Order for Second Reading read.
It was a surprise when I came top of the ballot for private Members' Bills this year. It was only the second time that I had put my name in and I have never prayed so hard to lose a ballot as I did last year. I was even more surprised to come top because a short time before I had drawn the No. 1 question at Prime Minister's Question Time--it was when the national lottery had just got off the ground and everyone was asking me to buy their lottery tickets for them. It is no good hon. Members asking me to win money for them--my role in life seems to be to win work rather than money in lotteries.
After I heard the result of the draw, my first thought was the Energy Conservation Bill that my right hon. Friend the Member for Berwick-upon- Tweed (Mr. Beith) introduced last year. I supported it strongly and promised to do so again. When one comes first in the ballot, however, many people come knocking on one's door. Before I had to decide on the Bill, I received 40 or 50 suggestions from individuals and organisations. I considered some, but thought all along that, if there was a chance that I might get meaningful energy conservation legislation through, that would be my choice. I did not think that the task was that hopeful--we all know what happened to the Energy Conservation Bill last year--and I knew that it would not be easy. Last year, 217 amendments and seven new clauses, some of which were sensible, were proposed, not in Committee but on the Floor of the House; it was quite an extraordinary affair. Given some of the opening comments about how uncontroversial the Bill was, it was even more extraordinary and, in the light of what happened, those comments seem ironic.
Despite what happened last year, support for such measures and the Bill has grown outside the House and the Government are beginning to realise the extent of that support. My choice was encouraged by my postbag. I received more letters from individuals in support of the Energy Conservation Bill than on all other issues put together. From speaking to my constituents about the issue for some months, I realised that there was strong feeling in favour of new measures to encourage energy conservation. I was also influenced by my experience of life as, in the late 1960s and early 1970s, I had the opportunity to live in Stockholm, Sweden. The amount of
Column 912energy that we used in our well-insulated flat there was far less than the amount required in the small house that I had left behind in England, despite the fact that we occasionally experienced temperatures of minus 27 deg C and regularly experienced those well below 0 deg.
I considered other Bills, such as environmental labelling, but after much consideration decided that it was to be the Home Energy Conservation Bill for me. Hon. Members who attended debates on last year's Bill will remember the impressive support that it gained both in the House and among local authorities and organisations of all types outside. Hon. Members will also know that the subject has been debated four times in the past year. I hope that they will forgive me if I repeat arguments, but I intend to concentrate on some of the changes made since last year's Bill and to describe how this Bill fits in with where this country is in the energy debates. Support for the Bill is increasing. More than 700 elected councils throughout the country, of all political parties, now support it and, during the past fortnight, Bournemouth and Watford have added their support. It is vital that the Bill has the support of local authorities as they will be the main recipients of the new duties under its provisions.
Few other Bills have commanded such wide support among elected councils, but the Bill also has exceptional support among voluntary organisations. Hon. Members will not be surprised that it enjoys the enthusiastic support of environmental campaigners such as Friends of the Earth and Greenpeace, in view of the importance of energy conservation to our environment. Given the Bill's benefits for the "fuel poor", the support of the National Right to Fuel Campaign and the Right to Warmth Campaign is predictable. But it must be almost unprecedented for a Bill to receive backing from organisations as varied as the Institute of Housing, Age Concern, Mencap, the Royal Society for the Protection of Birds and the Trades Union Congress as well as community health councils, residential associations, townswomen's guilds and many others.
The Bill has popular support from people across the country of all political persuasions and of none, which is why I am delighted that the Bill's sponsors come from so many different parts of the House. I am particularly grateful for the support of Conservative Members, including the hon. Members for Suffolk, South (Mr. Yeo), for Eltham (Mr. Bottomley), for Leominster (Mr. Temple-Morris), for Keighley (Mr. Waller), and for Holland with Boston (Sir R. Body). I am grateful to the Under-Secretary of State, the hon. Member for Hertfordshire, West (Mr. Jones), for his constructive approach so far to the Bill.
I have had terrific support from all hon. Members as I have walked about the House in recent weeks, which has been interesting for me as a new Member. It has come particularly from Opposition Members. I must also thank hon. Members in my own party who are here this morning.
