House of Commons Hansard Debates for 4 Feb 1994

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ground for the Government realistically to consider the opportunities for establishing additional targets after the year 2000.

Fuel prices have been falling for the domestic consumer in Britain in the past two years as a direct result of the initiatives of privatisation in the gas and electricity industries. Against that background, notwithstanding the imposition of VAT on gas and electricity, there is a danger that the need for energy conservation is not borne in mind by the general public. They see their bills drop year by year, but if we are to encourage people to be conscious of the need for energy efficiency, we almost need to see fuel prices rising.

It is a strange and awkward argument. Of course, we do not want members of the public--our constituents--to have to pay more for fuel. Yet we want to encourage energy efficiency. The best way of doing that is to put up prices. So, starting from the awkward position of seeking to encourage energy efficiency but not wanting to put up prices, we have to consider other ways of drawing to the attention of the public the importance of reducing their liability.

The Bill goes a long way to creating the publicity which makes people energy conscious. It is a limited measure. My first criticism of it is that it deals only with domestic buildings. Domestic buildings are an important part of energy usage. Some 30 per cent. of the final United Kingdom demand goes into domestic buildings. It has been suggested that as much as 46 per cent. of energy used for space heating methods and 15 per cent. of energy used for water heating could be saved by energy conservation measures. This is important, but so is the commercial and public sector which--through its buildings rather than industrial usage--consumes about 13 per cent. of total energy used.

Those two sectors represent 43 per cent. of United Kingdom energy demand. We should deal with the 13 per cent. used in commercial and public buildings, as well as the percentage used in the important domestic sector. The two sectors also account for about 50 per cent. of United Kingdom carbon dioxide emissions, which is why we need to establish those savings.

The average household now uses the same amount of energy as it did in 1970. Higher heating and lighting standards are being attained, but building regulations have also improved. New households are using two thirds of the space heating required in pre-1976 homes. The achievements have been enormous, but we have a long way to go. Other hon. Members have referred to improvements in the building regulations and to the fact that further action can be taken in that sphere. In principle, I endorse those improvements--on which the Government are consulting--but I must add the proviso that there is a danger that we may be using building regulations as the principal weapon to encourage energy efficiency and forgetting the importance of existing buildings.

Mr. Patrick Thompson : I support the improvements in building regulations and I hope that my hon. Friend will agree that it is not a question of more bureaucratic control, but of getting the message across about energy-conscious building design and improved design quality. Those are more important than increasing the number of regulations, which can often be misinterpreted.

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Mr. Thomason : My hon. Friend is right, but there is a danger that the proposed building regulations will be over-regulatory and that we will create homes from which so little energy will be lost that other difficulties may arise, as there will also be very little fresh air. We need to encourage greater awareness of energy efficiency in building design, but the general public must be aware of the advances in energy efficiency for existing buildings, because that is where the maximum savings can be achieved.

The pay-back from even the simplest energy-efficiency scheme is enormous. People will get their capital back in a few years. Investing in energy- saving schemes is a good strategy. People who can afford to do so should introduce such schemes--even modest schemes--if they have not already done so. I understand the difficulties for people on low incomes, who do not have capital available to finance energy-saving schemes even though they would pay lower service costs for heating and lighting as a result.

I have several reservations about the Bill. Local government can produce schemes, but one cannot, and should not, force people to introduce energy- efficiency schemes. The Bill fails to deal with that problem and it must be considered carefully. The proposed local authority plan should be directed towards encouraging the public to invest voluntarily in energy efficiency rather than towards bureaucratic mechanisms. I am worried that there is too much emphasis on bureaucracy and structure and not enough on the end product of persuading people to invest in such schemes.

I think that I am likely to be the only member of the Select Committee on the Environment to speak in this debate, as I do not see any of my colleagues in the Chamber. Perhaps I should therefore say a few words about the report that the Committee produced on 3 November 1993. It is a considerable tome--three very large volumes--and the Committee took a great deal of time hearing the evidence and assessing the conclusions produced in volume I.

