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Column 1179yet has only 1 per cent. of the world's population. We are clearly overproducing carbon dioxide even for the present high levels of global production.
The first and crucial reason why energy conservation is important is that we need to reduce carbon dioxide emissions. The second is that we need to make people warmer. It is worth noting--it was mentioned by the right hon. Member for Berwick-upon-Tweed--that currently some 7 million families in Britain cannot afford to pay for the warmth that they need and that 3 million homes are suffering condensation and mould growth.
The family expenditure survey in 1988 showed that the average low-income family spent £8.50 each week on fuel, representing 10 per cent. of total household expenditure. In other families--not the low-income end of the spectrum--a little more money was spent, at £11.30 per week on average, but it represented less than 5 per cent. of total household expenditure. In other words, for families on low incomes, the proportion of the household budget spent on heating their homes is far greater than the proportion of average and above-average income families. Fuel poverty is a reality for millions of people in our country, and the imposition of VAT on domestic fuel bills will make that even worse.
The third reason for ensuring that energy conservation is carried out is that it will save people money across the board. That will be especially important after 1 April this year. The hon. Member for Norwich, North (Mr. Thompson) spoke earlier about VAT on domestic fuel. He said that a levy on everyone's energy bills to encourage energy saving measures was a worthwhile thing.
I have heard VAT on domestic fuel called many things, but using it as a lever to encourage energy efficiency work is, I must say, a poor explanation for imposing it on millions of households throughout the country. Energy-saving measures are important. Energy-saving measures will cut people's heating and electricity bills, but VAT on domestic fuel is not the way to go about ensuring that that happens.
Mr. Jim Cunningham : Does my hon. Friend accept that the imposition of VAT on energy, particularly in more deprived areas where there are older properties, as there are in my constituency in Coventry, is a contradictory policy because the Government have also cut grants to people in inner cities who live in older properties? There are currently major problems with between 17,000 and 20,000 properties in my constituency. Those properties are occupied by the poorest families.
Most experts believe that the Government's figures are over-optimistic. Even on the Government's own figures, the imposition of VAT on fuel will reduce carbon dioxide emissions in this country by less than 1 per cent. Advancing energy conservation objectives as the reason for the imposition of VAT on fuel is not a particularly sound argument.
The fourth reason why energy conservation is important is that it generates employment. The Bill specifically refers to that point in clause 2(3).
Mr. Malcolm Wicks (Croydon, North-West) : I am sorry to interrupt my hon. Friend now that he has moved on to his fourth point. However, with regard to his third point, does he agree that not only would an efficient energy efficiency programme save people money, but in some cases it would also save lives? We must be aware of the fact that more of our elderly people die in winter compared with summer than in countries such as Sweden which are clearly far colder than Britain. The Swedes have always taken energy efficiency seriously and we never have. The fact that we are top of the winter mortality league should be a cause for shame. If the Bill helps to reduce that, that is another reason to support it.
Mr. Smith : My hon. Friend has a long history of work in that area and he is absolutely right. With regard to thermal efficiency, our building regulations standards are currently at about the level of standards in Sweden in the 1930s. That says a great deal about the progress that we still have to make. I will refer in a moment to the building regulations issue because it is important that we place some of these points in that context.
The fourth reason why energy conservation is important is that it generates employment. Several studies have been carried out to assess how many jobs would be created if we had a substantial programme of energy efficiency work in this country. They vary in detail, but, as a broad average, they show that for every £20 million expenditure per year on energy efficiency work some 1,000 new jobs could be created. A recent study by the Goodman group in the United States showed that, pound for pound, expenditure on energy conservation work generates about 40 per cent. more employment than expenditure on energy production work or developing new sources of energy generation. There are a range of reasons why we should be endorsing and working much harder at energy conservation than we are now. Those reasons relate to the environment, to making people warmer and to saving people money. In addition, as my hon. Friend the Member for Croydon, North-West (Mr. Wicks) said, they relate to saving people's lives. They also relate to generating employment.
Many local authorities around the country are already engaged in such programmes. I was pleased that the hon. Member for Bromsgrove (Mr. Thomason) mentioned a number of local authorities which are already engaged in good energy-efficiency work. I noted with a somewhat wry smile that every local authority that he mentioned is Labour controlled, but this is not necessarily a party political matter. Local authorities with all forms of political control have taken up the issue of energy efficiency and have effectively run with the ball.
