HL Deb 26 January 2005 vol 668 cc1264-6

3 p.m.

Lord Ezra asked Her Majesty's Government:

Whether they will introduce fiscal incentives for domestic householders to improve the energy efficiency of their homes.

Lord Davies of Oldham

My Lords, the Government have introduced a number of measures to improve household energy efficiency, including reduced VAT rates for professionally-installed energy saving materials and the landlords' energy saving allowance. Budget 2004 also announced the Government's intention to consider a green landlords scheme. The Government continue to explore options for using other cost-effective fiscal measures to improve household energy efficiency, taking account of economic, social and environmental objectives. Any decisions on the further use of fiscal instruments to incentivise household energy efficiency will be made by the Chancellor within the Budget timetable.

Lord Ezra

My Lords, I thank the noble Lord for that generally encouraging Answer. Does he recall that last year the Government reduced the carbon emissions objective in the domestic sector from 5 million tonnes per annum by 2010 to 4.2 million tonnes due to the slower than expected uptake of insulation measures? Is it not a fact that in the private domestic sector, energy efficiency is generally lower than in the social sector, as revealed by successive House Condition Surveys? Should the Government be looking even more seriously at providing incentives in the private domestic sector, particularly by means of the measures indicated in the Question?

Lord Davies of Oldham

My Lords, the noble Lord is right that the greater problem lies in the private-owned domestic sector, which is why we are considering measures that will be appropriate to that sector to provide the incentives for energy saving. He will recognise that one crucial area, which we are watching carefully, requires field trials to be completed. As the actual product for insulation in homes cannot be ready until later this year, we have time to evaluate those field trials and work out how we incentivise people to adopt these measures. I agree with the noble Lord that we have a considerable way to go to hit the targets that we have set for 2010, and it will require us to deploy a range of measures to give incentives to the market

Lord Lawson of Blaby

My Lords, is the Minister aware that there is no shortage of energy? If there was a scarcity, the market and the price mechanism would reflect that perfectly adequately. Why is taxpayers' money being used to subsidise energy, when there is no more case for subsidising the efficient use of energy than, say, the efficient use of foodstuffs, or anything else?

Lord Davies of Oldham

My Lords, we are all concerned about the question of energy consumption, and we all recognise that there are substantial changes in the nature of our energy supply in the United Kingdom, as has been attested in many debates in this House on energy provision. We are also concerned with reducing waste. In a world in which many areas are going energy-short and are obliged to exploit forms of carbon-based energy that increase greenhouse gases, it behoves us all to follow a strategy that reduces our dependence on such developments.

Lord Renton of Mount Harry

My Lords, I agree wholeheartedly with what the Minister said, and I disagree with my noble friend Lord Lawson. Is it not a fact, as the Minister said, that, since carbon-produced electricity is one of the major sources of increases in carbon dioxide emissions, all of us are becoming increasingly worried about the speed at which this is happening? One's heart sinks when one hears that the Government are considering further measures and a decision will eventually be taken by the Chancellor. Why do the Government not get on with it, as the noble Lord, Lord Ezra, said, and introduce something positive quickly? For example, a fiscal incentive for those who install double-glazing would quickly make houses much more energy efficient.

Lord Davies of Oldham

My Lords, there is an incentive to householders to install double-glazing, and we have a range of measures to give support to energy conservation in those terms. It is not fair to suggest that one should regret that a great deal of these measures lie with the Treasury, which is proactive and creative on this. I apologise if I produced dissention on the Benches opposite about these strategies; I was hoping to engender healthy debate.

Baroness Miller of Hendon

My Lords, can the Minister tell the House whether the vast number of new houses that the Deputy Prime Minister has indicated that he wishes to build for about £60,000 each will contain all of these energy-efficient measures

Lord Davies of Oldham

My Lords, it is certainly our intention to build to a high standard. We are encouraging new build, and the incentives are already in place for cavity walls and improved insulation for lofts and roofs. In those areas, we are already giving incentives to houses that need conversion. Of course, we intend that the new houses that we expect to build under the ambitious plans of my right honourable friend the Deputy Prime Minister will meet these high standards.