The report is important because it directly bears on the thinking behind the Bill. Our inquiry revealed the multiple

benefits--environmental, social and economic--of a comprehensive and adequately funded energy improvement programme. Examples include the benefits of reducing consumers' energy costs, which is such a vital selling point for investment ; attacking fuel poverty and ill health by dealing with the problems of people on lower incomes and helping them to protect their homes adequately from cold and damp ; reducing total energy consumption and the adverse effects of energy production, conversion and consumption, thus alleviating climate change, air pollution, acid rain and waste disposal ; and reducing the costs of importing fuels and making United Kingdom companies more competitive. We must not forget the latter, as it is not often mentioned in debates on energy efficiency.

Mr. Stephen Milligan (Eastleigh) : The need to retain the competitiveness of United Kingdom companies is important. Does my hon. Friend agree that the Liberal Democrats' carbon tax would impose huge additional costs on industry and would have the wrong effect?

Mr. Thomason : I confirm that that is the case. It is extraordinary that the Liberal Democrats have proposed a measure that would directly attack British industry at a

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time when it is critical that it should maximise its competitive advantage. British industry now has a chance to compete with every country in the world on both quality and cost and it would be disastrous if that advantage were thrown away because of the introduction of a carbon tax, which would be a burden on industry as my hon. Friend said.

Mr. Simon Hughes : I had better not let that remark go without a response, or the hon. Member might be persuaded that there is no response. He must know that the argument for the carbon tax is that it would bite equally throughout the European Community, but--more importantly--the industrial and commercial sectors, which make up 18 per cent. of users, would also have to pay tax on fuel use. The Government have sought only to charge the domestic user.

Will the hon. Gentleman reflect on the fact that the Conservative party and its policies might be more popular if the Government had introduced a carbon tax on all users, so that everyone paid equally, rather than imposing value added tax on domestic fuel use?

Mr. Thomason : Unfortunately, the hon. Gentleman's proposals, by adversely affecting the competitiveness of British industry, would ensure that many British workers would not have an income to pay the fuel tax. He would create unemployment by sapping the vitality of British industry's competitiveness.

I find the argument that a carbon tax must be introduced on a European basis fascinating. Apparently, the Liberal Democrats are not seeking to impose a carbon tax in the United Kingdom unless it is also introduced throughout Europe. It must therefore be seen as an example of their intention to give European institutions decision-making powers over this country.

Mr. Peter Atkinson (Hexham) : Does my hon. Friend agree that, even if a carbon tax were applied throughout Europe, it would make European industry much less competitive compared to Asia and other markets, so it would have the same disastrous effect as if it were applied only in this country?

Mr. Thomason : My hon. Friend is absolutely right, and makes a powerful point.

The Select Committee made the further point that energy efficiency generates jobs and achieves net improvements in the balance of trade, which is why it should always be supported, with reasonable provisos. The Committee concluded, however, that if those multiple benefits are to be achieved, it is essential that a package of measures be developed and co- ordinated between several Government Departments and the other key players in the field, of which local government is one. The Bill deals with that matter.

Central Government are taking action to make greater energy savings in their buildings and other areas of responsibility. It is essential that those initiatives be built upon and that those Departments that appear a little reluctant to take on the challenge be encouraged to follow the example of the best Departments.

Mr. Simon Hughes : The hon. Gentleman must not mislead the House. The Government had a five-year programme for reducing energy use in their buildings. After two and a half years, energy use had gone up, not down. If that is progress, I am a Dutchman.

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Mr. Thomason : I shall not comment on the international aspects of members of the Liberal party, but it is clear that the Government are bringing their energy use under control, and that must be welcomed. Organisations such as the Energy Saving Trust, to which my hon. Friend the Member for Eastbourne referred earlier, the energy utilities, regulators and consumers must all be involved in that exercise. I pay tribute to the energy generators and distributors because they are participating in an exercise that may seem contrary to their commercial interests. They are participating in schemes that will lead to a more efficient use of energy, and must be congratulated on that.

