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Column 1194one aspect of the functions that authorities should already be carrying out when ensuring that people are thinking ahead and looking for a sustainable future.
We know that energy efficiency is worth while and cost effective and will help save the environment. It is a win-win situation. Energy efficiency saves money and helps to save the earth, but we are not complacent about the work that we are doing now, and we are continuing to adapt our initiatives to meet changing circumstances. If future, we intend to use our efforts to emphasise the importance and value of energy efficiency to all those with an interest. We will continue to work with the Energy Saving Trust to develop our dialogue with industry, and work with the European Union.
From 1 April, provision for the home energy efficiency scheme will be almost doubled and extended to pensioners and disabled people. The extra £35 million per year for the United Kingdom will provide grants for more than 200,000 extra households per year, bringing the total number of households receiving grants to almost half a million a year. It will reduce the fuel bills of recipients, save energy and help to fight the threat of global warming. It will also create some 1,500 jobs. It will boost a specialist sector of the construction industry and materials producers and improve the housing stock. Over the next two years, we will also be significantly expanding the "helping the earth begins at home" advertising and promotion campaign. We hope to establish a scheme under which mortgage lenders incorporate home energy labelling into their survey reports, and to see building regulations which improve energy efficiency standards come into force.
We will also continue to work closely with the European Union in its work on standards and labels for domestic appliances. As the House can see, a lot has been done, a lot is being done and a lot will be done to ensure that we meet our environmental targets and our commitments to the international community and to ensure that we utilise energy efficiency to combat climate change and to promote our environmental objectives.
Where does the Bill fit into that? Our commitments to energy conservation are clear, but we have concerns about some of the details of what is proposed. We have to look at the Bill in the context of Government policies overall.
The Government are determined to keep a tight lid on public spending, and, as importantly, to avoid unnecessary burdens on local authorities ; not to assume inappropriate responsibilities for central Government and to avoid regulation unless there are overriding reasons.
Our concerns about the Bill centre on the additional duties it would place on individual authorities. If the Bill were to be amended so that those duties were turned into powers which enabled authorities to take the schemes forward where they thought that that was in the best interests of their residents, our concerns would be largely met.
We are also concerned at the assumption that central Government would pay for those programmes. Indeed, it is interesting to learn that the Association of Metropolitan Authorities does not consider that the financial burdens of this Bill would be particularly great for an individual authority, especially when taking account of the longer-term payback from reducing the energy consumption of a council's own housing stock. If that were the case, such a self-financing scheme would, could and should be readily adopted by responsible authorities.
Column 1195We know that we must keep spending under control if we are to sustain economic recovery. The tight financial settlement means that any additional costs arising from the new functions for local government proposed in the Bill would have to be found from making offsetting savings elsewhere.
As it stands, the Bill would have spending implications for local authorities and for central Government. I know that the right hon. Member for Berwick-upon-Tweed has circulated figures showing how much it might cost two local authorities to set up a database on the condition of housing stock in their authorities. Newark and Sherwood district council estimates that it would cost about £1 per dwelling ; Derby city council estimates 53p per dwelling. If those costings were replicated by other local authorities, the cost of setting up databases across the United Kingdom would lie between £11 million and £23 million.
It is quite possible that those costs would not be representative of those incurred elsewhere--indeed, they may understate the costs that would be incurred by others. Both those authorities already have a keen interest in energy efficiency. One of them already has the necessary computer hardware, software and trained staff.
We must not forget that those costs are only part, and probably a small part, of the costs that would be involved in carrying forward the Bill. In addition, local authorities would have to bear the costs of preparing draft plans ; consultation ; preparing final plans ; keeping the plans up to date ; and implementing their
On the other hand, we must recognise that not all those costs would be additional. We have already issued guidance to authorities asking them to collect information about the energy efficiency of housing in their areas as part of the process of preparing housing investment programmes. It would be useful to consider the extent of the additional costs which would be imposed by the legislation. That matter can be considered in Committee. The Government would be faced with additional spending.