Finally, I pay tribute to hon. Members who have taken up this type of Bill before. The hon. Member for Ceredigion and Pembroke, North (Mr. Dafis) first introduced an Energy Conservation Bill and continues to be a strong supporter, for which we are grateful. Secondly, my right hon. Friend the Member for Berwick-upon -Tweed had the
Column 913difficult task of attempting to take his Energy Conservation Bill through the House last year in the face of strong opposition and opposition tactics.
Essentially, the Bill that I propose this year gives local authorities a duty to survey the energy efficiency of residential properties in their areas and produce reports to enable the Secretary of State to act. That is necessary to correct the current lack of co-ordinated information on home energy efficiency across the country. It is widely felt, particularly by environmentalists and those who work in energy conservation, that that is the main obstacle to a comprehensive national energy conservation strategy. That is why the Association for the Conservation of Energy has called this the most important Bill for energy conservation since the war and why it supports it so strongly, for which I am grateful.
Clause 1 defines an energy conservation authority. We are in the same position as last year as that is not easy to define, given the on-going reorganisation. But it is agreed that the responsibility of being an energy conservation authority should fall on councils that are already responsible as housing authorities.
Mr. Nigel Waterson (Eastbourne): Will the hon. Lady clarify the philosophy of her Bill before she goes any further? She has criticised the constructive criticism last year about the Bill presented by the right hon. Member for Berwick-Upon-Tweed (Mr. Beith), but in her Bill, has not she learnt lessons from those criticisms, particularly in giving much greater flexibility to energy conservation authorities in applying the Bill's terms?
Mrs. Maddock: The hon. Gentleman's observations are correct. As I go on, I intend to emphasise the changes that we have made. Clause 1 seeks to define clearly some of the names used in the Bill, which created all sorts of problems last year, particularly the definition of "measures and arrangements". That was not in last year's Bill, but is included this time to emphasise the wide range of possible ways in which local authorities can deal with home energy conservation. However, it is not intended to be all- inclusive. Clause 2 is the hub of the Bill. It sets out the duties of energy conservation authorities, which are to assess the energy efficiency of their own properties and take reasonable steps--I stress the word "reasonable"-- to assess the potential for improvement in energy efficiency of other residential properties in their areas. Specifically, each authority has a duty to produce and publish a strategy report containing the measures that it believes are necessary to achieve energy savings of 30 per cent. from the homes in its area.
Last year's Bill also gave local authorities a duty to state the measures that they thought were necessary to reduce domestic energy use by 10 and 20 per cent. Those additional requirements have been dropped because the Government felt that they would make councils produce three different reports. There is no reason why local authorities cannot prioritise the measures that they recommend. The timetable set by the Secretary of State would almost certainly necessitate that by spreading the required measures over a number of years. It has been
Column 914debated whether 20 or 30 per cent. should be the target. I chose to begin with 30 per cent. because it is a realistic aim for most councils.
In their climate change document, the Government conclude: "Perhaps up to 25 per cent. of current total energy consumption outside the transport sector could be saved through take up of energy efficiency investments with a payback of up to 5 years".
Many other countries have much more ambitious targets, and the Intergovernmental Panel on Climate Change said that a 60 per cent. reduction in carbon dioxide emissions is needed globally in the near future. On that matter, in their White Paper, "This Common Inheritance: The Second Year Report", the Government acknowledge that
"Using energy efficiently is the quickest and most cost-effective way of reducing CO emissions."
It has been suggested that setting the same target for all local authorities is unfair, as some have already done a lot of energy conservation work. Surprisingly, the councils that have done the most seem to be the most enthusiastic about the Bill. If local authorities have a real problem making further progress, there is no reason why the Secretary of State cannot be flexible in setting his timetable. In common with last year's Bill, the councils' reports must contain an assessment of how much carbon dioxide emissions would decrease if the measures were implemented, as well as a statement of the authority's policy for giving priority to the work to be carried out in accommodation occupied by those suffering financial hardship, whom we often describe as the "fuel poor". The report must also be fully costed.
Clause 3 provides that authorities that so wish may include an assessment of the savings in fuel bills that they would expect from their reports' implementation. Some hon. Members will remember that that was a duty rather than a power in last year's Bill. Authorities can also include their estimate of the effect of the measures on nitrogen and sulphur dioxide emissions and the number of jobs that would be created by the reports' implementation. In an ideal world, those would all be done as duties by local authorities. However, I recognise the limited financial resources that we are trying to work with, so to minimise the cost to local authorities, I have conceded on that point.
