§ 5.15 p.m.
§ The Earl of LAUDERDALE rose to call attention to the need to conserve energy as a scarce resource and the need for effective Government policies to this end; and to move for Papers. The noble Earl said: My Lords with 14 speakers named for a debate of two-and-a-half years—I mean hours—it is clear that we must all be selective. So I propose to omit any further reference to depletion policy as belonging to the supply side, which I am not going to focus on, nor shall I argue the case for or against Mr. Gerald Leach's low energy strategy. I mean to focus on the demand side—the supply side at the consumer end.
§ Recognising that frugality is a handsome income and that economy is the poor man's mint, I draw attention to four fundamentals. Rising energy prices help, if they are rising in real terms, but the market economy works properly only in a perfect world. Secondly, investment is surely justifiable when the net present 261 value of savings expected exceeds the capital cost. A good example was when, at one of the BP refineries, a sum of £2½ million was invested which brought about savings on input of £1. 8 million a year. Thirdly, the investment context is the general expectation that energy prices will double in real terms by the end of the century; that is, at about 3 per cent. compound per annum, roughly the rate of real return on manufacturing investment in the past decade. Finally, wiping up waste and saving energy merits appraisal as an investment option alongside any programme for new power stations, which will cost not a penny less than £1,000 million each and involve a 10-year lead-time.
§ The set-up inherited when the present Administration took office last May was described in the White Paper of 1975 (Cmnd. 6575): an inter-ministerial and inter-departmental committee, of no fewer than 11 Ministries, with which, in typical Whitehallese, we were told the Treasury would"keep in close touch "—you bet it would!—would be advised by an Advisory Council on Conservation, with the Department of Energy conservation unit as—again, in the best Whitehallese —the"focal point ". All this to do no more than"promote and encourage ". There was not a word about an investment programme. But you cannot carve satisfactorily in butter.
§ Some attainments there have been. By July last, some 40 per cent. of local authority houses and some 53 per cent. of owner-occupied houses are believed to have been insulated Several big building firms, such as Bovis, Barratt and New Ideal, have adopted the Medallion design sponsored by the Electricity Council, which is estimated to cut the electricity use of an 80 square metre house by something like a half—that is, the design as improved since 1975. But I must add that some other building firms are not doing so.
§ As to offices, the Yorkshire Electricity Board has set a fine example by designing new offices which, in their turn, cut electricity use down to 200 kilowatts per annum per square metre. In the area of shops, they have again promoted the use of heat pumps which, as against the conventional package of air conditioning and ventilating, have brought savings in elec- 262 tricity consumption of up to 40 per cent., with little more than 10 per cent. increase in the capital cost of the installation. An example, I am told, is the Mothercare shop at Woking. The chemical industry has cut consumption per unit of output by 8 per cent. in the period 1975 to 1978. Generally in industry sodium lamps are replacing high-pressure mercury and fluorescent lamps, and automatic lighting controls are coming in. Perhaps the most significant changes relate to the road where the motor manufacturers have covenanted to ensure that new designs improve the mileage per gallon by about 2 per cent. each year, starting five years ago and looking five years hence. There have been some enterprising local authority initiatives, such as the recycling of refuse in Manchester and elsewhere to generate heat, and the glass industry has developed an enterprising bottle-bank scheme.
§ But is is no good trying to satisfy a tiger by feeding it on cat's-meat. Between 1975 and 1978 the total energy consumption of this country, including losses on conversion, was up 5 per cent., and last year it was believed to have been up another 5 per cent., but the statistics are not yet complete and no doubt the heavy winter had a part to play. The domestic figure shows that consumption per head went up 4 per cent. in the period 1975 to 1978, and possibly by as much as 9 per cent. last year.
§ Let us deal with the miscreants, sector by sector, in the period 1966 to 1978. In industry the growth has been 35 per cent.; in domestic use 42 per cent.; in commercial use 73 per cent.; in public buildings 75 per cent.; and in offices 121 per cent.
§ One is told by those in business that the domestic building regulations are trailing behind the rise of energy prices and are way behind the level at which it would be economic to push further improvements. The current housing regulations, under Statutory Instrument No. 723 of 1975, took two-and-a-half years to gestate. The latest Housing Regulation proposals put out for consideration could, it would seem, be much stiffer in terms of loft and wall insulation given the most recent rises in energy costs in real terms, and apparently they ignore the insulation of ground floor flooring and the question of draughts. They fall completely short of the Medallion standards pioneered by the 263 Electricity Council, and the same is true of building regulations for commercial buildings.
§ There are many opportunities for savings. In regard to road transport, what about speed limits? Our limits are higher than those on the Continent. What about petrol sales? In some countries, with rough justice, petrol sales are limited to alternative days according to one's registration number; even numbers on certain days and odd numbers on other days. It has the effect of cutting down petrol purchase. What about restricting cars in town centres? Little has been done about that so far. How about the suggestion of equating the tax on diesel and petrol so that they are level, and therefore encouraging rather than discouraging transfers to diesel, which in road traction can mean a saving of 25 to 30 per cent? Then one must consider the encouragement of petrol additives supplied by such firms as Chalbar and others.
§ Let us consider opportunities for savings on the railway. British Rail uses 5 per cent. of the transport energy for 7 per cent. of the country's passenger miles, and 16 per cent. of the country's freight ton miles. A medium electrification scheme to take between 22 and 31 per cent. of the network would add about 2,000 to the present 2,300 GWH electricity consumption in a year, but would cut diesel consumption from 170 million to 80 million gallons a year. A greater scheme to take electrification up to 50 per cent. of the network would add only 2,700 GWH electricity consumption per year, but would cut diesel use to 30 million gallons a year.
§ What about combined heat and power? The gossip in Whitehall—I am not claiming that there is a particular Conservative leak in my direction, although there seems to be in many other directions—is that the Cabinet are approaching a decision on the Marshall Report about whether to identify a suitable site for a pilot scheme. Surely the critical question in this area is the flexibility available to the CEGB to buy and resell surplus energy already generated by industry for its own use and surplus to its needs.
§ What about amending the Electricity Act of 1947 to put heat sales on a level with electricity sales? Of hospitals it is 264 commonly said that there is tale after tale of ventilation and airconditioning equipment being badly maintained and leading to extra consumption. There is certainly tale after tale of boiler and furnace instruments in the smaller factories being either not maintained, or ignored if they are working. There is surely need to push the heat service contractors who are in business to advise companies on saving energy, so that they may live on the profits they can make out of it by having something to sell. There are one or two such contractors who are very well known. Providers of additives, such as Chalbar, come to mind in that connection.
§ Let us consider electricity and gas tariffs. Is it absurd to think in terms of regressive tariffs so that the more one consumes the still higher one pays? What about relating tariffs to the steps taken by consumers to insulate their properties? The suggestion has been made on many occasions that company law should be amended to require manufacturing companies to include an energy audit, that is to say per unit of output in their annual accounts. The bottle-bank scheme to which I referred could surely be matched in regard to tin cans, bottle tops and newsprint.
§ Some remedies are tactical; some are a question of exhortation; some-I respectfully submit in view of my remarks about investment—are mistaken. I refer to the withdrawal of relatively small grant schemes which, since they were not fully taken up. do not offer all that great savings. Then there are some remedies that relate to incentives. The critical decisions are strategic. They are way beyond the capacity of the set-up inherited last May—the kind of decision to save, let us say, a £1,000 million power station and to allocate a comparable amount of investment to serious efforts of energy saving.
What can be achieved is determined entirely by our horizons. Last December the Prime Minister, addressing the Foreign Policy Association in New York, listed this as one of the eight top priorities for the whole Western World. I quote:
to conserve our energy resources, especially fossil fuels ".
I believe that we need to separate responsibility for this right away from the Department of Energy's job to see that energy is generated. It needs to be handed
over to the sort of task group urged five years ago by the Select Committee on Technology in another place whose recommendations I quote in these terms:
…. effective conservation policies are unlikely to emerge without an appropriate machinery … in view of the urgency of directing and co-ordinating a range of diverse activities, we favour an interdepartmental structure … The essential feature of any new body must be to get things done and to mobilise public support. It must therefore command sufficient resources and political status "—
I commend in particular those words"and political status "—
within Government for the task in hand ".
The report continued:
In view of the lack of direction at the centre, we recommend that a task force ' of Ministers, officials and a few outside experts… should be set up: (i) It must essentially be full-time, it should be directed at Ministerial level and should report directly to the Prime Minister "—
I draw noble Lords' particular attention to the requirement that the task force should report directly to the Prime Minister.
(ii) It should absorb and replace the Advisory Council on Energy Conservation. (iii) It mustbe given a clear target to aim at…".
§ There are all sorts of proposals that can be made. There are all sorts of arguments to be deployed. Rut without the right structure and access to the Prime Minister, and responsibility laid within her reach for critical strategic decisions in this field, I believe we shall get nowhere. I beg to move for Papers.
§ 5.33 p.m.
§ Lord STRABOLGI
My Lords, I am sure we are all very glad that the noble Earl, Lord Lauderdale, has put down this Motion, since conservation must play an important part in any future energy policy. When the noble Earl said, with a charming slip of the tongue, that he hoped the debate would not last for two and a half years, I was reminded of one noble Lord, now long since dead, about whom it used to be said that his speeches seemed to last for three weeks although in actual fact they only took 10 days. I congratulate the noble Earl for having managed to attract a good many speakers to his Motion. I shall try not to be guilty, and to speak as briefly as possible.
Whether we rely on increased coal production, or on nuclear energy, or on both these sources—as I believe we should 266 —we need, as the noble Earl has said, to save and husband our resources, and to plan ahead as much as we can. This will be particularly important during the next few decades when the world's oil, including our own North Seal oil, begins to run out. Shell recently published a report on energy efficiency which concludes that, even with existing technology, 30 per cent. of our energy could be saved by technical improvements.
