be severely critical of a body which was formally set up only in November 1992. These things do take time.
Some of the things at which the trust is looking are financing the reductions of gas consumption in housing, smaller-scale applications of combined heat and power and the provision of grants. That is important for home owners who wish to change their central heating boiler. It is said, rightly, that some of the schemes are small, but when they are added up across the country they will make a significant contribution.
We have heard also about the Energy Efficiency Office's programmes, and how those are being strengthened. We have heard also of the advice and information that the programmes are providing. The Energy Efficiency Office has been significantly beefed up. Its budget for 1994–95 is now more than £100 million—17 times the levels of expenditure on it in 1979–80.
Hon. Members—in particular my hon. Friend the Member for Norwich, North—have spoken of the long-term importance of the changes in building regulations to ensure that all new properties are as energy efficient and as insulated as we can make them.
I will touch on non-domestic energy-efficiency schemes, although I appreciate that that is not the thrust of the Bill. There is the energy management assistance scheme which, among other things, subsidises consultants' fees for identifying opportunities in this field.
The House has heard about the "Making a Corporate Commitment" campaign. More than 1,600 organisations have already signed up to the campaign which seeks to increase management commitment to energy efficiency in both the private and public sectors. The Government and other public bodies have given their support for that campaign. There are also the 11 regional energy efficiency officers who encourage energy-saving programmes.
On the domestic side, we have touched rightly on the "helping the earth begins at home" campaign. That campaign is trying to increase the awareness of the link between energy use in the home and the threat of global 1163 warming. The campaign's broad aim is to make sure that people learn to use energy more efficiently. I have come across one or two examples of that during my research.
Part of the campaign, which was launched by the Secretary of State, was to see that all major retailers contributed what they could to lowering domestic electricity consumption and expense. That was done mainly by selling low-energy light bulbs at half the retail price. I understand that use of low-energy light bulbs saves 85 kg of carbon dioxide annually, and will save £10 on the average fuel bill. I gather that the bulbs are as bright as ordinary light bulbs, but they use only one quarter of the electricity and last eight times longer than ordinary light bulbs.
I come from Yorkshire and, quite unfairly perhaps, we Yorkshiremen are said to be extremely careful with our money. Well, that seems to me to be a good deal. When the debate is over today, and I return to the bosom of the Waterson family, I shall be raising those figures with Mrs. Waterson to ensure that we can make those savings ourselves.
On the same basic subject, it was perhaps little noted at the time that the electricity industry regulator, Professor Littlechild, made a contribution towards encouraging conservation. He proposed that electricity companies spend £100 million by 1998 to promote energy-saving devices, such as energy-efficiency fridges, low-power light bulbs and energy-efficient personal computers. That all adds up to helping the basic thrust of the campaign, the aim of which everyone is agreed on.
The House has also heard about the best practice programme, which is moving in a similar direction, and about home energy labels, which have been promoted by the Energy Efficiency Office, and voluntary appliance labels. Those give consumers a guide to the energy efficiency of refrigerators and similar facilities in the home.
It bears repetition that the central importance in all that is the home energy efficiency scheme, which provides grants for basic energy-efficiency measures. It was important, and rightly welcomed, that the Chancellor almost doubled the provision for the scheme in the Budget. The scheme was extended not only to pensioners but to those who are receiving disability living allowance. It is reckoned that the extra £35 million a year will provide grants to about 200,000 households a year. That would bring the total number of households receiving grants to almost 500,000 throughout the country.
I will return to the theme that I hope will wash over into Committee. That is my concern that there is a danger of dissipating legislative energy and the enthusiasm of people who are involved in the field in too many different projects and schemes. The right hon. Member for Berwick-upon-Tweed conceded in his speech that there was a risk of diverting resources into a less than fruitful direction.
I must ask whether local councils are the best vehicle through which the process can be pushed forward. Is there a problem, particularly with the private housing stock, that council inspectors will be seen as busybodies? There was a lot of feeling in my constituency when the local council started its survey of private housing stock. People felt that the inspectors were demanding access to private homes and there was some confusion over the precise powers that they 1164 enjoyed. One would not like to see such a situation developing into a tabloid story if the Bill were to end up on the statute book.
An important way of encouraging energy efficiency is a subtle combination of the role of the market, publicity and information and exhortation. A combination of those three subjects in a triangle could make people see that it is in their own interests to do what they can to save energy. I will mention two aspects of what I call the market forces approach. In November last year, the Secretary of State for the Environment urged all companies to consider the total impact of what they did on the environment. He called for the publication of energy efficiency targets and their inclusion in companies' annual reports.
Environmental reporting is becoming much more the norm for large and even medium-sized public companies. It is important that the matter is taken seriously by management, is monitored and reported on the annual report, and that it leads to constructive debate by the shareholders of the company at its annual meeting. That is a major contribution.
Another aspect of the market forces argument is the proposal, again made by the Department of the Environment, that lending institutions should be encouraged to play a part in encouraging energy efficiency by providing home energy ratings when properties change hands. As I understand it, when one went to buy a new property, it would have with it, apart from the other warranties and descriptions, a rating for how energy efficient it was. It was also proposed that the lending institutions should provide so-called "green loans" to encourage householders to invest in energy-efficiency measures. That strikes me as potentially a powerful way of reaching the agreed goal in energy conservation.
If the extent to which people's properties are energy efficient affects their pocket, energy-efficiency measures will be taken up. That could work in the same way as insurers, particularly from some parts of central London, are willing to give significant discounts on premiums if householders can demonstrate that they have taken significant precautions against break-ins and burglaries. That is something which we should encourage. Perhaps my hon. Friend the Minister will dwell on that matter in his speech.
Another major question—I appreciate that we cannot go into it in detail today—is how much the proposals will cost. The Bill is a little coy, perhaps not unreasonably, about the cost implications. The right hon. Member for Berwick-upon-Tweed touched on the estimates, which I have also seen, provided by at least a couple of local authorities, of the start-up and continuing costs of the legislation. I must say in all honesty to the right hon. Gentleman that I am sceptical about some of the calculations. That matter can also be examined in more detail in Committee.
I am worried not only about the cost but about the potential extra bureaucracy involved. We have quite enough local and central Government officials as it is. We should look again at that aspect, especially because, as I said earlier, the legislation might involve surveying private housing stocks, often substantial stocks, across the country in every local government area.
In short, I am not yet fully convinced that the Bill is the answer. I am convinced that it is a useful contribution to the broader debate and that it deserves to go into Committee and be discussed in more detail. I still have 1165 reservations about whether it would not be a better use of resources and time to beef up existing schemes, of which there is already a range in operation. However, the Bill deserves a fair wind, at least for the moment. Again, I congratulate the right hon. Gentleman on winning this particular lottery.
§ Mr. Roy Thomason (Bromsgrove)
I join other hon. Members in congratulating the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on not only winning the lottery but presenting the Bill. I am delighted that he chose to put his luck to the production of this Bill rather than to other forms of betting that might have been more directly financial advantageous to him.
In an earlier exchange, it was suggested that the subject of energy conservation was a little boring. Having listened to the speeches so far this morning, "boring" is not the adjective that comes to mind. The debate has been extremely well informed and interesting. Extremely worthwhile contributions have been made by all hon. Members that have spoken. I am particularly grateful to my hon. Friend the Member for Eastbourne (Mr. Waterson) for his interesting excursion into the various schemes that are available to encourage energy efficiency, and for the tribute that he paid to the work of the Department of the Environment.
My hon. Friend the Member for Norwich, North (Mr. Thompson) said that he would give the Government a B-plus for energy conservation on a school report. I would give the Government an A-minus.
§ Mr. Patrick Thompson
A great deal will depend on what our hon. Friend the Minister has to say in his speech. It is possible that one of us may have the chance to intervene to give the Government alpha-plus or whatever.
§ Mr. Thomason
I would have put a comment on the school report saying, "Potentially scholarship material, but needs to pay just a little more attention to get there." My hon. Friend the Member for Norwich, North has made the point precisely. That attention may well be given during the Minister's remarks.
I welcome the Bill. I shall support it, but only as a starting point. It raises issues which require further consideration. I am not yet satisfied that it is precisely correct in its drafting and approach. But we need to have the discussion; we need to have initiatives taken. Therefore, the Bill is to be welcomed as a move in that direction.
Let us set the Bill in its context. The Government were active at the Rio summit in encouraging the reduction of emissions into the atmosphere internationally; this is clearly an international problem. We cannot simply deal with it nationally. We must encourage Governments in other countries to take action, too. We must be seen to do our part.
I am glad that the Government have set targets for CO2emissions up to the year 2000. However, I hope that before long they will he prepared to extend their targets beyond the year 2000. It seems to me that we should not simply create the barrier of that year and wait until we are almost at that point before we start to look beyond. In the initiatives proposed in the Bill we are perhaps setting the 1166 ground for the Government realistically to consider the opportunities for establishing additional targets after the year 2000.
Fuel prices have been falling for the domestic consumer in Britain in the past two years as a direct result of the initiatives of privatisation in the gas and electricity industries. Against that background, notwithstanding the imposition of VAT on gas and electricity, there is a danger that the need for energy conservation is not borne in mind by the general public. They see their bills drop year by year, but if we are to encourage people to be conscious of the need for energy efficiency, we almost need to see fuel prices rising.
It is a strange and awkward argument. Of course, we do not want members of the public—our constituents—to have to pay more for fuel. Yet we want to encourage energy efficiency. The best way of doing that is to put up prices. So, starting from the awkward position of seeking to encourage energy efficiency but not wanting to put up prices, we have to consider other ways of drawing to the attention of the public the importance of reducing their liability.
The Bill goes a long way to creating the publicity which makes people energy conscious. It is a limited measure. My first criticism of it is that it deals only with domestic buildings. Domestic buildings are an important part of energy usage. Some 30 per cent. of the final United Kingdom demand goes into domestic buildings. It has been suggested that as much as 46 per cent. of energy used for space heating methods and 15 per cent. of energy used for water heating could be saved by energy conservation measures. This is important, but so is the commercial and public sector which—through its buildings rather than industrial usage—consumes about 13 per cent. of total energy used.
Those two sectors represent 43 per cent. of United Kingdom energy demand. We should deal with the 13 per cent. used in commercial and public buildings, as well as the percentage used in the important domestic sector. The two sectors also account for about 50 per cent. of United Kingdom carbon dioxide emissions, which is why we need to establish those savings.
The average household now uses the same amount of energy as it did in 1970. Higher heating and lighting standards are being attained, but building regulations have also improved. New households are using two thirds of the space heating required in pre-1976 homes. The achievements have been enormous, but we have a long way to go.
Other hon. Members have referred to improvements in the building regulations and to the fact that further action can be taken in that sphere. In principle, I endorse those improvements—on which the Government are consulting —but I must add the proviso that there is a danger that we may be using building regulations as the principal weapon to encourage energy efficiency and forgetting the importance of existing buildings.
§ Mr. Patrick Thompson
I support the improvements in building regulations and I hope that my hon. Friend will agree that it is not a question of more bureaucratic control, but of getting the message across about energy-conscious building design and improved design quality. Those are more important than increasing the number of regulations, which can often be misinterpreted.
§ Mr. Thomason
My hon. Friend is right, but there is a danger that the proposed building regulations will be over-regulatory and that we will create homes from which so little energy will be lost that other difficulties may arise, as there will also be very little fresh air. We need to encourage greater awareness of energy efficiency in building design, but the general public must be aware of the advances in energy efficiency for existing buildings, because that is where the maximum savings can be achieved.
The pay-back from even the simplest energy-efficiency scheme is enormous. People will get their capital back in a few years. Investing in energy-saving schemes is a good strategy. People who can afford to do so should introduce such schemes—even modest schemes—if they have not already done so. I understand the difficulties for people on low incomes, who do not have capital available to finance energy-saving schemes even though they would pay lower service costs for heating and lighting as a result.
I have several reservations about the Bill. Local government can produce schemes, but one cannot, and should not, force people to introduce energy-efficiency schemes. The Bill fails to deal with that problem and it must be considered carefully. The proposed local authority plan should be directed towards encouraging the public to invest voluntarily in energy efficiency rather than towards bureaucratic mechanisms. I am worried that there is too much emphasis on bureaucracy and structure and not enough on the end product of persuading people to invest in such schemes.
I think that I am likely to be the only member of the Select Committee on the Environment to speak in this debate, as I do not see any of my colleagues in the Chamber. Perhaps I should therefore say a few words about the report that the Committee produced on 3 November 1993. It is a considerable tome—three very large volumes —and the Committee took a great deal of time hearing the evidence and assessing the conclusions produced in volume I.
The report is important because it directly bears on the thinking behind the Bill. Our inquiry revealed the multiple benefits—environmental, social and economic—of a comprehensive and adequately funded energy improvement programme. Examples include the benefits of reducing consumers' energy costs, which is such a vital selling point for investment; attacking fuel poverty and ill health by dealing with the problems of people on lower incomes and helping them to protect their homes adequately from cold and damp; reducing total energy consumption and the adverse effects of energy production, conversion and consumption, thus alleviating climate change, air pollution, acid rain and waste disposal; and reducing the costs of importing fuels and making United Kingdom companies more competitive. We must not forget the latter, as it is not often mentioned in debates on energy efficiency.
§ Mr. Stephen Milligan (Eastleigh)
The need to retain the competitiveness of United Kingdom companies is important. Does my hon. Friend agree that the Liberal Democrats' carbon tax would impose huge additional costs on industry and would have the wrong effect?
§ Mr. Thomason
I confirm that that is the case. It is extraordinary that the Liberal Democrats have proposed a measure that would directly attack British industry at a 1168 time when it is critical that it should maximise its competitive advantage. British industry now has a chance to compete with every country in the world on both quality and cost and it would be disastrous if that advantage were thrown away because of the introduction of a carbon tax, which would be a burden on industry as my hon. Friend said.