At the outset, the right hon. Gentleman was somewhat coy as to whether the Bill required a money resolution. Only a cursory glance at the Bill makes it clear that the Secretary of State would be required to set a date by which all plans should be sent to him, and a timetable for the implementation of plans. Of course, that would require funds to be provided by Parliament.
In addition to the concern about extra funding and, indeed, where that funding should come from, hon. Members know that we are determined not to add to the burdens of local authorities unless it is unavoidable. We are concerned that the provisions in the Bill may impose an unnecessary burden.
Mr. Chris Smith : I wonder whether the Minister could explain his point about funds being required to be provided by Parliament for the Secretary of State. The consideration of plans submitted to the Secretary of State by local authorities would not involve anything other than consideration presumably by one or two officials in his Department. Surely, it is within the present resources of the Department of the Environment to carry out that consideration.
Column 1196Clearly, if local authorities are obliged to provide reports on the energy efficiency of their housing stock, those reports would need to be considered by the various regional offices and by officials in the Department of the Environment. That would almost certainly require a bid from the permanent secretary of the Department for extra staff for that function.
The thought that all that could be done on a totally cost-free basis is wholly unrealistic. The cost to central Government of the regulating and monitoring function might not be substantial, but it would be real and would require a money resolution. Listening to the proponents of the Bill, I am concerned that there is an ambiguity which will need to be explored in Committee. The ambiguity is whether this is an exercise that some Labour Members suggested could be done at little or no real cost to local authorities, because they would be making savings on their stock over a period and that money could be reinvested, or whether there would be a real cost arising from this legislation that should be met by either local or central Government.
Whatever is the case, I suspect that there will be costs arising from this legislation. Those costs are a concern to us at a time when we are trying to control public expenditure. That concern will be legitimately considered in Committee.
Mr. Beith : The essence of the Bill is certainly not to commit to the programme of work that people might feel is desirable when they see the outcome of the energy audit. The Bill does not impose on the Secretary of State the responsibility to fund however much work might be seen as desirable to achieve different levels of energy efficiency. The core of the Bill is the insistence that auditing should be carried out at a reasonable cost. As the Secretary of State has clearly said publicly that the Government wish to see this work done, surely he is not suggesting that the limited burden that would be imposed on his Department and on local authorities is so great as to make him want to go back on what he said and hope that local authorities will not do it at all.
Mr. Baldry : I return to what I said earlier : even the modest approach of simply wishing to have an audit of the housing stock in a local authority area is not without cost. As I said, Newark and Sherwood district council, which benefited considerably from the green house demonstration programme and is probably as advanced as any local authority in this field, estimates that it would cost £1 per dwelling. Derby district council, which is a
Conservative-controlled council with an impressive housing record, a switched-on housing department and a dynamic housing committee, estimates that it would cost 53p per dwelling.
As I said, if we extrapolate those costs across local authorities generally, that would lead to an overall cost of somewhere between £11 million and £23 million for only the auditing function. That is a real cost. It may well be that in Committee the right hon. Gentleman will be able to convince us that we have misunderstood what others are saying. But I think that the estimates of Newark and Sherwood and Derby district councils, which are the two examples that he prayed in aid in his briefing on this Bill, are real costs and they must be met from somewhere. Those costs concern us. If one is making it a mandatory
Column 1197obligation upon local authorities that they shall carry out those orders, the costs must be met from somewhere. That will take me on to my second concern.
Mr. Beith : I do not understand what the Government are saying. I understood it to be the Government's view that they want the work to be carried out. They are worried that local authorities might be obliged to carry out the work because, if so, that would cost money. Frankly, if local authorities obeyed the Government's wish that the work be carried out, it would still cost the same amount of money. What are the Government saying to the House?
Mr. Baldry : The Government are concerned that the Bill is seeking to put statutory duties on every local authority. When statutory duties are placed on every local authority, they then, not surprisingly, come to the Government and say that Parliament has placed a new obligation and a new burden upon them.
As part of the negotiations that we have every year with the local authority associations, they, not surprisingly, trawl through any legislation that has been passed by any Department. The associations then say that a certain function has been put on the statute book, from which there is a cost involved. The associations then wish to be reimbursed for that cost.