There is scope for a wider use of combined heat and power systems (which are widely used in Scandinavia). I am sure that we were very interested in what the noble Earl said about this, and we hope that the noble Earl, Lord Gowrie, will have something to say about it in his reply.
I agree, too, with the noble Earl that there should also be a much more rational use of our transport, both road and rail, for passengers and freight. Private cars account for a very large consumption. There are more than 300 million passenger cars in the world, with 40 per cent. of them in the United States. I am glad to see that efforts are being made in the United States to reduce the size and fuel consumption of private cars. Indeed, already we see rather fewer of those enormous limousines that we used to see in the 1960s, which seemed to stretch on for ever and to take up the parking space of several cars. I believe that over here the Society of Motor Manufacturers are working on this problem. Perhaps the Minister will tell us what the Government are doing to encourage the better and more economical use of private cars.
The noble Earl also mentioned the glass industry and the bottle bank scheme. I am very glad that he did, because in my professional life I had quite a lot to do with promoting this scheme. I know the amount of energy saving that the glass industry is able to make by recycling Gullet, as it is used to produce new glass.
In the case of freight, only about 10 per cent. is carried by rail and water, which is much less than in many other industrial countries. Perhaps we should be thinking really seriously about reviving our canals and about ways of diverting more freight on to the railways. Lady Castle made an effort at this when she was Secretary of State, but nothing very 267 much happened. We hope that the present Government may be more successful. I think that this is something which should be considered very seriously for the future. We need to do rather more than to rely on market forces and rationing by the purse.
The Government must also do more to encourage home insulation. Indeed, I am sorry to say that at the moment the result of their policy is positively to discourage it. It seems almost unbelievable—and I would not believe it of any other Government but this one—that they should choose this time to propose a cut of 50 per cent. in the budget for private sector insulation under the Homes Insulation Scheme during the current financial year and to merge the local authority allocation for insulating council houses into the already drastically reduced housing insulation programme.
The Government, continuing on their blinkered course, have also decided not to carry on with the plan for advisory centres on insulation; and, to cap it all, the Department of Industry have decided not to renew the scheme to subsidise investment by firms in more efficient energy-saving equipment when this comes to an end in June. Rather than cutting out the grant scheme altogether in this somewhat ham-handed way, it would surely have been better to have reduced the qualifying figure from £3,000 worth of insulation to, say, £1,000 worth per application. This would at least have been some help to small businesses which the Government are always saying they want to encourage. I agree with the noble Earl that what we want is a task group to co-ordinate this between the different departments—preferably, as he said, under the control of the Prime Minister.
We are falling behind other developed countries in the amount of money we spend on energy conservation measures. Last year I believe we spent about £115 million, but a small country, such as Denmark, spent £275 million—over double. The Dutch plan to insulate 80 per cent. of their housing stock by the end of this year. Their subsidy level is about three times that of ours. We shall have to pay for the Government's shortsightedness in the future, since homes built under the proposed new regulations could be under- 268 insulated at the very start of their 60 year life, and will cost more to insulate later. Then, of course, those householders who are public-spirited enough to install insulation or solar heating find that the rateable value of their house is increased, so that they have to pay more on the new assessment.
In the United States of America householders who improve their homes in this way save tax, but here they are penalised. I tried to do something about that when I was with the Department of Energy. I was not successful because it was the responsibility of other departments like those of Energy and Environment, and of course the Treasury came into it as well, which is another case for having the noble Earl's overall co-ordinating body. Therefore, I hope that the noble Earl, Lord Gowrie, will be more successful because really think that something should be done to improve what is a anomalous situation.
The Government's short-sighted policy seems to extend to North Sea oil. May I ask the noble Earl whether the Press reports are true, that the Government are proposing to sell off the exploration and production side of BNOC to the private sector in order to help to reduce the PSBR? By all accounts, BNOC should be making profits of over £1 billion by about 1985 and North Sea oil is a continually increasing asset. Only rakes or fools sell off their assets to finance a deficiency in income unless there is really no alternative.
There is a further objection to the dismantling of BNOC, and it is this: How can we have a sensible depletion policy without the production side of BNOC? We may need to hold back production one day in certain fields to the level of our own needs. It might be advantageous—I do not put it any higher than that—to leave some of the oil where it is, on conservation grounds. That is one of the reasons why we need BNOC, which is in a better position to afford the delay in revenue and to cover its investment. I hope therefore that the Government will not sell off this great capital asset for short-term reasons of expediency or on ideological grounds because they cannot bear to think of any part of the North Sea production being owned by the State.
269 In the case of coal, half of the coalfields in South Wales were recently under threat of extinction because BSC had been importing large quantities of coking coal from abroad. Happily, that danger has been averted by a short-term agreement negotiated between the National Coal Board and BSC, whereby BSC has agreed to avoid any increased import commitment during this year. However, that is only a temporary respite and there will still be some surplus in South Wales. Further negotiations will be necessary for the period beyond this year.
The Coal Board believes, and I agree with it, that imports should be supplementary to, and not in place of, United Kingdom production. The coal industry's general productivity has been rising over the last year, and last month saw the highest output for six years. That shows, I think, that the massive investment in collieries by the National Coal Board during the time of the last Government, at the cost of about £500 million a year, and the new incentives scheme are beginning to pay off.
However, for coking coal the position is different and our industry cannot compete with foreign imports without a subsidy. The position has become even more precarious since the closure of so many steel plants. I think a Government subsidy would be preferable to the closure of pits. Most other ECC countries take the long view and subsidise their coking coal production, West Germany by £12 a tonne, France by £15 a tonne and Belgium by £24 a tonne; but in Britain the subsidy is only £1 a tonne. The National Coal Board and the National Union of Mineworkers want a subsidy like other ECC countries, and I believe the amount suggested is £10 a tonne. Twenty pits in Wales are under threat. Once a coal mine is closed it cannot be opened again and we may need all of our indigenous coal one day. We have the best working seams of coal in Europe and we must conserve this great energy source and not let it become the victim of short-sighted, monetary fanaticism for which future generations will not thank us.
§ 5.45 p.m.
§ Lord TANLAW
My Lords, I am most grateful to the noble Earl for instigating 270 this debate at this time, because the energy argument must press forward and step-by-step we are emphasising different aspects of it. I am only sorry that due to a long-standing formal engagement I shall be unable to remain until the end of this debate. I shall look at Hansard with great interest because I think that the noble Earl has put forward one of the main criticisms that we would put forward from these Benches to Her Majesty's Government, that there does not appear to be a clear investment programme in conservation as such. I feel, also, that the suggestions that the noble Earl put forward in the course of his opening speech are the objectives towards which we from these Benches are working; an energy-efficient society based on the most efficient use of energy-producing raw materials in which the conservation of all energy will make a considerable contribution by the year 2000. We, too, believe that 30 per cent. is a reasonable figure and we agree with Shell that it is attainable, provided that the Government offer the correct incentives.
I feel that part of this programme of conservation will mean having to look again at all of our raw materials from which energy is produced. I think, in particular, what has been said by the noble Lord, Lord Strabolgi, is relevant in regard to coal. We think in 20 years' time that coal will be considered too valuable to be burnt for the production of electricity. It will have many other uses; the liquefaction and gasification processes will open up new fields; coal may not be used for electricity production. Therefore, I would be interested to know what is the Government's view of substitution, first, through conservation and, secondly, through alternative energy strategies.
I believe—although I stand to be corrected—that the new costings on the Severn Barrage are beginning to show that it will be an economical project; in spite of its huge capital size it will produce benefits on a substitution basis. The combined heat and power already mentioned is another area of investigation for which we have pressed from these Benches, and we are relieved to see that it is being taken seriously at last.
If those points are accepted, then in our energy efficient society I believe that there must be an acceleration in what has 271 been really rather a boring subject, which is labelling. I maintain, and I have said this before in this House, that one cannot expect consumers to conserve energy if they do not know the correct rating or efficiency of the machine that they are using, be it a motor car, a house, or an appliance in the home.
I should like to take this opportunity of making a correction. When we had this discussion on labelling in Hansard on 24th July 1979 and the reference is to column 1709—it has been pointed out to me that I gave the energy efficiency figures for a heat pump instead of for an electric oven, and I should like the record to be corrected because it does not make much sense. They are two entirely different ratios, as some noble Lords are aware.
What this debate is really about, and we hope to extract from them the information, is whether the Government have a conservation policy and programme other than that of price. While we accept that price is a very real way of achieving conservation, it is not clear whether the Government are actually increasing the prices for other reasons, and the Treasury has been mentioned as one of the causes, rather than as part of a specific programme of which a step-by-step price ladder is being worked out by the Government for the future.
Home insulation has been mentioned by both the two leading speakers. We too are extremely concerned about the lack of grants that are available fully to insulate a home for the ordinary householder to achieve his own private conservation policy. The latest figures that were available to me before the debate show that it is possible to obtain through the local authority 60 per cent. of the cost, up to a maximum of £50. Our calculation is that to do a proper job on a house will cost up to £250 and we should like to see two-thirds of those costs met by some form of grant in order that householders may do the job properly because in our view to do the job improperly is a waste of £50. If we are going to insulate a house we might as well do a proper job.
We also feel, with the noble Earl, Lord Lauderdale, that the building regulations are not adequate and that indeed the future anticipation of the Government still makes 272 them inadequate by European standards with regard to insulation. Again I feel that there should be some indication by Her Majesty's Government as to whether they agree with this policy or whether they are prepared just to let it go for the time being, because we believe, with the noble Earl, that perhaps there is not as much time as the Government give the impression of there being at the moment.