The role of local authorities is at the heart of the Bill. The potential for cost savings within local government is considerable, as its total energy bill was estimated at £800 million in 1989. Even a small percentage saving would therefore have a knock-on effect on reducing carbon emissions. The contribution to reducing greenhouse gases is significant, as local government activities contribute some 10 per cent. of United Kingdom emissions. Public buildings alone contribute some 4 million tonnes of carbon emissions a year. The local authority associations have set targets to reduce local authority energy consumption in their non-domestic buildings by 15 per cent. over the five years ending on 31 March 1996. They are to be congratulated on that important initiative, but the pledge is limited to public buildings and does not apply to local authority housing stock. Within the means available, I hope that local government will pay greater attention to the potential for reducing energy loss from their housing stock.

Mr. Brandreth : My hon. Friend mentioned the distinction between people's homes and Government buildings, whether owned by local government or central Government. Better results will be achieved with a bottom-up rather than a top-down approach. People see that they can save money in their own homes or businesses. The problem with central Government and local government is that there is no sense of ownership and people do not recognise the fact that they are spending taxpayers' money. They feel that the problem is remote, which is why we have not seen the impact that we should have seen in reducing energy use in central Government and local government. I am concerned that the Bill will result in audit and exhortation, without real action.

Mr. Thomason : My hon. Friend is absolutely right. Clearly, there is an ownership problem in the public sector, which is one reason why privatisation has been such a success in so many industries. The savings that can be made, with a direct impact on business, can then be appreciated by all concerned in that business. In the public sector, employees do not perceive the problems to be theirs and are not personally involved in the operation of the business.

Mr. Milligan : Further to the powerful point made by my hon. Friend the Member for City of Chester (Mr. Brandreth), who is responsible for the heating bill of the House of Commons ? We have often noticed how over- heated our offices are. The right hon. Member for Berwick-upon-Tweed (Mr. Beith) sits on a Committee that could have some influence in that matter. Should we not put our house in order before we criticise others ?

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Mr. Thomason : I am grateful to my hon. Friend for making that point. Many of us have complained about the heat in the Corridors.

Mr. Dafis : I am a little worried that the perception is being projected that this is a top-down process. There is a mandatory requirement for local authorities to act in a certain way, but the Bill provides for a great deal of consultation locally. One of the great advantages is that that will involve people in understanding the importance of energy efficiency for everyone. It will be part of the process of creating a new culture and attitude to energy efficiency, referred to by an hon. Member earlier as the culture of thrift and good husbandry. It is part of the consequence of a green economy.

Mr. Thomason : The hon. Gentleman is right if the Bill is successful. Although I support the Bill, I am worried that there may be too much emphasis on bureaucracy and not enough on encouragement. I hope that the Bill will lead to the cultural change to which the hon. Gentleman referred. I want to be convinced of that, but I am not sure whether the Bill is phrased in the correct manner to maximise that point.

Mr. Patrick Thompson : Before we move too far from the subject of the heat in this building, may I tell my hon. Friend that my wife came into my office only the day before yesterday and was amazed at the heat. She made a strong energy efficiency speech to me on the spot, which I shall never forget. My hon. Friend's point relates to the one that I made about the relationship between Departments. We need to open up the matter, not in a bureaucratic way but in the manner suggested by my hon. Friend the Member for City of Chester (Mr. Brandreth), by improving communication and awareness.

Mr. Thomason : I agree with my hon. Friend. I am impressed by the role of Members' spouses. My hon. Friend the Member for Eastbourne said that he was going to rush home to talk to his spouse about new lighting provisions in the Waterson household and now my hon. Friend the Member for Norwich, North tells us that his spouse has made representations to him about the heating in this building. Communication obviously exists between Members and their spouses on energy efficiency. Let us hope that it is replicated in the public at large as a result of the Bill.

Mr. Simon Hughes : On the issue of energy efficiency in this building, I sit on the Accommodation and Works Committee and the hon. Gentleman is right to say that my right hon. Friend the Member for Berwick- upon-Tweed (Mr. Beith) sits on the House of Commons Commission. The Committee has made provision in the budget for work on the building to improve energy efficiency so that we do not have over-heated offices and waste energy. When people outside have a go at us about our capital expenditure programmes, we can tell tham that in the long term we shall have a sounder, greener economy, which I hope hon. Members and their spouses will welcome.