If a local authority wished to carry out an audit of its stock within its resources, we would wish to encourage that. We are concerned about placing a statutory duty on each and every local authority which they would then have no alternative but to carry out. Some will do it more efficiently than others, but they will turn to the Government and say that they wish to be reimbursed.
I made it clear in my opening comments that our concern is that the Bill contains too many shalls and not enough mays. We are generally determined not to add to the burdens of local authorities unless they are unavoidable. Our second concern is that the provisions of the Bill may impose an unnecessary burden. The House should take that concern into account now, in Committee and when the Bill comes back to the Floor of the House.
Many local authorities are already doing a great deal to improve energy efficiency. Some 250 local authorities have agreed to sign up to my Department's "Making a Corporate Commitment" campaign. Some authorities have set themselves performance improvement targets. For example, Basingstoke and Dean borough council aims to reduce effective energy use by 15 per cent. in the five years to 1998 ; Bedfordshire county council aimed to reduce energy costs by 15 per cent. over the five years to 1991 and by a further 10 per cent. by 2000 ; Cotswold district council plans a 15 per cent. reduction over five years to 1997 ; Ipswich borough council plans a 15 per cent. reduction over five years to 1998. I am sure that there are many more.
In addition, many local authorities are already taking steps to improve domestic energy efficiency, and obviously we wish to encourage that. Local authorities already spend around a quarter of their council house repair and improvement budgets on energy-related work, such as new heating systems. Better output can, of course, be obtained by applying the lessons which every local authority should have learned by what has been achieved through the green house programme.
The programme was launched in 1990 to establish a network of energy efficiency demonstration projects to show local authorities in England how energy efficiency of
Column 1198council housing could be improved. Over three years, some 180 schemes in 130 local authorities have been undertaken. Results are very encouraging, with schemes achieving fuel cost reductions of up to 40 per cent. and carbon dioxide reductions of up to 50 per cent. Drawing on experiences gained from the green house programme, we asked local authorities to include energy efficiency as an integral part of their housing strategies and investment programmes. Interim guidance was issued last June and further guidance is planned for the spring.
A key element of that guidance is that local authorities should survey their housing stock to establish its energy rating as part of devising an energy efficiency strategy for inclusion in their overall housing investment strategy. Indeed, it is difficult for any responsible authority to come to the Department of the Environment to make a sensible bid for housing investment money unless it has carried out a survey of its housing stock.
We need to take stock and to consider in Committee what has already been done by local authorities, the work that is in progress and that which stems from the recent changes to the housing investment programme process. We may conclude that it is not necessary to impose additional duties on local authorities. It may be simpler, cheaper and wiser to build on existing systems than to establish something new.
Similarly, we are keen to avoid unnecessary burdens on central Government. We need to consider further whether it is essential for additional duties to be imposed on the Secretary of State, whether it is appropriate for him to prescribe the precise way in which a local authority should go about this undoubtedly important part of its business or whether it should be left to manage those things for itself. We can be certain that, even among those local authorities that carry out surveys and develop best practice in energy efficiency, the way in which they conduct those surveys will not always be exactly the same. It would seem somewhat curious to argue that the Secretary of State should have a statutory duty to prescribe the precise way in which local authorities should go about conducting the surveys.
That takes me to our natural desire to avoid unnecessary regulation. As the House will know, my right hon. Friend the President of the Board of Trade is having a bonfire of unnecessary controls. We can celebrate the first part of that in the Second Reading of the Deregulation and Contracting Out Bill next week. We shall be able to keep ourselves warm by the fire of unnecessary regulation which will be burnt during the proceedings on the Bill. We are determined not to introduce new controls as fast as the old ones are turned to ashes. We need to consider whether further legislation is essential, or whether the same objectives could be achieved without new laws.