The detailed list of consultees contained in last year's Bill was considered unnecessary and over-bureaucratic. Although it is highly desirable that parish councils, tenants associations and environmental groups should be consulted about energy conservation reports, I know how much councils already consult one another and, in the interests of progress, I have been persuaded to avoid the danger of over-prescribing how councils produce their reports.
Clause 4 covers the role of the Secretary of State. In England, the responsible Department will be, of course, the Department of the Environment, whereas in Scotland and Wales the respective Secretaries of State will be responsible.
Column 915Housing Executive will voluntarily meet the standard set in the Bill? I believe that Northern Ireland is not covered by the terms of the Bill.
Mrs. Maddock: I have not heard directly from the Housing Executive, but I appreciate that many hon. Members will be disappointed that, unlike its predecessor, the Bill no longer applies to Northern Ireland. I share that disappointment, but in mitigation, clause 7 at least provides for the possible extension of the Bill to Northern Ireland should any future Government accept that proposal. I would support that.
The duty of the Secretary of State is first to set a date by which all the reports must be sent to him. He will then publish a timetable for progress on those reports.
Clause 6 deals with money and provides for the expenses incurred by local authorities and others in implementing measures according to the Secretary of State's timetable.
In an effort to respond constructively to the criticisms levelled at last year's Bill, substantial parts of it have been changed, but the essential elements remain. Last year's proposals were criticised because there were too many "shalls" and not enough "mays". I hope that we have addressed that problem through the changes that have been made.
Mr. Harry Barnes (Derbyshire, North-East): I understand that Northern Ireland could be incorporated within the terms of the Bill--in common with last year's Energy Conservation Bill--at a later stage. I presume that that is due to pressure from the Government and their willingness to accept various provisions. It is interesting to note that although the Civil Rights (Disabled Persons) Bill does not apply to Northern Ireland, a Government statement will be made in Committee to the effect that it will be extended to it in order to gain support from hon. Members representing Northern Ireland who have tabled their own relevant Bill. At some stage today, perhaps the Minister will tell us that it is the Government's intention in Committee to extend the worthy Home Energy Conservation Bill to Northern Ireland, which should not be excluded by the proposed new arrangements.
When discussing how we should deal with local authorities, one might ask why the Secretary of State should prescribe exactly what the local authorities should do. In this case, however, the Secretary of State will be using statistics produced by local authorities, so his direction is necessary.
When the Energy Conservation Bill was discussed last year, a number of hon. Members accused it of creating "thermal thought police" in every local authority, who would have the right of entry into every home to measure heat loss and the right to insist on the installation of
Column 916double glazing, against the wishes of the owner. Although that image might have been amusing, it was not amusing that hon. Members genuinely considered that a likely result of the Bill. That was not the intention behind that proposed legislation and nor is it the intention in this year's Bill. To make that absolutely clear, we have included clarification in several clauses for the avoidance of doubt, but I shall not bore hon. Members with that now.
Mr. Nigel Evans (Ribble Valley): I understand that the changes are designed to make it transparent that the Bill does not confer powers on local authority officers to enforce the measures contained in it. A number of my colleagues on the Conservative Benches will be happier about those changes, because on far too many occasions when it has been left to local officers to interpret what their powers may or may not be, they have gone beyond what was intended even by the House.
Mrs. Maddock: I accept that we must be careful. I was told that the Bill should contain more "mays" than "shalls" because otherwise people just get on with things. I accept that there is a danger if we are not clear about what we want people to do. People can interpret legislation for their own ends, one way or another.
There is no reason to force anyone to have a energy audit carried out on his home because, as has been proved time and again, a local authority does not need to examine every home in order to produce a strategy report. After all, local authorities manage to produce house condition surveys annually without going into every home. Many authorities use sampling methods and general principles, so there is absolutely no reason why authorities should not be able to produce a comprehensive set of proposals to conserve energy in their local homes without the necessity of going into every house.
When the Energy Conservation Bill was proposed last year, a number of local authorities were understandably concerned about the effort that would be required to fulfil their obligations. For that reason two local authorities, Derby city council and Newark and Sherwood district council, were asked to assume that the Bill had become law and that the relevant council committee had asked officers for information on resource and staffing implications of drawing up local conservation plans required by the Bill in their areas. Neither council had any difficulty formulating those plans. They calculated that they could conduct a full energy audit based on a sample of 10 per cent. of homes and produce the required report for less than £50, 000. That figure was the cost of implementing last year's proposed Bill, and it was assumed that councils had no existing records or database of the energy efficiency of any of their local homes. That is manifestly untrue.