Mr. Thomason : I am delighted that the hon. Gentleman refers to those improvements. We look forward to seeing their implementation at an early date, within, I trust, fair and reasonable budgetary provisions, rather than the inflated figures that we have heard mentioned for improvements in this building.

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Mr. Milligan : My hon. Friend mentioned inflated estimates. Does he share my shock at another Committee's proposal to spend £15 million on refurbishing kitchens in the House? Is not saving energy and using the available money to improve energy efficiency in this place a far greater priority than spending money on the boondoggle of improving the kitchens?

Mr. Thomason : That was my point, but, Mr. Deputy Speaker, I appreciate that we may be tempting you to correct us if we discuss improvements to the House other than those relating to energy efficiency.

The Department of the Environment has made supplementary credit approvals of up to £3 million in 1993-94 for energy investment in English local authorities' general administrative buildings. It is another example of the Department's awareness of the need to take action, which I hope will be encouraged.

Local authorities have the potential to improve energy efficiency standards and, therefore, the affordable warmth of their housing stock as well as of their public buildings and to join combined heat and power or district heating schemes. The Bill should, if not directly at least by implication, cover such issues. Local authorities are already taking action that is germane to their ability to implement their plans, as envisaged in the Bill. The Green House demonstration programme was introduced by the Department of the Environment in 1991-92. Its aim was to establish a network of replicable projects throughout England to show the scope for securing energy-efficiency improvements in council housing. The scheme was applauded by many witnesses at the Select Committee's inquiry which described it as

"potentially one of the most effective measures ever introduced by the Government directly for local authorities."

The Select Committee was told that schemes funded through the Green House programme have achieved energy savings of 40 per cent., with 50 per cent. reductions in CO emissions ; but it was also told that the surface of the problem had barely been scratched. In its evidence, the Department of the Environment said that £5 million was being allocated to schemes to be undertaken in 1993-94, but this is to be the final year of the programme.

The Department expects local authorities to implement the good practice lessons of the programme through their housing investment programmes, but I urge the Minister to consider carefully the success of the green house programme and the possibility of extending it if resources allow ; the Select Committee was encouraged by the results. It was, however, concerned that the achievements and good practice should not be lost. It hopes that the Department of the Environment will ensure that local authorities are given sufficient motivation to replicate the green house concept through the targeted use of capital receipts, credit approvals and changes to leasing regulations for schemes that meet similar criteria. I shall go into more detail about that later.

What more might local authorities do and what could they do under the Bill's proposals? Local authorities could improve their contribution to energy-efficiency programmes in a number of ways. The Select Committee recommended that for local authorities with low levels of capital receipts the Government should grant further credit approvals for measures meeting similar criteria to those used for the Green House programme's projects. That would encourage a number of local authorities to embark

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on schemes compatible with the Bill's proposals, which they might feel unable to do at the moment and which they are not considering seriously.

Furthermore, the Government could change the conditions of operational leasing so that local authorities could invest in more energy-efficient forms of heating, as they should. The Committee found it nonsensical thatthe Department of the Environment was encouraginglocal--

Mr. Jim Cunningham (Coventry, South-East) : Why should the Government make credit approvals rather than make grants available? I am sure that the hon. Gentleman knows that these days many local authorities are struggling to find resources, so why should not the Government give them grants rather than credit approvals?

Mr. Thomason : Credit approvals are often more effective. As the hon. Gentleman knows, the revenue implications for raising the capital may not be substantial ; it is the permission to raise capital which is most important for many councils. That is why I believe that credit approvals are an excellent way to encourage but not force local authorities to take a particular course of action. Grants are not always sufficiently finely tuned. They may distort the market and may not be directed in the most cost -effective manner, whereas, if the local authority takes charge of the scheme through credit approvals that it can shape to meet particular schemes based on the requirements of its neighbourhood, the money may be used more cost effectively.