Hence, the Government are determined to do all we can to promote energy efficiency. We know--we agree with the right hon. Member for Berwick-upon- Tweed--that local authorities have an important role to play. The right hon. Member and his supporters seek to introduce a Bill which we need to consider with care. The Government believe that the Bill could make a constructive contribution, but we have genuine concerns about it. In particular, we are concerned that it might impose additional and unnecessary burdens on local authorities and central Government. It could also create new and unnecessarry controls and hinder our efforts to control
Column 1199public expenditure. Those issues need full examination and should, therefore, be considered in Committee, where I hope that they can be resolved constructively.
Mr. Cynog Dafis (Ceredigion and Pembroke, North) : I am privileged to have an opportunity to respond to the debate and consider some of the points that have been raised. I begin by thanking the right hon. Member for Berwick-upon-Tweed (Mr. Beith) for taking up the Bill and for his excellent opening speech this morning. I was delighted that such an able and experienced Member was prepared to adopt the Bill. We have had an excellent debate. I was gratified to note the extent of support for the principles and purport of the Bill. I noted carefully the reservations that the Minister expressed. I shall respond to some of them before I finish my remarks. The debate has been an opportunity for a wide-ranging debate on energy efficiency. That is most welcome. There is no doubt that energy efficiency should be a central issue in Government policy.
The debate has also been an opportunity for the Minister to provide a wide- ranging apologia for the Government's initiatives and policies and an opportunity for the Opposition Front-Bench spokesman to have a go at the Government about their deficiencies. Of course, that is reasonable enough.
We heard a great deal of substance and much intelligent comment during the debate. The hon. Member for Norwich, North (Mr. Thompson) set the scene very effectively. He referred to the astonishing fact that global energy demand is likely to double by the year 2020. He also said that the percentage of energy produced from sources that emit carbon dioxide would increase from 74 to 92 per cent., which is both dramatic and worrying.
I have another statistic. In its preparations for the Rio summit, the Intergovernmental Panel on Climate Change insisted that we need a 60 per cent. reduction in global carbon dioxide emissions in the near future. The panel also recognised that there will have to be an increase in carbon dioxide emissions in developing countries to enable some development and therefore the reduction in the developed world must be well over 60 per cent. That is an urgent requirement. I do not need to say that energy policy is controversial. It is a very difficult area and all sorts of issues cause hot controversy. The hon. Member for Norwich, North mentioned nuclear energy, which is highly controversial, but renewable energy sources are also becoming controversial, which is astonishing in my view.
There is universal agreement that energy efficiency and conservation must be the areas of priority action. A cultural change in people's lives is necessary, so that everyone becomes more aware of their responsibilities and can make informed choices about their use of energy. I am convinced that the creation of energy conservation schemes--the energy plans to be drawn up by local authorities--would enhance and encourage the development of a new and strong awareness among ordinary people. That is one reason why it is essential that the process be mandatory. The fact that it is will signal its urgency and importance.
The involvement of local organisations is essential and is also covered by the Bill, which contains a requirement
Column 1200for local organisations of all types to be involved in the consultation process. The hon. Member for Norwich, North mentioned the Norwich energy action campaign, which led to the creation of the Norfolk Energy Forum, and described the way in which they have resulted in greater public understanding of the importance of energy efficiency.
The hon. Member for City of Chester (Mr. Brandreth) had two criticisms of the Bill--or perhaps they should be described as reservations. One was what he described as the danger of the "top-down" approach. The advantage of such an approach is that it establishes the process within a United Kingdom strategy, which is necessary. Instruction from above is the only means of having such a strategy. However, by involving the local community we would at the same time be encouraging a "bottom-up" approach. I must emphasise that it is essential that such a process be mandatory.
The other reservation of the hon. Member for City of Chester was that the Bill was concerned more with analysis --gathering information, and so forth --than with action. That brings us to the heart of the matter. If enacted, the Bill would set up a process which would identify precisely how action could be most effective. It is not about gathering information for the sake of it, but about making action effective. There is a danger of resources being dissipated in various directions, and of inappropriate action and targeting. Other hon. Members have said that cost effectiveness needs to be considered. The Bill is primarily about efficiency, action and a clear sense of direction.
