Select Committee on Trade and Industry Minutes of Evidence



Examination of Witnesses (Questions 103-121)

PETER LEHMANN AND PROFESSOR JOHN CHESSHIRE

TUESDAY 7 MAY 2002

Chairman

  103. Good afternoon, gentlemen. The pair of you need no introduction to us. You have been witnesses and advisers in a number of guises in the past. We are very pleased to have you here this evening. Perhaps we could start off by asking you to explain why you are here in the sense that we have this body with an exalted title, the Fuel Poverty Advisory Group. We have seen the membership: a distinguished dramatis personae. What are you supposed to be doing?
  (Mr Lehmann) Our role is a very clear one. The Government have set out a strategy for ending fuel poverty amongst vulnerable households by 2010 and amongst other households by 2016. We have to advise them how to deliver that. Will current policies deliver? If not, what is needed and what are the most effective routes to delivering that.

  104. You are going to gather evidence. Are you going to commission research? What sort of budget will you have? How are you going to go about that side of the business?
  (Mr Lehmann) Two main routes. Firstly, we have support from officials in DTI and DEFRA and we shall guide them very strongly by what it is they are looking for. Secondly, we have the resources and knowledge of the members of the committee. What we are trying to do is pair a member of the committee with an official for each of the topics we are going to cover. If we need to commission any additional work, that will have to be done through the normal DEFRA and DTI budget. We do have pretty good staffing support from the DTI and DEFRA.

  105. Will you be looking at best practice internationally as well as gathering evidence in the UK?
  (Mr Lehmann) To a limited extent. The issue of fuel poverty is one in which we sadly are amongst the world leaders. I am always very keen on gathering information from other countries, learning and not re-inventing the wheel. On the broader energy efficiency front, for the non-fuel poor, there is a lot to be learned. Here I would say not as much. Where we are going to learn is from our colleagues in the devolved administrations, because our group just covers England. We shall be trying to learn and teach what is happening in Scotland, Wales and Northern Ireland.

  106. One has the impression that this is a new body, you are going to report annually, but what happens if you have to do some firefighting? That is perhaps not the most appropriate metaphor but a crisis arises or you see something just coming onto the radar screen. Will you have the flexibility of having access to Ministers? Will they say there is no R in the month so you cannot see them? What is the score?
  (Mr Lehmann) We have done it already. Even before the first meeting of the group the Government was close to putting out its final version of guidance to local authorities on what constitutes a decent home. We were rather worried about that, so we intervened directly via DEFRA with DTLR and secured some very important changes to the document. The answer is yes, there is flexibility. When we give advice to Ministers we do not want to generalise, we want to explore a problem as far as we can take it and then give the advice. In some circumstances that will mean getting things done on the way. That flexibility is very much there.

  107. You just mentioned that you made representations to DTLR through DEFRA. Is this not a terrible minefield that you are going to have to dance through?
  (Mr Lehmann) It is awkward sometimes. I do not want to be complacent. In some ways it is inevitable and it happens in companies. You have to have different people doing different things; sometimes it can be frustrating but actually this worked rather well. I wrote directly to DTLR and that resulted in a meeting of officials. We keep our sponsoring Ministers in the loop on this. Sometimes it will cause us some frustrations and difficulties. One in particular was raised earlier which we shall have to tackle with the help of our sponsoring Ministers and that is the issue of benefits take-up. We are finding that is an important source of problems and we shall want to pursue this.
  (Professor Chesshire) We have only met twice—once today—but as we identify a problem, we are very much minded to take action to follow it up before our next meeting. It is only when we have a significant difficulty which we have not resolved where we will leave it to the end of the year to report to Ministers. We do not want to have a huge accumulating list of issues which are not addressed. We want to address them, if we can, as we go.

  108. Will you be able to look at potential barriers to eliminating fuel poverty which exist within Government as well? Are you going to say they do not have this degree of liaison correct?
  (Mr Lehmann) Yes. We discussed a paper today on all the other possible departments and parts of regional and local government as well, which might be involved in this. We are going to be focusing on two or three of the most important ones. Yes, very much so.

Mr Hoyle

  109. Can I take you on to membership of the group? It is always interesting to see who is going to be represented. Would it be fair to say that the people you are taking on may not take an impartial view, that they will be representing interests that they have? What would your view be of that?
  (Mr Lehmann) Obviously they all represent organisations who have different views of the world. I would say two things. One was mentioned earlier on. The Government and the Regulator have done a good job of making people think about fuel poverty and the companies as well. A lot of what they do is obviously driven by their desire to increase shareholder value, but people in industry do now recognise that here is a problem which is a problem for all of us and they want to help solve that. Secondly, there will be lots of differing views from different organisations there and some of these are quite difficult issues. We heard some discussion earlier on about whether we should carry on with a decentralised initiative-led approach or a more centralised one. People can have different judgements about that and we want to try to thrash out the evidence and see whether we can come to a view. Some people have different interests but we will work through that. They are healthy.