A number of councils have conducted infra-red surveys of their areas and produced photographs of the hot spots where the heat has escaped. I know that that has been done successfully in Ealing and that a county council attempted to do the same some years ago. Sutton will do exactly that in three weeks' time and exhibit the results to the public, as Ealing did. People will be able to pick out their own home, get an idea of how much heat is escaping and receive advice on what they can do to conserve energy.
With the changes that have been made to create the Home Energy Conservation Bill this year, some councils will face virtually no cost when producing their reports
Column 917because they already have the required information. As the requirements for a full energy audit have been replaced with a duty merely to assess the energy efficiency of authorities' properties and to take reasonable steps to estimate the potential for improving energy efficiency in other properties, it is unlikely that the Bill's implementation will cost most local authorities even half as much as the Government estimated last year.
The Bill is essential to enable us to have a comprehensive national energy conservation strategy. I accept that, from time to time, the Government have produced a variety of good initiatives with the result that several hundreds of thousands of properties and their owners have been helped. An example of such a scheme is the greenhouse programme, in which I was involved when I was a local councillor. However, last year there were discussions about that, and we were told that it was a demonstration programme and would not go on for ever. Much has been done under the home energy efficiency scheme.
However, the Bill is important because, although we need on-going plans, we need, above all, to co-ordinate our targets, commitments and resources. The Bill and its predecessor, which we discussed last year, were criticised by some hon. Members who said things along the following lines: "It does not put double glazing in a single window or cavity insulation in a single wall." I believe that such a response misses the point completely.
Does a plan for a hospital make a single person well? Does it create a single bed of itself? Of course it does not. No one says that money spent on plans for a hospital is wasted. One needs to decide where the best place is to build the hospital, what one will build it from, how many bed spaces it needs and so on. It is the same with the Home Energy Conservation Bill. The Bill is about gathering necessary information to construct a comprehensive energy conservation strategy, and it lays foundations on which all parties in the House are agreed that we need to build.
The reasons that we need to tackle energy efficiency fully are many. For most of us, greater home energy efficiency means a chance to reduce our gas and electricity bills slightly. That is very welcome. However, for some people it could mean that they will be able to heat their home adequately for the first time.
One of the memories that stays with me over the years, as someone who has been a councillor and now a Member of Parliament, is that of visiting elderly people who must remain huddled in one room all winter because they cannot afford to heat anywhere else. It should not have to happen in the 1990s.
The Government accept that, to protect our environment, energy efficiency is the quickest and most cost-effective way of reducing emissions of carbon dioxide and other gases that contribute to the greenhouse effect. We have a target, set by the Prime Minister at the 1992 Rio summit, of returning emission of greenhouse gases to 1990 levels by the year 2000.
However, 25 per cent. of that reduction was supposed to have been accounted for by the introduction of VAT on domestic fuel. Now that that second stage of tax has been defeated--for which I am thankful--there is a huge hole in the Government's strategy for achieving their target. We must fill that hole very soon because, in March,
Column 918the United Kingdom will be represented at the Berlin environmental summit, the first summit of the countries that have ratified the Rio climate change convention. A recent report from the Intergovernmental Panel on Climate Change shows that we are far short of the reductions necessary to stabilise those emissions.
In addition, investing in energy conservation work is a very efficient way of creating jobs and boosting our economy. The main study carried out in the United Kingdom by the Association for the Conservation of Energy suggests that 500,000 jobs could be created over a period. The net cost per job year is estimated to be about £23,000. Most of the jobs created are relatively low-skilled occupations, and I believe that they would be concentrated in areas where there are both many unemployed people and many poorly insulated homes. Investing in warmer homes improves people's health. There have been reports about that very recently. Research by the Standing Conference on Public Health shows that people living in colder homes tend to have poorer health, as a result of the cold itself and the damp that it causes. It is thought that there are potential savings of billions of pounds to the national health service if we rectify poor housing. Above all, energy is big business. We spend £50 billion nationally on energy per year.
Action is needed. Last year, a poll was conducted before the Second Reading of the Energy Conservation Bill. Although one must be slightly sceptical about polls of Members of Parliament, seven out of 10 Members wanted a more strategic approach to energy conservation. Support for the Bill has grown and grown. It will not only help our environment; it will help people. It will help those who are at present in homes that are cold or damp.