The hon. Member for Bromsgrove (Mr. Thomason) emphasised the need for an understanding of the most cost-effective ways to bring about improved energy efficiency, and I am sure that that problem would be dealt with by the schemes. After all, clause 2(1)(a) says that the schemes will decide what measures would be desirable and practicable to achieve greater energy conservation as regards the heating and lighting of accommodation. Finding the most appropriate and cost-effective method is therefore the heart of the matter. The question of the cost of implementing the schemes and the programme of energy efficiency is left open. The Bill does not specify how that should be done.
I looked carefully at the paper prepared by the Labour party a year ago. The hon. Member for Islington, South and Finsbury (Mr. Smith) is right to say that that programme would involve no Exchequer cost, because it advocates premia-based bills for people whose homes have undergone changes under the energy efficiency programme. That is one option, but the Bill leaves it to the Secretary of State to decide what method should be used to fund the programme.
Targets for reducing carbon dioxide emissions vary between 10 and 30 per cent. That flexibility recognises the work already done by many local authorities. The Minister emphasised how many local authorities have already carried out considerable work in that regard, but local authorities in many parts of the country could save at least 10 per cent. more in carbon dioxide emissions. The effectiveness of the work can be monitored simply by measuring energy consumption in areas where the programme has been implemented. That can be seen in the level of people's fuel bills, so it is easily feasible.
Local authorities' environmental and housing departments are uniquely equipped for carrying out the work of the survey and deciding what needs to be done. The
Column 1201execution of the tasks is non-controversial because in most cases local authorities would act as enablers rather than providers of services. The hon. Member for Eastbourne (Mr. Waterson) and the Minister cast doubt on the figures prepared by Newark and Sherwood and by Derby local authorities. There cannot be much doubt that the work was done rigorously--it was certainly done in good faith on the basis of what those authorities thought would be necessary to set up the equipment to carry out the surveys.
Mr. Brandreth : Did those two local authorities do that work using their own current resources? If so, I imagine that, like my own local authority, they did it because they believed that it was worth while. I am reluctant to have a mandatory system imposed because it would take away a local authority's incentive to do the work for its own good and for the sake of the housing stock in its community. It would then become a matter for which funding is provided and for which audits must be carried out. Those local authorities are doing the audit because they know that it makes sense, which is why I favour the voluntary principle.
Mr. Dafis : I take the hon. Gentleman's point, but local authorities must understand that it makes sense for all of them to undertake the work. The authorities that have been mentioned have done so partly because they are enthusiastic and excited about what it involves. Others have not acted, however, so there needs to be mandatory action to ensure that they take advantage of the opportunities.
Mr. Robathan : I have not been here for the entire debate, but I said that I had been contacted by all my local authorities, which are enthusiastically backing the Bill. District councils would have to implement its provisions and I believe that they and individuals across the country would enthusiastically give their support.
Mr. Dafis : I have come across hardly any opposition--for the sake of honesty, I stress the word "hardly"--from local authorities to the principle of the Bill's provisions being mandatory. The principle is largely accepted by most local authorities and we have had many requests for information.
Concern has been expressed that the process would be regarded as authorising prying into private homes. I do not believe that it should be a matter for concern, because local authorities have a responsibility under the Housing Act 1985 to assess housing conditions in their district at least once a year and energy efficiency should be part of that assessment.
Newark and Sherwood reckons that a 2 per cent. sample of housing stock would be sufficient to obtain the energy profile of an area. The Bill would provide no additional powers or rights of access to buildings. It would not be difficult to obtain the support and co-operation of householders, as they would gain a considerable advantage from a visit by the person carrying out the energy audit ; they would be given a great deal of useful information about their property and how to make energy savings.
Column 1202householders in order to gain access to their property because it would be to their advantage. I cannot imagine that householders would object, but if they did there would be no access to their property. Reference has been made to the remarkable coalition of support that has gathered around the Bill, not least among Members of Parliament. It is striking that there have been so many strong expressions of support and substantial contributions from Conservative Members. Many organisations also support the Bill. It has been said that they are of a social and environmental nature, although businesses also support it.