For example, Leicester city council has filled the cavity walls in nearly 13,000 council homes, achieving cost savings of 50 per cent. due to economies of scale, and it is conducting an energy survey of all of its council housing stock. That demonstrates that some local authorities are already doing some of the work that the Bill will ensure is done by local authorities up and down the country. One of the reasons why I welcome the Bill is that it makes the conducting of such surveys and audits mandatory for local authorities, rather than simply permissive. A permissive power would not add anything to the existing position--it would simply be a declaratory statement on the statute book saying to local authorities, "We know that some of you are already doing it already and we want to encourage
Column 1181you to do it." The Bill seeks to encourage reluctant local authorities as well as those that are well ahead of the game already.
There are many other examples of local authorities with a good energy conservation record. Glasgow city council has already been mentioned. It has insulated something like 70,000 homes under the Heat Wise programme. Newcastle has worked out a project, together with the European Commission, British Gas, Northern Electric and British Coal, aimed at reducing carbon dioxide emissions and energy consumption in the city by the year 2000. Nottinghamshire county council has had a programme of energy conservation work in its buildings for 14 years. Mendip district council is implementing a three-stage plan for the improvement of its stock of 5,500 houses. Many other examples could be given. Many local authorities are already in the vanguard of progress in this respect.
The Government's record stands rather poorly in comparison with that of local government. However, they are doing one or two useful things. In the most recent Budget, the Chancellor announced an increase in funding fo the home energy efficiency scheme from £35 million to £77 million per year. That is welcome. Some of that additional money has been transferred from other energy-efficiency work funded by the Government. It is worth noting that, even with the increase in funding, the scheme is limited in what it can fund in people's homes. It relates mainly to insulation and the lagging of pipes and boilers--it is not used for things such as cavity wall insulation and the installation of new boilers, which are two of the most efficient measures that can be taken in people's homes. Therefore, the scheme is limited.
Mr. Robert Ainsworth (Coventry, North-East) : My hon. Friend is talking about the home energy efficiency scheme and the increase that was announced recently by the Government, to a great fanfare. Is my hon. Friend aware that it has been projected that, despite the increase in the budget, half the stock will not have been dealt with by 2000 with the current levels of efficiency ? The Government have not admitted that, and I have not been able to get an answer from them to my written questions. Does my hon. Friend think that the Government do not know what the target is for completion of the programme? Does not the independent work which has been carried out lead to that conclusion ?
Mr. Smith : My hon. Friend takes the words out of my mouth. I was about to advert that, under the home energy efficiency scheme and even with the additional funding, it will take the best part of two decades to insulate all the low-income households in the country. In other words, people will start to pay higher bills in April, but some will not get help with insulation until some time next century. Welcome though the increase in the scheme has been, it is a modest measure and we should not allow the Government to get away with telling us that it is the perfect answer to the energy-efficiency needs of the country. The Government have also established the Energy Saving Trust, which is potentially an extremely valuable institution. However, the trust will need more than the £6 million that British Gas has tipped in and the £25 million that the regional electricity companies are saying that they will tip in to have the kind of impact that the scheme could have if it were turned into a viable body. It may improve,
Column 1182of course, as the months and years go by, but it has made something of a slow start. We can but hope that it will pick up rather faster than it has hitherto.
In other aspects, the Government are going backwards. The Government green house programme to assist local authorities to carry out energy-efficiency work in their own buildings was worth £45 million last year. The programme is worth £5 million and, so far as I am aware, it is due to be abandoned completely. At the same time as they are increasing the home energy efficiency scheme, the Government have been cutting the green house programme completely. If one looks at elements within the housing investment programme for energy insulation and efficiency work, there have been cuts year by year in authorisations for improved insulation work.
The hon. Member for Bromsgrove said that the Government are putting their own house in order and making sure that their own buildings are becoming more energy efficient. I have to tell the hon. Gentleman that they are not doing so. I tabled a parliamentary question a few weeks ago asking for information on energy expenditure, by Department, in the past three years. The answer shows that the Government's expenditure on energy has gone up in each of the past three years. That does not say very much for the Government's reported target of 15 per cent. energy efficiency savings in five years.
If we had a Government who were more serious about energy efficiency, how could we build on the provisions of the Bill and not just use it as a mechanism for planning our national work in the area? How could we do more to improve the energy conservation profile around the country? I would advance just three ideas.
First, we could and should have a proper national programme of energy conservation work in people's homes. We could do it without any cost to the taxpayer if we implemented the proposals that the Opposition made a year ago. They were rejected by the Government, but we are still open to last- minute conversion by the Government if they want to pick up the idea and run with it. The proposals were to carry out work in people's homes free at the point of installation, but funded over a period by a small premium on the unit price of gas and electricity. People would still be better off because they would save substantially on their energy bills. It would make them warmer and mean that we had a major rolling national programme of energy conservation work in people's homes. The idea ought to be taken much more seriously by the Government than it has been hitherto. Secondly, we need some changes in the regulatory regime. At present, with the slight exception of the introduction of the E factor, which appears to have produced some benefits, the basic system of regulation for electricity and gas in Britain means that there is an inbuilt advantage for the electricity companies and British Gas in selling more of their product. Therefore, they have a disincentive to invest properly in energy efficiency.