I was saying that the Select Committee thought that it did not make sense for the Department of the Environment to encourage local authorities to install inefficient forms of heating merely because they were moveable assets with a residual value--for example, storage heaters as opposed to gas, central or district heating or insulation.

As I said earlier, the present arrangements mean that the operational leasing of moveable units of heating is easier for local government to finance. The restrictions apply to capital investment on static systems and it would, therefore, be appropriate for the Department of the Environment to allow local government to lease static systems such as boilers. That does not happen at the moment. If operational leasing could be extended to fixed assets of an energy-efficient nature it would assist local government to put substantially more money into energy-efficiency schemes compatible with the plans produced under the Bill.

More local authorities should incorporate energy efficiency into their other programmes such as city challenge. As has been said, many companies now produce green annexes to their annual report and assess their contribution to the environment as part of their financial statement. We must ensure that consideration of the importance of energy efficiency runs through central and local government's policies and thinking. The issue should be taken into account in projects such as city challenge.

Mr. Jim Cunningham : Does not the hon. Gentleman realise that although we would welcome the involvement of the city challenge initiative in energy savings, very few local authorities win under that scheme? In other words, a number of authorities compete every year, but resources are limited.

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Mr. Thomason : Some authorities may not win, but some do win. My argument is that they ought to incorporate energy efficiency in their bids. They ought to think in terms of energy efficiency and incorporate that in city challenge. There is insufficient evidence that that lesson has been learnt. A steer from Ministers to encourage local authorities, when putting in city challenge bids, to take energy efficiency into account would be welcome.

Mr. Chris Smith (Islington, South and Finsbury) : I fear that the hon. Gentleman is doing less than justice to some of the excellent local authorities and their work on city challenge. I direct his attention to the city of Leicester, where the city challenge work has a full component of energy efficiency work.

Mr. Thomason : I believe that the words that I used were "if more local authorities incorporated energy efficiency into their schemes", and that is my argument. Although there are good examples--the hon. Gentleman has referred to Leicester in that context--several authorities are not considering energy-efficiency in their bids. We want them all to consider energy efficiency.

Mr. Patrick Thompson : That is quite important, because there is the issue of emphasis in local authorities. Earlier, I mentioned the fact that Norwich was one of the cities that took a lead under the energy action scheme. The key is the word "action". Now we have the Norfolk Energy Forum, which I praised earlier, but I think that my hon. Friend is saying that we want action, not discussion. I emphasise that perhaps we ought to go back to calling organisations "energy action" rather than energy forums.

Mr. Thomason : That is absolutely right. We need to ensure that energy efficiency is in people's thoughts.

The hon. Member for Islington, South and Finsbury (Mr. Smith) referred to Leicester city council. I was saying that more local authorities need to take energy-efficiency measures into account. Let me give him another example of a local authority that takes energy efficiency into account, to emphasise that the debate is not of a party political nature. When the Select Committee visited Newcastle, it found that insulation work had been carried out by Neighbourhood Energy Action, the city council and an organisation called Keeping Newcastle Warm, using city challenge funds. That is another example of work that is being done through city challenge. However, we need more of that ; energy efficiency should be taken into account all the time. In Newcastle, people demonstrated that there is the potential to move beyond the basic draught-proofing, loft insultation and energy advice measures of the home energy efficiency scheme. In Glasgow, the Select Committee found that the city council and Heatwise Glasgow were working towards more effective and comprehensive energy improvement schemes, although not using city challenge money.

The Select Committee would like more local authorities--I emphasise more-- to introduce home energy labels for their housing stock. It is notoriously difficult to encourage tenants and landlords to invest in energy efficiency, but the advantage is that higher rents can be offset against lower energy bills. Labelling would also allow local authorities to set targets gradually to improve their housing stock. It would also be helpful if more local authorities took up the opportunities offered by contract energy management, where specialist energy management companies seek out

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and finance oportunities in host organisations and receive a proportion of the fuel bill savings generated. Contract energy management offers special benefits to public sector organisations, which have limited resources to invest in capital programmes. That brings me back to the argument about the problems of capital investment by local authorities that was made by the hon. Member for Coventry, South-East (Mr. Cunningham). Here is an example where, without putting out capital investment, local authorities can be involved in achieving energy efficiency savings that have direct financial benefit to them, by partnership with the private sector.