Organisations representing disabled people are especially interested--a fact which merits attention. Disabled people spend far more on energy than other people. The imposition of value added tax on domestic fuel will impact heavily on them. According to figures that I have seen, it is clear that the concessions granted to help those in lower income groups will not entirely compensate for their increased expenditure, so social as well as environmental objectives need to be considered.
An important political objective could also be achieved if the Bill were passed. There is an opportunity for the Government to show that they are prepared to deal with energy efficiency seriously. A range of measures has already been introduced, but the passage of the Bill with its mandatory powers would convince the public at large that the Government are serious. It would be seen as an attempt to get to grips with the unfortunate and damaging effects of the introduction of VAT on domestic fuel. Thousands of people will be watching the Bill's progress carefully.
We need to think in the context of the need to approach sustainability. The Minister has emphasised that. The Government's intentions were shown by the publication of the documents a fortnight ago about the Government's commitments to Rio, their statement that we need a radical change of direction and their insistence on the need for a sense of urgency in relation to sustainability. No one should underestimate the enormity of the task that approaching sustainability involves. The Prime Minister described it as a "huge task".
The Bill is the perfect example of sustainable development. It provides improved welfare and a better quality of life in the form of comfort and improved health. It facilitates increased economic activity and greater efficiency. It reduces heat and maintenance costs, reduces pollution and leads to a better husbanding of natural resources. It is a practical Bill, despite the reservations that the Minister mentioned. It is uncontroversial. It is not over-ambitious. In addition to being practical, it would signal the Government's willingness to take seriously the subject of energy efficiency and the task of approaching sustainability.
I very much hope that the Bill will be enacted in its entirety or nearly in its entirety.
Mr. Stephen Milligan (Eastleigh) : I must congratulate the hon. Member for Ceredigion and Pembroke, North (Mr. Dafis), whose brainchild the Bill was. It has proved, at least so far, to be a sustainable development.
Unfortunately, I was not in the House to hear the opening speech by the right hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) whose Bill it is, and I apologise to him for that. I had to be in my constituency for
Column 1203the past 48 hours, where we had an important meeting with the Minister for Public Transport to discuss the future of railway jobs. Indeed, I was not here last night. As the hon. Member for Ogmore (Mr. Powell) is sitting on the Front Bench, I thank him personally for the sensitive and co-operative way in which the Labour Whips Office is administering the policy of non-co-operation. It has been of great advantage that that has not been administered too tightly ; as a result, some hon. Members have been enabled to leave the House from time to time. [Interruption.] One has to pay tribute where tribute is due.
There has been a certain degree of political correctness in the debate. The fact that the Bill is supported by three parties and a wide range of sponsors should induce some scepticism.
Mr. Dafis rose --
Mr. Milligan : That deepens the suspicion. If everyone is agreed on spending other people's money, we must consider the Bill carefully. The first question that we have to ask, which no one has asked in my hearing in the debate, is : do we need to save energy? What is the purpose of saving energy? It was argued some years ago that we need to save energy simply because energy is a finite resource ; we are running out of oil and gas ; therefore, we need to save energy. I do not believe that that argument is credible any longer. There are many other finite resources. There are finite supplies of many minerals. We do not have to have saving programmes for ferrous metals. That argument is extremely dubious. We have greater known resources of energy than at almost any time in human history. The resources of oil and gas are very extensive. In this country, we have 300 years' supply of coal under our soil. We are closing pits because it is no longer economic to extract the coal and because other technologies are more advantageous. That may well be the case for other sources of energy of which there is considerable supply. So the fact that there are finite energy resources is not in itself an argument for saving energy.
Mr. Robathan : My hon. Friend comes to the debate somewhat late, as he admits. It would be reasonable to ask whether he pays any fuel bills, because if he does, he will know that they are quite costly and that the less fuel he uses, the less he will have to pay. In his own very rich condition, I am sure, it may not matter to him too much, but to many people it matters quite a lot how much they pay. I am sure that he realises that that is a good reason in itself for saving fuel and energy.