Finally, I should like to paint for hon. Members a vivid picture that I have of when I first was an elected person, helping people. I went into a home where the bathroom and kitchen were covered in black mould--a decent house, not insulated, where there was not enough money to pay for heating. As I present the Bill to the House, I have that picture. We have the opportunity to make that picture something that is of the past and will not happen again.
Welcome though the debate is, we have discussed the matter for far too long. There is much agreement. There is so much support that surely now is the time for action--to make possible a truly comprehensive, integrated energy conservation policy for the nation. I commend the Bill to the House.
Mr. Michael Shersby (Uxbridge): I am pleased to have the opportunity of congratulating the hon. Member for Christchurch (Mrs. Maddock) on her good fortune in the ballot and on introducing the Bill. I assure her that she has absolutely nothing to fear from having the privilege of introducing legislation. It has always, I think, been a belief of every Back-Bench Member of the House that the Government do not have a monopoly of introducing legislation, and that Back Benchers make an extremely valuable contribution to the sum of legislation on the statute book. I say that with the experience of having introduced seven Private Members' Bills of my own, all of which are now Acts of Parliament.
Column 919I am strongly in favour of energy conservation measures. They are, as the hon. Lady rightly said, highly desirable in contributing to the health and happiness of the nation, and they should be supported wherever possible.
I have welcomed the steps that the Government have taken to make our homes warmer and to prevent the waste of energy, and I am pleased to welcome the Bill as a further step in that process, which I hope will not stop here, but will make further progress in the years to come.
The Bill is, if I may say so with due respect to the right hon. Member for Berwick-upon-Tweed (Mr. Beith), an improvement on the Bill that was introduced by him in the previous Session. I am sure that his wise advice has been available to the hon. Lady, drawing on the benefit of his experience on Report, which has now produced an admirable measure, which is obviously very much more acceptable to Members of the House.
The hon. Lady has removed some of the more bureaucratic provisions that led to the belief by some hon. Members that there would be unnecessary intrusion into private homes, which was implied by the need for expensive, intrusive energy audits of the type which, if they are carried to excess by local authorities, can sometimes lead to problems. They were an important feature of the Bill introduced by the right hon. Gentleman in the previous Session. That should mean that activity of local authorities as a result of the Bill will, as far as possible, be simply an extension of what the Government encourage them to do as part of the housing investment programme and within existing local government and housing legislation. However, the Bill goes some way to achieving laudable aims that add to the policies that are being pursued by the Government with widespread and, I believe, cross- party support. I have been a great enthusiast for the Government's energy efficiency scheme. As hon. Members know, last year, the Chancellor doubled public spending on that scheme so that, for the first time, everyone aged more than 60 became eligible for a grant. I am sure that that has been extremely successful and I welcome the additional £10 million that the Chancellor announced in his Budget statement.
I have seen at first hand the tremendous benefit that is conferred on people by the scheme, particularly in the many old homes that are not energy efficient. We are proud of the number of listed buildings that we have in our country and of the towns, cities and villages whose character is enhanced by buildings constructed many years ago. All those buildings, almost without exception, are not energy efficient. The use of the energy scheme introduced by the Government means that draughts are excluded and elderly people living in those houses are, for the first time, warm and comfortable--a tremendous advance in our time. I hope that we can go further. The scheme starts when one reaches the age of 60 which, in 1994, is a comparatively young age in terms of the human life span, so the scheme provides for many people the prospect of living in warm and comfortable homes for the rest of their lives.
The hon. Lady's Bill goes further. It is an imaginative measure, which I warmly welcome. I wish her every success in piloting the Bill on to the statute book and will be there to support her.
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Mr. Andrew F. Bennett (Denton and Reddish): I am delighted to have the opportunity to speak in today's debate and support the Bill. I congratulate the hon. Member for Christchurch (Mrs. Maddock) on her good fortune in coming at the top of the ballot. I hope that she will have the good fortune to persuade the Government, this time, to allow her measure to pass on to the statute book.
I see that the Parliamentary Under-Secretary of State for the Environment, the hon. Member for Hertfordshire, West (Mr. Jones), is in his place. The original Bill introduced two years ago included his name in the list of sponsors. I hope that he will now ensure that the Bill passes through the House.