With regard to transport, we feel that further electrification of the British Rail system is a matter of some urgency which must be decided within the next two or three years if it is to be implemented at the time when it is most required, which I think is between 15 and 20 years from now. There is a minor point of which some noble Lords may not be aware—and I have declared my interest in electric traction before—namely, that the law regarding the use of electric traction vehicles within an urban environment is about 50 years out of date. It is a technical point regarding earthing and the cables required for this. We feel that if the trolley bus—which is making its comeback in many cities of Europe now as being the most practical, clean and efficient form of urban transport—is to make an impact in our cities in this country then we must look again at the law regarding the use of electric vehicles in an urban situation. Although some enlightened councils are testing out vehicles on private tracks, they are unable to do so on a route in order to get a proper assessment of its use because of the law as it stands today. So perhaps the Government will look at this matter. I think it would be possible to develop a form of trolley bus—or indeed a tramcar—which would not need a great tangle of wires which environmentalists (in some ways rightly) do not want to see come back to our cities again. Nevertheless, it is a much cleaner and more efficient way of doing it, such as is done in the City of Melbourne and which is not unattractive and provides a very efficient service for the public there.
On another point, the creation of a national energy authority is a part of Liberal policy which is going to be discussed in the Scottish Liberal conference tomorrow when I go up to Scotland; we are recommending a national energy authority to cover all spheres of energy production in this country. I think (and 273 I hope) it would report direct to the Prime Minister, and it would offer an opportunity to clear up some of the cross-departmental delays that occur and misunderstandings —and indeed unfairness—vis-à-vis. Consumers, But the most important thing from my point of view is that it may be possible, through such an authority, to clear up once and for all the long-term funding of the energy industries. It seems to me extraordinary that an industry as large as the electricity or the gas industry has to negotiate its capital programme on a year by year basis. No business ever does that; it is impossible to do it. One either agrees a capital project and works it out on a discounted cash flow basis over a five year period or the period of construction and then it goes ahead step by step. But if one has to agree how much money is available each year that is perhaps the least efficient way to create a capital programme, because on a stop-go basis every time the capital programme is stopped the cost of restarting it is enormous and of course escalates to the extraordinary total sums that are being created when we build some of our power stations.
So perhaps the Government will look at capital funding and I think a relationship will be found between that and the increase in prices which has just occurred through the Electricity Council to consumers, of approximately 16 per cent. When we had this debate on the gas price increases the argument was put forward that the demand was exceeding supply and therefore in order to cut demand. prices had to be increased and people were asked to conserve. I think the argument has been wrongly put in the Press; but the argument which appears to have been put forward by the Government with regard to the increase in electricity prices is that demand has dropped and supply has increased over demand. Therefore there is a loss of income to the industry and they have to increase the prices in order to balance that loss. Perhaps the Government can give some guidance as to their policy. My own view is that the increase in electricity prices is entirely due to a target set by the Treasury of 1.8 per cent. return on profits on current cost accounting assets. I think that is what is known in the City as"inflation accounting ". As I understand it, the electricity industry has to increase 274 prices on inflation accounting and has to take account of inflation; and, in doing so, it has to increase its prices accordingly. That in itself is inflationary so year by year, by using these inflation accounting methods, the industry will he having to increase its prices, which will be adding to inflation, and so on. We shall get galloping inflation in the energy industries and a direct, sudden and quite unnecessary increase in wages, due to an accounting point of view taken by the Treasury.
I think we must accept that we are not at the moment economically in our prime on a national basis and this surely is the moment to look at this and to make a contribution towards lowering inflation which would simply be a way of approaching the energy industries and saying:"We are going to drop your inflation accounting targets in order that you may price in relation to market forces and not in relation to Treasury accounting ".
My Lords, I may not have made myself clear but I think we are getting into a silly position here which is nothing to do with energy prices and nothing to do with supply and demand; it is due to demands by the Treasury on the methods of bookkeeping in a great industry. Perhaps if the Government will look at that we may get somewhere.
Finally, above all I think we should have to reconsider the problem of energy as a whole. Both the noble Earl, Lord Lauderdale, and the noble Lord, Lord Strabolgi, have suggested this and we are suggesting from these Benches that the time has come to consider a council of the type which I have suggested and which other noble Lords have put forward in their own ways.
§ 5.58 p.m.
§ Lord BALOGH
My Lords, I also wish to thank the noble Earl for having brought this extremely difficult matter to our notice. I am of course glad that I find myself largely in agreement with him and I only hope that this will not harm him in his career in the City and elsewhere!
The use and pricing of petroleum is one of the most difficult questions with which we have to deal and one of the most tantalisingly complicated problems. I think this can be best demonstrated by the fact that so great a guru as Milton 275 Friedman predicted in 1974 that the price of oil could not be held at 10 dollars per barrel because the whole cartel would break down. That was some prediction, given the fact that the price of petroleum multiplied by 12 in the period from just before the prediction and the present time. Demand for it is very stolid; how stolid it was can be seen by the fact that an unparalleled increase in the price hardly stopped the rise in the demand for oil. Of course, any disagreement about price, any breach in the unanimity of the cartel, did not bring about a fall in price but a rise in price.
This very odd phenomenon can be easily explained; of course, the real theoretical monopoly price (because that it is) for oil is, roughly speaking, according to my calculations, between 80 and 100 dollars per barrel. One may well ask, why should the Arabs not raise their price to the true theoretical price? The answer is, of course, political. The Arabs depend as much on America as the Americans depend on oil from the Arab countries, and the Arabs would not wish to antagonise the most effective protector they have. I do not know how good a protector it is, but it is the one they have.?
It is clear that to rely on the market to get the development we desire, the saving of energy, would be courting disaster. We are here confronted not with a situation where the most profitable price will be prevailing, but the price which for political reasons the main producer decrees. If economic affairs worsen still further I cannot see any possibility of fulfilling our obligations under the Energy Agency in Paris without rationing. I think there is no doubt that without it we will not get the sort of redeployment of resources which we need.
Thus substitutes have to be found. But where are those substitutes, and what do they amount to? Coal, of course, is a good substitute, and it is to be hoped that the temporary losses made by our coal mines will not lead to closures and permanent diminution of productive capacity. It is very probable that oil prices will go up and the price of coal will go up. Therefore I think a bridging period is necessary. Unfortunately, that is not now likely, because of religious 276 reasons, of monetarism. There is very much loose talk about substitutes. There is, for instance, the problem of electricity from the winds. But how many of your Lordships would like to have windmills, 150 to 200 feet high, with the noisy propellor rattling morning, noon and night? I think some of the enthusiasts of non-conventional instruments have not taken into account the political realities of their plans.
So we are driven for considerable saving to propaganda."Save it"was invented when I was a Minister. I did not think it would do any good, and it did not. Much more likely is an American recovery, because they have shale and they have tar sands; that is a possibility. The most important thing—and Governments, both under the previous regime and now, have not put enough steam behind it—is fusion. If we could solve fusion I think our main difficulties would be over for a very long time to come. The relative advantages of electricity and gas will, of course, change.
The noble Earl spoke about the possibility of subsidising the insulating of houses. Perhaps I am putting a different interpretation on his words from the one he meant.
§ The Earl of LAUDERDALE
My Lords, I was saying that I thought the subsidy for insulation was a pretty small scheme anyway. Since it was not very greatly taken up the saving is even smaller I was not advocating subsidy as 'such, but I am advocating investment in general in energy conservation.
§ Lord BALOGH
My Lords, I quite see that. It seems to me that what could be done and what might help is to have a surcharge on the rates of houses which are not insulated, progressive and at the lower end subsidised. The other possibility would be to reverse the charge system for gas and electricity. At the moment we have charges arranged in two or three ranges, and the first range is quite considerably higher than the next one. It seems to me that one could, so to speak, take a standard consumption level based on the number of light and power points, and increase the charges heavily from the second range onwards. There is a great deal of antagonism to 277 this. People say that some householders are locked into an unsuitable energy source. It seems to me that human ingenuity could overcome that. I think at the end of the debate we shall be wiser but sorrier, because we shall begin to realise the difficulties facing any suggestion.
§ 6.9 p.m
§ The Earl of KINTORE
My Lords, I want first to thank the noble Earl for giving us the opportunity of discussing the enormous subject of energy. The only thing is that in a short debate you cannot really do more than talk about very few aspects. I think I agree with almost everything he said, in particular his remarks about a co-ordinating body. This appears to me to be very lacking. There are a number of obviously cost-effective opportunities for saving fuel and money. Are they being pursued with vigour? It does not appear to me that sufficient vigour is being deployed.
The Grampian Regional Council, of which I used to be a member, has had some startlingly successful cases due to the application of heat pumps for heating and ventilating five of their education department swimming pools. Although they serve a small population the example is there, but I do not know how many times it can be multiplied. The results so far obtained are better than those predicted. For the five new pools into which they put heat pumps for recirculating the air, the capital cost was roughly £190,500. That gave an annual saving of £64,206 or about a 34 per cent. return on the money invested, or a pay-back period of the order of two-and-three-quarter years.
The engineers critically looked at the costs and savings obtainable in five other old-established pools in which the Grampian Regional Council has a controlling interest, and a computer study shows that for a capital cost of £71,000 an annual saving of £30,672 should result. That saving can be made by converting those pools to heat pump operation. There are at least another 10 pools under various ownership in the region and at an intelligent guess the possible annual saving would be as follows; for a cost of £141,000 there should be a saving of £52,000. Therefore, it seems that in our small region, with a population of half a 278 million, we could save in the order of £146,878 per annum for an investment of £402,500. I stress that it is only a small district of half a million people.
What about the rest of the United Kingdom? I do not know how many pools there are, but if we can make this saving in Scotland, I see no reason why it should not be done throughout the United Kingdom. As the population of the United Kingdom is 50 million or thereabouts, it is worth looking at the sums that are lying on the plate to be grabbed and saved.
It appears to me that such studies and schemes should be pushed much more vigorously than they are at present. These days they seem to get through a council more or less by mistake. Councils are very keen on whether there should be two miles of free bussing or one mile, or what the fees should be and so on, but"economy"is still a dirty word in local government. It is an unfortunate situation, but it exists. In this respect, we want a lead from the Government or some body and it must be a co-ordinated lead.