  110. Just take the good people of Chorley. Who would represent their views on this, besides me representing them here? Who would represent them on your group.
  (Mr Lehmann) That is a fair point. We try by proxy to represent them. We cannot claim to be as closely in touch with them as you are. That is in the end for Ministers and Government. William Gillis, who is close to the front line, is a member of the group, as is Jill Owen, who is the Chair of the Public Utilities Access Forum. We do have people who are close to the community, but we do not pretend to be representative.

  111. Do you have a good regional spread as well?
  (Mr Lehmann) Yes.
  (Professor Chesshire) We also have Energywatch, which is a Consumer Council body, and we have Help the Aged. I am sure we can always play tunes on a group but the judgement was that it has to be small enough to have a bit of punch. It is not my impression at all, and I am sure the Chairman would agree with this, that those differences of interest have emerged in the debate we have had to date. Different facets of addressing the issue, yes, but where we have sought to reach agreement, we have done so dramatically quickly.
  (Mr Lehmann) One issue of representational interest which is relevant and I am concerned about is that a number—we do not know how many—of those in fuel poverty are from ethnic minorities and we do not have anyone from ethnic minorities on our group. We are looking to see whether we can find an organisation which would be suitable there.

  112. When do you hope to have that addressed? I do think that is important.
  (Mr Lehmann) I am addressing it personally and I am trying to find an organisation which has somebody who would want to come forward and help us.

  113. In the very near future.
  (Mr Lehmann) I cannot promise I shall be successful. It is not always easy to locate the right people. As we speak, I am working on it.

  114. I do think that is important.
  (Mr Lehmann) Yes; I do too.

Linda Perham

  115. The terms of reference for your group state that the group's membership should be representative ex officio members rather than individuals, who should be able to take a broad and impartial view, but the membership list does rather suggest that there really are people who represent a certain sector. Help the Aged was mentioned. Would you not feel that someone like Mervyn Kohler, whom I happen to know quite well, would perhaps have just a certain focus? You did say earlier that the people would get together and work for the good of the group as a whole, but it is quite a long list of people representing different groups. Are you confident, especially if you get someone from the ethnic minorities, that this group can work together for your common aims?
  (Mr Lehmann) Yes, I am absolutely confident. The debates so far have revealed that. We will be able to work towards agreement on some issues and on other issues we will not be able to and then we may have to tell Government that we have different views on this and that can be helpful as well sometimes. Obviously Mervyn Kohler is going to focus and help us to understand some of the issues which face older people and that is very useful. He will have a focus on certain issues; others will have a focus on other ones. We have a helpful mix there.

  116. You have your list of topics which is quite formidable, about a dozen topics which make up your future work programme. In your memorandum you talk about your first meeting on 12 March where other issues were addressed like skills shortages in gas engineering, which has certainly come up with us before as quite a serious problem, and others. Do you have any idea of how you are going to prioritise what you have come up with? Are there certain issues which are so serious that they need to be addressed immediately?
  (Mr Lehmann) There are two or three priorities. The first is an evaluation of the pros and cons of the present schemes, of Warm Front, the energy efficiency commitment, Warm Zones; what are the advantages and disadvantages and what should be the balance between those schemes as we go forward? The second very high priority is the one which was talked about earlier on, the so-called hard-to-heat homes, either those with solid walls or those outside the gas supply area and in particular those which are both outside the gas supply area and have solid walls, which are clearly not covered by the present programme and will need some further policies. Those will be our priorities. The third, arising from today's meeting, would be discussions with the Department of Work and Pensions on benefits take-up.

  117. Do you have any idea what you can achieve by the end of your first year? You are doing annual reports to Government, are you not?
  (Mr Lehmann) Yes. Let us take those three issues. I would hope that we will be able to come up with recommendations about how the balance between those programmes should be struck going forward and that we shall be able to come up with some ideas on the best ways of tackling those hard-to-heat homes. We heard a number of ideas today: solar, bringing gas to the area. We need to try to evaluate the costs and benefits of those different schemes. On solid walls, we shall be very keen to see whether we can stimulate technical developments. When I go walking or cycling I can put on something which is paper thin and keeps the heat in and the wind out. Why can we not do that for houses? My scientific friends tell me that is too naive. Nevertheless, it seems a good question and one we should try to drive forward. I hope we shall have made some progress on those two issues: evaluation of the present schemes and the hard-to-heat homes.
  (Professor Chesshire) One thing we can do is determine a style of work and nip around various parts of Whitehall trying to join activities together. I hope we would have in some of these priority areas a number of well-thought out strategies but given the funding cycle the likelihood that we could actually influence a programme within the period of a year is quite small for obvious reasons.