§ Mr. Simon Hughes
I had better not let that remark go without a response, or the hon. Member might be persuaded that there is no response. He must know that the argument for the carbon tax is that it would bite equally throughout the European Community, but—more impor-tantly—the industrial and commercial sectors, which make up 18 per cent. of users, would also have to pay tax on fuel use. The Government have sought only to charge the domestic user.
Will the hon. Gentleman reflect on the fact that the Conservative party and its policies might be more popular if the Government had introduced a carbon tax on all users, so that everyone paid equally, rather than imposing value added tax on domestic fuel use?
§ Mr. Thomason
Unfortunately, the hon. Gentleman's proposals, by adversely affecting the competitiveness of British industry, would ensure that many British workers would not have an income to pay the fuel tax. He would create unemployment by sapping the vitality of British industry's competitiveness.
I find the argument that a carbon tax must be introduced on a European basis fascinating. Apparently, the Liberal Democrats are not seeking to impose a carbon tax in the United Kingdom unless it is also introduced throughout Europe. It must therefore be seen as an example of their intention to give European institutions decision-making powers over this country.
§ Mr. Peter Atkinson (Hexham)
Does my hon. Friend agree that, even if a carbon tax were applied throughout Europe, it would make European industry much less competitive compared to Asia and other markets, so it would have the same disastrous effect as if it were applied only in this country?
§ Mr. Thomason
My hon. Friend is absolutely right, and makes a powerful point.
The Select Committee made the further point that energy efficiency generates jobs and achieves net improvements in the balance of trade, which is why it should always be supported, with reasonable provisos. The Committee concluded, however, that if those multiple benefits are to be achieved, it is essential that a package of measures be developed and co-ordinated between several Government Departments and the other key players in the field, of which local government is one. The Bill deals with that matter.
Central Government are taking action to make greater energy savings in their buildings and other areas of responsibility. It is essential that those initiatives be built upon and that those Departments that appear a little reluctant to take on the challenge be encouraged to follow the example of the best Departments.
§ Mr. Simon Hughes
The hon. Gentleman must not mislead the House. The Government had a five-year programme for reducing energy use in their buildings. After two and a half years, energy use had gone up, not down. If that is progress, I am a Dutchman.
§ Mr. Thomason
I shall not comment on the international aspects of members of the Liberal party, but it is clear that the Government are bringing their energy use under control, and that must be welcomed.
Organisations such as the Energy Saving Trust, to which my hon. Friend the Member for Eastbourne referred earlier, the energy utilities, regulators and consumers must all be involved in that exercise. I pay tribute to the energy generators and distributors because they are participating in an exercise that may seem contrary to their commercial interests. They are participating in schemes that will lead to a more efficient use of energy, and must be congratulated on that.
The role of local authorities is at the heart of the Bill. The potential for cost savings within local government is considerable, as its total energy bill was estimated at £800 million in 1989. Even a small percentage saving would therefore have a knock-on effect on reducing carbon emissions. The contribution to reducing greenhouse gases is significant, as local government activities contribute some 10 per cent. of United Kingdom emissions. Public buildings alone contribute some 4 million tonnes of carbon emissions a year.
The local authority associations have set targets to reduce local authority energy consumption in their non-domestic buildings by 15 per cent. over the five years ending on 31 March 1996. They are to be congratulated on that important initiative, but the pledge is limited to public buildings and does not apply to local authority housing stock. Within the means available, I hope that local government will pay greater attention to the potential for reducing energy loss from their housing stock.
§ Mr. Brandreth
My hon. Friend mentioned the distinction between people's homes and Government buildings, whether owned by local government or central Government. Better results will be achieved with a bottom-up rather than a top-down approach. People see that they can save money in their own homes or businesses. The problem with central Government and local government is that there is no sense of ownership and people do not recognise the fact that they are spending taxpayers' money. They feel that the problem is remote, which is why we have not seen the impact that we should have seen in reducing energy use in central Government and local government. I am concerned that the Bill will result in audit and exhortation, without real action.
§ Mr. Thomason
My hon. Friend is absolutely right. Clearly, there is an ownership problem in the public sector, which is one reason why privatisation has been such a success in so many industries. The savings that can be made, with a direct impact on business, can then be appreciated by all concerned in that business. In the public sector, employees do not perceive the problems to be theirs and are not personally involved in the operation of the business.
§ Mr. Milligan
Further to the powerful point made by my hon. Friend the Member for City of Chester (Mr. Brandreth), who is responsible for the heating bill of the House of Commons? We have often noticed how over-heated our offices are. The right hon. Member for Berwick-upon-Tweed (Mr. Beith) sits on a Committee that could have some influence in that matter. Should we not put our house in order before we criticise others?
§ Mr. Thomason
I am grateful to my hon. Friend for making that point. Many of us have complained about the heat in the Corridors.
§ Mr. Dafis
I am a little worried that the perception is being projected that this is a top-down process. There is a mandatory requirement for local authorities to act in a certain way, but the Bill provides for a great deal of consultation locally. One of the great advantages is that that will involve people in understanding the importance of energy efficiency for everyone. It will be part of the process of creating a new culture and attitude to energy efficiency, referred to by an hon. Member earlier as the culture of thrift and good husbandry. It is part of the consequence of a green economy.
§ Mr. Thomason
The hon. Gentleman is right if the Bill is successful. Although I support the Bill, I am worried that there may be too much emphasis on bureaucracy and riot enough on encouragement. I hope that the Bill will lead to the cultural change to which the hon. Gentleman referred. I want to be convinced of that, but I am not sure whether the Bill is phrased in the correct manner to maximise that point.
§ Mr. Patrick Thompson
Before we move too far from the subject of the heat in this building, may I tell my hon. Friend that my wife came into my office only the day before yesterday and was amazed at the heat. She made a strong energy efficiency speech to me on the spot, which I shall never forget. My hon. Friend's point relates to the one that I made about the relationship between Departments. We need to open up the matter, not in a bureaucratic way but in the manner suggested by my hon. Friend the Member for City of Chester (Mr. Brandreth), by improving communication and awareness.
§ Mr. Thomason
I agree with my hon. Friend. I am impressed by the role of Members' spouses. My hon. Friend the Member for Eastbourne said that he was going to rush home to talk to his spouse about new lighting provisions in the Waterson household and now my hon. Friend the Member for Norwich, North tells us that his spouse has made representations to him about the heating in this building. Communication obviously exists between Members and their spouses on energy efficiency. Let us hope that it is replicated in the public at large as a result of the Bill.
§ Mr. Simon Hughes
On the issue of energy efficiency in this building, I sit on the Accommodation and Works Committee and the hon. Gentleman is right to say that my right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) sits on the House of Commons Commission. The Committee has made provision in the budget for work on the building to improve energy efficiency so that we do not have over-heated offices and waste energy. When people outside have a go at us about our capital expenditure programmes, we can tell tham that in the long term we shall have a sounder, greener economy, which I hope hon. Members and their spouses will welcome.
§ Mr. Thomason
I am delighted that the hon. Gentleman refers to those improvements. We look forward to seeing their implementation at an early date, within, I trust, fair and reasonable budgetary provisions, rather than the inflated figures that we have heard mentioned for improvements in this building.
§ Mr. Milligan
My hon. Friend mentioned inflated estimates. Does he share my shock at another Committee's proposal to spend £15 million on refurbishing kitchens in the House? Is not saving energy and using the available money to improve energy efficiency in this place a far greater priority than spending money on the boondoggle of improving the kitchens?
§ Mr. Thomason
That was my point, but, Mr. Deputy Speaker, I appreciate that we may be tempting you to correct us if we discuss improvements to the House other than those relating to energy efficiency.
The Department of the Environment has made supplementary credit approvals of up to £3 million in 1993–94 for energy investment in English local authorities' general administrative buildings. It is another example of the Department's awareness of the need to take action, which I hope will be encouraged.
Local authorities have the potential to improve energy efficiency standards and, therefore, the affordable warmth of their housing stock as well as of their public buildings and to join combined heat and power or district heating schemes. The Bill should, if not directly at least by implication, cover such issues. Local authorities are already taking action that is germane to their ability to implement their plans, as envisaged in the Bill.
The Green House demonstration programme was introduced by the Department of the Environment in 1991–92. Its aim was to establish a network of replicable projects throughout England to show the scope for securing energy-efficiency improvements in council housing. The scheme was applauded by many witnesses at the Select Committee's inquiry which described it aspotentially one of the most effective measures ever introduced by the Government directly for local authorities.The Select Committee was told that schemes funded through the Green House programme have achieved energy savings of 40 per cent., with 50 per cent. reductions in CO2 emissions; but it was also told that the surface of the problem had barely been scratched. In its evidence, the Department of the Environment said that £5 million was being allocated to schemes to be undertaken in 1993–94, but this is to be the final year of the programme.
The Department expects local authorities to implement the good practice lessons of the programme through their housing investment programmes, but I urge the Minister to consider carefully the success of the green house programme and the possibility of extending it if resources allow; the Select Committee was encouraged by the results. It was, however, concerned that the achievements and good practice should not be lost. It hopes that the Department of the Environment will ensure that local authorities are given sufficient motivation to replicate the green house concept through the targeted use of capital receipts, credit approvals and changes to leasing regulations for schemes that meet similar criteria. I shall go into more detail about that later.
What more might local authorities do and what could they do under the Bill's proposals? Local authorities could improve their contribution to energy-efficiency programmes in a number of ways. The Select Committee recommended that for local authorities with low levels of capital receipts the Government should grant further credit approvals for measures meeting similar criteria to those used for the Green House programme's projects. That would encourage a number of local authorities to embark 1172 on schemes compatible with the Bill's proposals, which they might feel unable to do at the moment and which they are not considering seriously.
Furthermore, the Government could change the conditions of operational leasing so that local authorities could invest in more energy-efficient forms of heating, as they should. The Committee found it nonsensical that the Department of the Environment was encouraging local—
§ Mr. Jim Cunningham (Coventry, South-East)
Why should the Government make credit approvals rather than make grants available? I am sure that the hon. Gentleman knows that these days many local authorities are struggling to find resources, so why should not the Government give them grants rather than credit approvals?
§ Mr. Thomason
Credit approvals are often more effective. As the hon. Gentleman knows, the revenue implications for raising the capital may not be substantial; it is the permission to raise capital which is most important for many councils. That is why I believe that credit approvals are an excellent way to encourage but not force local authorities to take a particular course of action.
Grants are not always sufficiently finely tuned. They may distort the market and may not be directed in the most cost-effective manner, whereas, if the local authority takes charge of the scheme through credit approvals that it can shape to meet particular schemes based on the requirements of its neighbourhood, the money may be used more cost effectively.
I was saying that the Select Committee thought that it did not make sense for the Department of the Environment to encourage local authorities to install inefficient forms of heating merely because they were moveable assets with a residual value—for example, storage heaters as opposed to gas, central or district heating or insulation.
As I said earlier, the present arrangements mean that the operational leasing of moveable units of heating is easier for local government to finance. The restrictions apply to capital investment on static systems and it would, therefore, be appropriate for the Department of the Environment to allow local government to lease static systems such as boilers. That does not happen at the moment. If operational leasing could be extended to fixed assets of an energy-efficient nature it would assist local government to put substantially more money into energy-efficiency schemes compatible with the plans produced under the Bill.
More local authorities should incorporate energy efficiency into their other programmes such as city challenge. As has been said, many companies now produce green annexes to their annual report and assess their contribution to the environment as part of their financial statement. We must ensure that consideration of the importance of energy efficiency runs through central and local government's policies and thinking. The issue should be taken into account in projects such as city challenge.
§ Mr. Jim Cunningham
Does not the hon. Gentleman realise that although we would welcome the involvement of the city challenge initiative in energy savings, very few local authorities win under that scheme? In other words, a number of authorities compete every year, but resources are limited.
§ Mr. Thomason
Some authorities may not win, but some do win. My argument is that they ought to incorporate energy efficiency in their bids. They ought to think in terms of energy efficiency and incorporate that in city challenge. There is insufficient evidence that that lesson has been learnt. A steer from Ministers to encourage local authorities, when putting in city challenge bids, to take energy efficiency into account would be welcome.
§ Mr. Chris Smith (Islington, South and Finsbury)
I fear that the hon. Gentleman is doing less than justice to some of the excellent local authorities and their work on city challenge. I direct his attention to the city of Leicester, where the city challenge work has a full component of energy efficiency work.
§ Mr. Thomason
I believe that the words that I used were "if more local authorities incorporated energy efficiency into their schemes", and that is my argument. Although there are good examples—the hon. Gentleman has referred to Leicester in that context—several authorities are not considering energy-efficiency in their bids. We want them all to consider energy efficiency.
§ Mr. Patrick Thompson
That is quite important, because there is the issue of emphasis in local authorities. Earlier, I mentioned the fact that Norwich was one of the cities that took a lead under the energy action scheme. The key is the word "action". Now we have the Norfolk Energy Forum, which I praised earlier, but I think that my hon. Friend is saying that we want action, not discussion. I emphasise that perhaps we ought to go back to calling organisations "energy action" rather than energy forums.
§ Mr. Thomason
That is absolutely right. We need to ensure that energy efficiency is in people's thoughts.
The hon. Member for Islington, South and Finsbury (Mr. Smith) referred to Leicester city council. I was saying that more local authorities need to take energy-efficiency measures into account. Let me give him another example of a local authority that takes energy efficiency into account, to emphasise that the debate is not of a party political nature. When the Select Committee visited Newcastle, it found that insulation work had been carried out by Neighbourhood Energy Action, the city council and an organisation called Keeping Newcastle Warm, using city challenge funds. That is another example of work that is being done through city challenge. However, we need more of that; energy efficiency should be taken into account all the time. In Newcastle, people demonstrated that there is the potential to move beyond the basic draught-proofing, loft insultation and energy advice measures of the home energy efficiency scheme.