I think that the experience which we have had with heat pumps—although it is a small aspect—shows the situation clearly. One has only to think of the amount of heat that pours through the roof of a paper mill. They then buy new heat to put under the rolls. It is admitted that the amount of saving that could be made there with the application of a heat pump would be terrific. If one talks to the industrialists in these paper mills one finds that they are sitting back doing nothing—they are waiting for the best handout that they can get from the Government to carry this work out. It is deplorable. It should be done on its own merits. The proof is there. It is being done in Germany and I believe largely throughout Europe.
It is deplorable that one has to go to Germany for nearly all the equipment. No one makes these things here. A heat pump is a proved piece of equipment. It is not experimental. Basically, it enables one to regain solar energy which is stored in the earth. Instead of having all the solar panels and so on, which are fine when the sun is out, but not so fine when it is not, the principle is that the earth has the heat in it and a heat pump 279 enables one to tap that enormous amount of natural energy and apply it as one likes. The Germans even have a production line for a heat pump for domestic use which will produce all the hot water necessary for an average house. Such a thing has never been heard of here and one cannot get it. Why not? The answer is that nobody is urging it. If one goes to industrialists they say,"If you give us the market; if you buy the first 300,000, we might think about it." A lead must come from somebody. It is not coming from individuals and it is not coming from industry. These type of matters need to be pushed.
§ The Earl of LAUDERDALE
My Lords, I am sorry to intervene, but is my noble friend suggesting that heat pumps cannot be bought in this country? If so, he is misinformed. In fact, the Electricity Council is pushing heat pumps very hard.
§ The Earl of KINTORE
My Lords, the heat pumps that we had to utilise up North had to be obtained from Germany. I do not say that they are not obtainable here, but one can get a better deal—at least so it is deemed—from Germany. That is a matter which requires to be looked into. I am not saying that one cannot get a heat pump in this country—of course one can. However, t hedevelopment of the heat pump is lacking.
The North of Scotland Hydro-Electric Board is also pursuing the hare of heat pumps, but it has not as yet come to any real conclusions as to what overall savings could be produced. It appreciates individual savings and is keen as regards that, but an overall picture is lacking. I believe that a positive lead on these aspects and the enormous area of possible energy savings, should be pursued by some co-ordinating body as suggested.
§ 18 p.m.
§ Lord HINTON of BANKSIDE
My Lords, we have had many debates in which figures for energy supply have been given, and there is no reason why I should spend time repeating them. I intend only to amend them by saying that the forward position in regard to two out of our four major energy resources seems to be worse than it was when we last discussed them. There are a great many people 280 who suggest that our salvation lies in the renewable source of energy. I think that it would be a good idea to look at those to see whether we can get a realistic view.
If one considers wind, which has already been mentioned, the maximum likely output of a wind-powered generator would probably be about 10 megawatts. Therefore, to supply the electricity needs of this country one would need 4,000 windmills. I do not think that 4,000 windmills would he tolerated on land, and the only way in which we could install them would he offshore on the Goodwin Sands or the Dogger Bank; and there they would cost about four times as much as conventional power stations, which will in any case be needed because the wind does not blow all the time.
The World Energy Conference calculated that by the year 2020 not more than 10 per cent. to 15 per cent. of the world's electricity demand could be met from solar cells. They also calculated that the contribution of low-temperature solar energy would not be more than 3 per cent. to 5 per cent. of the world's energy demand. Our position in this country, because of our climate and latitude, is below the world average.
Turning to nuclear fusion, it is no more than a sparkle in the eye of the scientists, and geothermal heat is likely to give only a marginal contribution. Before one arouses enthusiasm for wave energy, I suggest that it is a good idea to talk to some of the people who were responsible for the design of the Mulberry Harbours and to learn of the difficulties that were experienced there. The output of tidal power is being examined. I shall be surprised if it is more than 5 percent. of our total electricity requirements.
The noble Earl, Lord Lauderdale, has already mentioned the book by Gerald Leach, in which he forecasts that we can have a rising standard of living up to the year 2025 without increasing our energy demand. His statistical documentation in that book is excellent, but I cannot accept the logic of his arguments. Optimistic as he is in other ways, Leach agrees that renewable energy sources can make only a small contribution.
One of Leach's assumptions appears to be that we shall divest ourselves of those 281 industries that are heavy energy users and substitute light industries. But can we really believe that we can do this within the postulated time, and that we can sell enough of our new range of products to pay for the more energy-intensive materials that we shall have to import? Another of Leach's assumptions is that all the changes which he recommends can be made effective immediately. His allowance for lead times is totally unrealistic. Moreover, the book appears to take no account of the fact that if, as he claims, the standard of living is rising, people will have more money to spend and so will buy more goods and thus neutralise some of the economies which he is predicting.
I think that it is much more realistic, dismissing his figures, to look at the figures which have been published by the Department of Energy, which show that in the year 2000 the demand for energy would he 40 per cent. above its 1978 level. That figure is roughly the same as the figure independently produced by the World Energy Conference. Little more than our present supply of energy is likely to be available at the end of the century. Therefore, we shall be 40 per cent. short. I suggest that harsh conservation measures immediately applied and changes in social habits, with the sacrifice of some things that were luxuries not so long ago but which are now thought of as necessities might achieve the economies that are necessary. It is worth while to remember that as recently as 1960 our per capita consumption of energy was 20 per cent. below its present level, and in 1910 it was only two-thirds of the present level. Therefore, we can live with lower energy consumptions.
We must, I think take immediate and, I am afraid, unpopular steps to bring our energy demand as nearly as possible into line with the probable availability of energy in the year 2000. If we fail to do this, we risk a crisis. Indeed, it might be worse than a crisis. In his 1975 Fawley Lecture, Lord Ashby said:Are we facing a crisis or a climacteric? A crisis is a temporary malfunction of society. Temporary sacrifices, temporary hardships, some violence: and the crisis is over; society emerges into a fresh phase of stability. But if we are approaching a climacteric, these expedients will not work".I am sadly certain that we are approaching a crisis. I believe that only by determined 282 efforts and by harsh sacrifices can we avoid a climacteric. To quote Lord Ashby again:It would be an historical anomaly if our present economic and social system were not to go the way of the Mayans and Minoans".I believe that we must act quickly to conserve energy if we are to postpone the date when that happens.
§ 6.26 p.m.
§ The EARL of AVON
My Lords, I am grateful to my noble friend Lord Lauderdale for introducing this short debate today, and I am happy to follow the noble Lord, Lord Hinton of Bankside, in virtually everything he said. The debate is very timely because today constant attention and discussion are needed to remind everyone of the need to conserve energy on both a personal and an industrial basis; and also for pressures to be kept up on all Governments—be they North Atlantic, African, South American, Far Eastern; in fact, world-wide—for the need for co-ordinated policies towards this end. I should like to concentrate my brief remarks on the international scene, for I believe that an international group—very much on the lines put forward by my noble friend Lord Lauderdale for this country—is needed to co-ordinate a policy.
After the dramatic oil price rises in the early 1970s, most countries, in fact, most peoples—albeit some more than others—took urgent steps to combat the rising prices by conservation and by promoting study on alternative energy research. But somehow this stimulus has died down. I should like to pick up my noble friend's remark when he told us about the idea of having alternate number plates for motor cars so that one fills up an even-numbered car on one day and an odd-numbered one another day a week. When I was in the United States last year someone I knew had bought a second car so that he could fill up on both days of the week because his other car had an odd number-plate. This is what I mean by stimulus dying down.
The recent oil price increases did not lead to a similar outcry to the one we had before, but rather to a shrug of the shoulders. I believe that the price rises will automatically be absorbed—this is what people are saying. They may be 283 absorbed today, but inactivity on research and idleness in conservation will mean a heavy price to pay in the future. Reaction to OPEC price increases has meant the formation of the International Energy Agency and it has led to the Paris conferences, in which Saudi Arabia was an active participant. However, international co-operation on energy matters seems to have cooled rather as Governments' and peoples' reaction has cooled.
The cost of energy affects us all on a global basis. Over the past decade it has caused slow growth and recession; it has caused inflation and unemployment; it has meant the squeezing of profits. Energy is now the most important factor in an economic policy; and, because it is such an unpredictable factor, this makes it all the more frightening. But not only is it economic. It is also, as we have discovered, a political factor. The OPEC countries have their problems caused by their new wealth; many highly diverse social problems have to be overcome, and extremely sensitive political decisions have to be made. Recently we have witnessed a Canadian Government being defeated basically on an energy policy. There are difficult decisions ahead as to how much oil to leave in the ground: many OPEC counties feel that this is crystal gazing into the future.
Co-operation has resulted in some restraint; also co-operation has led to countries being able to absorb recent structural changes such as produced by the Iranian revolution. At best, this can be called a delicate balance in what I call a continuing crisis. Closer economic reaction to the changing problems of energy is needed, and a concerted policy to increase public awareness of the energy shortfall.
Conservation and economies are required. Education in the efficient use of energy is needed, and the promotion of other sources of energy could mean survival. I should like to speak for a minute on this latter subject. Great Britain has coal—and we have heard the noble Lord, Lord Strabolgi, on this subject—and the expanding world use of coal is a study in itself. The Government should actively encourage this. On nuclear energy, about which we have heard little so far in this debate, this 284 country was at one time a leader in this field: we arc losing our lead. The economies that the Government are making across the board to put the country's finances on a sound basis are, I believe, correct. But it would be folly to cut back in any way on anything which would lead to the putting back of the clock either in the coal indistry, the field of nuclear energy or, for that matter, gas. Cutbacks could lead to economic disaster, while promotion could produce enormous dividends in the future.
