§ Mr. Jim CunninghamTo ask the Chancellor of the Exchequer if he will make a statement on the use of financial incentives to encourage the use of domestic energy efficient products. [119062]
§ John HealeyThe Government have already introduced a range of measures to promote energy efficiency in the home. The Government have reduced the rate of VAT to 5 per cent. on the grant-funded installation of new central heating systems and heating appliances, factory-insulated hot water tanks, micro combined heat and power systems, and renewable energy heating systems in the homes of the less well-off. The Government have also reduced VAT to 5 per cent. on the installation of specific energy-saving materials.
The Government consulted on economic instruments to improve household energy efficiency during 2002 and a summary of responses has been published on the HMT website. Budget 2003 announced that, in the light of this initial consultation, the Government will shortly undertake further detailed consultation on specific measures to encourage household energy efficiency.
The Government have also introduced other measures to improve the energy efficiency and tackle fuel poverty in the domestic sector, including the Energy Efficiency Commitment (EEC) and Warm Front.
The EEC requires gas and electricity suppliers to encourage and assist their domestic customers to reduce energy consumption and to meet targets for quantified energy savings. Households on income and disability related benefits are currently provided with at least 50 per cent. of the benefits from the EEC.
Since its launch in June 2000, the Warm Front Scheme, which provides packages of insulation and heating measures worth up to £2,500 to private sector households in receipt of certain benefits, has assisted over 500,000 households, helping improve the comfort levels and living conditions of some of the most vulnerable members of society.