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Lord Ezra: In presenting their views on the future development of energy, the Government have put particular emphasis on the development of renewables and on the development of energy efficiency. So far, relatively little has been done in that area, particularly in the domestic sector.
The Treasury launched two consultative documents in the past year or so looking at various fiscal instruments; however, certainly in the Pre-Budget Statement, none of them were applied. It remains to be seen whether anything can be done in the Budget. The problem about all this, which my noble friend's amendment highlights, is that it has all been done piecemeal. No doubt quite a lot is being done. However, if we really are to galvanise the domestic sector into doing something quite dramatic about improving their use of energy, which is going to be required if the 20 per cent improvement in the White Paper is to be achieved, then there has to be a major combined effort on the part of government, bringing together the various existing initiatives and adding a number of new ones in order to achieve this objective.
I believe that this amendment should figure in a Bill dealing with energy at this time and that it is indeed fully reflective of what we are told is one of the Government's main policy objectives.
Lord Whitty: I agree with quite a lot of what all the speakers have said. However, I do not agree with the amendment. As the noble Lord, Lord Ezra, has just said, it is clear that achievement of energy efficiency improvements—effectively doubling the underlying rate of energy efficiency improvement—over the next
20 years is an absolutely key part of the overall calculations in the energy White Paper and of the Government's policy. Clearly, the household sector—in terms of both the efficacy of heating and lighting houses and the appliances they use within the house—has a major effect on whether we can achieve that energy efficiency.As Members of the Committee said, important measures are already in place. Perhaps we should emphasis the importance and availability of those measures. For example, there is an energy efficiency commitment that requires energy suppliers themselves to provide support to their domestic consumers to improve energy efficiency. Such support concerns the household. One does not have to visit a centre in Plymouth, Bristol or Devizes to obtain that support; the supplier is now obliged to provide consumers with information on how they can obtain energy efficiency support.
The energy White Paper envisages that, in the next phase, the energy efficiency commitment will probably be doubled. Therefore, the supply companies will place an even greater emphasis on energy efficiency improvements among individual consumers. Other schemes include the Energy Efficiency Advice Centres—to which the noble Baroness referred, and which are important. There may be an argument for extending them.
The noble Baroness, Lady Byford, criticised the disappearance of electricity and gas showrooms. There are electricity and gas showrooms, but they are owned by individual companies. Unfortunately, many of the old ones have been closed. If the previous Conservative government had intended to preserve those at privatisation they would probably have done so. We would have supported them in that. They have undoubtedly closed. Some of the energy advice has, therefore, to be provided in other ways and not by individual companies and appliance sellers.
We have other schemes such as the DTI's £10 million clear skies initiative so that households can become more familiar with renewable energy of the kind referred to by the noble Baroness, Lady Miller. Home owners can obtain grants of between £500 and £5,000 towards such schemes. Community organisations, similarly, can receive grants of up to £100,000 for grants and feasibility studies to develop renewable energy as a contribution to energy efficiency and low carbon. Both the Energy Saving Trust, which has been mentioned, and the Carbon Trust receive government funding to undertake—in the case of the Carbon Trust—field trials and innovations such as micro generators and micro CHP, which was referred to earlier in Committee.
I think that the Government are taking a number of steps which will be brought together very soon, after the Easter Recess, when we publish our Energy Efficiency Implementation Plan. The plan will set out all those steps in relation to households, commerce and business.
So I do not think that it is right to say that the Government have not delivered. It may be clearer when the implementation is before us and it is all brought together. I do not think that that complaint is valid. Nor do I think that the amendment as it stands would do what the noble Baroness seeks to do. Certainly the Government would have some serious problems with the second part of the amendment. I assume that the first part relates very much to energy advice centres. The noble Baroness made it clear that the term "easy access" meant physical access to energy advice centres. That will not be possible for all households.
As I say, one of the better means of communicating is to do it through the supply companies with whom everyone at least has an often fraught quarterly relationship when the bills are delivered and when advice on energy efficiency in terms of cutting the next bill can be provided to every individual household. Not everyone will have easy access to demonstration models or to advice centres but I accept that it is important to get the information across to households.
Paragraph (b) of the amendment takes us into different territory. It refers to "fiscal incentives". As the noble Lord, Lord Ezra, said, we have had a number of consultations on fiscal incentives. There was a reference to it in the PBR, but not a definitive one. Either in the forthcoming Budget or in some future Budget the Chancellor of the Exchequer may take action in that regard. Certainly, there is great potential for both positive and negative use of fiscal incentives in order to guide consumers to more energy efficient products and processes. Whether by adopting such incentives we could ensure that everyone took notice of such products—as is proposed in the amendment—is another matter.
We have given substantial signals in favour of energy efficiency through the fiscal system—I refer to car tax and the price of fuel—but many people, including some noble Lords, still buy large cars that consume expensive fuel. One cannot ensure by means of introducing fiscal measures that people will follow certain signals. The wording of that part of the amendment would cause difficulties but, in any case, there is a problem as regards legislating for a programme of fiscal incentives in a non-finance Bill. It would be unprecedented to state in an Energy Bill how the Chancellor should establish new forms of taxation, which is effectively what we are talking about here. Therefore, I have a problem with both the wording and the principle of the second part of the amendment.