I have not mentioned solar or wind. but these have been covered by other noble Lords. The work in Brazil on producing alcohol from vegetation is but one of the many projects being carried out in the world today which to me are fascinating. No Government policy in itself can work without overseas cooperation. Countries are in this together. The word "interdependence "is once more applicable. Sheikh Yamani has recently said that there is a need for closer co-operation between producers and consumers, to reassure the former about the purchasing power of their income and the latter of continuing supplies. He went on to say that separate discussions could be held between Europeans and the producing nations to improve their relationship and move away from confrontation.
More recently still the United States Secretary of Energy, Mr. Charles Duncan, is reported as saying that his talks in Saudi Arabia were very successful. He was confident that Saudi Arabia would continue to ensure sufficient oil production to sustain world economic growth. I doubt that this is in any way possible, but any way that they could keep it equal would help. My point is that here is the will: Cannot we accept this in good faith? Where should we go from now? I should like to suggest three possibilities. First, there is the Independent Energy Agency. This was set up as a kind of answer to OPEC. OPEC looked upon it as a confrontation. That is now over and it is an accepted agency. Could the IEA not do more, perhaps with OECD, to co-ordinate Western countries and talk to the OPEC countries at an increasingly high level of representation?
Secondly, there is NATO. Including, as it does, countries in Europe, with our- 285 selves and Norway producing oil, with highly industrialised countries needing oil, embracing Canada and the United States with their individually unique situations, could not this organisation try to promote a common policy and devise contingency plans for energy—conservation in particular? Thirdly, following up the Paris talks which they had on energy some few years ago, we need to keep a dialogue with OPEC countries about future oil prices and world stability. I do not believe that a new conference would do any good. I had the impression when I recently visited Riyadh that there had been enough talk already, but is there not scope here for perhaps my noble friend the Foreign Secretary to start a diplomatic initiative? If, after discussion, a paper could be produced jointly by, say, Great Britain and West Germany, sent to Saudi Arabia for initial reactions, and then returned for broader consultations with NATO partners on the one hand and the OPEC members on the other, whilst keeping diplomatic contact with other industrial and Third World countries, we might be able to improve relationships, ease confrontation, and move towards energy price stability and thereby economic stability and, for many countries, political stability. There is no doubt in my mind that whatever can be done to conserve energy and promote other sources of energy within our own shores will greatly add to our argument in any dialogue between the West and the OPEC countries in the future. My Lords, I support the Motion.
§ Lord MOWBRAY and STOURTON
My Lords, may I just intervene at this moment? There are only something like 44 minutes between now and when my noble friend Lord Gowrie wishes to start answering at 7.20 p.m. If noble Lords could try to limit themselves to speeches of about seven and a half minutes on average, that would be very helpful.
§ 6.37 p.m.
§ Lord RITCHIE-CALDER
My Lords, thank you very much, I shall take the hint and keep to seven and a half minutes. It is only two minutes less than I usually speak. I want again to embarrass the noble Earl, Lord Lauderdale, by saying how much I agree with him. He is going 286 to be in great difficulties presently when my noble friend Lord Balogh and I and others here approve of his sentiments. His sentiments on this occasion I find practically irreproachable.
First, I would take issue, with great hesitation, with the noble Lord, Lord Hinton of Bankside. I would if we had time. You cannot do it in seven and a half minutes. You cannot do it with anyone of his eminence with less than a very considered reply. While I agree with him that inA Lower Energy Strategy for the United Kingdom—that is the Gerald Leach book he referred to—we probably have an over-optimism, I feel that in that is spelt out for our close attention, and for the very close attention of any council on energy, including that led by the Prime Minister, the things that we ought to be getting on with. Here we have a situation which is either a crisis or a climacteric—and I happen to think that it is the climacteric in this case, because I think we are going through a crisis situation which in fact is historically changing the nature of our society, and not just pressures which are being put on us. Therefore we should be looking at the situation which in fact is becoming cumulatively more dangerous, but also, for heaven's sake, looking to the possibilities which we are definitely neglecting today, or not doing enough about, which will in fact become absolutely imperative.
Nearly 20 years ago in Rome we had a rather ironical conference of the United Nations called the New Sources of Energy. It was a very impressive conference, except for one thing: I think we had one paper on nuclear energy, because that had been dealt with at the Atoms for Peace Conference at the United Nations, but every other paper was on what we are now calling the alternative sources of energy. Each one of them was one of the oldest sources of energy we had. Solar power, wind, sea, waves, and this and that were all dealt with, and it began to be extremely embarrassing because all the eminent authorities, including Nobel Prize winners from Britain and America, and so forth, got up and wagged their fingers solemnly at all the underdeveloped countries and said,"Now, be warned, you go out and make your windmills with rattan sails. Weave your sails ". But while we were talking to them—remember, this was 20 years ago—about what they should be 287 doing, our scientists and technologists were completely neglecting the very things we were telling them to do. We cannot afford to go on like that. Therefore, when we are stressing the need for solar and wave energy, heat pumps and the rest, they are the very things we shall need, in combination and probably in small scale rather than large scale, as a nation and internationally as well. They are the developments which we might begin to use and harness.
While sitting here waiting to speak I was thinking back 40 years to a time when, in the 1930s, I made a film about the mining industry. In one shot in the film were eight retired miners whose working lives in the pits totalled 400 years. Of that time, 360 years of work had gone up the chimney in wasted energy. Methods are now far more efficient, but noble Lords will see what that demonstrates. Life was cheap, as was work, and therefore coal was cheap because life and work were cheap, and those resources could he squandered. Now, however, we are talking about shortages with which we must cope, and we must cope with them urgently. What we unquestionably need is an overall view and, whatever we call it—a council or an energy agency—it must form a strategy which allows us to judge, as I genuinely believe we are not yet capable of judging, what amount of nuclear energy we will need or what our commitment to nuclear energy should be 10 or 20 years from now. But we must get on with it now because that is how we shall educate the people in how it is to he done; we cannot blame people for not doing what they do not know.
I am reminded, on the whole question of insulation and so on, that I can boast that I slept, not naked but undressed, in an igloo in the Arctic. That is a perfectly normal statement to make, as I am sure the noble Lord, Lord Tweeeds-muir, another old Arctic hand, will tell your Lordships. There is nothing curious about what I did. I slept on a snow bench in an igloo with a caribou quilt underneath me and a caribou cover over me. It was a completely congenial experience and the temperature in the night was quite adequate. Why? We might remind ourselves that an igloo is not an ice house but a snow house, and snow is a very good insulator; once it turns to 288 ice one gets a transfer from cold to insulation and an igloo can stay very warm simply by the nature of the insulation. Unfortunately, I cannot build or buy an igloo, but we should learn the lessons which other people have learned for themselves throughout the world. They should be a lesson to us as to how we can conserve energy. I have spoken for seven minutes and, as promised, I will resume my seat.
§ 6.45 p.m.
§ Lord MILNE
My Lords, I echo the sentiments of noble Lords as to the value of this debate. In the housing industry, of which I have some knowledge and must declare an interest, the possibilities in this direction are huge, as any householder can confirm. For brevity, I propose to take one instance; that of double glazing. At present, only a tiny fraction of housing stock is so equipped, yet it has been shown that if all new housing stock was so fitted, more than £200 million sterling could be saved annually by that alone, and that is at 1978 figures.
I do not know what the figures are for the many other devices, but taken together the total potential saving must be asolutely immense. Although some measures can be taken anytime, plans to install double glazing on any scale are clearly better taken at the planning stage, since consequent design improvements can be incorporated which will further improve cost-efficiency. The trouble is that all these additions cost money and the added cost in a competitive market without grant aid or mandatory force is unlikely to appeal to cost-conscious designers.
To maximise fuel saving, a positive Government policy of encouragement is indeed necessary. In a minor way this exists, but the treatment is very inconsistent. As we have heard, grants are available for roof and wall insulation, but VAT is payable. Double glazing, on the other hand, receives no grant, but at the moment it is zero-rated for VAT if professionally installed, and even this, I believe, is under review. Abroad they are far more positive. In Europe and America, as has been stated. grants are available for double glazing, while in many countries it is mandatory at the time of building.
Any such policy here or any reduction in the initial differential between single 289 and double glass, which is fast becoming important anyway, would have a considerable repercussion in the industry. It would clearly expand greatly the consequent job creation; the effects, even if they were not enormous, would certainly spill over into allied industries. On the other hand, any increase in the differential, as for example in VAT, as was I believe mooted, without an equivalent grant would be extremely damaging, discouraging and counter-productive to any saving of energy.
§ 6.48 p.m.
§ Lord HENLEY
My Lords, I will, if I may, bring the debate a little nearer home; in fact right back to the Palace of Westminster, and to the heating here, which in my humble opinion is quite excessive. A little remembrance of Matthew, chapter VII, verses i-v and that sort of stuff about motes and beams might not go amiss. I wish in particular to refer to three Questions which my noble friend Lord Hylton and I asked at different times earlier this year for Written Answer. First, I asked the Leader of the House this Question, which was answered by his deputy because the Leader was apparently doing more important things:
I was told in reply:
- (i) at what temperature the interior of the Palace of Westminster is maintained during the winter and in particular what are the minimum temperatures maintained in the Library and chamber of the House of Lords;
- (ii) what is the total cost per annum at today's prices of heating the Palace;
- (iii) what would be the saving if all thermostats were set (a) 5 degrees fahrenheit or (b) 2.5 degrees fahrenheit lower during the winter.(i) During the winter average temperatures within the Palace of Westminster are maintained as close as possible to 68°F; the minimum temperature in the Library is 68°F; and in the House of Lords Chamber 70°F.(ii) The total cost per annum of heating the Palace is approximately £220,000; this includes domestic hot water.(iii) By setting all the thermostats at (a) 5°F or (b) 2.5°F lower, savings of up to approximately (a) £20,000 or (b) £10,000 might he achieved ".—[Official Report, 15/1/80, col. 96.]Secondly, my noble friend Lord Hylton asked Her Majesty's Government about the insulation of the Palace of Westminster, and about what considerations had been given to improving its thermal efficiency. He received an Answer which appeared in Hansard of 25th February. My noble friend was told, at column 1138: 290The Palace of Westminster is substantially insulated by thick stone walls "—any of your Lordships who live in castles might know that there is some truth in that—but large windows and the cast iron roofs contribute to some heat loss.There had been carried out an infra-red aerial photometric survey of heat losses, which was being analysed, and the Answer added:The modernisation of the heating will produce significant energy savings ",which I shall greatly welcome.