I always warn people that, when there appears to be consensus in the House, the House is sometimes at its most dangerous. I should like the Bill to be passed, but I do not think that it is worth passing unless we consider its financial implications. When I challenged the hon. Lady earlier to say how the measures contained in the Bill would be financed, she stressed that it would not cost local authorities very much. She said that the measure merely drew up a plan, and nobody would criticise a plan for a hospital.
But there is no point in planning for a hospital unless there is a realistic opportunity to build that hospital. The same is true of the Bill- -it is important that we have a proper energy audit of all buildings in the country, but unless there is a realistic chance of carrying out the energy efficiency measures proved necessary by the audit, there is little point in drawing up the plan.
Mrs. Maddock: Does the hon. Gentleman agree that, if we are to do what he would like to see happen, the Bill is an extremely important first step, and that without it we cannot take the action that the hon. Gentleman would like to see?
Mr. Bennett: I accept that the measure is an important first step, which is why I congratulated the hon. Lady. But it is important that, in passing it, the House faces up to the question of how to finance the work that the measure will show to be necessary.
Mr. Llew Smith (Blaenau Gwent): While I accept my hon. Friend's point--that we must consider the Bill's financing--does he think that it is ironic that we should be discussing the Bill's financing and whether it will be possible when, every year, we spend more than £100 million on research and development in the nuclear industry? A transfer of money may be a way of helping to finance the measure.
Mr. Bennett: I see all sorts of ways of financing the measure, but I want to stress that it is important for the House to consider the implications of the financing. I accept that, if we draw the attention of individual home owners to the fact that their houses are energy inefficient, a small number of them will have the spare resources to take some action.
But the majority of individuals will not have the resources to implement the necessary energy efficiency measures. It is important for us to look at ways in which home owners may be able to obtain extra loans from
Column 921building societies to implement measures that are in their best interests, and the possibility of grants and other provisions. My two local authorities--Tameside and Stockport--and Manchester city council, in its overspill housing, have programmes for energy efficiency for their council houses, but they are unable to carry out the measures on as many dwellings as they would like each year. We will provide little consolation to those authorities if we tell them to draw up plans to demonstrate that many of their council houses are energy inefficient, and pass that information on to the occupiers of those houses, unless we can provide them with the resources to carry out the necessary measures.
Mr. Gary Waller (Keighley): Does the hon. Gentleman agree that not the least important aspect of this very valuable measure is that of public information and knowledge? If more householders were aware of the considerable savings that they were able to make, I am sure that many of them would, by hook or by crook, find ways of obtaining the capital investment required to save them a great deal in the long term. If, as a community, we put resources into such schemes, we would make greater savings than we would by investing money in trying to find alternative means of energy that might be controversial.
Mr. Bennett: I accept that such an investment would be a good one, but I would argue that it is a good investment for those individuals who are able to borrow the money to invest, and for the community. I am suggesting that, if we introduce the measure, we must address the question of how we are to find that investment--whether through making it possible for individuals to borrow the money to invest in energy efficiency or by making it possible for local authorities and others to borrow the money.
Mr. Shersby: Surely the point of the hon. Lady's Bill is to ensure that local authorities have a plan and address the problem--in that way, householders' attention is also drawn to the problem. Some householders can carry out their own energy efficiency work and local authorities can take advantage of the Government's energy efficiency schemes--the two will come together.
Mr. Bennett: I accept that argument in part, but I stress that my authorities, Stockport and Tameside, have plans for carrying out energy efficiency measures, but the capital schemes currently in operation slow down the progress that they can make. In welcoming the measure, we must consider how to pay for it. There is no simple solution--it is a complex subject.
The report of the Select Committee on the Environment is one of which the Minister can be proud--he was the Chairman of that Select Committee. I hope that when he speaks later today, he will not only welcome the Bill but say how many of the recommendations in his report--
Column 922we made few amendments to it in Committee-- will be implemented. One of the key questions in the report is how energy efficiency is to be financed.
The hon. Lady mentioned the fact that, following the Rio summit, we have a commitment to stabilise carbon dioxide emissions by the year 2000. It is estimated that, in order to achieve that goal, carbon dioxide emissions have to be reduced by 10 million tonnes of carbon. As a result of the changes in the Government's policy on value added tax, about 7 per cent. of that target cannot now be achieved. I never believed that VAT on fuel would motivate people to make the savings for which the Government hoped. Another 15 per cent. is to come from increases in fuel duties--although I am not convinced that that has changed people's attitudes towards energy conservation. Between 25 and 30 per cent. of the saving is to come from the activities of the Energy Saving Trust, as well as various other measures.