There is a whole host of schemes in the United States, for example, where the regulatory regime has decoupled increased sales from profits. That decoupling, by means of a change in regulation, could insert into the system a real incentive for the utilities to encourage energy efficiency, rather than sit back and simply let it happen.
The third area in which we could make considerable progress is in the building regulations. Eight or nine months ago, the Government made some amendments to the building regulations which made a mild improvement,
Column 1183most of which resulted from the insertion in the building regulations of double glazing as standard for new properties. However, there is far more that the Government could do on building regulations, especially with regard to the thermal insulation value of walls, roofs and floors of new construction. I urge the Government to look further at how the building regulations could be improved in that respect.
I also urge the Government to pick up the Bill that we shall debate in a few weeks, which would insist on better thermal standards for buildings when they are converted rather than only for new buildings. There is a lot that could be done which is not being done. We could have a decent national programme of energy efficiency work. Changes could be made to the regulatory regimes for gas and electricity. We could have better building regulations. The Government's record on energy use and energy efficiency could be improved.
The Bill makes a good start. That, above all, is what is important about it. It represents a platform on which we can build. It creates a mechanism that will put in place work in local authorities to identify needs, assess priorities and set out what needs doing. Then all that we need is a change of Government to ensure that the work gets done.
Berwick-upon-Tweed (Mr. Beith) has raised the very important issue of energy conservation. It also provides a useful opportunity for advancing energy efficiency in our housing.
It is a constructive Bill, on which there is clearly considerable consensus, demonstrated by the fact that the supporters are drawn from both sides of the House. That consensus has been echoed in the excellent speeches by my hon. Friends the Members for Norwich, North (Mr. Thompson), for Blaby (Mr. Robathan), for Eastbourne (Mr. Waterson) and for Bromsgrove (Mr. Thomason). I am not sure what marks I will get at the end of my speech from my hon. Friend the Member for Norwich, North. I generally assume that the Government's policies always merit alpha and if there is a shortcoming and the mark is beta-plus, that is because of my failure rather than that of the policies.
The debate has also shown that hon. Members have some concerns about the Bill, which I hope can be considered constructively in Committee and resolved.
As hon. Members have said, the Bill has also provided us with the opportunity to consider energy efficiency. I think that the House knows that the Government attach great importance to energy conservation, energy saving and, most importantly, to the efficient use of energy in our homes and in running businesses.
For many years, we have made it clear that energy efficiency makes sound sense because it saves money, which can be used to develop businesses, improve homes and boost the economy. The energy efficiency campaign has already contributed to significant savings in energy use. When discussing energy efficiency, there is always a temptation--or a danger--to think that nothing has happened until today. That is not the case. Since 1979, the United Kingdom economy has grown by about 25 per
Column 1184cent., but, despite that substantial economic growth, we still use roughly the same amount of energy. That is entirely due to the considerable improvements in the more efficient use of energy. With further cost effective improvements, about 20 per cent. of current energy demand can be cut. That is good news for the economy and very good news for the environment.
Of course, cost effectiveness is not the only reason why we continue to seek to improve energy efficiency--such efficiency also helps to protect the environment by reducing the threat of climate change. My hon. Friend the Member for Norwich, North gave a good dissertation on climate change, which is a consequence of industrialisation and prosperity. The release of carbon from burning fossil fuels for energy is increasing the amount of carbon dioxide in the atmosphere--carbon dioxide is the most significant greenhouse gas and contributes to the enhancement of the natural greenhouse effect. The natural effect is beneficial ; the bad news is when it is enhanced and climatic changes result.
As the hon. Member for Islington, South and Finsbury (Mr. Smith) said, there is almost unanimity in the House--with the possible exception of my hon. Friend the Member for Billericay (Mrs. Gorman), whom he mentioned-- about the fact that that issue needs to be tackled. Although uncertainties remain, we know enough about the threat of climate change to be satisfied that the problem is real and serious. Britain will have to take costly measures in order to adapt. That may lead to disruption to our markets in other countries and to our sources of raw materials and other commodities, which may affect our trading position. I do not think that anyone believes that tackling the dangers presented by climate change and taking the necessary precautions will be a nil-cost policy. That is why the international community must take precautionary action, in effect taking out insurance against that risk. So we welcome initiatives that will help to tackle the problem of climate change by encouraging energy efficiency.