The third Question to which I want to refer was also from my noble friend Lord Hylton. I do not know on what date the Question was set down, but he received an Answer on 27th February. Following my earlier Question, my noble friend asked, as reported at column 1501 of the Official Report, why on the morning of 14th February the thermometer in the Peers' Entrance recorded 76°F, while the thermometer in the Lords' Library—located between the first room one enters, where the newspapers are, and the next room to the left—recorded 74°F. I can assure your Lordships that those temperatures are by no means unusual. I have done a little survey, and I have found that the temperatures are normally well above 70°F. The noble Earl, Lord Ferrers, answered this Question, too. My noble friend was told:The Peers' Entrance is served by the steam radiator system "—I presume that is rather old-fashioned—and that therefore the heat could be only on or off; there could not be an in-between setting. Might I ask whether the heat could be permanently switched off?—because, after all, the Peers' Entrance is only a cloakroom, and I see no reason why a cloakroom need be heated.
According to the Answer, although the Library is fitted with thermostats, controlled by the staff, theambient temperatures "—whatever they might be—and the lighting and electrical equipment may keep temperatures above 68°F ".I wonder whether that problem might not be solved if it were attempted to keep the temperature at 63°F. If the temperature is normally 5 or 6 degrees higher when the setting is for 68°F, perhaps the 291 ideal temperatures would be attained by doing what I suggest. The Answer concluded:This difficulty will be removed when the planned air-cooling programme is implemented ".I should like to ask just one question about this air-cooling programme. Will it use up further fuel?—because what my noble friend Lord Hylton and myself are worried about is not so much the heat, which is excessive, but the use of energy in producing this heat.
Having referred to those three Questions, I wish merely to add that I have mentioned the Palace because it is a public building, and I presume that other public buildings are heated to a similar extent. The Palace is a showcase which people see, and if we do not reduce our heating a little, I do not see why anyone else should be expected to reduce theirs. It seems hypocritical to debate the subject of conservation in a Chamber in which we need not wear any clothes at all, though that would raise other problems. Finally, I believe that we might all be rather more healthy if we reduced our heating a little. It is not only a question of saving energy, though obviously that should be the first priority——
§ Lord MOTTISTONE
My Lords, before my noble friend sits down, may I ask whether he is aware that having attended the debate for his speech and that of the noble Lord, Lord Milne, I have only just regained a reasonable temperature after having walked for a quarter of an hour in order to come down to the House? It has taken me all that time to get properly heated up.
§ 6.54 p.m.
Viscount HAN WORTH
My Lords, this is one of the few occasions on which I should have liked to speak for more than 10 minutes, but I cut my speech because I thought that we were short of time, though apparently we are not. However, what I have to say should take only about six minutes. I have raised in this House several times recently the matter of better house and industrial 292 insulation, and the replies that I have received seem to me quite extraordinary, and to lead to only one conclusion: that the Ministry are simply not interested in this, one of the most important potential energy savers. I regret to say that some of the arguments which they have put forward either arise out of ignorance or, frankly, are intellectually dishonest. One example of this, which I fear I must quote, concerns the danger of condensation. If a house is insulated more highly, one cuts down the condensation. The only instance in which this is not so is if the ventilation is decreased. To put this forward as an argument against better insulation is to my mind simply intellectually dishonest.
From a recent report by Shell, it appears that by bringing all our buildings, both domestic and industrial, up to an economically justifiable standard of insulation, there would be achieved a 50 per cent. saving in the energy used for heating. This saving represents about one quarter of the nation's total energy requirement, costing some £3,500 million.
Much as I deplore it, I can just understand the logic of cutting the home insulation programme in order to reduce public expenditure. What I cannot understand at all is why the Ministry refused to raise to any reasonable level the building standard requirement for the roof and wall insulation of new houses. Their present proposals are still the subject of consultation. In the case of roofs, an economic standard would be almost double what is proposed; that proposed for walls is rather better, but still much too low. There is none whatever for ground floors. Worse still, it is not proposed to implement an improved standard for walls for two to three years. The extra cost for meeting the Government's proposals is only about £230 on a new three-bedroom house, and the payback on saving on fuel bills is under three years.
On a previous occasion I refrained from arguing in more detail the case for better insulation, but pointed out that it was very uneconomic to insulate walls and floors after a house was built, and that we were saddling future generations with unsatisfactory housing—in particular in the context of what is inevitable: rising fuel costs. I now realise that 293 many noble Lords would have liked me to give more information about benefits and costs of insulation. In comparison with those on the Continent, our houses are extremely badly insulated. Your Lordships might think that this difference could be accounted for by the harsher Continental climate. It is true that the Continental climate is more extreme than our own, but the picture is very different if one takes the number of days on which we need heating and multiply that by the temperature difference between the outside and the required inside temperature. The answer to that is known as"degree days ".
For instance, we in London must heat our homes 331 degree days more than those people living in Paris, yet France's insulation standards are well over a third more stringent than ours. France has improved its insulation standards by almost 250 per cent. in recent years, and along with most of the other Continental countries will be again improving these standards in the near future. The insulation standards that our Government have proposed are just equal to the standards that France has at the present time—and France finds them unsatisfactory. Britain, if the Government's proposed improvements are passed, will remain far behind the rest of Europe.
Great Britain has a great deal to gain from a reduction in national fuel consumption, but the individual householder stands to gain much as well, and in a relatively short period of time. Fuel prices rise at a much faster rate than do insulation prices, therefore making it a more economically-sound investment to insulate than to continue to pay increasingly expensive fuel bills. Take, for example, a three-bedroom house with no roof insulation—and there are quite a number of them. If it were to be insulated with 10 millimetres of fibre-glass insulation, the material would cost about £45. A genuine profit as a result of the savings in fuel bills would result in just over a year's time; and by insulating the walls—and this is not at all expensive with cavity wall insulation—it would pay off in only a very little longer period. As fuel prices continue to rise in real terms, this pay-back period will be even shorter.
My Lords, there is one point I should like to raise in connection with double- 294 glazing. Professionally installed double-glazing has almost always been counted as an alteration, and as such has been zero-rated for purposes of VAT. Last year Customs and Excise issued a discussion document referring back to a case brought originally by Mecca, in which Mecca had lost a case concerning VAT on other alterations and the judge had suggested that Customs and Excise were were rather too liberal in their interpretation of the word"alteration ". This led to a Customs and Excise discussion document listing many aspects of building work where it was felt zero-rating for VAT purposes could now be terminated. One of those areas would be double-glazing. This is quite unacceptable, and I hope that the Government will take action on this matter seriously.
§ 7.3 p.m.
§ Baroness SHARPLES
My Lords, I, too,I am grateful to my noble friend for initiating this debate. I am surprised that there has been hardly any mention of nuclear energy. What of the future beyond 2000? There is so little time, and so many ideas that take years to be of national use. I am more scared of the effects of groups such as Friends of the Earth than 1 am of any possible dangers from a nuclear reactor. Surely, in this country, we must show by our example that we are not afraid to build nuclear power stations. The emerging nations will need even more power than we ourselves to industrialise their countries; and, with the price of fuels—coal and oil—already out of their reach and bound to rise, the only feasible hope is in nuclear fuel. There can be no improved prosperity without more energy.
In the USA it took five wasted years and over £25 million for the Sohio Pac-Tex project, which hoped to carry Alaskan crude oil from West to East and which was cancelled because there was no time limit to the objections. This could happen here. Fred Hoyle, in Energy or Extinction, shows that if we do not really lead the way—and quickly—resentment in under-developed countries—and I have no doubts about this—will build up very rapidly against prosperous countries, and environmentalists will have a great deal to answer for if we arrive at this situation.
§ 7.5 p.m.
§ Lord ENERGLYN
My Lords, I shall endeavour to compress 30 years of research into three minutes. I think that is a good example of conservation. I, too, should like to thank the noble Earl, but in thanking him may I say that I wish he had perhaps added the term "utilisation ", because that is another way of looking at conservation. We in this country have become too ready to discard industrial processes because the cost of energy appears to render them unprofitable. Governments have listened too readily—and I repeat, too readily—to economists in arriving at the decisions to close down industry on energy evaluation. They have not given the technologists a chance to look at the industries in peril and to offer alternative methods of utilising energy to make those industries profitable again.
Time will permit me to take only one example—one which is very much in our minds at the moment—and that is the production of iron. This is an energy-intensive process, and, because the price of coal and oil has seemingly made the smelting of low-grade ores uneconomic—and I would draw your Lordships' attention to the fact that it is uneconomic, apparently, only in this country—the Government are condoning the closure of furnaces which were designed to smelt low-grade iron ore produced in this country. Consequently, we are condemning places like Corby, Scunthorpe and such like, whose birth was based upon low-grade iron ore, to becoming ghost towns, simply because it is claimed that the energy input in terms of metallurgical coal is too great to make them economic. Metallurgical coal is becoming increasingly scarce throughout the world, and every iron and steel complex in the world is searching around for metallurgical coal. But there is coal and coal, as I shall come to in a moment.