In early debate on the subject, the Government informed us that they could find 75 per cent. of the required cuts in CO emissions. Almost half those cuts have now disappeared through changes in policy, so it is important that the Government explain how they will achieve their target.
I understand the Government's previous main argument: the Energy Saving Trust was to be the main mechanism for providing grants and encouraging people to conserve energy. I do not approve of setting up quangos, but that quango was going to raise its money from the levy--some people would call it a tax--imposed on the privatised gas and electricity industries and, as such, would not be subject to Treasury rules on public expenditure: it would count as private expenditure. It was a very neat move by the Government. They suggested that the Energy Saving Trust should spend almost £1 billion per year over the next few years in pushing energy conservation in this country.
The Select Committee inquiry found that the Energy Saving Trust had some prospects of obtaining money via the gas regulator, but not via the electricity industry. The fundamental question that we must ask the Minister is: how will the Energy Saving Trust be funded? The situation has grown dramatically worse since the Environment Select Committee inquiry. We now know that the new gas regulator is determined that the gas industry will not make a significant contribution to the Energy Saving Trust. The trust is the mechanism through which the Government can encourage energy conservation, but, unless they can finance the trust, I cannot see how it will deliver effectively the substantial energy savings that are required. I believe that the gas regulator has got it wrong: she has a very narrow view of her responsibilities to the consumer, and she seems to be interested only in gas prices next year. I believe that we should take a much longer-term view of the price of gas in this country and the present "dash for gas". Sooner or later--it may be later than some people think-- we will face a shortage of natural gas, and the gas regulator should take that into account. It might be in the country's long-term environmental interests to introduce mechanisms to discourage the use of natural gas, which will reduce carbon dioxide emissions dramatically and ensure that we achieve the Rio target.
Column 923As the gas regulator is totally independent of Government--or so she claims--if she says that the Energy Saving Trust will receive no significant funds via the gas industry, the Government must come up with a means of financing the trust.
The Parliamentary Under-Secretary of State for the Environment (Mr. Robert B. Jones): I am grateful to the hon. Gentleman for giving way. As the matter is slightly outside the Bill's framework, I will address it now.
I note what the hon. Gentleman has said about the gas regulator, and I am sure that he will make his views known to her in vigorous terms. However, she is considering three schemes, and we are awaiting her decision on the matter. We will obviously continue to review the organisation and financing of the Energy Saving Trust, and we hope to come to some conclusion as soon as the regulator's position is clear.
Mr. Bennett: I thank the Minister. Having written the Select Committee report, I am sure that he will appreciate that, even if the regulator approves the three schemes to which he referred, it will fall far short of the amount of money that, as Chairman of the Environment Select Committee, he thought was needed to make the Energy Saving Trust work; and, at that stage, thought would be provided by the gas industry.
I welcome the fact that the regulator is looking at three possible schemes, but if the measure goes through and local authorities carry out the audits quickly, the Energy Saving Trust will need money in order to offer grants and perhaps guarantee loans. Its needs will be far greater than its resources.
In welcoming the Bill, it is clear that the House must take the debate further: it has to look very seriously at the way in which we can finance energy savings. I suggest that the Government must look at the problem of first-time home buyers, may of whom borrow all the money they can afford-- or that the building societies and banks think they can afford--merely to purchase a property.
Perhaps the Government could implement a grant or loan system which would allow first-time home buyers to borrow a little extra money to ensure that their homes are energy efficient. That would be extremely helpful, both in terms of people's comfort and in terms of ensuring that their fuel bills are lower and they are therefore able to meet their mortgage payments. It would make sense, but it would be difficult to implement at present.
Mr. Simon Hughes (Southwark and Bermondsey): I think that the hon. Gentleman makes a very important point. An idea which is consistent with Government policy and which could be implemented easily is to allow tax relief for work that is done on a house which is deemed an energy saving and approved in that context. If the Government are looking at freezing mortgage interest tax relief or reducing it further, it could be replaced by tax relief which gives people an incentive to conserve energy. Together with better British minimum standards for energy conservation, that would make a huge difference and do a small proportion of the hon. Lady's work, even before the local authorities' reports are completed.