We have had a continuing programme of Government-led action and initiatives. In 1990, we produced Britain's first comprehensive survey of all aspects of environmental concern, including global warming. The report, "This Common Inheritance", was a milestone in environmental auditing. It will go down as an excellent example of taking forward the principles of sustainable development. The preface quotes from John Stuart Mill's "Principles of Political Economy" : "Is there not the Earth itself, its forests and waters, above and below the surface? These are the inheritance of the human race What rights, and under what conditions, a person shall be allowed to exercise over any portion of this common inheritance cannot be left undecided. No function of government is less optional than the regulation of these things, or more completely involved in the idea of a civilised society."
Mr. Chris Smith : I endorse the sentiments of John Stuart Mill, but, if "This Common Inheritance" was such a milestone, when will we see the third--supposedly annual--assessment of progress, which was supposed to have emerged last September and has yet to appear?
Mr. Baldry : "This Common Inheritance" was not only an enormously valuable contribution in its own right, but the start of a process whereby the Government stated, at regular intervals, their actions, achievements and further commitments. The House will recall that both the first and second-year reports set out in a clearly tabulated manner,
Column 1185referring to each of the commitments in the White Paper, a summary of the White Paper commitment, the action taken to date, and the further commitments envisaged.
The programme is advancing constantly. For example, the first year's report shows what the Government did during that time to develop potentially economic renewable energy technologies, new regulations and controls, and the use of the market. The second year's report updates the information in the same fashion, with a summary of the White Paper commitments, the action to date and the commitment to further action.
In due course, a further report will be published because this is an extremely important process. The Government are taking forward their commitments and ensuring that the House and the country understand the action being taken. Equally important, they are ensuring that we know the further targets that they have set. Clearly, at a time when we have been considering the important strategy of sustainable development, which contains many objectives, it was sensible to ensure that that substantial document was in place before producing the next report on the follow- through from "This Common Inheritance" because they are integral documents. When the hon. Gentleman sees next year's report and annual update of "This Common Inheritance", he will be impressed by the continuing targets that we have set ourselves.
Mr. Baldry : With respect, the hon. Gentleman was not listening. I made it very clear that, as a consequence of the earth summit in Rio, we published a sustainable development strategy which sets out targets for action in a range of environmental activities. The annual reports--the updates on "This Common Inheritance"--not only outline our achievements, which are substantial, but set out the targets for coming years. It is sensible to ensure that the targets for our sustainable development strategy are clearly set out in the annual updates, but until they were finalised with the international community, they could not be included.
When the hon. Member reads the next annual update, which will be published in the not-too-distant future, he will realise that it sets tough targets incorporating those that followed the sustainable development strategy established at the Rio summit and will also deal with other aspects of environmental protection set out in the original White Paper.
The production of annual updates has established a method of which we can be proud and which has become a model for other countries. At the earth summit in Rio, we encouraged others to follow our lead by making a concerted effort to tackle environmental issues. The framework convention on climate change which was negotiated in Rio commits us to return our emissions of carbon dioxide to 1990 levels by the year 2000. The convention was ratified in December and will come into force in March.
Agenda 21, which was also agreed at Rio, set out an environmental strategy for the 21st century and recommended that Governments produce strategies for sustainable development. The Prime Minister persuaded
Column 1186other Heads of Government to produce strategies by the end of last year and the United Kingdom agreed its strategy in December. Last week, the Prime Minister launched the United Kingdom's four major strategies which were produced as a follow-up to the earth summit. They are substantial documents, and I hope that hon. Members will have the opportunity to read them. They are a sustainable development strategy, a climate change programme, a biodiversity action plan and a sustainable forestry programme.
The sustainable development strategy builds directly on the 1990 White Paper "This Common Inheritance", but it considers more closely sustainable development, which means economic development in a good environment for our children's sake. Its message for the next 20 years is one of balance. It stresses the need for economic development and the importance of environmental protection. Economic development and environmental protection go together, and energy efficiency has a key role in encouraging sustainability.
The sustainable development strategy includes three new measures : the Government's panel on sustainable development, which is a small, high-level group to give strong and independent advice to the Government ; a United Kingdom round table on sustainable development to bring together representatives of the main sectors or groups under the Secretary of State for the Environment ; and a citizens environment initiative to carry the message to individuals and local communities.