In Glasgow, the Select Committee found that the city council and Heatwise Glasgow were working towards more effective and comprehensive energy improvement schemes, although not using city challenge money.
The Select Committee would like more local authorities —I emphasise more—to introduce home energy labels for their housing stock. It is notoriously difficult to encourage tenants and landlords to invest in energy efficiency, but the advantage is that higher rents can be offset against lower energy bills. Labelling would also allow local authorities to set targets gradually to improve their housing stock.
It would also be helpful if more local authorities took up the opportunities offered by contract energy management, where specialist energy management companies seek out 1174 and finance oportunities in host organisations and receive a proportion of the fuel bill savings generated. Contract energy management offers special benefits to public sector organisations, which have limited resources to invest in capital programmes.
That brings me back to the argument about the problems of capital investment by local authorities that was made by the hon. Member for Coventry, South-East (Mr. Cunningham). Here is an example where, without putting out capital investment, local authorities can be involved in achieving energy efficiency savings that have direct financial benefit to them, by partnership with the private sector.
§ Mr. Jim Cunningham
Does the hon. Gentleman recognise, however, that many local authorities, such as Coventry, are confronted by an extensive capital investment programme, whether it is through council housing schemes or bringing in consultants. There is a big capital cost, but in the longer term, obviously, they can recoup that. Does he also recognise that authorities such as Coventry city council have been involved in energy-saving schemes for many years, but that they have a limit when one considers large council housing stocks?
§ Mr. Thomason
I am fascinated to see the rush of Opposition Members to defend local government, when I have not criticised local government. I have said that more local authorities should promote energy efficiency and that better practice should be encouraged. Of course, there are good schemes to which I have referred, and to which the hon. Member for Islington, South and Finsbury referred, which have been implemented by local government. I suggest that we need more of those schemes. We need the Government to play a part in encouraging local government to take up those schemes. Some of the schemes are not sufficiently widely known and not appreciated, and the financial savings that can be generated are not widely understood.
The importance of the debate and the Bill lies not only in the scheme that it advocates, but in the facts that, for three or four hours, the House is debating energy efficency; we are making ourselves and, through ourselves, more people in the country, aware of the importance of energy efficiency; and we are driving towards the objectives that everyone who has contributed to the debate so far agrees should be aimed at.
§ Mr. Simon Hughes
May I reinforce the point that the hon. Gentleman has just made? My right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) came second in the ballot for private Members' Bills. Does not the fact that he chose this subject for his Bill show the importance that we attach to energy conservation? It says that we Back Benchers regard this as one of the most important things that we can do something about. I hope that that message will get across.
§ Mr. Thomason
I am sure the hon. Gentleman makes an important point.
The difficulty with contract energy management schemes and some other parts of the European Community's Save directive is the perceptual barrier that is to be overcome by local authorities. Many authorities are already undertaking conservation work, but there is a perception in local government that schemes take away in-house decision making. We need to make it clear to 1175 local government that, by contracting out to an operator who will achieve savings and make recommendations that can be introduced at no extra cost, it is not giving away a power, but, on the contrary, showing that it can provide a better service to people who use its buildings or live in its houses. The best practices of local government should be replicated throughout.
I hope that the Government will try to encourage energy management throughout the public sector and, in particular, will acknowledge the work of contract energy management.
If more local authorities were allowed to hold minority interests in contract energy management companies, further progress might be made. Partnership between local government and the private sector in combined heat and power projects is another, perhaps more important, area where the best needs to be replicated more universally.
It would be helpful if more local authorities worked in partnership with specialised energy organisations, such as the Select Committee witnessed between Glasgow city council and Heatwise Glasgow, as a result of which tremendous energy improvements and savings have been achieved in the city's local authority housing stock.
Those are some of the things that can be done in the context of the Bill's proposals and some of the things that are already being done. Let me now deal with the terms of the Bill.
The Bill encourages schemes that should have a good pay-back period. Cavity wall insultation, which costs perhaps £300 to £500 to install in an average property, is expensive. Only 22 per cent. of the existing housing stock has it, yet that investment will be paid back in between four and seven years. The return is not brilliant, but it is satisfactory and people should be made aware of its advantages.
Double glazing is relatively even more expensive because its pay-back period is between 10 and 20 years. It is marginal whether it is cost effective, yet cavity wall insulation has been installed in only 22 per cent. of the housing stock, but double glazing has been installed in 51 per cent. The reason for that, I suspect, is that people see other advantages for double glazing: it improves the appearance of the property or adds convenience.
We need to increase the perception of other forms of insulation such as cavity walling to make people conscious of the savings that are available and of the advantages. The fitting of double glazing should be encouraged—I am not complacent about only 51 per cent. of properties having it —but there is a lesson to be learned from the difference in the installation figures for those two forms of energy installation.
Another area that is early in development in this country, has a low take-up and yet is extremely effective is condensing boilers. The pay back can be as little as two to four years, yet few people are fitting them. I hope that the plans envisaged in the Bill will lead to greater use of condensing boilers.
One would think that draught proofing was the simplest form of energy efficiency. It cuts, on average, 23 per cent. of heat loss. It can have a short pay-back period; the money invested can be returned in as little as two years—or 10 years if more expensive schemes are used. Draught proofing is easy to install, but is fitted in only 35 per cent. 1176 of the housing stock. Virtually two thirds of the housing stock does not have the most elementary form of energy-efficient device, which should be encouraged by virtue of the Bill
Water tank insulation also has a quick pay-back period, but, in contrast to draught proofing, it is fitted in 94 per cent. of properties. People are aware of the need to insulate hot water tanks, but do not yet appear to be aware of the importance of excluding draughts from their properties. Is it more comfortable to sit in a house in which the hot water cylinder does not have a jacket than it is to sit in one with a gale blowing through every window? The public have not perceived the importance of draught proofing. I trust that action will be taken as a result of the Bill.
The legislation does not deal with manufacturers—perhaps that subject falls outside the Bill's direct purpose. However, it should be seen as fundamentally important to the future of energy-saving schemes. Too many energy-inefficient products are sold. Too many old appliances are not being replaced by energy-efficiency equipment. We must develop public awareness so that new fridges, dishwashers and washing machines are far more energy efficient. When the public buy such a product, they must realise the importance of finding out its energy efficiency. If they do so, they will get better value for money. That subject is not likely to be covered by the Bill, but I wish it were.
I have some worries about the Bill, the first of which involves regulation and over-regulation. Many Conservative Members are worried that more regulations are being introduced, and there is more and more control of the individual. We welcome the Government's initiative in introducing a deregulation measure. That is good news, and we do not want another set of proposals to create more regulations for the individual. It is important, therefore, that the scheme is seen to be voluntary, and as a means to encourage energy-efficient schemes, not a licence for local government or anyone else to dictate to individuals. It must not give local government the authority to impinge on individuals' freedom.
Clause 2(1)(a) uses the word "investigation". It requires local government to carry out an investigation to decide on the measures required. The word "investigation" puzzles me slightly. In press reports I have seen "survey" used instead of "investigation". That implies that somebody from the local council will knock on the door of every house in the district and look around the property to see how energy efficient it is. I hope that the Bill does not intend to introduce such a policy—I should be worried if it did. If the Bill proceeds into Committee, as I hope it will, I trust that we shall have some clarification on that subject.
Some schemes have been introduced that are cost-effective means of assessing energy-efficiency measures. I think that Derby city council has produced a scheme in which properties are looked at on a type-by-type basis, rather than a property-by-property basis.
Clearly, there is an important cost implication to be considered, as well as the issue of privacy. Therefore, I trust that that point can be cleared up as the Bill progresses. Otherwise, we must ask ourselves what rights the local authority will have to gain access to inspect properties and how it will assess volume of work undertaken on a property-by-property basis. I am sure that that is not intended, but it ought to be clarified.
I am concerned that the Secretary of State is left with the power to set the appropriate percentage saving, which, 1177 presumably, it will be necessary for local government to implement. There are cost implications for local authorities in complying with legislation, and that ought to worry us.
Some local authorities may find it easy to meet targets, partly because they have not already made efforts. Other authorities may find it more difficult because they do not have available financial resources. That requires further consideration.
I emphasise the point about successful local authorities because if a council had done effectively nothing about energy efficiency for years, finding savings of 20 per cent. would be relatively easy. However, for an authority that had been efficacious in its energy efficiency work, such as those mentioned earlier, saving another 20 per cent. would be extremely hard. It is necessary to consider the starting point of such savings and to acknowledge the success that has been achieved by many in local government.
Briefly, I shall draw attention to the financing of the Bill, as it obviously has cost implications. I wonder whether all the implications have been thought through fully and I should like to be assured that they have. We have considered the pay-back arrangments and we can see that the individual who installs energy efficiency schemes will, by virtue of a reduction in their fuel bills, get the money back relatively quickly.
Therefore, is there a need to consider recycling money? May we invest a smaller sum in the scheme and see it being reused as savings are achieved by the individual? The individual house owner must see some direct financial benefit, but I am concerned that simply handing out grants or loans may not be the best way in which to use scarce resources.
We need to consider the way in which we address advertising and organisation and the costs of those if the plans are to be introduced. I should like specific provisions made, probably in clause 2(2)(b) or elsewhere in the Bill, to address specifically the method of financing, so that it considers not only what can be and should be saved, but the financial implications of the proposals for the individual householder, the local authority and possibly the Government as well.
We need to consider how we set the targets. I am a little worried about Government setting targets through the structure envisaged in the Bill, which it may not be possible to achieve. It is all well and good setting a target which states that by a certain date, local authority 'X' must achieve a 10 per cent. saving in energy and what that would mean for carbon emissions and so on, but how could we monitor progress and establish the success of the authority in meeting that target? How do we verify the conclusions that the plan seeks to achieve, establish that they have been achieved and assess the ongoing cuts that may be required? The monitoring and inspection arrangements require further consideration.
I should be very concerned if people who had installed insulation or whatever under an energy efficiency scheme then had someone knocking on their door to check that the work had been done. Clearly, we need a policing method for grants to ensure that the money is used for the right purpose, but I am worried about the idea of an energy efficiency police force being created and lurking in corners trying to catch people out. I know that that is not what is envisaged, but let us try to ensure that the Bill dispels any anxiety on that score.
I suppose that another fundamental point is that it is all well and good installing draught-proofing, but if a 1178 householder leaves the windows open all the time there will be no saving. We must ensure that best practice extends not just to the installation of energy-efficiency systems but to their use. The points that I have raised do not strike at the root of the Bill, but they are germane to its consideration.
The Bill represents a good and valuable starting point, but it is no more than a starting point. It should encourage partnership between the private sector, central and local government and the public. It should encourage a greater awareness of energy efficiency and a better use of resources. With some amendment and improvement, it could be a very important measure.
§ Mr. Chris Smith (Islington, South and Finsbury)
On behalf of the Opposition, I warmly welcome the Bill and offer the right hon. Member for Berwick-upon-Tweed (Mr. Beith) our full support.
The Bill represents a substantial push in the right direction. It sets in place a mechanism for producing an audit of energy efficiency needs area by area around the country. It sets in place a planning mechanism for developing the schedule of work that could be carried out. It sets in place also a proper assessment of priorities. In my constituency, for example, there are blocks of flats constructed 30 or 40 years ago with little insulation where there is a crying need for better insulation and energy efficiency work. The Bill would enable us to have a proper audit, a proper system of planning and a proper assessment of priorities. What it does not do is to enforce the carrying out of energy efficiency work. It lays the foundations that would enable the work to be done and provides a useful impulse to encourage the carrying out of that work.
Why is energy conservation so important in the first place? A number of hon. Members on both sides of the House have touched on some of the reasons. I would identify four very simple reasons why energy conservation is crucial. The first is an environmental reason. We are now beginning to understand the impact that carbon dioxide and other greenhouse gases have on the atmosphere of our planet. The scientific consensus—disagreed with, it would seem, only by the hon. Member for Billericay (Mrs. Gorman) at times—is that the increasing concentration of carbon dioxide in our atmosphere will in due course lead to catastrophic climate change unless we do something about our production of carbon dioxide. That is why the Government were right to sign up at the Rio summit two years ago to the target of reducing our carbon dioxide emissions to 1990 levels by the year 2000. I would argue that that is why the Government are wrong not to have any targets beyond 2000. It is significant that, in the Sustainability documents published a week or so ago, the Government once again duck the issue of what happens beyond 2000. They say that it may be necessary in due course to set targets. Of course it is necessary to set targets beyond 2000. I believe that the Government have performed an ill service in not doing so before now.
It is worth noting that carbon dioxide emission levels in Britain are currently rising, despite the Government's commitment to restore them to their 1990 level by 2000. We must recognise that reducing carbon dioxide emissions is important. It is worth noting also that Britain contributes some 3 per cent. of the world's carbon dioxide emissions, 1179 yet has only 1 per cent. of the world's population. We are clearly overproducing carbon dioxide even for the present high levels of global production.
The first and crucial reason why energy conservation is important is that we need to reduce carbon dioxide emissions. The second is that we need to make people warmer. It is worth noting—it was mentioned by the right hon. Member for Berwick-upon-Tweed—that currently some 7 million families in Britain cannot afford to pay for the warmth that they need and that 3 million homes are suffering condensation and mould growth.
The family expenditure survey in 1988 showed that the average low-income family spent £8.50 each week on fuel, representing 10 per cent. of total household expenditure. In other families—not the low-income end of the spectrum —a little more money was spent, at £11.30 per week on average, but it represented less than 5 per cent. of total household expenditure. In other words, for families on low incomes, the proportion of the household budget spent on heating their homes is far greater than the proportion of average and above-average income families. Fuel poverty is a reality for millions of people in our country, and the imposition of VAT on domestic fuel bills will make that even worse.
The third reason for ensuring that energy conservation is carried out is that it will save people money across the board. That will be especially important after 1 April this year. The hon. Member for Norwich, North (Mr. Thompson) spoke earlier about VAT on domestic fuel. He said that a levy on everyone's energy bills to encourage energy saving measures was a worthwhile thing.