In looking at the energy values employed in the making of iron, the furnace itself loses about 40 per cent. of the heat that is generated within it. That amount of heat could generate enough steam to develop a power station. With this utilisation of thermal energy, we have in our hands a source of cheap electricity. To make aluminium we need a source of cheap electricity. With cheap electricity 296 derived from the furnace, we then have the next factor, which is that in order to make aluminium or iron we have to render the ore into a molten condition—another big energy-intensive process. In both cases we have molten rock—lava, if you like, my Lords. Electrodes put in the lava will extract the alumina, the aluminium, from the slag which is to be generated in the steel furnace. What I am saying is that the original iron furnace now becomes an aluminium furnace as well. Having taken the aluminium out, we still have electricity, which we then begin to use to process this lava—it is still lava—for the silica, the metal of the new silicon age. Finally, there is an end product which becomes a building material. Pour it into water, and pumice is produced. So here we now have Corby and Scunthorpe, not being iron and steel centres but becoming metal factories. None of this would be possible if there were not some co-ordinating system. Every country in the world is searching for an energy policy. By good fortune, most of the producers and consumers of energy in this country have been nationalised.
Might I make a suggestion to the Government for their serious consideration? It is to form an energy council composed of the chairmen of all the nationalised industries—and also the TUC—and that these chairmen be charged with the responsibility of equating and calibrating the cost of units of energy, thermal, physical and human, so that industry can look to the future with some certainty. To make this council work, as the noble Earl has pointed out, you need somebody in authority. Possibly the Prime Minister will be too busy, hut I suggest that certainly a Minister of State should be the chairman of this energy council, composed—and I repeat—of the chairmen of all the nationalised industries. Thus we can put an end to all this horse-trading and duplication in search of energy values throughout the country. With this, I suggest that we would have a renaissance of engineering development in this country because we would be producing metal factories and not simply iron mills.
§ 7.11 p.m.
The EARL of GOWRIE
My Lords, a friend of mine who is a writer, an anarchist 297 and a publisher had the idea some months back of publishing for distribution among anarchist organisations a debate in this House in the name of the noble Earl, Lord Clancarty, about flying saucers. He has made a handsome book about it which I hope to present to your Lordships' Library. But, entertaining though that was, it would be a more practical thing if the last three energy debates in this House could be collected and published for wider distribution. They have been remarkably concise and remarkably expert. The only trouble with them is that they usually have to be answered by me and I have to follow people like the noble Lord, Lord Energlyn —appropriately named in this matter—who knows a great deal more about the subject than most of us in Government and for whose counsel we are always grateful. But I cannot pretend to be able even had I the time, to flee to the Box to take up his suggestion about iron ore-related energies until I can consult other experts about it. I suspect that the noble Lord is well in advance of the field here; but we will attend closely what he has to say.
My Lords, it has been a most interesting and valuable debate, one that affects and is deeply related to the future prosperity of our country and the wellbeing of all who live here. As my noble friend Lord Avon and others have said—and I should like to congratulate my noble friend on an immensely wise speech—it has great international implications for the world as a whole. It is very hard now to separate foreign policy and energy policy. There is no difference between the Government and my noble friend Lord Lauderdale, whom I congratulate on the way he opened the debate and for the attention that it commanded. There is no difference between us in our view of the importance of energy conservation and the need to continue it. There are those who wonder why we, in the United Kingdom, should be so concerned with conservation; and their puzzlement is understandable perhaps when one reflects on the fact that we are a highly successful energy producer—far and away the largest producer of primary energy in Europe. Our coal industry is the largest in the Community, with reserves to last several hundred years at current rates of consumption. I say particularly to my noble friend Lady Sharpies that we have a substantial and expanding nuclear 298 power industry with an unsurpassed safety record. We are a major oil producer and we can look forward to self-sufficiency for the coming decade.
We have a strong position and one which we intend to maintain, but I think that a measure of the interest and responsibility of this debate is that there is no evidence that that position is allowing those in Government, those in the legislature, in this country to be complacent. Our plentiful resources do not let us isolate ourselves from the international problems of security and availability of energy resources. Recent events in Iran and Afghanistan have emphasised the precarious nature of existing energy supply lines and the vital role of energy in ensuring economic prosperity and national security.
On the overseas point, I would say that, of course, the noble Sheikh, Sheikh Yamani, were he here—and I have the great privilege and pleasure of lunching with him in this House at the invitation of my noble friend Lord Bessborough this summer; and he was most interesting on all these topics—I think that he would say that his policies were a form of imposed conservation on the West. And we must not underestimate them in that regard. In the longer term, North Sea oil and gas reserves will be declining by the mid-1990s and we will have to re-enter a world market in which supplies are likely to be increasingly scarce and expensive. All other industrially developed countries will be seeking to import growing amounts of energy. Our energy strategy takes account of these long-term prospects and places emphasis upon three main areas, all mentioned in the debate; coal, nuclear power and energy conservation.
Energy conservation is, therefore, a vital part of this tripartite policy. Our concept of conservation is not the essentially negative one of using less energy, which could be achieved by lower industrial output or by reduced standards at home. On the contrary, we see conservation as a very positive policy of increasing the efficiency with which energy is used so that less energy is needed for a given level of industrial output or of comfort in the home; and it will not surprise your Lordships that, as one whose responsibilities are primarily in the employment field. I would see in conservation considerable outlets for raising employment levels; and 299 the Government are studying these most closely.
We have changed some emphases as your Lordships will be aware. A change of emphasis is reflected in the replacement of the"Save it!"campaign by what we think is the more positive slogan,"Make the most of Energy ". We feel that the key to effective energy conservation is economic and realistic prices which reflect the real long-term cost of supply. The price message makes consumers aware of the scarce and finite nature of energy resources and, in our view, is the most effective incentive to the efficient use of these resources; and, let there be no doubt about this, the pricing mechanism is also an inseparable part of the logic of getting public spending under control and maintaining firm monetary objectives.
We recognise that rising fuel costs may not be easy for some consumers, particularly the old and the poor. That is why we have introduced a new scheme of assistance with heating costs announced last autumn by my right honourable friend the Secretary of State for Social Services, which is designed to provide worthwhile help for those in most need. In addition, we are currently reviewing the whole range of help available to assist consumers with their fuel bills and we intend to make extra provision next winter to help those elderly and low-income consumers in most need. That is a commitment. Our proposals will be announced as soon as possible and I can assure your Lordships that they will be announced in good time to enable people to plan in advance how they can manage next winter.
It is important that the price message is accompanied and reinforced by information and advice to the consumer which emphasises the need to use energy efficiently and informs consumers how they can achieve this in their particular circumstances. The Department of Energy has a substantial programme of information and advice to energy users in industry and commerce, in the home, on the road and at school. About £12 million have been spent since 1975 on national Press and television advertising, booklets and leaflets, films for industry, exhibitions and on the production of educational material. In the current financial year, over £2 million will have been spent, providing sound 300 practical advice to the public, using the slogan, as I said earlier,"Make the most of energy ". Spending on the Government's advertising campaign in the next financial year will increase to over £3 million.
At this point, I will try as best I can and as rapidly as possible, consistent with giving as full answers as I can, to turn to some points which were made during the debate. My noble friend Lord Lauderdale mentioned the need—and this was also echoed by the noble Lord, Lord Tanlaw—for the separation of responsibility for energy conservation from the Department of Energy. He talked about"a task force with resources, reporting directly to the Prime Minister ". The noble Lord, Lord Energlyn, also said something about that. Energy conservation is a central part of energy policy and so it must be developed in balance with other energy sectors, as I have already suggested. It is therefore appropriate to locate it in the Department of Energy. There is now a full division dealing with conservation on a par with the divisions developing supply policy. I have attended Cabinet committees and meetings, and my experience there has been that the effects of energy pricing and energy policies are talked about as a matter of urgency pretty well every week. There are few items of Government policy which are not affected, so I do not think there is any sense of remoteness or of its being hived off to one particular Ministry and not taken account of by others.
Again, my noble friend and the noble Lord, Lord Tanlaw, talked about the restructuring of fuel tariffs. He is not here tonight, but I know that that is dear to the heart of the noble Lord, Lord Kaldor. It has been studied on a number of occasions but, generally speaking, the conclusion has been that tariff restructuring is not the most satisfactory way of helping poor consumers with their fuel costs. It tends to benefit small consumers, whether rich or poor, while doing significant harm to a considerable number of poor consumers who already face high bills. Your Lordships may have seen a recent statement on energy pricing policy issued by the Nationalised Energy Industries Consumer Council, which also concluded that tariff restructuring is not the answer to the problems of poorer consumers; so that is something we are rather sceptical about. I can tell my 301 noble friend that a response to the Marshall Report is expected shortly, but I do not have it as yet.
As regards building regulations for dwellings, a matter which was raised by a number of speakers, the proposed level of loft insulation is a minimum level which is appropriate to the average expected use of houses. The level takes account of the expected energy price increases in real terms to the end of the century. The level set for the Medallion Homes reflects the higher cost of heating by electricity, but I would emphasise, as I said at the beginning, that every householder has a marked financial incentive in high energy prices to insulate his or her home.
The noble Lord, Lord Strabolgi, mentioned the ending of the Department of Industry's energy conservation scheme. That scheme was intended by the previous Administration to last two years. Now that economic realism is introduced for energy prices, there is good incentive for industry as well as the domestic consumer to invest in energy conservation. I do not think it should be the test of a Government's serious commitment to a policy simply to measure the amount of taxpayers' money it throws at it. It is in the interest of industry itself to conserve energy and insulate buildings, and I am sure industry is perfectly well aware of that.
The noble Lord, Lord Tanlaw, who gave me early warning that he would not be here, talked about the home insulation scheme and the need for a grant of up to £200. We feel that most houses can be insulated for less than £100 and the average grant applied for is still well below the £50 limit. Obviously, in the interests of good housekeeping and economy, we are watching that.
The noble Lord, Lord Strabolgi, also raised the question of improving the energy efficiency of motor cars and encouraging the energy-efficient design of new cars. Last June the Society of Motor Manufacturers announced, following discussions with the Government, a scheme for British manufacturers to improve the overall average mileage per gallon of new cars by 10 per cent. by 1985. An improvement of 1.9 per cent. after the first year was announced on 6th March, and I think it was the previous Govern 302 ment which required that the petrol consumption of cars had to be announced on anything advertising them. We certainly endorse and would continue that requirement.