Mr. Jim Cunningham : Does the hon. Gentleman recognise, however, that many local authorities, such as Coventry, are confronted by an extensive capital investment programme, whether it is through council housing schemes or bringing in consultants. There is a big capital cost, but in the longer term, obviously, they can recoup that. Does he also recognise that authorities such as Coventry city council have been involved in energy-saving schemes for many years, but that they have a limit when one considers large council housing stocks?

Mr. Thomason : I am fascinated to see the rush of Opposition Members to defend local government, when I have not criticised local government. I have said that more local authorities should promote energy efficiency and that better practice should be encouraged. Of course, there are good schemes to which I have referred, and to which the hon. Member for Islington, South and Finsbury referred, which have been implemented by local government. I suggest that we need more of those schemes. We need the Government to play a part in encouraging local government to take up those schemes. Some of the schemes are not sufficiently widely known and not appreciated, and the financial savings that can be generated are not widely understood.

The importance of the debate and the Bill lies not only in the scheme that it advocates, but in the facts that, for three or four hours, the House is debating energy efficency ; we are making ourselves and, through ourselves, more people in the country, aware of the importance of energy efficiency ; and we are driving towards the objectives that everyone who has contributed to the debate so far agrees should be aimed at.

Mr. Simon Hughes : May I reinforce the point that the hon. Gentleman has just made? My right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) came second in the ballot for private Members' Bills. Does not the fact that he chose this subject for his Bill show the importance that we attach to energy conservation? It says that we Back Benchers regard this as one of the most important things that we can do something about. I hope that that message will get across.

Mr. Thomason : I am sure the hon. Gentleman makes an important point.

The difficulty with contract energy management schemes and some other parts of the European Community's Save directive is the perceptual barrier that is to be overcome by local authorities. Many authorities are already undertaking conservation work, but there is a perception in local government that schemes take away in-house decision making. We need to make it clear to

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local government that, by contracting out to an operator who will achieve savings and make recommendations that can be introduced at no extra cost, it is not giving away a power, but, on the contrary, showing that it can provide a better service to people who use its buildings or live in its houses. The best practices of local government should be replicated throughout.

I hope that the Government will try to encourage energy management throughout the public sector and, in particular, will acknowledge the work of contract energy management.

If more local authorities were allowed to hold minority interests in contract energy management companies, further progress might be made. Partnership between local government and the private sector in combined heat and power projects is another, perhaps more important, area where the best needs to be replicated more universally. It would be helpful if more local authorities worked in partnership with specialised energy organisations, such as the Select Committee witnessed between Glasgow city council and Heatwise Glasgow, as a result of which tremendous energy improvements and savings have been achieved in the city's local authority housing stock.

Those are some of the things that can be done in the context of the Bill's proposals and some of the things that are already being done. Let me now deal with the terms of the Bill.

The Bill encourages schemes that should have a good pay-back period. Cavity wall insultation, which costs perhaps £300 to £500 to install in an average property, is expensive. Only 22 per cent. of the existing housing stock has it, yet that investment will be paid back in between four and seven years. The return is not brilliant, but it is satisfactory and people should be made aware of its advantages.

Double glazing is relatively even more expensive because its pay-back period is between 10 and 20 years. It is marginal whether it is cost effective, yet cavity wall insulation has been installed in only 22 per cent. of the housing stock, but double glazing has been installed in 51 per cent. The reason for that, I suspect, is that people see other advantages for double glazing : it improves the appearance of the property or adds convenience.

We need to increase the perception of other forms of insulation such as cavity walling to make people conscious of the savings that are available and of the advantages. The fitting of double glazing should be encouraged-- I am not complacent about only 51 per cent. of properties having it--but there is a lesson to be learned from the difference in the installation figures for those two forms of energy installation.

Another area that is early in development in this country, has a low take- up and yet is extremely effective is condensing boilers. The pay back can be as little as two to four years, yet few people are fitting them. I hope that the plans envisaged in the Bill will lead to greater use of condensing boilers.