I have heard VAT on domestic fuel called many things, but using it as a lever to encourage energy efficiency work is, I must say, a poor explanation for imposing it on millions of households throughout the country. Energy-saving measures are important. Energy-saving measures will cut people's heating and electricity bills, but VAT on domestic fuel is not the way to go about ensuring that that happens.
§ Mr. Jim Cunningham
Does my hon. Friend accept that the imposition of VAT on energy, particularly in more deprived areas where there are older properties, as there are in my constituency in Coventry, is a contradictory policy because the Government have also cut grants to people in inner cities who live in older properties? There are currently major problems with between 17,000 and 20,000 properties in my constituency. Those properties are occupied by the poorest families.
§ Mr. Smith
My hon. Friend is absolutely right and I will refer in a moment to some of the things that the Government are doing in that area.
Most experts believe that the Government's figures are over-optimistic. Even on the Government's own figures, the imposition of VAT on fuel will reduce carbon dioxide emissions in this country by less than 1 per cent. Advancing energy conservation objectives as the reason for the imposition of VAT on fuel is not a particularly sound argument.
The fourth reason why energy conservation is important is that it generates employment. The Bill specifically refers to that point in clause 2(3).
§ Mr. Malcolm Wicks (Croydon, North-West)
I am sorry to interrupt my hon. Friend now that he has moved on to his fourth point. However, with regard to his third point, does he agree that not only would an efficient energy efficiency programme save people money, but in some cases it would also save lives? We must be aware of the fact that more of our elderly people die in winter compared with summer than in countries such as Sweden which are clearly far colder than Britain. The Swedes have always taken energy efficiency seriously and we never have. The fact that we are top of the winter mortality league should be a cause for shame. If the Bill helps to reduce that, that is another reason to support it.
§ Mr. Smith
My hon. Friend has a long history of work in that area and he is absolutely right. With regard to thermal efficiency, our building regulations standards are currently at about the level of standards in Sweden in the 1930s. That says a great deal about the progress that we still have to make. I will refer in a moment to the building regulations issue because it is important that we place some of these points in that context.
The fourth reason why energy conservation is important is that it generates employment. Several studies have been carried out to assess how many jobs would be created if we had a substantial programme of energy efficiency work in this country. They vary in detail, but, as a broad average, they show that for every £20 million expenditure per year on energy efficiency work some 1,000 new jobs could be created. A recent study by the Goodman group in the United States showed that, pound for pound, expenditure on energy conservation work generates about 40 per cent. more employment than expenditure on energy production work or developing new sources of energy generation.
There are a range of reasons why we should be endorsing and working much harder at energy conservation than we are now. Those reasons relate to the environment, to making people warmer and to saving people money. In addition, as my hon. Friend the Member for Croydon, North-West (Mr. Wicks) said, they relate to saving people's lives. They also relate to generating employment.
Many local authorities around the country are already engaged in such programmes. I was pleased that the hon. Member for Bromsgrove (Mr. Thomason) mentioned a number of local authorities which are already engaged in good energy-efficiency work. I noted with a somewhat wry smile that every local authority that he mentioned is Labour controlled, but this is not necessarily a party political matter. Local authorities with all forms of political control have taken up the issue of energy efficiency and have effectively run with the ball.
For example, Leicester city council has filled the cavity walls in nearly 13,000 council homes, achieving cost savings of 50 per cent. due to economies of scale, and it is conducting an energy survey of all of its council housing stock. That demonstrates that some local authorities are already doing some of the work that the Bill will ensure is done by local authorities up and down the country. One of the reasons why I welcome the Bill is that it makes the conducting of such surveys and audits mandatory for local authorities, rather than simply permissive. A permissive power would not add anything to the existing position—it would simply be a declaratory statement on the statute book saying to local authorities, "We know that some of you are already doing it already and we want to encourage 1181 you to do it." The Bill seeks to encourage reluctant local authorities as well as those that are well ahead of the game already.
There are many other examples of local authorities with a good energy conservation record. Glasgow city council has already been mentioned. It has insulated something like 70,000 homes under the Heat Wise programme. Newcastle has worked out a project, together with the European Commission, British Gas, Northern Electric and British Coal, aimed at reducing carbon dioxide emissions and energy consumption in the city by the year 2000. Nottinghamshire county council has had a programme of energy conservation work in its buildings for 14 years. Mendip district council is implementing a three-stage plan for the improvement of its stock of 5,500 houses. Many other examples could be given. Many local authorities are already in the vanguard of progress in this respect.
The Government's record stands rather poorly in comparison with that of local government. However, they are doing one or two useful things. In the most recent Budget, the Chancellor announced an increase in funding fo the home energy efficiency scheme from £35 million to £77 million per year. That is welcome. Some of that additional money has been transferred from other energy-efficiency work funded by the Government. It is worth noting that, even with the increase in funding, the scheme is limited in what it can fund in people's homes. It relates mainly to insulation and the lagging of pipes and boilers—it is not used for things such as cavity wall insulation and the installation of new boilers, which are two of the most efficient measures that can be taken in people's homes. Therefore, the scheme is limited.
§ Mr. Robert Ainsworth (Coventry, North-East)
My hon. Friend is talking about the home energy efficiency scheme and the increase that was announced recently by the Government, to a great fanfare. Is my hon. Friend aware that it has been projected that, despite the increase in the budget, half the stock will not have been dealt with by 2000 with the current levels of efficiency? The Government have not admitted that, and I have not been able to get an answer from them to my written questions. Does my hon. Friend think that the Government do not know what the target is for completion of the programme? Does not the independent work which has been carried out lead to that conclusion?
§ Mr. Smith
My hon. Friend takes the words out of my mouth. I was about to advert that, under the home energy efficiency scheme and even with the additional funding, it will take the best part of two decades to insulate all the low-income households in the country. In other words, people will start to pay higher bills in April, but some will not get help with insulation until some time next century.
Welcome though the increase in the scheme has been, it is a modest measure and we should not allow the Government to get away with telling us that it is the perfect answer to the energy-efficiency needs of the country. The Government have also established the Energy Saving Trust, which is potentially an extremely valuable institution. However, the trust will need more than the £6 million that British Gas has tipped in and the £25 million that the regional electricity companies are saying that they will tip in to have the kind of impact that the scheme could have if it were turned into a viable body. It may improve, 1182 of course, as the months and years go by, but it has made something of a slow start. We can but hope that it will pick up rather faster than it has hitherto.
In other aspects, the Government are going backwards. The Government green house programme to assist local authorities to carry out energy-efficiency work in their own buildings was worth £45 million last year. The programme is worth £5 million and, so far as I am aware, it is due to be abandoned completely. At the same time as they are increasing the home energy efficiency scheme, the Government have been cutting the green house programme completely. If one looks at elements within the housing investment programme for energy insulation and efficiency work, there have been cuts year by year in authorisations for improved insulation work.
The hon. Member for Bromsgrove said that the Government are putting their own house in order and making sure that their own buildings are becoming more energy efficient. I have to tell the hon. Gentleman that they are not doing so. I tabled a parliamentary question a few weeks ago asking for information on energy expenditure, by Department, in the past three years. The answer shows that the Government's expenditure on energy has gone up in each of the past three years. That does not say very much for the Government's reported target of 15 per cent. energy efficiency savings in five years.
If we had a Government who were more serious about energy efficiency, how could we build on the provisions of the Bill and not just use it as a mechanism for planning our national work in the area? How could we do more to improve the energy conservation profile around the country? I would advance just three ideas.
First, we could and should have a proper national programme of energy conservation work in people's homes. We could do it without any cost to the taxpayer if we implemented the proposals that the Opposition made a year ago. They were rejected by the Government, but we are still open to last-minute conversion by the Government if they want to pick up the idea and run with it. The proposals were to carry out work in people's homes free at the point of installation, but funded over a period by a small premium on the unit price of gas and electricity. People would still be better off because they would save substantially on their energy bills. It would make them warmer and mean that we had a major rolling national programme of energy conservation work in people's homes. The idea ought to be taken much more seriously by the Government than it has been hitherto.
Secondly, we need some changes in the regulatory regime. At present, with the slight exception of the introduction of the E factor, which appears to have produced some benefits, the basic system of regulation for electricity and gas in Britain means that there is an inbuilt advantage for the electricity companies and British Gas in selling more of their product. Therefore, they have a disincentive to invest properly in energy efficiency.
There is a whole host of schemes in the United States, for example, where the regulatory regime has decoupled increased sales from profits. That decoupling, by means of a change in regulation, could insert into the system a real incentive for the utilities to encourage energy efficiency, rather than sit back and simply let it happen.
The third area in which we could make considerable progress is in the building regulations. Eight or nine months ago, the Government made some amendments to the building regulations which made a mild improvement, 1183 most of which resulted from the insertion in the building regulations of double glazing as standard for new properties. However, there is far more that the Government could do on building regulations, especially with regard to the thermal insulation value of walls, roofs and floors of new construction. I urge the Government to look further at how the building regulations could be improved in that respect.
I also urge the Government to pick up the Bill that we shall debate in a few weeks, which would insist on better thermal standards for buildings when they are converted rather than only for new buildings. There is a lot that could be done which is not being done. We could have a decent national programme of energy efficiency work. Changes could be made to the regulatory regimes for gas and electricity. We could have better building regulations. The Government's record on energy use and energy efficiency could be improved.
The Bill makes a good start. That, above all, is what is important about it. It represents a platform on which we can build. It creates a mechanism that will put in place work in local authorities to identify needs, assess priorities and set out what needs doing. Then all that we need is a change of Government to ensure that the work gets done.
§ The Parliamentary Under-Secretary of State for the Environment (Mr. Tony Baldry)
The Bill of the right hon. Member for Berwick-upon-Tweed (Mr. Beith) has raised the very important issue of energy conservation. It also provides a useful opportunity for advancing energy efficiency in our housing.
It is a constructive Bill, on which there is clearly considerable consensus, demonstrated by the fact that the supporters are drawn from both sides of the House. That consensus has been echoed in the excellent speeches by my hon. Friends the Members for Norwich, North (Mr. Thompson), for Blaby (Mr. Robathan), for Eastbourne (Mr. Waterson) and for Bromsgrove (Mr. Thomason). I am not sure what marks I will get at the end of my speech from my hon. Friend the Member for Norwich, North. I generally assume that the Government's policies always merit alpha and if there is a shortcoming and the mark is beta-plus, that is because of my failure rather than that of the policies.
The debate has also shown that hon. Members have some concerns about the Bill, which I hope can be considered constructively in Committee and resolved.
As hon. Members have said, the Bill has also provided us with the opportunity to consider energy efficiency. I think that the House knows that the Government attach great importance to energy conservation, energy saving and, most importantly, to the efficient use of energy in our homes and in running businesses.
For many years, we have made it clear that energy efficiency makes sound sense because it saves money, which can be used to develop businesses, improve homes and boost the economy. The energy efficiency campaign has already contributed to significant savings in energy use. When discussing energy efficiency, there is always a temptation—or a danger—to think that nothing has happened until today. That is not the case. Since 1979, the United Kingdom economy has grown by about 25 per 1184 cent., but, despite that substantial economic growth, we still use roughly the same amount of energy. That is entirely due to the considerable improvements in the more efficient use of energy. With further cost effective improvements, about 20 per cent. of current energy demand can be cut. That is good news for the economy and very good news for the environment.
Of course, cost effectiveness is not the only reason why we continue to seek to improve energy efficiency—such efficiency also helps to protect the environment by reducing the threat of climate change. My hon. Friend the Member for Norwich, North gave a good dissertation on climate change, which is a consequence of industrialisation and prosperity. The release of carbon from burning fossil fuels for energy is increasing the amount of carbon dioxide in the atmosphere—carbon dioxide is the most significant greenhouse gas and contributes to the enhancement of the natural greenhouse effect. The natural effect is beneficial; the bad news is when it is enhanced and climatic changes result.
As the hon. Member for Islington, South and Finsbury (Mr. Smith) said, there is almost unanimity in the House —with the possible exception of my hon. Friend the Member for Billericay (Mrs. Gorman), whom he mentioned—about the fact that that issue needs to be tackled. Although uncertainties remain, we know enough about the threat of climate change to be satisfied that the problem is real and serious.
Britain will have to take costly measures in order to adapt. That may lead to disruption to our markets in other countries and to our sources of raw materials and other commodities, which may affect our trading position. I do not think that anyone believes that tackling the dangers presented by climate change and taking the necessary precautions will be a nil-cost policy. That is why the international community must take precautionary action, in effect taking out insurance against that risk. So we welcome initiatives that will help to tackle the problem of climate change by encouraging energy efficiency.
We have had a continuing programme of Government-led action and initiatives. In 1990, we produced Britain's first comprehensive survey of all aspects of environmental concern, including global warming. The report, "This Common Inheritance", was a milestone in environmental auditing. It will go down as an excellent example of taking forward the principles of sustainable development. The preface quotes from John Stuart Mill's "Principles of Political Economy":Is there not the Earth itself, its forests and waters, above and below the surface? These are the inheritance of the human race … What rights, and under what conditions, a person shall be allowed to exercise over any portion of this common inheritance cannot be left undecided. No function of government is less optional than the regulation of these things, or more completely involved in the idea of a civilised society.
§ Mr. Chris Smith
I endorse the sentiments of John Stuart Mill, but, if "This Common Inheritance" was such a milestone, when will we see the third—supposedly annual—assessment of progress, which was supposed to have emerged last September and has yet to appear?
§ Mr. Baldry
"This Common Inheritance" was not only an enormously valuable contribution in its own right, but the start of a process whereby the Government stated, at regular intervals, their actions, achievements and further commitments. The House will recall that both the first and second-year reports set out in a clearly tabulated manner, 1185 referring to each of the commitments in the White Paper, a summary of the White Paper commitment, the action taken to date, and the further commitments envisaged.