The House will have a further opportunity to discuss the follow-up to the Rio summit in a debate on Monday. I am sure that many hon. Members here today will be interested in participating in that debate. It is worth noting that Conservative Members have made some excellent speeches, but that, with the exception of the hon. Member for Islington, South and Finsbury (Mr. Smith) who speaks for his party, Labour Members have been notable by their almost total absence. We should perhaps recall their absence in the debate on Monday. The climate change programme sets out a detailed programme of measures to meet the United Kingdom's commitments under the convention on climate change, placing the United Kingdom at the forefront of efforts to combat global warming. The document is the product of a far-reaching public participation exercise. The United Kingdom is one of the first countries to publish a detailed programme of measures aimed at reducing greenhouse gas emissions to 1990 levels by the year 2000.
Sometimes, to hear the Opposition speak, one would gain the impression that Britain was always the last on environmental initiatives. Indeed, on most environmental initiatives Britain is the first. We were the first country in the world to demonstrate under the convention how we will meet the targets for the main greenhouse gases.
Mr. Dafis : It is worth noting that some European countries have far more ambitious targets in relation to reducing CO emissions than Britain. Denmark, I believe, intends to reduce emission levels by 25 per cent. by the end of the century, as does Germany, which intends to reduce emission levels by 30 per cent. by the year 2005.
Column 1187are determined to meet and will meet, and there is the type of aspirational targets that people put in documents, knowing that they have no chance of meeting them, expecting that they will not be in government by the time the year comes when they are supposed to have met the target, but thinking that it looks a jolly good figure to put in a document at some international gathering. The targets that we sign up to, whether they be for water protection, air pollution or combating climate change, are targets which we are determined to meet, and will meet.
Central to our programme on combating climate change are measures to limit CO . That is a programme based on partnership with business, the public and the private sectors. It sets out comprehensive measures aimed at achieving savings by 2000 of about 10 million tonnes of carbon--or 6 per cent. of United Kingdom emissions--as well as about 10 per cent. of methane emissions, about 75 per cent. of nitrous oxide emissions and substantial reductions in other gases. The overall effect should be a 5 per cent. reduction in United Kingdom greenhouse gas emissions by the year 2000.
However, the programme looks beyond 2000. There was some suggestion today that the sustainable development strategy in some way finishes at the year 2000. It does not. It sets out some of the longer-term options for action that may need to be considered in the light of emerging scientific evidence and the further development of the convention, so that we develop a sustainable strategy.
We are determined to meet those commitments--commitments to the international community and commitments to our children. Energy efficiency can help us to move towards sustainable development, and energy efficiency is our first priority for limiting CO emissions. Energy efficiency is the fastest and most effective way of meeting our CO targets. Everyone has a part to play in that, as we are all users of energy.
Like the promoters of the Bill, we are keen to encourage energy efficiency in the home. No less than a quarter of all CO emissions in the United Kingdom are from energy used in our homes. That can be reduced by one fifth or even up to a half by taking simple energy efficiency measures. Indeed, nearly half of the savings that we are looking for through the climate change programme are expected to come from reducing energy consumption in the home.
The business and transport sectors are both expected to contribute about a quarter of the savings, and one tenth of the savings are expected to come from the public sector.
We are playing our part in carrying forward the climate change programme. We have substantially increased our spending on energy efficiency. In 1994- 95, spending will be increased to more than £100 million--17 times the spending in 1979-80.
We are also providing a strong framework to encourage energy efficiency. The Energy Efficiency Office in my Department carries our energy efficiency policy forward. It promotes cost-effective energy-efficiency measures in the work place and the home, and strengthens environmental protection by reducing energy use. Our policy has four main prongs : we use publicity to try to ensure that everyone is aware of the importance of energy-efficiency ; we provide encouragement and technical advice to enable people to take informed decisions
Column 1188about whether and how to invest in energy- efficiency measures ; where necessary, we provide financial incentives to encourage the installation of energy-efficiency measures ; and, where appropriate, we promote regulation.
We have a wide range of initiatives to encourage improved energy efficiency in housing, each of which is targeted on a specific group. We provide publicity through our "helping the earth begins at home" campaign, which uses advertising and promotion to make people aware of the link between energy use in the home and the threat of global warming and encourages people to use energy more efficiently. The campaign has the support of a range of organisations, and it gives straightforward advice to householders on how they can best insulate and heat their homes, on how they might install energy-saving light bulbs and on a range of measures that every householder can take--insulation, draft proofing, heating appliances and controls and simply turning a thermostat down by 1 deg C, which can knock 10 per cent. off heating bills without leading to a noticeable difference in comfort in most rooms.
My hon. Friends commented on heating in the Palace of Westminster. It is clear that we could turn down the thermostat considerably more and make a large contribution to savings on the Palace's heating bill.