I would say to the noble Lord, Lord Strabolgi, that it is not the general policy of the Government to encourage the movement of freight traffic from one mode to another, whether by subsidy or any kind of restrictive licensing. If one form of freight uses more energy in transporting goods, that will show up in the costs which hauliers will have to charge their customers and therefore in the relative attractiveness of that mode. In all the transport debates to which I have listened or in which I have participated in your Lordships' House, there has on all sides been agreement that we need plural transportation systems, and I think it would be wrong for the Government to interfere there. We would certainly agree with the noble Lord, Lord Strabolgi, about the potentially significant energy conservation to be obtained through the wider use of diesel-engined vehicles, but potential fuel savings need to he weighted against the higher capital cost of the diesel engine as compared with its petrol equivalent; and in the present industrial climate your Lordships will not be surprised if I say that we are very sensitive to the capacity of British industry to meet an increase demand for dieselengined vehicles without the usual sad increase in imports if that were made a requirement.
On the subject of imports, the noble Lord, Lord Strabolgi, mentioned imports of coking coal. The Government certainly welcome the agreement which the National Coal Board have reached with the BSC. We do not think it necessary for he Government to step in to stop future coking coal imports. The problems of 1981, after the end of the present agreement, should, in our view, be solved in the same way; but we are, of course, in a sad situation in this industry at the moment and it would be in its own interests and the interests of the whole country if the difficulties in South Wales and in the steel industry could be settled as rapidly as possible.
The noble Lord mentioned de-rating energy conservation improvement in houses. The payback on domestic instal- 303 lation measures is very good even when re-rating takes place perhaps five years later. Our view is that the immediate return in savings to the householder is the best incentive there.
The noble Lord, Lord Strabolgi, raised two more points about recent changes in the home insulation scheme and the public sector housing insulation programme. If noble Lords think that I am giving the noble Lord, Lord Strabolgi, more than his fair share, in fact I think that others raised these points as well. Changes have recently been made to the two insulation schemes, and they were announced by the Secretary of State for the Environment. First, the allocation of funds for the home insulation scheme has been reduced from £25 million to £12½ million in 1980-81, to reflect more closely the actual level of take-up which occurred during the first 18 months of the scheme. Secondly, the public sector housing insulationprogramme has not been given a separate allocation. This decision is in line with the Government's decision to allow local authorities to decide their own priorities. The Secretary of State for the Environment told authorities that he hoped they would still give priority to insulating public sector housing, in the interests of conservation.
On the question of the"privatisation"as it is called, of the BNOC, the noble Lord said, witheringly, that only rakes or fools sell oft their assets to finance a deficiency of income. I would certainly agree with that sentiment where individuals or even companies were concerned, but Governments have the priceless asset of being able to impose taxation. Therefore, comparisons between Governments and individuals or companies seem to me to he misplaced. It is our intention to give the public an opportunity to participate directly in the BNOC's oil-producing activities, and we are currently considering the options for achieving this. I must say to the noble Lords, Lord Strabolgi and Lord Balogh, that public sector deficits and attempts to clear them are not, in our view, short-sighted monetary fanaticism. They are good housekeeping and, as such, should commend themselves to conservationists.
The noble Lord, Lord Hinton of Bank-side, mentioned renewable sources of 304 energy and the noble Lord, Lord Tanlaw, mentioned the Severn barrage and so on. The Government are, in fact, taking this seriously. They are spending about £7 million in the current financial year on renewables, and this is commensurate with the stage of development of these new technologies. I agree with the noble Earl, Lord Kintore, who said that there are instances where"economy"is still a dirty word in local government. I hope the fact that we are stabilising, and being more stringent in, rate support grant, will make it a cleaner world indeed.
I have already mentioned the remarkable and clear speech from my noble friend Lord Avon. He mentioned the issue of producer-consumer relations. Certainly, faced with the prospect of an increasingly tight oil market in the long-term, there is urgent need to establish fuller international co-operation between oil producers and consumers. We need, in particular, to prevent sudden and steep rises in oil prices which do so much damage to the world economy and therefore, as I think one noble Lord pointed out, to political stability. We support useful international initiatives; for instance, the proposed Community-Gulf meeting, which may lead to progress in this area.
The noble Lord, Lord Milne, and the noble Viscount, Lord Hanworth, mentioned double glazing. The proposed revision of building regulations for wall insulation makes allowance for the energy-saving benefits of double glazing. Our Department of Energy publicity points out that double glazing is worth having in some circumstances, but is, overall, less cost-effective than insulation. The question of VAT, which both noble Lords raised is being studied inter-departmentally at present.
My noble friend Lord Henley said that we must attend to the beam in our own eye rather than the motes in others, and raised questions about the heating of the Palace of Westminster. My original brief said, with an air of relief, that this was a matter for the Department of the Environment. I said that that would not wash at this end of the Palace of Westminster, so we went back to the DoE. Apparently, the villain of the piece is our archaic steam radiator system. Many people outside this House perhaps think of this House as being in toto an archaic steam radiator 305 system, and those are the people who I wish would study your Lordships' contributions on energy, to see how go-ahead they are. We recognise, with my noble friend, that a more modernised system would give substantial savings. But I would ask your Lordships to cast your minds back to the very hot summer of 1976, when, I think because of the stained glass, this was the most pleasant place to spend the afternoon all through that time.
The noble Viscount, Lord Hanworth, excoriated the delay in revising building regulations. A three-year period for the implementation of higher standards in walls has been suggested, in order to give the building industry time to adapt their construction techniques.
Finally, pricing, together with information and advice, and with judicious but generous help to those who are most in need, is therefore the cornerstone of our energy conservation policy. We do not accept, as many people seem to think, that a Government's commitment to conservation can be measured by the amount of taxpayers' money that it is prepared to hand out in subsidies. It seems to us absurd that taxpayers' money should be freely used to subsidise the energy conservation investments of people who should be making—and, indeed, all the evidence is that they are making—such investments in their own interest and should continue to do so.
We think that the best way to measure conservation is by results, rather than by programmes. We are already seeing some results, and I can tell the House that the consumption figures for the last quarter of last year, when temperature-corrected, are below those of 1978, while petroleum consumption was, indeed, about a full 5 per cent. lower. We are also seeing substantial energy savings in certain sectors of industry, and in particular companies. Now that we have introduced realism into energy pricing we can, I think, expect better and more widespread progress. But we are not complacent, and I assure the House that we shall study everything that has been said.
§ 7.37 p.m.
§ The EARL of LAUDERDALE
My Lords, the House will be grateful to my noble friend Lord Gowrie for giving us 27 minutes of interesting information, some 306 of which was of course prepared about a week in advance of the debate, and some of which related to things said during the debate. I think that my noble kinsman Lord Milne, and also the noble Viscount, Lord Hanworth, deserve an accolade for raising something that we were told is under examination; namely, the VAT implications. My noble friend Lady Sharples, in three minutes flat, pinpointed a matter of great importance about the environmentalists, to which I do not think my noble friend Lord Gowrie found time to reply.
I think one should just underline one or two points that were made. The noble Lord, Lord Tanlaw, referred to the need for an investment performance programme with regard to an energy-efficient society. It is something which I myself had meant to say, but forgot to do so. By the same token, I thought that my noble friend Lord Hinton did not at all over-egg the pudding, when he spoke about our approaching not a crisis but a climacteric, and I was glad to hear the noble Lord, Lord Ritchie-Calder, say the same. It is the emphasis which those noble Lords, who have great experience in the energy field, have put on the climacteric, which they and I believe we are approaching, and which is historically critical, that makes me feel that the debate in itself was worthwhile. But I am sorry that I cannot say quite so much about the agreeable, polished, urbane reply which we have just had from my noble friend Lord Gowrie. It was an essay, rather like the old Foreign Secretary's tour d'horizon, which was customary for every Foreign Office debate. It was a kind of survey in nice, genial terms. I think one might describe it as"folded with soft wings ". What alarmed me—and I say"alarmed"advisedly—was that there was no discernible reference in his reply to the need for an investment approach to the programme of energy savings.
The Minister told us—I was fascinated because I thought that we were about to hear some leaks—what goes on in the Cabinet when these matters are discussed from time to time. He did not give me the impression that these were serious discussions on the balance of public sector investment, or investment in general. I was not surprised—but I was sorry—that he did not take up the point that was made five years ago in a distinguished 307 [The Earl of Lauderdale.] Select Committee report in another place about an energy task group reporting directly to the Prime Minister. I had the feeling that perhaps reality was being wrapped in illusion.
If my noble friends on the other side—in energy subjects we are all friends together—thought that I was politically embarrassed at their support, and I here I refer to the noble Lords, Lord Balogh, Lord Ritchie-Calder and Lord Straholgi, to say nothing of the noble Lord, Lord Tanlaw, on the Liberal Benches, who all supported my general approach, I must tell them that any embarrassment I might have felt momentarily was matched by the pleasure of the spectrum of consensus in all quarters of the House.
This debate still leaves us with a question which we shall have to go on asking: how serious are the Government on this topic? How much do the Government listen to the House of Lords? Perhaps they are listening a little more this week than they did last week. I know that my noble friend Lord Gowrie will not take it amiss if I remind him that, although we greatly appreciate his replies and his efforts to obtain suitable answers from a department to which he does not belong, that we look forward to the time when the Government take this matter more seriously and when they have in this House a Minister on the Front Bench who speaks from inside that department. Knowing what thou knowest not is in a sense omniscience. Perhaps it is worth my noble friend remembering that problems worthy of attack prove their worth by hitting back. The Front Bench will not be too sure after my remarks in this debate that next time I shall seek leave to withdraw my Motion for Papers. However, on this occasion I beg leave to withdraw it.
§ Motion for Papers, by leave, withdrawn.