The programme is advancing constantly. For example, the first year's report shows what the Government did during that time to develop potentially economic renewable energy technologies, new regulations and controls, and the use of the market. The second year's report updates the information in the same fashion, with a summary of the White Paper commitments, the action to date and the commitment to further action.
In due course, a further report will be published because this is an extremely important process. The Government are taking forward their commitments and ensuring that the House and the country understand the action being taken. Equally important, they are ensuring that we know the further targets that they have set.
Clearly, at a time when we have been considering the important strategy of sustainable development, which contains many objectives, it was sensible to ensure that that substantial document was in place before producing the next report on the follow-through from "This Cornmon Inheritance" because they are integral documents. When the hon. Gentleman sees next year's report and annual update of "This Common Inheritance", he will be impressed by the continuing targets that we have set ourselves.
§ Mr. Baldry
With respect, the hon. Gentleman was not listening. I made it very clear that, as a consequence of the earth summit in Rio, we published a sustainable development strategy which sets out targets for action in a range of environmental activities. The annual reports—the updates on "This Common Inheritance"—not only outline our achievements, which are substantial, but set out the targets for coming years. It is sensible to ensure that the targets for our sustainable development strategy are clearly set out in the annual updates, but until they were finalised with the international community, they could not be included.
When the hon. Member reads the next annual update, which will be published in the not-too-distant future, he will realise that it sets tough targets incorporating those that followed the sustainable development strategy established at the Rio summit and will also deal with other aspects of environmental protection set out in the original White Paper.
The production of annual updates has established a method of which we can be proud and which has become a model for other countries. At the earth summit in Rio, we encouraged others to follow our lead by making a concerted effort to tackle environmental issues. The framework convention on climate change which was negotiated in Rio commits us to return our emissions of carbon dioxide to 1990 levels by the year 2000. 'The convention was ratified in December and will come into force in March.
Agenda 21, which was also agreed at Rio, set out an environmental strategy for the 21st century and recommended that Governments produce strategies for sustainable development. The Prime Minister persuaded 1186 other Heads of Government to produce strategies by the end of last year and the United Kingdom agreed its strategy in December.
Last week, the Prime Minister launched the United Kingdom's four major strategies which were produced as a follow-up to the earth summit. They are substantial documents, and I hope that hon. Members will have the opportunity to read them. They are a sustainable development strategy, a climate change programme, a biodiversity action plan and a sustainable forestry programme.
The sustainable development strategy builds directly on the 1990 White Paper "This Common Inheritance", but it considers more closely sustainable development, which means economic development in a good environment for our children's sake. Its message for the next 20 years is one of balance. It stresses the need for economic development and the importance of environmental protection. Economic development and environmental protection go together, and energy efficiency has a key role in encouraging sustainability.
The sustainable development strategy includes three new measures: the Government's panel on sustainable development, which is a small, high-level group to give strong and independent advice to the Government; a United Kingdom round table on sustainable development to bring together representatives of the main sectors or groups under the Secretary of State for the Environment; and a citizens environment initiative to carry the message to individuals and local communities.
The House will have a further opportunity to discuss the follow-up to the Rio summit in a debate on Monday. I am sure that many hon. Members here today will be interested in participating in that debate. It is worth noting that Conservative Members have made some excellent speeches, but that, with the exception of the hon. Member for Islington, South and Finsbury (Mr. Smith) who speaks for his party, Labour Members have been notable by their almost total absence. We should perhaps recall their absence in the debate on Monday. The climate change programme sets out a detailed programme of measures to meet the United Kingdom's commitments under the convention on climate change, placing the United Kingdom at the forefront of efforts to combat global warming. The document is the product of a far-reaching public participation exercise. The United Kingdom is one of the first countries to publish a detailed programme of measures aimed at reducing greenhouse gas emissions to 1990 levels by the year 2000.
Sometimes, to hear the Opposition speak, one would gain the impression that Britain was always the last on environmental initiatives. Indeed, on most environmental initiatives Britain is the first. We were the first country in the world to demonstrate under the convention how we will meet the targets for the main greenhouse gases.
§ Mr. Dafis
It is worth noting that some European countries have far more ambitious targets in relation to reducing CO2 emissions than Britain. Denmark, I believe, intends to reduce emission levels by 25 per cent. by the end of the century, as does Germany, which intends to reduce emission levels by 30 per cent. by the year 2005.
§ Mr. Baldry
In environmental protection, we have learnt as the years have gone by that there are two types of targets. There is the type of targets that we set, which we 1187 are determined to meet and will meet, and there is the type of aspirational targets that people put in documents, knowing that they have no chance of meeting them, expecting that they will not be in government by the time the year comes when they are supposed to have met the target, but thinking that it looks a jolly good figure to put in a document at some international gathering. The targets that we sign up to, whether they be for water protection, air pollution or combating climate change, are targets which we are determined to meet, and will meet.
Central to our programme on combating climate change are measures to limit CO2. That is a programme based on partnership with business, the public and the private sectors. It sets out comprehensive measures aimed at achieving savings by 2000 of about 10 million tonnes of carbon—or 6 per cent. of United Kingdom emissions—as well as about 10 per cent. of methane emissions, about 75 per cent. of nitrous oxide emissions and substantial reductions in other gases. The overall effect should be a 5 per cent. reduction in United Kingdom greenhouse gas emissions by the year 2000.
However, the programme looks beyond 2000. There was some suggestion today that the sustainable development strategy in some way finishes at the year 2000. It does not. It sets out some of the longer-term options for action that may need to be considered in the light of emerging scientific evidence and the further development of the convention, so that we develop a sustainable strategy.
We are determined to meet those commitments—commitments to the international community and commitments to our children. Energy efficiency can help us to move towards sustainable development, and energy efficiency is our first priority for limiting CO2 emissions. Energy efficiency is the fastest and most effective way of meeting our CO2 targets. Everyone has a part to play in that, as we are all users of energy.
Like the promoters of the Bill, we are keen to encourage energy efficiency in the home. No less than a quarter of all CO2 emissions in the United Kingdom are from energy used in our homes. That can be reduced by one fifth or even up to a half by taking simple energy efficiency measures. Indeed, nearly half of the savings that we are looking for through the climate change programme are expected to come from reducing energy consumption in the home.
The business and transport sectors are both expected to contribute about a quarter of the savings, and one tenth of the savings are expected to come from the public sector.
We are playing our part in carrying forward the climate change programme. We have substantially increased our spending on energy efficiency. In 1994–95, spending will be increased to more than £100 million—17 times the spending in 1979–80.
We are also providing a strong framework to encourage energy efficiency. The Energy Efficiency Office in my Department carries our energy efficiency policy forward. It promotes cost-effective energy-efficiency measures in the work place and the home, and strengthens environmental protection by reducing energy use.
Our policy has four main prongs: we use publicity to try to ensure that everyone is aware of the importance of energy-efficiency; we provide encouragement and technical advice to enable people to take informed decisions 1188 about whether and how to invest in energy-efficiency measures; where necessary, we provide financial incentives to encourage the installation of energy-efficiency measures; and, where appropriate, we promote regulation.
We have a wide range of initiatives to encourage improved energy efficiency in housing, each of which is targeted on a specific group. We provide publicity through our "helping the earth begins at home" campaign, which uses advertising and promotion to make people aware of the link between energy use in the home and the threat of global warming and encourages people to use energy more efficiently.
The campaign has the support of a range of organisations, and it gives straightforward advice to householders on how they can best insulate and heat their homes, on how they might install energy-saving light bulbs and on a range of measures that every householder can take —insulation, draft proofing, heating appliances and controls and simply turning a thermostat down by 1 deg C, which can knock 10 per cent. off heating bills without leading to a noticeable difference in comfort in most rooms.
My hon. Friends commented on heating in the Palace of Westminster. It is clear that we could turn down the thermostat considerably more and make a large contribution to savings on the Palace's heating bill.
Those are all straightforward measures that each householder can take in their own home not only to save money but to make a contribution to the environment. We see our role as ensuring that they get the information on which they can make informed judgments.
The campaign is already having a clear impact. Our energy advice week will run from 12 to 20 February, and I hope that all hon. Members will do what they can in their constituencies to support the campaign, which will concentrate on providing clear and impartial advice on energy efficiency, because we want people to be aware that energy efficiency can cut fuel bills.
We have a comprehensive package of measures to provide encouragement, information and advice to help people to take informed decisions on how to invest in energy efficiency. We help building professionals and housing managers in a number of ways. Our best practice programme provides authoritative advice and information for building professionals and housing managers on improving energy efficiency in housing.
We have produced a range of good practice guides on, for example, energy efficiency in offices and how architects can develop a low-energy office. I mention that, because it was suggested earlier that we should be doing more to encourage architects to design for energy efficiency. We are doing so. The Building Research Establishment and the Energy Efficiency Office have been doing that for a long time.
One reason why we have been able to increase our gross domestic product so substantially without consuming much more energy is because British industry and business have incorporated best practice in buildings, in heating and lighting and in the use of energy.
Good housekeeping in schools has been promoted in a guide for school staff, governors and pupils. Hon. Members who visit schools in their constituencies—I know that many of my hon. Friends do—will know that schools that manage their own budgets have been taking a close interest in how to ensure the greatest energy 1189 efficiency in their buildings. Likewise, best practice guides have been issued for energy efficiency in hospitals, and NHS hospital trusts have been making substantial savings on their heating bills as a consequence of incorporating good and best practice.
We have, for example, a guide for energy and estate managers on a best practice programme for electricity savings in hospitals. It sets targets for savings of 15 per cent. in energy consumption over the next five years. In a recent study of 450 hospitals, the Audit Commission identified scope for energy savings of 15 per cent. All those savings can be obtained in a comparatively straightforward way if managers and others apply themselves to thinking about energy efficiency and considering it when they make decisions about the future of their estate.
We have best practice guides and energy consumption guides to show energy users how their consumption compares with that of others. We also have good practice guides and case studies describing good practice and new practice case studies that promote novel measures. We also had the green house demonstration programme, which has made £60 million available over three years to encourage local authorities to develop and apply energy-efficiency strategies to housing.
The hon. Member for Islington, South and Finsbury was rather curmudgeonly about that, saying that, because the green house programme was coming to an end, it meant that the Government were in some way lessening their commitment to energy efficiency. That is rubbish. The green house programme is, by definition, a demonstration programme. It allocated money from the overall housing programme to encourage local authorities to see what they could achieve with their resources to promote energy efficiency in their housing stock. It was never intended to be an indefinite programme, but a demonstration programme. During its three years' existence, it has achieved a considerable amount. Indeed, it is not insignificant that Newark and Sherwood council, one of the local authorities prayed in aid in support of the Bill, did all its work under the green house demonstration programme. Extra money was given to the council under the programme, clearly proving its value.
We have been able to show local authorities what they can achieve if they sensibly apply good energy efficiency methods to their housing stock. We now say—as the right hon. Member for Berwick-upon-Tweed said—that, when local authorities assess their housing investment programme each year and come to the Department of Environment to identify the projects and the sums of capital required, we expect those authorities to make clear their intentions on energy efficiency. We want to ensure that they make energy efficiency an integral part of their annual housing investment programme submissions. In that way, we will ensure that energy efficiency becomes an integral part of the culture of housing management.
We also have a network of 11 regional energy efficiency offices, which promote good environmental management in energy-efficiency measures across the United Kingdom. They provide an independent source of advice, which enables energy consumers to take action. They signpost the Department programmes and provide information on energy-efficient techniques and technologies. Companies or businesses often recognise that they have to take action on energy efficiency, but they are concerned about whom they should approach. If they go to one of the utilities, will they receive impartial advice? Understandably, that 1190 sometimes causes them concern. Chambers of commerce, the Confederation of British Industry and businesses generally have discovered that a high standard of advice is available from the regional energy efficiency offices. That advice has enabled many businesses and companies to save substantial sums of money.
We are also providing help for individuals. We are promoting home energy labelling, which provides information on the energy efficiency of a dwelling and identifies the most cost-effective measures for improving it. Under the campaign "helping the earth begins at home", we have, together with others, developed a home energy label. It is of little value to householders to know that they need to make their homes more energy efficient if they do not have some standard and objective test by which to measure improvements in their home.
The home energy labelling will do that. It will provide valuable information to home owners and buyers about the energy efficiency of a property. We are working with mortgage lenders to incorporate home energy labelling into their survey reports and we are encouraging them to offer "green loans" to help people to improve the energy efficiency of their homes.
In due course, I hope that, when people buy and sell their homes, among the sales particulars and general information such as, for example, telling one which council tax band the property may be in, there will also be an indication of the property's home energy rating. People will be able to make value judgments about the property's energy efficiency and assess whether, when they move in, they will need to undertake work to improve the energy efficiency of that property.
We are encouraging voluntary appliance labels to give consumers a guide to the energy efficiency of the appliances that they buy. Often, consumers want to do the right thing for the environment—they want to buy, for example, the most energy-efficient kettle. That is difficult if they have not got the information on which to make a value judgment. We want appliance labels so that if a person who wants to buy a kettle goes into a shop, the appliance label will give them an indication which is the most energy-efficient appliance.
Where necessary, we provide financial incentives to encourage the installation of energy-efficiency measures. The home energy efficiency scheme provides grants for basic insulation measures and advice for low-income households. Since the scheme began in 1991, more than 500,000 homes have been treated—a substantial number. In this financial year, grants of £37.5 million are expected to be given to 240,000 households—almost a quarter of a million households—which was dismissed by the Opposition spokesman as if it were nothing.
Treating 240,000 homes is a substantial achievement and £37.5 million is a substantial sum of money. It may not be a substantial sum of money to the Opposition, but in real terms it represents a substantial commitment by the Government towards energy efficiency.