Those are all straightforward measures that each householder can take in their own home not only to save money but to make a contribution to the environment. We see our role as ensuring that they get the information on which they can make informed judgments. The campaign is already having a clear impact. Our energy advice week will run from 12 to 20 February, and I hope that all hon. Members will do what they can in their constituencies to support the campaign, which will concentrate on providing clear and impartial advice on energy efficiency, because we want people to be aware that energy efficiency can cut fuel bills.
We have a comprehensive package of measures to provide encouragement, information and advice to help people to take informed decisions on how to invest in energy efficiency. We help building professionals and housing managers in a number of ways. Our best practice programme provides authoritative advice and information for building professionals and housing managers on improving energy efficiency in housing.
We have produced a range of good practice guides on, for example, energy efficiency in offices and how architects can develop a low-energy office. I mention that, because it was suggested earlier that we should be doing more to encourage architects to design for energy efficiency. We are doing so. The Building Research Establishment and the Energy Efficiency Office have been doing that for a long time.
One reason why we have been able to increase our gross domestic product so substantially without consuming much more energy is because British industry and business have incorporated best practice in buildings, in heating and lighting and in the use of energy. Good housekeeping in schools has been promoted in a guide for school staff, governors and pupils. Hon. Members who visit schools in their constituencies--I know that many of my hon. Friends do--will know that schools that manage their own budgets have been taking a close interest in how to ensure the greatest energy
Column 1189efficiency in their buildings. Likewise, best practice guides have been issued for energy efficiency in hospitals, and NHS hospital trusts have been making substantial savings on their heating bills as a consequence of incorporating good and best practice.
We have, for example, a guide for energy and estate managers on a best practice programme for electricity savings in hospitals. It sets targets for savings of 15 per cent. in energy consumption over the next five years. In a recent study of 450 hospitals, the Audit Commission identified scope for energy savings of 15 per cent. All those savings can be obtained in a comparatively straightforward way if managers and others apply themselves to thinking about energy efficiency and considering it when they make decisions about the future of their estate.
We have best practice guides and energy consumption guides to show energy users how their consumption compares with that of others. We also have good practice guides and case studies describing good practice and new practice case studies that promote novel measures. We also had the green house demonstration programme, which has made £60 million available over three years to encourage local authorities to develop and apply energy- efficiency strategies to housing. The hon. Member for Islington, South and Finsbury was rather curmudgeonly about that, saying that, because the green house programme was coming to an end, it meant that the Government were in some way lessening their commitment to energy efficiency. That is rubbish. The green house programme is, by definition, a demonstration programme. It allocated money from the overall housing programme to encourage local authorities to see what they could achieve with their resources to promote energy efficiency in their housing stock. It was never intended to be an indefinite programme, but a demonstration programme. During its three years' existence, it has achieved a considerable amount. Indeed, it is not insignificant that Newark and Sherwood council, one of the local authorities prayed in aid in support of the Bill, did all its work under the green house demonstration programme. Extra money was given to the council under the programme, clearly proving its value.
We have been able to show local authorities what they can achieve if they sensibly apply good energy efficiency methods to their housing stock. We now say--as the right hon. Member for
Berwick-upon-Tweed said--that, when local authorities assess their housing investment programme each year and come to the Department of Environment to identify the projects and the sums of capital required, we expect those authorities to make clear their intentions on energy efficiency. We want to ensure that they make energy efficiency an integral part of their annual housing investment programme submissions. In that way, we will ensure that energy efficiency becomes an integral part of the culture of housing management. We also have a network of 11 regional energy efficiency offices, which promote good environmental management in energy-efficiency measures across the United Kingdom. They provide an independent source of advice, which enables energy consumers to take action. They signpost the Department programmes and provide information on energy-efficient techniques and technologies. Companies or businesses often recognise that they have to take action on energy efficiency, but they are concerned about whom they should approach. If they go to one of the utilities, will they receive impartial advice? Understandably, that
Column 1190sometimes causes them concern. Chambers of commerce, the Confederation of British Industry and businesses generally have discovered that a high standard of advice is available from the regional energy efficiency offices. That advice has enabled many businesses and companies to save substantial sums of money. We are also providing help for individuals. We are promoting home energy labelling, which provides information on the energy efficiency of a dwelling and identifies the most cost-effective measures for improving it. Under the campaign "helping the earth begins at home", we have, together with others, developed a home energy label. It is of little value to householders to know that they need to make their homes more energy efficient if they do not have some standard and objective test by which to measure improvements in their home. The home energy labelling will do that. It will provide valuable information to home owners and buyers about the energy efficiency of a property. We are working with mortgage lenders to incorporate home energy labelling into their survey reports and we are encouraging them to offer "green loans" to help people to improve the energy efficiency of their homes.