Mr. Milligan : I am happy to show my hon. Friend my fuel bills for recent quarters, from which he will see that my consumption is modest, as indeed are my means. Like many people, I am conscious of the cost of fuel, but people must meet many other bills. They know what they are and
Column 1204can decide whether to install energy-saving measures. They do not need a Government measure to make that decision or to pay more tax to support such a measure.
There were scare stories about 15 or 20 years ago, at the time of the first oil crisis, that oil was running out and we had to have massive energy- saving measures. Oil is now cheaper in real terms than it has ever been. We have plentiful supplies of energy, including on this island, and it is not clear that we want to reduce energy uses for that purpose.
The second argument is that we need to save energy for strategic reasons, but, as we have so many energy resoures in this country, it is not clear that there is a strategic argument for saving energy. The only serious argument for saving energy is global warming. Has the case for global warming been proved? It is perfectly clear that the earth is warming up. One need only look at the length of glaciers in the Alps, which have been shrinking in the past 30 or 40 years, to realise that we are living on a warmer globe. That is not a bad thing. There are many disadvantageous results, but there are advantages, too. It may soon be possible to expand vineyards in southern England. Instead of trying only to prevent global warming, we also should be taking more action to adapt to it and to take advantage of it. If we were faced with global cooling, how much more worried we would be about the situation.
Mr. Patrick Thompson : My hon. Friend, in his interesting argument, mentioned global cooling. I should like to bring him back to the nitty- gritty of the Bill. I have discovered in the past hour that Norwich city councillors have suffered much cooling and have been made uncomfortable, which shows what needs to be done at a more practical level. I gather that a survey conducted in the past 19 hours of 406 windows in Norwich city hall showed that 19 would not open, 123 would not close, 48 had broken fittings, 21 had missing fittings, 20 had damaged or corroded frames and 201 panes of glass needed replacing. Surely we should be discussing such practical measures of insulation to ensure that we use energy efficiently and that councillors keep warm rather than the esoteric matters that my hon. Friend is suggesting.
Mr. Milligan : I am grateful to my hon. Friend. It seems, if I may put it in graphic terms, that Norwich has a window of opportunity to take advantage of the new consensus in favour of energy saving. It is clear that the globe is warming up, but it is rather less clear whether that is due to natural or man-made factors. Evidence on that is still not certain. As results of global warming would be fairly disastrous if it continued according to some of the more extreme forecasts, it is right for us to take measures to reduce energy usage. In all environmental matters, however, there is a tendency for a consensus to develop in the House--we all want to be seen to be green and pro-environmental--without counting the costs. We have realised in recent years that, faced with the costs of environmental improvements, people take a different attitude. I cite the example of rising water bills. The House approved EC directives to increase the quality of water in the seas around our beaches and of drinking water, but people across the country are now facing huge increases in water bills. I am surprised that there has been such controversy about the effect on elderly people of
Column 1205imposing VAT on fuel, because the increase in water bills that many elderly people are now facing dwarfs the increase in fuel bills, especially after the compensation measures that have been agreed by my right hon. and learned Friend the Chancellor. People are asking, "Are we getting the environmental benefit that was promised? No one told us the cost." In considering measures such as the Bill, it is relevant to ask difficult questions about costs.
I was not present to hear the speech of the right hon. Member for Berwick- upon-Tweed, so I do not know what details he proposed, but in an article in The House magazine he suggested that the cost per council could be about £50,000 or £60,000. That seems to be pretty unrealistic. The survey and audit would be very limited--the hon. Member for Ceredigion and Pembroke, North talked about 2 per cent. of houses. I am not sure that there will be much advantage if only 2 per cent. of houses in my constituency are audited. I do not see how we can learn much more from an audit than from a general study of conditions across the country. If the proposal is to conduct a house-by-house survey, the figures given seem unrealistic. At a time when everyone is complaining about rising taxes and the level of the public sector borrowing requirement, we must be extremely cautious, particularly if the burden is to be borne by council tax payers. I thank my hon. Friend the Minister for the generous settlement agreed for the standard spending assessment for the Eastleigh district, which has enabled Eastleigh council to reduce its share of the council tax by 50 per cent. I wonder how many other boroughs can boast that they have halved their proportion of council tax. At a time when people are finding it difficult to make ends met, the prospect of increasing council tax, for whatever worthy reason, must be studied with care.