  118. Concerns were expressed to us by Ann Robinson of Energywatch about the feasibility of achieving the 2010 target. There is obviously not much time available. How do you think you can ensure that your findings and recommendations are translated into early action so that target is reached?
  (Mr Lehmann) We think it is a very tough but achievable target with the right policies. The best way we can help is firstly by doing the proper evaluation, weighing the evidence, looking very carefully at the most cost effective ways of doing it, because resources are clearly going to be limited, then making sensible recommendations backed by evidence to Ministers with the full weight of the Committee behind them. That is the first thing. Secondly, in the meantime, as we have done on the decent home standard, we can intervene when policies are being developed to try to make sure that fuel poverty considerations are taken on board.

  119. It struck me, listening to the other evidence, that we have an awful lot of well-meaning groups who are trying to do something in the fuel poverty agenda. We had three before you. Does that complicate things that there are so many different organisations and also the membership of your group reflects it as well, that there are lots of different strands, lots of different people with different interests and a number of groups who seem to be campaigning for the same thing really? Does that complicate things for you or does it actually help you that there is this momentum of different groups who feel strongly that they have to address the problems of fuel poverty?
  (Mr Lehmann) It is helpful. It makes it more complicated that different people have different views about things, but these are very difficult issues, so it is helpful to have them aired. The campaigning work is probably helpful. I do not agree with everything that was said this afternoon, but it was extremely helpful. All credit to these groups for having raised this issue and helped persuade the Government to set a target. It is important to keep up the pressure, important to keep up the encouragement to achieve the target, because that will help secure the resources and commitment from Government.
  (Professor Chesshire) This area has come from a standing start in terms of spend within the last five to ten years. Research generally goes back 20 or 30 years. It is an area of public policy which has emerged via those campaigning groups. It left Parliament standing still in a sense, although there were some Members who did have a great interest in this area. It is one of those areas where external pressure very much helped to forge policy. My own judgement is that I want them to continue that pressure. They represent different areas of the country, different experiences, direct engagement and delivery in some cases and in others more of a research role. They can each play a role, together with others, in sharpening the focus and the quality of the data we have. I am sure you have heard of the difficulty of getting together income data, family make-up data, house condition data, fuel price data. It is an immensely challenging task, surprisingly. One would think it was easy, but it is a challenging task. Trying then to shift the nature of the debate, which Whitehall delights in, from inputs and outputs to outcomes. This again is an area where measurement on the ground is going to prove absolutely essential. Many of our statistics stopped short of the outcomes because that normally means visiting a home to assess what improvements have been made. People operating on the ground with grassroots knowledge can play a very valuable role.

Chairman

  120. That is a good point on which to finish. I was just thinking as you were talking at the end that perhaps the Government has made a stick for their own back by appointing a crowd like you. All power to your elbow. This will certainly not be the last discussion we will have, but I should like to think that it will not be the last discussion we will have as a Select Committee talking to an advisory group. I am sorry more of my colleagues were not here, but there are several issues today and we also had a long session this morning. We were anxious to get this session in and to get witnesses like yourselves in, because we have quite an ambitious programme between now and Whit and beyond. Professor Chesshire knows the pressures under which we operate. We are very grateful to you for coming in and thank you for your forbearance.
  (Mr Lehmann) Thank you. May I just say one word because we heard the discussion about the company schemes when you were talking to the Electricity Association? We had a discussion about those this afternoon and if you want a bit of a flavour of some of those results, I would give you that very briefly.

  121. Yes, that would be helpful.
  (Mr Lehmann) It has been difficult to get the data; not because the companies were unwilling but because there were lots of different schemes and it was a matter of trying to understand and measure. It is work in progress and work we are pursuing and intend to pursue. It is very important because there are important policy implications. The information so far is very preliminary. We do not have results in from all the companies. It is that something over one million customers have been helped as a result of these company schemes. We do not know the extent of them; some of them are rather small, some of them bigger. About 1.3 million plus two more large companies to come and about one quarter to one fifth of those were outside the obligations.
  (Professor Chesshire) Two hundred and seventy-five thousand outside EESoP and Warm Front and Warm Deal.
  (Mr Lehmann) There may have been some more where they were partially EESoP schemes and partially add-ons. What we do not know yet and we shall try to find out is whether these have achieved big savings for customers or whether it is a light bulb or two. We shall be pursuing that. We do know that in some cases they have achieved a lot through the benefits health checks.

  Chairman: That is extremely helpful. Thank you very much for that. You are beginning to prove your worth already. Thank you very much.


 


 
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