We have all become rather cynical of any comments made by the Opposition about any sort of public spending ever since we woke up one morning to hear the hon. Member for Dunfermline, East (Mr. Brown) announcing that the Labour party had no spending commitments. So it is impossible to make any sensible judgments or have any debates on any area of Opposition spending and whether it will be more, less or indifferent because they clearly want 1191 to try to ensure that they have no spending commitments between now and the next general election. If they have, they are not real commitments.
§ Mr. Milligan
Does my hon. Friend also remember that the hon. Member for Dunfermline, East made it clear that only commitments which were given in the House were solid, and the ones which were made outside the House were for the birds? Does he agree that we have had a clear commitment from the Opposition Front Bench today that the Labour party will spend a great deal more money in the energy efficiency area?
§ Mr. Baldry
The hon. Gentleman is rushing to make it clear that, perhaps, it was not a commitment, and that if it was a commitment, it was not one that he had the authority of the shadow Chancellor to give.
§ Mr. Smith
May I make two observations in response? First, the amount of extra money that the Government have just trumpeted as a splendid addition to the home energy efficiency scheme budget represents about 2 per cent. of the annual income that the Government will have as a result of putting VAT on domestic fuel. That does not seem to be an especial act of generosity.
Secondly, if the hon. Member for Eastleigh (Mr. Milligan) and the Minister had listened to what I said, they would have realised that the national energy efficiency programme, which I advocated, all the details of which we published a year ago—I would happily provide them for the hon. Member for Eastleigh if he wishes—and which has the endorsement not just of the shadow Chancellor but of the entire shadow Cabinet, does not cost the taxpayer a single penny.
§ Mr. Baldry
That is an example of the strategy of the new model Labour party: Labour Members go around the country giving the impression that they intend to spend more money on energy efficiency and so on, but when they are challenged as to whether they have made a commitment in the House or one for the birds outside the House, they go back to the small print and say, "Actually, no. We were not proposing any extra spending at all. This was not a commitment to extra spending." I suspect that we shall see considerably more of that between now and the next general election.
§ Mr. Patrick Thompson
Now that my hon. Friend is apparently about to break away from the startling debate about what the Opposition are or are not saying about public spending, could he say whether there is any chance of the excellent home energy efficiency scheme being extended in some sensible way, which is what I called for in my speech?
§ Mr. Baldry
Throughout its history, the home energy-efficiency scheme has been extended year by year. There are good reasons for that. There are also good reasons—not least, logistical reasons—why we cannot have an enormous scheme all at once. We need to ensure a steady take-up of the scheme by people who want to have their homes insulated, but if the scheme is advertised and promoted too widely and too many people come forward, 1192 those who have applied for energy grants and have been waiting an number of weeks for them to come through will be frustrated.
Neighbourhood Energy Action and those who have been running the home energy efficiency scheme over the years have been outstanding. They have managed to insulate half a million homes. I do not suppose that there is an hon. Member who has received a complaint about the NEA and the organisations that apply the home energy efficiency scheme. That is a considerable tribute to them. It is also a tribute to the way in which the Government have been running the scheme to ensure that at no time is it so large that those involved cannot properly meet the needs and tackle the logistical problems.
I have no doubt, given the scheme's considerable success in the past, that it will continue to contribute. I repeat that this year there are expected to be financial grants of £37.5 million for a quarter of a million households. That is a very considerable contribution in any one year. In addition, some £69 million—nearly £70 million—of Department of the Environment moneys this year were allocated to estate action to be spent on energy-related works.
I am sorry that the hon. Members for Coventry, South-East (Mr. Cunningham) and Coventry, North-East (Mr. Ainsworth), who intervened several times, are no longer here, because Coventry has received large amounts of estate action money. Several huge estates in Coventry have been completely refurbished over the past couple of years, and refurbishment of estates such as the Woodend estate continues, with estate action funding. Much of that funding goes towards making homes more energy efficient.
§ Mr. Brandreth
In my own constituency of Chester, the Poet's Corner estate in Blacon is a beneficiary of the scheme. One aspect has been particularly exciting: a skills survey was undertaken among people who live on the estate who have become involved in ensuring that the energy-efficiency measures are put into force. Not only is the money being made available; the community has the sense of ownership that is so essential if the scheme is to work properly.
§ Mr. Baldry
My hon. Friend makes an extremely good point. One of the great advantages of estate action schemes is that they not only promote community involvement but help to generate local jobs for local people on the estates concerned.
In addition to the funding that we are putting into energy efficiency, we are encouraging regulation where it is appropriate, even in a deregulatory age. For example, the regulations governing energy efficiency standards in new buildings in the United Kingdom have been tightened several times over the past 20 years, and they are currently being reviewed again.
We are consulting on proposals to strengthen the provisions in the building regulations, which include the provision of double glazing, improved insulation, better heating controls and the incorporation of a home energy rating. Revisions should lead to an improvement in energy efficiency of 25 to 35 per cent. compared with current regulations. Thus, substantial improvements in energy efficiency are being effected by building regulations.
We know that the task of achieving energy efficiency savings is not one which the Government can achieve alone. Many others have an important part to play in 1193 encouraging energy efficiency in the home. That is why we have worked with the gas and electricity industries to set up the Energy Saving Trust to develop and manage new programmes to promote the efficient use of energy in the domestic and small business sectors. The trust has a target of reducing carbon dioxide emissions by 2.5 million tonnes of carbon by 2000—a quarter of the United Kingdom's target reduction.
The trust has made an excellent start. Four schemes have already been launched, and two large initiatives for action in the home are out for consultation. A scheme to encourage the sale of low-energy light bulbs to domestic customers, run in conjunction with the industry, resulted in the sale of 740,000—nearly three quarters of a million—in only eight weeks, about the same number as are sold otherwise throughout the whole year.
An incentive scheme for gas condensing boilers resulted in 3,000 rebates of £200 being claimed by owner-occupiers by the end of 1993. New manufacturers and products have entered the marketplace as a consequence. A residential combined heat and power scheme has been heavily over subscribed in the first tranche. A pilot study of local energy advice centres for the domestic and small business sector, partly funded by the Government, is proving very successful.
We are working closely also with the European Union to improve domestic energy efficiency. A directive setting energy efficiency standards for central heating boilers came into effect on 1 January this year. A directive on appliance labelling will introduce labelling for refrigerators, freezers and fridge-freezers by the end of this year. We are pressing the Commission for action in setting minimum energy efficiency standards for domestic applicances generally.
Local authorities also have an important role to play. The energy bill for local authority housing comes to nearly £3 billion a year, so local government efforts are crucial if we are to complete our energy efficiency programme.
Central and local government are already working closely together through the central and local government forum, which was set up under the White Paper, "This Common Inheritance", to carry forward the energy efficiency campaign in local government. The local authority associations have endorsed and encouraged their members to adopt a target of reducing energy consumption in their non-housing buildings by 15 per cent. over a five-year period. The associations will shortly survey their members to establish where progress has been made and assess the extent of the additional commitment required.
As well as energy efficiency in their estates, local authorities and local councils can fulfil a valuable role in pulling together energy thinking in their areas. Industry, schools, further education institutions and, of course, householders, can all contribute to energy efficiency and produce genuine savings towards our carbon targets. As was said earlier, initiatives such as city challenge and a host of different groups, including local authorities, community groups and various partners in city challenge, have come together to promote, among other things, energy efficiency to improve the warmth and comfort of local people in their homes.
Local authorities are in a good position to pull together and co-ordinate thinking in their areas, possibly through establishing targets whose achievements can be monitored. That need not be a resource-intensive exercise: rather, it is 1194 one aspect of the functions that authorities should already be carrying out when ensuring that people are thinking ahead and looking for a sustainable future.
We know that energy efficiency is worth while and cost effective and will help save the environment. It is a win-win situation. Energy efficiency saves money and helps to save the earth, but we are not complacent about the work that we are doing now, and we are continuing to adapt our initiatives to meet changing circumstances.
If future, we intend to use our efforts to emphasise the importance and value of energy efficiency to all those with an interest. We will continue to work with the Energy Saving Trust to develop our dialogue with industry, and work with the European Union.
From 1 April, provision for the home energy efficiency scheme will be almost doubled and extended to pensioners and disabled people. The extra £35 million per year for the United Kingdom will provide grants for more than 200,000 extra households per year, bringing the total number of households receiving grants to almost half a million a year. It will reduce the fuel bills of recipients, save energy and help to fight the threat of global warming. It will also create some 1,500 jobs. It will boost a specialist sector of the construction industry and materials producers and improve the housing stock.
Over the next two years, we will also be significantly expanding the "helping the earth begins at home" advertising and promotion campaign. We hope to establish a scheme under which mortgage lenders incorporate home energy labelling into their survey reports, and to see building regulations which improve energy efficiency standards come into force.
We will also continue to work closely with the European Union in its work on standards and labels for domestic appliances. As the House can see, a lot has been done, a lot is being done and a lot will be done to ensure that we meet our environmental targets and our commitments to the international community and to ensure that we utilise energy efficiency to combat climate change and to promote our environmental objectives.
Where does the Bill fit into that? Our commitments to energy conservation are clear, but we have concerns about some of the details of what is proposed. We have to look at the Bill in the context of Government policies overall.
The Government are determined to keep a tight lid on public spending, and, as importantly, to avoid unnecessary burdens on local authorities; not to assume inappropriate responsibilities for central Government and to avoid regulation unless there are overriding reasons.
Our concerns about the Bill centre on the additional duties it would place on individual authorities. If the Bill were to be amended so that those duties were turned into powers which enabled authorities to take the schemes forward where they thought that that was in the best interests of their residents, our concerns would be largely met.
We are also concerned at the assumption that central Government would pay for those programmes. Indeed, it is interesting to learn that the Association of Metropolitan Authorities does not consider that the financial burdens of this Bill would be particularly great for an individual authority, especially when taking account of the longer-term payback from reducing the energy consumption of a council's own housing stock. If that were the case, such a self-financing scheme would, could and should be readily adopted by responsible authorities.
1195 We know that we must keep spending under control if we are to sustain economic recovery. The tight financial settlement means that any additional costs arising from the new functions for local government proposed in the Bill would have to be found from making offsetting savings elsewhere.
As it stands, the Bill would have spending implications for local authorities and for central Government. I know that the right hon. Member for Berwick-upon-Tweed has circulated figures showing how much it might cost two local authorities to set up a database on the condition of housing stock in their authorities. Newark and Sherwood district council estimates that it would cost about £1 per dwelling; Derby city council estimates 53p per dwelling. If those costings were replicated by other local authorities, the cost of setting up databases across the United Kingdom would lie between £11 million and £23 million.
It is quite possible that those costs would not be representative of those incurred elsewhere—indeed, they may understate the costs that would be incurred by others. Both those authorities already have a keen interest in energy efficiency. One of them already has the necessary computer hardware, software and trained staff.
We must not forget that those costs are only part, and probably a small part, of the costs that would be involved in carrying forward the Bill. In addition, local authorities would have to bear the costs of preparing draft plans; consultation; preparing final plans; keeping the plans up to date; and implementing their recommendations.
On the other hand, we must recognise that not all those costs would be additional. We have already issued guidance to authorities asking them to collect information about the energy efficiency of housing in their areas as part of the process of preparing housing investment programmes. It would be useful to consider the extent of the additional costs which would be imposed by the legislation. That matter can be considered in Committee. The Government would be faced with additional spending.
At the outset, the right hon. Gentleman was somewhat coy as to whether the Bill required a money resolution. Only a cursory glance at the Bill makes it clear that the Secretary of State would be required to set a date by which all plans should be sent to him, and a timetable for the implementation of plans. Of course, that would require funds to be provided by Parliament.
In addition to the concern about extra funding and, indeed, where that funding should come from, hon. Members know that we are determined not to add to the burdens of local authorities unless it is unavoidable. We are concerned that the provisions in the Bill may impose an unnecessary burden.
§ Mr. Chris Smith
I wonder whether the Minister could explain his point about funds being required to be provided by Parliament for the Secretary of State. The consideration of plans submitted to the Secretary of State by local authorities would not involve anything other than consideration presumably by one or two officials in his Department. Surely, it is within the present resources of the Department of the Environment to carry out that consideration.
§ Mr. Baldry
I never cease to be amazed by how Labour Members think the machinery of government works. 1196 Clearly, if local authorities are obliged to provide reports on the energy efficiency of their housing stock, those reports would need to be considered by the various regional offices and by officials in the Department of the Environment. That would almost certainly require a bid from the permanent secretary of the Department for extra staff for that function.
The thought that all that could be done on a totally cost-free basis is wholly unrealistic. The cost to central Government of the regulating and monitoring function might not be substantial, but it would be real and would require a money resolution. Listening to the proponents of the Bill, I am concerned that there is an ambiguity which will need to be explored in Committee. The ambiguity is whether this is an exercise that some Labour Members suggested could be done at little or no real cost to local authorities, because they would be making savings on their stock over a period and that money could be reinvested, or whether there would be a real cost arising from this legislation that should be met by either local or central Government.
Whatever is the case, I suspect that there will be costs arising from this legislation. Those costs are a concern to us at a time when we are trying to control public expenditure. That concern will be legitimately considered in Committee.
§ Mr. Beith
The essence of the Bill is certainly not to commit to the programme of work that people might feel is desirable when they see the outcome of the energy audit. The Bill does not impose on the Secretary of State the responsibility to fund however much work might be seen as desirable to achieve different levels of energy efficiency. The core of the Bill is the insistence that auditing should be carried out at a reasonable cost. As the Secretary of State has clearly said publicly that the Government wish to see this work done, surely he is not suggesting that the limited burden that would be imposed on his Department and on local authorities is so great as to make him want to go back on what he said and hope that local authorities will not do it at all.
§ Mr. Baldry
I return to what I said earlier: even the modest approach of simply wishing to have an audit of the housing stock in a local authority area is not without cost. As I said, Newark and Sherwood district council, which benefited considerably from the green house demonstration programme and is probably as advanced as any local authority in this field, estimates that it would cost £1 per dwelling. Derby district council, which is a Conservative-controlled council with an impressive housing record, a switched-on housing department and a dynamic housing committee, estimates that it would cost 53p per dwelling.
