Household Energy Efficiency (Hansard, 8 January 2004)

§ The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)
My Lords, as set out in the recent Pre-Budget Report, the Government agree that there is a case for using economic instruments to promote energy efficiency. However, in the light of the European Union VAT negotiations and the review of corporation tax, the Government will give further detailed consideration to what such measures entail. A further announcement will be made around Budget 2004.

§ Lord Ezra
My Lords, I thank the noble Lord for that Answer, but are there not a number of recommendations emanating from those two consultations, to both of which I responded, that could have been adopted? In view of the importance that the Government attach to improving energy efficiency in the domestic sector, is it not surprising that such an apparently leisurely approach is being adopted?

§ Lord McIntosh of Haringey
My Lords, I resist the suggestion that there is a leisurely approach. There are important changes, economic instruments and initiatives which can be taken that are involved in the EU VAT negotiations and in the corporation tax review. But many other actions are being taken at the same time, as the noble Lord well knows because he is well versed in those matters. For example, that has not stopped us having reduced VAT rates for energy-saving materials. It has not stopped the Warm Front programme of £150 million a year that helps 400,000 households with the installation of heating. We have not been prevented providing money for the Carbon Trust and the Energy Saving Trust. I could go on. They are not matters on which we are taking a leisurely approach.

§ Lord Jenkin of Roding
My Lords, is it not clear that by far the most effective economic instrument to secure energy saving is a realistic price for the supply of energy? Would it not be much better if the Government, instead of seeking to keep electricity and gas prices down to protect the fuel poor, made increases in social security benefits to compensate those families who would find it difficult to pay an economic price for gas and electricity?

§ Lord McIntosh of Haringey
My Lords, I rather suspected that the noble Lord, Lord Jenkin, hankered after the old pool arrangements whereby there was an auction every day. Instead of the contract going to those who offered the lowest prices, it went to those who offered the highest. That was an extraordinary 253 way of conducting capitalism and I am astonished that the noble Lord should hanker after that, rather than the new electricity trading arrangements.

§ Lord Jenkin of Roding
My Lords, may I make it clear that I said nothing of the sort?

§ Lord McIntosh of Haringey
My Lords, what does "realistic" mean other than "higher"?

§ Baroness Gardner of Parkes
My Lords, as the Minister has raised various possible actions to save energy—taking the Question slightly wider than the economic issues—why are we reading in the newspapers this week that everyone will have to install a mixer tap to prevent people being scalded by the temperature of their hot water? Why are the Government not suggesting reducing the heat of the water to a point where it would not scald? Would that not save energy?

§ Lord McIntosh of Haringey
My Lords, I am not sure that even the most nannying government—this is not a nannying government—would send in inspectors to control the level at which householders have set their water temperature. That would be the implication of the suggestion.

§ Baroness Wilcox
My Lords, given that both the UK Business Council for Sustainable Energy and the National Home Energy Rating responded to the Government's consultation of August 2003 by suggesting that stamp duty rebates would be helpful in stimulating the general demand for energy efficiency, why did the Government rule out those proposals?

§ Lord McIntosh of Haringey
My Lords, that is exactly the kind of matter that the Chancellor will be considering in his Budget and I have given an undertaking that they will be referred to at the time of the Budget.

§ Lord Ezra
My Lords, reverting to the importance that the Government attach to savings in the domestic energy sector, would it not be desirable for them to plan a major campaign to stimulate users to save energy, rather than dribbling out incentives from time to time in various ways, issued by various government departments?

§ Lord McIntosh of Haringey
My Lords, I am not instinctively opposed to that suggestion. I am sure that there are ways in which we could co-ordinate our campaigns more effectively.

§ Lord Campbell of Alloway
My Lords, which department of state is in charge of energy efficiency? Is it the DTI, as it always was? If it is not, why?

§ Lord McIntosh of Haringey
My Lords, different aspects of energy efficiency are the responsibility of different departments. Energy generally is the 254 responsibility of the Department of Trade and Industry. The Question comes to me from the Treasury because of the tax implications.