In due course, I hope that, when people buy and sell their homes, among the sales particulars and general information such as, for example, telling one which council tax band the property may be in, there will also be an indication of the property's home energy rating. People will be able to make value judgments about the property's energy efficiency and assess whether, when they move in, they will need to undertake work to improve the energy efficiency of that property.
We are encouraging voluntary appliance labels to give consumers a guide to the energy efficiency of the appliances that they buy. Often, consumers want to do the right thing for the environment--they want to buy, for example, the most energy-efficient kettle. That is difficult if they have not got the information on which to make a value judgment. We want appliance labels so that if a person who wants to buy a kettle goes into a shop, the appliance label will give them an indication which is the most energy-efficient appliance. Where necessary, we provide financial incentives to encourage the installation of energy-efficiency measures. The home energy efficiency scheme provides grants for basic insulation measures and advice for low-income households. Since the scheme began in 1991, more than 500,000 homes have been treated--a substantial number. In this financial year, grants of £37.5 million are expected to be given to 240,000 households--almost a quarter of a million households--which was dismissed by the Opposition spokesman as if it were nothing. Treating 240,000 homes is a substantial achievement and £37.5 million is a substantial sum of money. It may not be a substantial sum of money to the Opposition, but in real terms it represents a substantial commitment by the Government towards energy efficiency. We have all become rather cynical of any comments made by the Opposition about any sort of public spending ever since we woke up one morning to hear the hon. Member for Dunfermline, East (Mr. Brown) announcing that the Labour party had no spending commitments. So it is impossible to make any sensible judgments or have any debates on any area of Opposition spending and whether it will be more, less or indifferent because they clearly want
Column 1191to try to ensure that they have no spending commitments between now and the next general election. If they have, they are not real commitments.
Mr. Milligan : Does my hon. Friend also remember that the hon. Member for Dunfermline, East made it clear that only commitments which were given in the House were solid, and the ones which were made outside the House were for the birds? Does he agree that we have had a clear commitment from the Opposition Front Bench today that the Labour party will spend a great deal more money in the energy efficiency area?
Mr. Chris Smith rose--
Mr. Baldry : The hon. Gentleman is rushing to make it clear that, perhaps, it was not a commitment, and that if it was a commitment, it was not one that he had the authority of the shadow Chancellor to give.
Mr. Smith : May I make two observations in response? First, the amount of extra money that the Government have just trumpeted as a splendid addition to the home energy efficiency scheme budget represents about 2 per cent. of the annual income that the Government will have as a result of putting VAT on domestic fuel. That does not seem to be an especial act of generosity.
Secondly, if the hon. Member for Eastleigh (Mr. Milligan) and the Minister had listened to what I said, they would have realised that the national energy efficiency programme, which I advocated, all the details of which we published a year ago--I would happily provide them for the hon. Member for Eastleigh if he wishes--and which has the endorsement not just of the shadow Chancellor but of the entire shadow Cabinet, does not cost the taxpayer a single penny.
Mr. Baldry : That is an example of the strategy of the new model Labour party : Labour Members go around the country giving the impression that they intend to spend more money on energy efficiency and so on, but when they are challenged as to whether they have made a commitment in the House or one for the birds outside the House, they go back to the small print and say, "Actually, no. We were not proposing any extra spending at all. This was not a commitment to extra spending." I suspect that we shall see considerably more of that between now and the next general election.
Mr. Patrick Thompson : Now that my hon. Friend is apparently about to break away from the startling debate about what the Opposition are or are not saying about public spending, could he say whether there is any chance of the excellent home energy efficiency scheme being extended in some sensible way, which is what I called for in my speech?