As I said, if we extrapolate those costs across local authorities generally, that would lead to an overall cost of somewhere between £11 million and £23 million for only the auditing function. That is a real cost. It may well be that in Committee the right hon. Gentleman will be able to convince us that we have misunderstood what others are saying. But I think that the estimates of Newark and Sherwood and Derby district councils, which are the two examples that he prayed in aid in his briefing on this Bill, are real costs and they must be met from somewhere. Those costs concern us. If one is making it a mandatory 1197 obligation upon local authorities that they shall carry out those orders, the costs must be met from somewhere. That will take me on to my second concern.
§ Mr. Beith
I do not understand what the Government are saying. I understood it to be the Government's view that they want the work to be carried out. They are worried that local authorities might be obliged to carry out the work because, if so, that would cost money. Frankly, if local authorities obeyed the Government's wish that the work be carried out, it would still cost the same amount of money. What are the Government saying to the House?
§ Mr. Baldry
The Government are concerned that the Bill is seeking to put statutory duties on every local authority. When statutory duties are placed on every local authority, they then, not surprisingly, come to the Government and say that Parliament has placed a new obligation and a new burden upon them.
As part of the negotiations that we have every year with the local authority associations, they, not surprisingly, trawl through any legislation that has been passed by any Department. The associations then say that a certain function has been put on the statute book, from which there is a cost involved. The associations then wish to be reimbursed for that cost.
If a local authority wished to carry out an audit of its stock within its resources, we would wish to encourage that. We are concerned about placing a statutory duty on each and every local authority which they would then have no alternative but to carry out. Some will do it more efficiently than others, but they will turn to the Government and say that they wish to be reimbursed.
I made it clear in my opening comments that our concern is that the Bill contains too many shalls and not enough mays. We are generally determined not to add to the burdens of local authorities unless they are unavoidable. Our second concern is that the provisions of the Bill may impose an unnecessary burden. The House should take that concern into account now, in Committee and when the Bill comes back to the Floor of the House.
Many local authorities are already doing a great deal to improve energy efficiency. Some 250 local authorities have agreed to sign up to my Department's "Making a Corporate Commitment" campaign. Some authorities have set themselves performance improvement targets. For example, Basingstoke and Dean borough council aims to reduce effective energy use by 15 per cent. in the five years to 1998; Bedfordshire county council aimed to reduce energy costs by 15 per cent. over the five years to 1991 and by a further 10 per cent. by 2000; Cotswold district council plans a 15 per cent. reduction over five years to 1997; Ipswich borough council plans a 15 per cent. reduction over five years to 1998. I am sure that there are many more.
In addition, many local authorities are already taking steps to improve domestic energy efficiency, and obviously we wish to encourage that. Local authorities already spend around a quarter of their council house repair and improvement budgets on energy-related work, such as new heating systems. Better output can, of course, be obtained by applying the lessons which every local authority should have learned by what has been achieved through the green house programme.
The programme was launched in 1990 to establish a network of energy efficiency demonstration projects to show local authorities in England how energy efficiency of 1198 council housing could be improved. Over three years, some 180 schemes in 130 local authorities have been undertaken. Results are very encouraging, with schemes achieving fuel cost reductions of up to 40 per cent. and carbon dioxide reductions of up to 50 per cent.
Drawing on experiences gained from the green house programme, we asked local authorities to include energy efficiency as an integral part of their housing strategies and investment programmes. Interim guidance was issued last June and further guidance is planned for the spring.
A key element of that guidance is that local authorities should survey their housing stock to establish its energy rating as part of devising an energy efficiency strategy for inclusion in their overall housing investment strategy. Indeed, it is difficult for any responsible authority to come to the Department of the Environment to make a sensible bid for housing investment money unless it has carried out a survey of its housing stock.
We need to take stock and to consider in Committee what has already been done by local authorities, the work that is in progress and that which stems from the recent changes to the housing investment programme process. We may conclude that it is not necessary to impose additional duties on local authorities. It may be simpler, cheaper and wiser to build on existing systems than to establish something new.
Similarly, we are keen to avoid unnecessary burdens on central Government. We need to consider further whether it is essential for additional duties to be imposed on the Secretary of State, whether it is appropriate for him to prescribe the precise way in which a local authority should go about this undoubtedly important part of its business or whether it should be left to manage those things for itself. We can be certain that, even among those local authorities that carry out surveys and develop best practice in energy efficiency, the way in which they conduct those surveys will not always be exactly the same. It would seem somewhat curious to argue that the Secretary of State should have a statutory duty to prescribe the precise way in which local authorities should go about conducting the surveys.
That takes me to our natural desire to avoid unnecessary regulation. As the House will know, my right hon. Friend the President of the Board of Trade is having a bonfire of unnecessary controls. We can celebrate the first part of that in the Second Reading of the Deregulation and Contracting Out Bill next week. We shall be able to keep ourselves warm by the fire of unnecessary regulation which will be burnt during the proceedings on the Bill. We are determined not to introduce new controls as fast as the old ones are turned to ashes. We need to consider whether further legislation is essential, or whether the same objectives could be achieved without new laws.
Hence, the Government are determined to do all we can to promote energy efficiency. We know—we agree with the right hon. Member for Berwick-upon-Tweed—that local authorities have an important role to play. The right hon. Member and his supporters seek to introduce a Bill which we need to consider with care. The Government believe that the Bill could make a constructive contribution, but we have genuine concerns about it. In particular, we are concerned that it might impose additional and unnecessary burdens on local authorities and central Government. It could also create new and unnecessarry controls and hinder our efforts to control 1199 public expenditure. Those issues need full examination and should, therefore, be considered in Committee, where I hope that they can be resolved constructively.
§ Mr. Cynog Dafis (Ceredigion and Pembroke, North)
I am privileged to have an opportunity to respond to the debate and consider some of the points that have been raised. I begin by thanking the right hon. Member for Berwick-upon-Tweed (Mr. Beith) for taking up the Bill and for his excellent opening speech this morning. I was delighted that such an able and experienced Member was prepared to adopt the Bill.
We have had an excellent debate. I was gratified to note the extent of support for the principles and purport of the Bill. I noted carefully the reservations that the Minister expressed. I shall respond to some of them before I finish my remarks. The debate has been an opportunity for a wide-ranging debate on energy efficiency. That is most welcome. There is no doubt that energy efficiency should be a central issue in Government policy.
The debate has also been an opportunity for the Minister to provide a wide-ranging apologia for the Government's initiatives and policies and an opportunity for the Opposition Front-Bench spokesman to have a go at the Government about their deficiencies. Of course, that is reasonable enough.
We heard a great deal of substance and much intelligent comment during the debate. The hon. Member for Norwich, North (Mr. Thompson) set the scene very effectively. He referred to the astonishing fact that global energy demand is likely to double by the year 2020. He also said that the percentage of energy produced from sources that emit carbon dioxide would increase from 74 to 92 per cent., which is both dramatic and worrying.
I have another statistic. In its preparations for the Rio summit, the Intergovernmental Panel on Climate Change insisted that we need a 60 per cent. reduction in global carbon dioxide emissions in the near future. The panel also recognised that there will have to be an increase in carbon dioxide emissions in developing countries to enable some development and therefore the reduction in the developed world must be well over 60 per cent. That is an urgent requirement.
I do not need to say that energy policy is controversial. It is a very difficult area and all sorts of issues cause hot controversy. The hon. Member for Norwich, North mentioned nuclear energy, which is highly controversial, but renewable energy sources are also becoming controversial, which is astonishing in my view.
There is universal agreement that energy efficiency and conservation must be the areas of priority action. A cultural change in people's lives is necessary, so that everyone becomes more aware of their responsibilities and can make informed choices about their use of energy. I am convinced that the creation of energy conservation schemes—the energy plans to be drawn up by local authorities—would enhance and encourage the development of a new and strong awareness among ordinary people. That is one reason why it is essential that the process be mandatory. The fact that it is will signal its urgency and importance.
The involvement of local organisations is essential and is also covered by the Bill, which contains a requirement 1200 for local organisations of all types to be involved in the consultation process. The hon. Member for Norwich, North mentioned the Norwich energy action campaign, which led to the creation of the Norfolk Energy Forum, and described the way in which they have resulted in greater public understanding of the importance of energy efficiency.
The hon. Member for City of Chester (Mr. Brandreth) had two criticisms of the Bill—or perhaps they should be described as reservations. One was what he described as the danger of the "top-down" approach. The advantage of such an approach is that it establishes the process within a United Kingdom strategy, which is necessary. Instruction from above is the only means of having such a strategy. However, by involving the local community we would at the same time be encouraging a "bottom-up" approach. I must emphasise that it is essential that such a process be mandatory.
The other reservation of the hon. Member for City of Chester was that the Bill was concerned more with analysis —gathering information, and so forth—than with action. That brings us to the heart of the matter. If enacted, the Bill would set up a process which would identify precisely how action could be most effective. It is not about gathering information for the sake of it, but about making action effective. There is a danger of resources being dissipated in various directions, and of inappropriate action and targeting. Other hon. Members have said that cost effectiveness needs to be considered. The Bill is primarily about efficiency, action and a clear sense of direction.
The hon. Member for Bromsgrove (Mr. Thomason) emphasised the need for an understanding of the most cost-effective ways to bring about improved energy efficiency, and I am sure that that problem would be dealt with by the schemes. After all, clause 2(1)(a) says that the schemes will decide what measures would be desirable and practicable to achieve greater energy conservation as regards the heating and lighting of accommodation. Finding the most appropriate and cost-effective method is therefore the heart of the matter. The question of the cost of implementing the schemes and the programme of energy efficiency is left open. The Bill does not specify how that should be done.
I looked carefully at the paper prepared by the Labour party a year ago. The hon. Member for Islington, South and Finsbury (Mr. Smith) is right to say that that programme would involve no Exchequer cost, because it advocates premia-based bills for people whose homes have undergone changes under the energy efficiency programme. That is one option, but the Bill leaves it to the Secretary of State to decide what method should be used to fund the programme.
Targets for reducing carbon dioxide emissions vary between 10 and 30 per cent. That flexibility recognises the work already done by many local authorities. The Minister emphasised how many local authorities have already carried out considerable work in that regard, but local authorities in many parts of the country could save at least 10 per cent. more in carbon dioxide emissions. The effectiveness of the work can be monitored simply by measuring energy consumption in areas where the programme has been implemented. That can be seen in the level of people's fuel bills, so it is easily feasible.
Local authorities' environmental and housing departments are uniquely equipped for carrying out the work of the survey and deciding what needs to be done. The 1201 execution of the tasks is non-controversial because in most cases local authorities would act as enablers rather than providers of services. The hon. Member for Eastbourne (Mr. Waterson) and the Minister cast doubt on the figures prepared by Newark and Sherwood and by Derby local authorities. There cannot be much doubt that the work was done rigorously—it was certainly done in good faith on the basis of what those authorities thought would be necessary to set up the equipment to carry out the surveys.
§ Mr. Brandreth
Did those two local authorities do that work using their own current resources? If so, I imagine that, like my own local authority, they did it because they believed that it was worth while. I am reluctant to have a mandatory system imposed because it would take away a local authority's incentive to do the work for its own good and for the sake of the housing stock in its community. It would then become a matter for which funding is provided and for which audits must be carried out. Those local authorities are doing the audit because they know that it makes sense, which is why I favour the voluntary principle.
§ Mr. Dafis
I take the hon. Gentleman's point, but local authorities must understand that it makes sense for all of them to undertake the work. The authorities that have been mentioned have done so partly because they are enthusiastic and excited about what it involves. Others have not acted, however, so there needs to be mandatory action to ensure that they take advantage of the opportunities.
§ Mr. Robathan
I have not been here for the entire debate, but I said that I had been contacted by all my local authorities, which are enthusiastically backing the Bill. District councils would have to implement its provisions and I believe that they and individuals across the country would enthusiastically give their support.
§ Mr. Dafis
I have come across hardly any opposition —for the sake of honesty, I stress the word "hardly"—from local authorities to the principle of the Bill's provisions being mandatory. The principle is largely accepted by most local authorities and we have had many requests for information.
Concern has been expressed that the process would be regarded as authorising prying into private homes. I do not believe that it should be a matter for concern, because local authorities have a responsibility under the Housing Act 1985 to assess housing conditions in their district at least once a year and energy efficiency should be part of that assessment.
Newark and Sherwood reckons that a 2 per cent. sample of housing stock would be sufficient to obtain the energy profile of an area. The Bill would provide no additional powers or rights of access to buildings. It would not be difficult to obtain the support and co-operation of householders, as they would gain a considerable advantage from a visit by the person carrying out the energy audit; they would be given a great deal of useful information about their property and how to make energy savings.
§ Mr. Milligan
The hon. Gentleman says that people would benefit, but is he suggesting that only 2 per cent. of households would be visited? If so, the benefit would be rather limited.
§ Mr. Dafis
I mentioned the benefit to show that it would not be difficult to obtain the co-operation of private 1202 householders in order to gain access to their property because it would be to their advantage. I cannot imagine that householders would object, but if they did there would be no access to their property.
Reference has been made, to the remarkable coalition of support that has gathered around the Bill, not least among Members of Parliament. It is striking that there have been so many strong expressions of support and substantial contributions from Conservative Members. Many organisations also support the Bill. It has been said that they are of a social and environmental nature, although businesses also support it.
Organisations representing disabled people are especially interested—a fact which merits attention. Disabled people spend far more on energy than other people. The imposition of value added tax on domestic fuel will impact heavily on them. According to figures that I have seen, it is clear that the concessions granted to help those in lower income groups will not entirely compensate for their increased expenditure, so social as well as environmental objectives need to be considered.