One would think that draught proofing was the simplest form of energy efficiency. It cuts, on average, 23 per cent. of heat loss. It can have a short pay-back period ; the money invested can be returned in as little as two years--or 10 years if more expensive schemes are used. Draught proofing is easy to install, but is fitted in only 35 per cent.

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of the housing stock. Virtually two thirds of the housing stock does not have the most elementary form of energy- efficient device, which should be encouraged by virtue of the Bill

Water tank insulation also has a quick pay-back period, but, in contrast to draught proofing, it is fitted in 94 per cent. of properties. People are aware of the need to insulate hot water tanks, but do not yet appear to be aware of the importance of excluding draughts from their properties. Is it more comfortable to sit in a house in which the hot water cylinder does not have a jacket than it is to sit in one with a gale blowing through every window? The public have not perceived the importance of draught proofing. I trust that action will be taken as a result of the Bill.

The legislation does not deal with manufacturers--perhaps that subject falls outside the Bill's direct purpose. However, it should be seen as fundamentally important to the future of energy-saving schemes. Too many energy-inefficient products are sold. Too many old appliances are not being replaced by energy-efficiency equipment. We must develop public awareness so that new fridges, dishwashers and washing machines are far more energy efficient. When the public buy such a product, they must realise the importance of finding out its energy efficiency. If they do so, they will get better value for money. That subject is not likely to be covered by the Bill, but I wish it were.

I have some worries about the Bill, the first of which involves regulation and over-regulation. Many Conservative Members are worried that more regulations are being introduced, and there is more and more control of the individual. We welcome the Government's initiative in introducing a deregulation measure. That is good news, and we do not want another set of proposals to create more regulations for the individual. It is important, therefore, that the scheme is seen to be voluntary, and as a means to encourage energy-efficient schemes, not a licence for local government or anyone else to dictate to individuals. It must not give local government the authority to impinge on individuals' freedom. Clause 2(1)(a) uses the word "investigation". It requires local government to carry out an investigation to decide on the measures required. The word "investigation" puzzles me slightly. In press reports I have seen "survey" used instead of "investigation". That implies that somebody from the local council will knock on the door of every house in the district and look around the property to see how energy efficient it is. I hope that the Bill does not intend to introduce such a policy--I should be worried if it did. If the Bill proceeds into Committee, as I hope it will, I trust that we shall have some clarification on that subject.

Some schemes have been introduced that are cost-effective means of assessing energy-efficiency measures. I think that Derby city council has produced a scheme in which properties are looked at on a type-by-type basis, rather than a property-by-property basis. Clearly, there is an important cost implication to be considered, as well as the issue of privacy. Therefore, I trust that that point can be cleared up as the Bill progresses. Otherwise, we must ask ourselves what rights the local authority will have to gain access to inspect properties and how it will assess volume of work undertaken on a property-by-property basis. I am sure that that is not intended, but it ought to be clarified.

I am concerned that the Secretary of State is left with the power to set the appropriate percentage saving, which,

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presumably, it will be necessary for local government to implement. There are cost implications for local authorities in complying with legislation, and that ought to worry us.

Some local authorities may find it easy to meet targets, partly because they have not already made efforts. Other authorities may find it more difficult because they do not have available financial resources. That requires further consideration.

I emphasise the point about successful local authorities because if a council had done effectively nothing about energy efficiency for years, finding savings of 20 per cent. would be relatively easy. However, for an authority that had been efficacious in its energy efficiency work, such as those mentioned earlier, saving another 20 per cent. would be extremely hard. It is necessary to consider the starting point of such savings and to acknowledge the success that has been achieved by many in local government.

Briefly, I shall draw attention to the financing of the Bill, as it obviously has cost implications. I wonder whether all the implications have been thought through fully and I should like to be assured that they have. We have considered the pay-back arrangments and we can see that the individual who installs energy efficiency schemes will, by virtue of a reduction in their fuel bills, get the money back relatively quickly.