However, I agree with much of what has been said in the debate and I have to admit that it is already government policy. The matter may become clearer soon after Easter when we issue the energy efficiency implementation plan.
Lord Jenkin of Roding: I am interested to know of the Government's energy efficiency implementation plan. We look forward with some interest to seeing that.
Last year I chaired an event organised by the Westminster Home and Community Safety Council. That body studies different subjects each year. The one that I particularly remember concerned housing. A great deal of the discussion concerned how you can improve the quality of the environment internally for residents through various forms of efficiency measures. I am not saying anything very original but one of the points that emerged was that a great deal more can be done with new housing than with the huge stock of existing housing. With new housing there ought to be all sorts of opportunities, whether through fiscal incentives or, as I would prefer to call them, economic instruments—because that is what they are—to try to encourage particular policies. That is something that I hope the department is looking at very closely.
Some of the measures mentioned by the noble Baroness, Lady Miller of Chilthorne Domer, are very much more easily done with new build than with a row of terraced houses or semi-detached houses on a suburban housing estate.
If one looks at existing housing, one would probably find that in all but the poorest households, many of the measures have already been taken—for example, roof insulation. There was a great phase of cavity wall filling some years ago. It was not always successful; it had to be done properly. Double glazing was put into windows. Many of those measures have been taken. They tend not to save energy, but to improve comfort. That is what people are going for. At the margin, there may be some saving of energy, but, for the most part, those measures are taken to improve the quality of living. The question of how that can feed through to a more economical use of energy needs also to be addressed.
As far as new housing is concerned, the Government have a considerable opportunity to effect new build. I have no hesitation in saying that the biggest obstacle they face is the very traditional way in which most UK housebuilders are accustomed to operating. I read in the Financial Times a few weeks ago that some of the big developers are bringing in foreign construction companies. One particular developer had brought Australian construction companies into this country because they were prepared to look at new methods of building that would have all the advantages of the kind mentioned by the noble Baroness, Lady Miller of Chilthorne Domer.
The Government have an opportunity there. It may be a long, hard push, because we all know how conservative housebuilders are in wanting to keep their costs down by doing the same as they have done in previous years. That is where one must somehow begin to have an impact on the domestic front.
I was slightly surprised to hear the Minister disparage the question of new equipment. One has only to look now at the pattern of new car buying and the incentives—they are economic instruments—offered in terms of lower licence fees to cars with more efficient fuel consumption and to cars that have dual propulsion, by petrol or diesel and by electricity. There are substantial advantages to be had.
The information that I have been able to glean is that a large number of those vehicles are being bought. That points to the fact that if one gives incentives of a sufficient value, which are properly publicised, people will come forward in large numbers and take advantage of them. I would have thought that the number of small cars one now sees on the roads represents a vastly larger proportion of road traffic than it used to. I am happy to say that a considerable social stigma is now attached to people who insist on driving around cities in large, four-wheel drive SUVs with bull bars at the front. They are the most inefficient vehicles of all. I hope that one would go on thumbing one's nose at them, because they are awful.
That kind of measure can be brought to bear. People can drive little run-abouts with a very economical use of fuel. Fiscal incentives can make that happen and it is actually working. I hope the Minister will take a slightly less jaundiced view of people's response. It takes a little time. One does not buy a new car until one is ready to dispose of the old one. One does not move into a new house often for a generation or more. That is when the changes can be made. That also applies to household appliances. Many of them are designed to last. The new ones are much more efficient than the old ones, but the energy saving is not enough to advance the purchase by five or 10 years. One waits until the old one wears out. One then gradually achieves a greater efficiency in the use of power and electricity in the home.
I hope Ministers will not be too pessimistic. A lot of the things that we have discussed can actually happen, provided that one is not too starry-eyed and expects it all to happen tomorrow, because it will not.
5 p.m.
Baroness Miller of Chilthorne Domer: Before the Minister replies to the noble Lord, Lord Jenkin of Roding, I should like to build on one aspect of his comments on older housing stock which is everything but new. As the Minister will know, as he was the keynote speaker at the conference, the role that local authorities can play in promoting energy efficiency—through their role as planning authorities and in housing and economic regeneration—should make them key players. As he said at the conference, the Government are looking at how to include energy in the Audit Commission's comprehensive performance assessments of local authorities and how to incorporate energy within the shared local priorities.
Given the strong role that local authorities could have if all that were achieved, I wonder whether the Government are pursuing it. Will it feature, for example, in the Energy Efficiency Implementation Plan? I expect that other Members of the Committee are as frustrated as I am that we will not see the plan until this Bill has left your Lordships' House. As the Government well know, unless they make those two moves local authorities will have absolutely no latitude in their work as they are so closely circumscribed by Government. The measures in the comprehensive
performance test focus them on those matters so specifically that there is no room to deal with other matters.
If the Government want local authorities to achieve their potential as regards energy, they must speak with urgency to the Audit Commission, and energy must be included as one of the key measures for local authorities. Those that are performing in a good or excellent way should be recognised for that. I would welcome the Minister's comments on that. His comments to the conference indicate that he has given thought to the issue.
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