An important political objective could also be achieved if the Bill were passed. There is an opportunity for the Government to show that they are prepared to deal with energy efficiency seriously. A range of measures has already been introduced, but the passage of the Bill with its mandatory powers would convince the public at large that the Government are serious. It would be seen as an attempt to get to grips with the unfortunate and damaging effects of the introduction of VAT on domestic fuel. Thousands of people will be watching the Bill's progress carefully.
We need to think in the context of the need to approach sustainability. The Minister has emphasised that. The Government's intentions were shown by the publication of the documents a fortnight ago about the Government's commitments to Rio, their statement that we need a radical change of direction and their insistence on the need for a sense of urgency in relation to sustainability. No one should underestimate the enormity of the task that approaching sustainability involves. The Prime Minister described it as a "huge task".
The Bill is the perfect example of sustainable development. It provides improved welfare and a better quality of life in the form of comfort and improved health. It facilitates increased economic activity and greater efficiency. It reduces heat and maintenance costs, reduces pollution and leads to a better husbanding of natural resources. It is a practical Bill, despite the reservations that the Minister mentioned. It is uncontroversial. It is not over-ambitious. In addition to being practical, it would signal the Government's willingness to take seriously the subject of energy efficiency and the task of approaching sustainability.
I very much hope that the Bill will be enacted in its entirety or nearly in its entirety.
§ 2.1 pm
§ Mr. Stephen Milligan (Eastleigh)
I must congratulate the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), whose brainchild the Bill was. It has proved, at least so far, to be a sustainable development.
Unfortunately, I was not in the House to hear the opening speech by the right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) whose Bill it is, and I apologise to him for that. I had to be in my constituency for 1203 the past 48 hours, where we had an important meeting with the Minister for Public Transport to discuss the future of railway jobs. Indeed, I was not here last night. As the hon. Member for Ogmore (Mr. Powell) is sitting on the Front Bench, I thank him personally for the sensitive and co-operative way in which the Labour Whips Office is administering the policy of non-co-operation. It has been of great advantage that that has not been administered too tightly; as a result, some hon. Members have been enabled to leave the House from time to time. [Interruption.] One has to pay tribute where tribute is due.
There has been a certain degree of political correctness in the debate. The fact that the Bill is supported by three parties and a wide range of sponsors should induce some scepticism.
§ Mr. Milligan
That deepens the suspicion. If everyone is agreed on spending other people's money, we must consider the Bill carefully.
The first question that we have to ask, which no one has asked in my hearing in the debate, is: do we need to save energy? What is the purpose of saving energy? It was argued some years ago that we need to save energy simply because energy is a finite resource; we are running out of oil and gas; therefore, we need to save energy.
I do not believe that that argument is credible any longer. There are many other finite resources. There are finite supplies of many minerals. We do not have to have saving programmes for ferrous metals. That argument is extremely dubious. We have greater known resources of energy than at almost any time in human history. The resources of oil and gas are very extensive. In this country, we have 300 years' supply of coal under our soil. We are closing pits because it is no longer economic to extract the coal and because other technologies are more advantageous. That may well be the case for other sources of energy of which there is considerable supply. So the fact that there are finite energy resources is not in itself an argument for saving energy.
§ Mr. Robathan
My hon. Friend comes to the debate somewhat late, as he admits. It would be reasonable to ask whether he pays any fuel bills, because if he does, he will know that they are quite costly and that the less fuel he uses, the less he will have to pay. In his own very rich condition, I am sure, it may not matter to him too much, but to many people it matters quite a lot how much they pay. I am sure that he realises that that is a good reason in itself for saving fuel and energy.
§ Mr. Milligan
I am happy to show my hon. Friend my fuel bills for recent quarters, from which he will see that my consumption is modest, as indeed are my means. Like many people, I am conscious of the cost of fuel, but people must meet many other bills. They know what they are and 1204 can decide whether to install energy-saving measures. They do not need a Government measure to make that decision or to pay more tax to support such a measure.
There were scare stories about 15 or 20 years ago, at the time of the first oil crisis, that oil was running out and we had to have massive energy-saving measures. Oil is now cheaper in real terms than it has ever been. We have plentiful supplies of energy, including on this island, and it is not clear that we want to reduce energy uses for that purpose.
The second argument is that we need to save energy for strategic reasons, but, as we have so many energy resoures in this country, it is not clear that there is a strategic argument for saving energy.
The only serious argument for saving energy is global warming. Has the case for global warming been proved? It is perfectly clear that the earth is warming up. One need only look at the length of glaciers in the Alps, which have been shrinking in the past 30 or 40 years, to realise that we are living on a warmer globe. That is not a bad thing. There are many disadvantageous results, but there are advantages, too. It may soon be possible to expand vineyards in southern England. Instead of trying only to prevent global warming, we also should be taking more action to adapt to it and to take advantage of it. If we were faced with global cooling, how much more worried we would be about the situation.
§ Mr. Patrick Thompson
My hon. Friend, in his interesting argument, mentioned global cooling. I should like to bring him back to the nitty-gritty of the Bill. I have discovered in the past hour that Norwich city councillors have suffered much cooling and have been made uncomfortable, which shows what needs to be done at a more practical level. I gather that a survey conducted in the past 19 hours of 406 windows in Norwich city hall showed that 19 would not open, 123 would not close, 48 had broken fittings, 21 had missing fittings, 20 had damaged or corroded frames and 201 panes of glass needed replacing. Surely we should be discussing such practical measures of insulation to ensure that we use energy efficiently and that councillors keep warm rather than the esoteric matters that my hon. Friend is suggesting.
§ Mr. Milligan
I am grateful to my hon. Friend. It seems, if I may put it in graphic terms, that Norwich has a window of opportunity to take advantage of the new consensus in favour of energy saving.
It is clear that the globe is warming up, but it is rather less clear whether that is due to natural or man-made factors. Evidence on that is still not certain. As results of global warming would be fairly disastrous if it continued according to some of the more extreme forecasts, it is right for us to take measures to reduce energy usage. In all environmental matters, however, there is a tendency for a consensus to develop in the House—we all want to be seen to be green and pro-environmental—without counting the costs.
We have realised in recent years that, faced with the costs of environmental improvements, people take a different attitude. I cite the example of rising water bills. The House approved EC directives to increase the quality of water in the seas around our beaches and of drinking water, but people across the country are now facing huge increases in water bills. I am surprised that there has been such controversy about the effect on elderly people of 1205 imposing VAT on fuel, because the increase in water bills that many elderly people are now facing dwarfs the increase in fuel bills, especially after the compensation measures that have been agreed by my right hon. and learned Friend the Chancellor. People are asking, "Are we getting the environmental benefit that was promised? No one told us the cost." In considering measures such as the Bill, it is relevant to ask difficult questions about costs.
I was not present to hear the speech of the right hon. Member for Berwick-upon-Tweed, so I do not know what details he proposed, but in an article in The House magazine he suggested that the cost per council could be about £50,000 or £60,000. That seems to be pretty unrealistic. The survey and audit would be very limited —the hon. Member for Ceredigion and Pembroke. North talked about 2 per cent. of houses. I am not sure that there will be much advantage if only 2 per cent. of houses in my constituency are audited. I do not see how we can learn much more from an audit than from a general study of conditions across the country. If the proposal is to conduct a house-by-house survey, the figures given seem unrealistic. At a time when everyone is complaining about rising taxes and the level of the public sector borrowing requirement, we must be extremely cautious, particularly if the burden is to be borne by council tax payers.
I thank my hon. Friend the Minister for the generous settlement agreed for the standard spending assessment for the Eastleigh district, which has enabled Eastleigh council to reduce its share of the council tax by 50 per cent. I wonder how many other boroughs can boast that they have halved their proportion of council tax. At a time when people are finding it difficult to make ends met, the prospect of increasing council tax, for whatever worthy reason, must he studied with care.
§ Mr. Iain Duncan Smith (Chingford)
Does my hon. Friend agree that clause 3 of the Bill is worrying? We have heard many complaints recently about the Conservative Government centralising powers in Westminster and taking them away from councils. Clause 3 of the Bill gives the Secretary of State onerous powers and duties. Does not that run contrary to messages about decentralising power?
§ Mr. Milligan
I know that my hon. Friend is a proponent of subsidiarity and appreciates the principle of the Maastricht treaty—although he has doubts about other of its aspects—but his words reflect the fact that powers and responsibilities must he borne at the appropriate level. I am not convinced that local authorities are the appropriate level. Some of them do good work—I am impressed by the work in my own district, where the provision of energy-saving schemes for elderly people has been encouraged. Elderly people have been compensated for the increase in VAT, but they face far higher fuel bills than most of us. We can spend time in the Chamber and turn the heating off at home, but people at home all day face higher fuel bills.
I have been impressed by the literature sent out with recent electricity bills by local electricity companies. The literature sets out in detail the sort of savings to be made from different investments. Double glazing yields certain savings, while protecting hot water boilers produces different savings. The literature graphically charts the savings that one can expect.
As one of my hon. Friends said, double glazing produces a low rate of return. It can cost between £3,000 1206 and £5,000 to install, and has a long pay-back period. In my constituency, Southampton city council has embarked on the improvement of some of its council estates and has forced people to install double glazing in their homes. Some people have bought their flats and cannot afford double glazing. Two of my constituents faced bills of £8,000 from Southampton city council. It insisted on installing double glazing against the wishes of those tenants, who had bought their flats and believed that they were free to make their own choice of improvements. I have written to my right hon. Friend the Minister for Housing, Inner Cities and Construction to ask him to intervene in that case. The policy may save energy, but it is imposing intolerable burdens on my constituents. Such costs should be looked at with great care.
I do not know whether my hon. Friend the Parliamentary Under-Secretary of State will have a chance to reply to me today, but I have noticed something else about the electricity companies' bills. They state that one way of saving VAT on fuel is to pay the VAT in advance —to suggest that one has used far more fuel in the current quarter than one will in the next quarter. In that way, one can avoid VAT for several years. I suspect that many people may take up that opportunity, which is an easy way to avoid the tax. The policy will yield a huge bonus to the electricity companies without providing a corresponding bonus to the Treasury. I do not know whether my hon. Friend wishes to encourage or discourage people to take advantage of the scheme, which is perfectly legal, but reduces the impact of the savings to be made by imposing VAT on fuel.
The Liberal Democrats' proposed carbon tax has been mentioned. I am puzzled about its impact. It was suggested, I think by the hon. Member for Southwark and Bermondsey (Mr. Hughes), that its main impact would be to introduce extra taxes on industry. Industry already pays VAT on fuel. A carbon tax would place an additional burden on industry and destroy jobs, whereas it has been argued that the Bill will promote jobs in energy conservation. I hope that the Liberal Democrats' idea of a carbon tax will die a slow death.
§ Mr. Milligan
A quick death. My hon. Friend has corrected me. I do not see any advantage in introducing that tax on a European basis when the situation in various countries differs so greatly.
I do not wish to oppose the merits of the Bill, as the principle of it is sensible. If it makes it possible to introduce more information and more studies of the benefits of energy conservation, that will be excellent. However, the Bill imposes a wide range of extra duties on local authorities, which are hard pressed at present and have a number of responsibilities. Some local authorities find that implementing and paying for certain responsibilities—for litter, for example, which seems a good thing for which to ask local councils to take responsibility—is quite onerous. We must think carefully before we load yet another responsibility on local authorities and ask people to pay even more council tax.
If the Bill goes to Committee, it will be considered carefully, but it must be viewed sceptically before further burdens and regulations are introduced.
§ Mr. Tom Cox (Tooting)
I shall make a short speech because other hon. Members wish to introduce Bills. I congratulate the right hon. Member for Berwick-upon-Tweed (Mr. Beith) on introducing the Bill. It is obvious that there are reservations about it, although, having been in the House a fair number of years, I have always heard it stated by whoever happens to be in Government that there are reservations about Bills. The proper place to discuss those reservations is in Committee. The Minister has suggested that the Bill will not be opposed and I hope that it will go to Committee, where genuine concerns can be discussed.
All hon. Members know from the contacts that we have had and from the visits that we have made in our constituencies that there is a deep concern, especially among elderly or disabled people and people on low incomes, about heating bills. Often, the houses that they live in are in urgent need of substantial improvements to doors and windows, which would make all the difference.
The hon. Member for Bromsgrove (Mr. Thomason) talked about the great benefits of privatisation and how electricity prices, if anything, have come down. Conservative Members need to read the recent report of the Electricity Consumers Committee, which was published on 25 January. That committee was set up by the right hon. Member for Henley (Mr. Heseltine) to try to protect the interests of the consumer. The report is a most damning indictment of what has happened since privatisation. It said that privatisation had delivered a totally inadequate deal for the country's 21 million electricity consumers and it called for big price cuts. The report also made the most damning comments about the behaviour of many of the people who now head those organisations, about their salaries, about 1208 share options and about the ever-increasing profits and dividends. The people appointed by the then Secretary of State for Energy now criticise what is happening.
I should like to comment on a paper that I and other hon. Members have received from the Association of Metropolitan Authorities. I am sure that those authorities cover all the political parties represented here. The association is in total support of the Bill. It says that the Bill will certainly help to reduce carbon dioxide emissions and will help energy conservation, and that the enormous numbers of people—some 7 million in this country—who sadly suffer from fuel poverty can only benefit from such legislation. It adds that every year some 40,000 people in Britain die because they cannot afford to have their homes properly heated. Any number of our constituents will tell us the same thing.
The AMA also says that such measures would create employment. No doubt people will ask, as they so often do, "Where will the money come from?" What about the enormous resources that local authorities gained from the sale of their housing stock? Many authorities, irrespective of the political party in control, are begging the Government to allow them to spend that money. If they were allowed to spend just some of those enormous resources on the measures that the Bill seeks to introduce, it would help to create employment as well as to improve local authority housing stock.
I hope that the Bill will be given a fair wind in Committee because there is no doubt that those whom we seek to represent fully support it.
§ Question put and agreed to.
§ Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 61 (Committal of Bills).