Mr. Iain Duncan Smith (Chingford) : Does my hon. Friend agree that clause 3 of the Bill is worrying? We have heard many complaints recently about the Conservative Government centralising powers in Westminster and taking them away from councils. Clause 3 of the Bill gives the Secretary of State onerous powers and duties. Does not that run contrary to messages about decentralising power?
Mr. Milligan : I know that my hon. Friend is a proponent of subsidiarity and appreciates the principle of the Maastricht treaty-- although he has doubts about other of its aspects--but his words reflect the fact that powers and responsibilities must be borne at the appropriate level. I am not convinced that local authorities are the appropriate level. Some of them do good work--I am impressed by the work in my own district, where the provision of energy-saving schemes for elderly people has been encouraged. Elderly people have been compensated for the increase in VAT, but they face far higher fuel bills than most of us. We can spend time in the Chamber and turn the heating off at home, but people at home all day face higher fuel bills.
I have been impressed by the literature sent out with recent electricity bills by local electricity companies. The literature sets out in detail the sort of savings to be made from different investments. Double glazing yields certain savings, while protecting hot water boilers produces different savings. The literature graphically charts the savings that one can expect.
As one of my hon. Friends said, double glazing produces a low rate of return. It can cost between £3,000
Column 1206and £5,000 to install, and has a long pay-back period. In my constituency, Southampton city council has embarked on the improvement of some of its council estates and has forced people to install double glazing in their homes. Some people have bought their flats and cannot afford double glazing. Two of my constituents faced bills of £8,000 from Southampton city council. It insisted on installing double glazing against the wishes of those tenants, who had bought their flats and believed that they were free to make their own choice of improvements. I have written to my right hon. Friend the Minister for Housing, Inner Cities and Construction to ask him to intervene in that case. The policy may save energy, but it is imposing intolerable burdens on my constituents. Such costs should be looked at with great care.
I do not know whether my hon. Friend the Parliamentary Under-Secretary of State will have a chance to reply to me today, but I have noticed something else about the electricity companies' bills. They state that one way of saving VAT on fuel is to pay the VAT in advance--to suggest that one has used far more fuel in the current quarter than one will in the next quarter. In that way, one can avoid VAT for several years. I suspect that many people may take up that opportunity, which is an easy way to avoid the tax. The policy will yield a huge bonus to the electricity companies without providing a corresponding bonus to the Treasury. I do not know whether my hon. Friend wishes to encourage or discourage people to take advantage of the scheme, which is perfectly legal, but reduces the impact of the savings to be made by imposing VAT on fuel.
The Liberal Democrats' proposed carbon tax has been mentioned. I am puzzled about its impact. It was suggested, I think by the hon. Member for Southwark and Bermondsey (Mr. Hughes), that its main impact would be to introduce extra taxes on industry. Industry already pays VAT on fuel. A carbon tax would place an additional burden on industry and destroy jobs, whereas it has been argued that the Bill will promote jobs in energy conservation. I hope that the Liberal Democrats' idea of a carbon tax will die a slow death.
Mr. Milligan : A quick death. My hon. Friend has corrected me. I do not see any advantage in introducing that tax on a European basis when the situation in various countries differs so greatly. I do not wish to oppose the merits of the Bill, as the principle of it is sensible. If it makes it possible to introduce more information and more studies of the benefits of energy conservation, that will be excellent. However, the Bill imposes a wide range of extra duties on local authorities, which are hard pressed at present and have a number of responsibilities. Some local authorities find that implementing and paying for certain responsibilities--for litter, for example, which seems a good thing for which to ask local councils to take responsibility--is quite onerous. We must think carefully before we load yet another responsibility on local authorities and ask people to pay even more council tax.
If the Bill goes to Committee, it will be considered carefully, but it must be viewed sceptically before further burdens and regulations are introduced.
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