Mr. Baldry : Throughout its history, the home energy-efficiency scheme has been extended year by year. There are good reasons for that. There are also good reasons--not least, logistical reasons--why we cannot have an enormous scheme all at once. We need to ensure a steady take-up of the scheme by people who want to have their homes insulated, but if the scheme is advertised and promoted too widely and too many people come forward,
Column 1192those who have applied for energy grants and have been waiting an number of weeks for them to come through will be frustrated. Neighbourhood Energy Action and those who have been running the home energy efficiency scheme over the years have been outstanding. They have managed to insulate half a million homes. I do not suppose that there is an hon. Member who has received a complaint about the NEA and the organisations that apply the home energy efficiency scheme. That is a considerable tribute to them. It is also a tribute to the way in which the Government have been running the scheme to ensure that at no time is it so large that those involved cannot properly meet the needs and tackle the logistical problems. I have no doubt, given the scheme's considerable success in the past, that it will continue to contribute. I repeat that this year there are expected to be financial grants of £37.5 million for a quarter of a million households. That is a very considerable contribution in any one year. In addition, some £69 million--nearly £70 million--of Department of the Environment moneys this year were allocated to estate action to be spent on energy-related works. I am sorry that the hon. Members for Coventry, South-East (Mr. Cunningham) and Coventry, North-East (Mr. Ainsworth), who intervened several times, are no longer here, because Coventry has received large amounts of estate action money. Several huge estates in Coventry have been completely refurbished over the past couple of years, and refurbishment of estates such as the Woodend estate continues, with estate action funding. Much of that funding goes towards making homes more energy efficient.
Mr. Brandreth : In my own constituency of Chester, the Poet's Corner estate in Blacon is a beneficiary of the scheme. One aspect has been particularly exciting : a skills survey was undertaken among people who live on the estate who have become involved in ensuring that the energy- efficiency measures are put into force. Not only is the money being made available ; the community has the sense of ownership that is so essential if the scheme is to work properly.
Mr. Baldry : My hon. Friend makes an extremely good point. One of the great advantages of estate action schemes is that they not only promote community involvement but help to generate local jobs for local people on the estates concerned.
In addition to the funding that we are putting into energy efficiency, we are encouraging regulation where it is appropriate, even in a deregulatory age. For example, the regulations governing energy efficiency standards in new buildings in the United Kingdom have been tightened several times over the past 20 years, and they are currently being reviewed again.
We are consulting on proposals to strengthen the provisions in the building regulations, which include the provision of double glazing, improved insulation, better heating controls and the incorporation of a home energy rating. Revisions should lead to an improvement in energy efficiency of 25 to 35 per cent. compared with current regulations. Thus, substantial improvements in energy efficiency are being effected by building regulations.
We know that the task of achieving energy efficiency savings is not one which the Government can achieve alone. Many others have an important part to play in
Column 1193encouraging energy efficiency in the home. That is why we have worked with the gas and electricity industries to set up the Energy Saving Trust to develop and manage new programmes to promote the efficient use of energy in the domestic and small business sectors. The trust has a target of reducing carbon dioxide emissions by 2.5 million tonnes of carbon by 2000--a quarter of the United Kingdom's target reduction.
The trust has made an excellent start. Four schemes have already been launched, and two large initiatives for action in the home are out for consultation. A scheme to encourage the sale of low-energy light bulbs to domestic customers, run in conjunction with the industry, resulted in the sale of 740,000--nearly three quarters of a million--in only eight weeks, about the same number as are sold otherwise throughout the whole year.
An incentive scheme for gas condensing boilers resulted in 3,000 rebates of £200 being claimed by owner-occupiers by the end of 1993. New manufacturers and products have entered the marketplace as a consequence. A residential combined heat and power scheme has been heavily over subscribed in the first tranche. A pilot study of local energy advice centres for the domestic and small business sector, partly funded by the Government, is proving very successful. We are working closely also with the European Union to improve domestic energy efficiency. A directive setting energy efficiency standards for central heating boilers came into effect on 1 January this year. A directive on appliance labelling will introduce labelling for refrigerators, freezers and fridge-freezers by the end of this year. We are pressing the Commission for action in setting minimum energy efficiency standards for domestic applicances generally.
Local authorities also have an important role to play. The energy bill for local authority housing comes to nearly £3 billion a year, so local government efforts are crucial if we are to complete our energy efficiency programme.
Central and local government are already working closely together through the central and local government forum, which was set up under the White Paper, "This Common Inheritance", to carry forward the energy efficiency campaign in local government. The local authority associations have endorsed and encouraged their members to adopt a target of reducing energy consumption in their non-housing buildings by 15 per cent. over a five-year period. The associations will shortly survey their members to establish where progress has been made and assess the extent of the additional commitment required.
As well as energy efficiency in their estates, local authorities and local councils can fulfil a valuable role in pulling together energy thinking in their areas. Industry, schools, further education institutions and, of course, householders, can all contribute to energy efficiency and produce genuine savings towards our carbon targets. As was said earlier, initiatives such as city challenge and a host of different groups, including local authorities, community groups and various partners in city challenge, have come together to promote, among other things, energy efficiency to improve the warmth and comfort of local people in their homes.
Local authorities are in a good position to pull together and co-ordinate thinking in their areas, possibly through establishing targets whose achievements can be monitored. That need not be a resource-intensive exercise : rather, it is