Therefore, is there a need to consider recycling money? May we invest a smaller sum in the scheme and see it being reused as savings are achieved by the individual? The individual house owner must see some direct financial benefit, but I am concerned that simply handing out grants or loans may not be the best way in which to use scarce resources.

We need to consider the way in which we address advertising and organisation and the costs of those if the plans are to be introduced. I should like specific provisions made, probably in clause 2(2)(b) or elsewhere in the Bill, to address specifically the method of financing, so that it considers not only what can be and should be saved, but the financial implications of the proposals for the individual householder, the local authority and possibly the Government as well.

We need to consider how we set the targets. I am a little worried about Government setting targets through the structure envisaged in the Bill, which it may not be possible to achieve. It is all well and good setting a target which states that by a certain date, local authority X' must achieve a 10 per cent. saving in energy and what that would mean for carbon emissions and so on, but how could we monitor progress and establish the success of the authority in meeting that target? How do we verify the conclusions that the plan seeks to achieve, establish that they have been achieved and assess the ongoing cuts that may be required? The monitoring and inspection arrangements require further consideration.

I should be very concerned if people who had installed insulation or whatever under an energy efficiency scheme then had someone knocking on their door to check that the work had been done. Clearly, we need a policing method for grants to ensure that the money is used for the right purpose, but I am worried about the idea of an energy efficiency police force being created and lurking in corners trying to catch people out. I know that that is not what is envisaged, but let us try to ensure that the Bill dispels any anxiety on that score.

I suppose that another fundamental point is that it is all well and good installing draught-proofing, but if a

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householder leaves the windows open all the time there will be no saving. We must ensure that best practice extends not just to the installation of energy-efficiency systems but to their use. The points that I have raised do not strike at the root of the Bill, but they are germane to its consideration.

The Bill represents a good and valuable starting point, but it is no more than a starting point. It should encourage partnership between the private sector, central and local government and the public. It should encourage a greater awareness of energy efficiency and a better use of resources. With some amendment and improvement, it could be a very important measure.

12.10 pm

Mr. Chris Smith (Islington, South and Finsbury) : On behalf of the Opposition, I warmly welcome the Bill and offer the right hon. Member for Berwick-upon-Tweed (Mr. Beith) our full support.

The Bill represents a substantial push in the right direction. It sets in place a mechanism for producing an audit of energy efficiency needs area by area around the country. It sets in place a planning mechanism for developing the schedule of work that could be carried out. It sets in place also a proper assessment of priorities. In my constituency, for example, there are blocks of flats constructed 30 or 40 years ago with little insulation where there is a crying need for better insulation and energy efficiency work. The Bill would enable us to have a proper audit, a proper system of planning and a proper assessment of priorities. What it does not do is to enforce the carrying out of energy efficiency work. It lays the foundations that would enable the work to be done and provides a useful impulse to encourage the carrying out of that work.

Why is energy conservation so important in the first place? A number of hon. Members on both sides of the House have touched on some of the reasons. I would identify four very simple reasons why energy conservation is crucial. The first is an environmental reason. We are now beginning to understand the impact that carbon dioxide and other greenhouse gases have on the atmosphere of our planet. The scientific consensus--disagreed with, it would seem, only by the hon. Member for Billericay (Mrs. Gorman) at times--is that the increasing concentration of carbon dioxide in our atmosphere will in due course lead to catastrophic climate change unless we do something about our production of carbon dioxide. That is why the Government were right to sign up at the Rio summit two years ago to the target of reducing our carbon dioxide emissions to 1990 levels by the year 2000. I would argue that that is why the Government are wrong not to have any targets beyond 2000. It is significant that, in the Sustainability documents published a week or so ago, the Government once again duck the issue of what happens beyond 2000. They say that it may be necessary in due course to set targets. Of course it is necessary to set targets beyond 2000. I believe that the Government have performed an ill service in not doing so before now.

It is worth noting that carbon dioxide emission levels in Britain are currently rising, despite the Government's commitment to restore them to their 1990 level by 2000. We must recognise that reducing carbon dioxide emissions is important. It is worth noting also that Britain contributes some 3 per cent. of the world's carbon dioxide emissions,

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