| Previous Section | Index | Home Page |
1.44 pm
The Minister for Construction, Planning and Energy Efficiency (Mr. Robert B. Jones): I congratulate the hon. Member for Coventry, North-East
(Mr. Ainsworth) on once again selecting this subject for discussion. We go back a long way in our interest in it and I certainly welcome the opportunity to exchange views on the subject in this domain as opposed to our previous one. The hon. Gentleman had a long list of questions, a number of demands that would knock holes in the income side of the Government's accounts, and a raft of proposals that would extend expenditure commitments. My eyesight may be failing, but I do not see alongside him any bag of gold provided by his right hon. Friend the Member for Dunfermline, East (Mr. Brown). Judging by the various things the right hon. Gentleman has said, I suspect that the hon. Gentleman does not have much influence with those on the Labour Front Bench.
I can reassure the House that this Government remain whole-heartedly committed to promoting energy efficiency. It is an important issue globally, as the hon. Gentleman and I recognise, and a cornerstone of the United Kingdom's climate change programme and sustainable development strategy.
I am pleased to report that the UK is on target to meet its commitment to return greenhouse gas emissions to 1990 levels by 2000: we expect carbon dioxide emissions to be between 4 and 8 per cent. below 1990 levels. That achievement reflects the impact of the whole package of measures set out in the UK climate change programme.
The hon. Gentleman cited some European data to raise questions. The Commission's estimates would suggest for the EU a 3 per cent. overshoot, but those are econometric projections and take no account of implemented or planned actions to limit or reduce emissions. They are based on modelling exercises, which appear likely to overestimate emissions. Member states' projections are more likely to be accurate than those of the Commission. Moreover, the Commission's approach takes no account of one crucial fact: member states do not simply undertake modelling exercises, but are obliged to take corrective action if, on the basis of actual emission trends and future projections, they consider that they are no longer on course to meet their climate change commitments for 2000.
I do not want to seem to be saying that we are complacent. It is clear that further commitments are needed to combat climate change--not least in the light of the report that my right hon. Friend the Secretary of State published yesterday, reviewing the potential effects of climate change in the UK.
Internationally, the UK is calling on all developed countries to agree a new target to reduce total greenhouse gas emissions to between 5 and 10 per cent. below 1990 levels by 2010--a challenging, but achievable, target that demonstrates the UK's continuing commitment.
Environmental issues, however important, are not the only driver behind energy efficiency. There are real opportunities for British business and domestic customers alike to save money. That has to be a powerful incentive--indeed, it has been described as the win-win scenario. I believe that there is also an important chance for British businesses to improve their environmental image and their competitive position.
No Government could rely entirely on legislation for improved energy efficiency. In some limited cases--for example, building regulations and energy efficiency standards for consumer products to which the hon. Gentleman referred--regulation is an appropriate way to make progress, but in general, Governments need to use a different, and wider, range of tools.
In large part, improved energy efficiency means influencing people's behaviour. We need--and have--a comprehensive package of measures to alert people to all the benefits of energy efficiency; to give them the technical information to decide what to do, and what it is worth to them; and to encourage market forces to operate, so that consumers can invest wisely in energy efficiency improvements.
That approach is fully in line with our deregulation initiative, which is not about "tearing up regulations" but about avoiding inappropriate regulations in the first place. It may be harder work for the Government to operate information and publicity campaigns than to make regulations, but I believe that it is more effective, and cheaper for those affected.
We provide a wide range of information for all types of consumers. In particular, we provide detailed technical information on energy efficiency technologies and their potential to generate energy and money savings. That information, which is generated by the energy efficiency best practice programme, is directly applicable to "energy professionals"--architects, process managers, building services people, and so on. It also helps us to develop our own policy.
The best practice programme is highly effective. Our research shows that, by December 1995, it was stimulating investment by business to generate energy savings worth some £450 million a year, at a cost to the Government of less than £20 million a year. That is a pretty good gearing ratio and is well on course to meet the programme's target of generating £800 million a year in savings by the year 2000.
For business, we believe it is important that senior management should take the lead by taking responsibility for energy efficiency. All the signs are that an energy-efficient business is a well-managed and therefore competitive and successful business. Certainly, the energy management performance of signatories to our Making a Corporate Commitment campaign is significantly better than that of non-participants. The hon. Member for Coventry, North-East might like to know that I am persuading those who are committed to running seminars for their supply chain to get the message back down the line. That is an effective way of doing it, because, if one's biggest customer says that that is something one should do, one takes more notice.
It is not enough for us to badger consumers. As the hon. Gentleman said, the Government also need to take a lead on energy efficiency. We have set specific targets for the Government estate--a 15 per cent. improvement by March 1996. The latest figures we have published, for 1993-94, show a 6 per cent. improvement over 1990-91. That is good progress, because one faces other problems in terms of increasing demands for energy--for example, through increasing reliance on office machinery. That, in turn, is a challenge for the manufacturers of computers and other equipment. They must try to improve energy efficiency. There is also the need for the right ambience, which is a problem in energy consumption.
I hope to publish the figures for 1994-95 shortly. We are currently discussing what further targets should be set for the period up to 2000. Progress continues to be reviewed at regular meetings of Departments' Green Ministers.
The Government are also taking the lead in new and more energy-efficient ways of supplying consumer needs. We are widely promoting combined heat and power, in the public and private sectors, and setting an example by installing it in Government property: for example--I do not know whether the hon. Gentleman is aware of this--in the Whitehall district heating scheme, and in my Department's new headquarters.
We set a target, in the climate change programme, of 5,000 MW of installed CHP capacity by the year 2000. We have already achieved a total installed capacity of about 3,500 MW--5 per cent. of United Kingdom electricity generation--on around 1,300 sites.
To take that further, our UK strategy for combined heat and power was launched a few days ago. That is intended for a broad audience, including both the wider public sector as well as industry. It records what we are doing to achieve our target, sets out our plans, and makes clear the wider context in which our policy is operating.
In general, we believe that, since investment in energy efficiency is highly cost-effective for consumers, with short payback periods, Government money should not be used directly to fund energy efficiency improvements. However, there are some areas where we are satisfied that Government funding is justified to overcome barriers to energy efficiency.
The home energy efficiency scheme is an important way of helping the fuel poor--those who cannot readily afford to make home improvements--by providing advice and grants for insulation and draught-proofing. It improves living conditions, and helps to save energy.
We are continuing to refine the scheme, to ensure that it is targeted to where it can do most good. That is why, although we were not able to maintain the budget for HEES last autumn, we ensured that grants would continue to be available, in full, to those in the greatest need.
We recently issued a consultation paper on ways of developing HEES. Our intention is to increase choice for eligible householders, by making the scheme less prescriptive and more flexible. We can do that by linking the grant-aided measures available more closely to the energy standards of people's homes. HEES is already good value for money, and we want to continue to secure the maximum benefit for every pound spent, whether the benefit is expressed in economic, social or environmental terms.
The Government are not the only player in relation to energy efficiency. We are also working to encourage others. The hon. Gentleman cited the Energy Saving Trust, which, in particular, represents an important partnership between energy suppliers, the energy efficiency industry and the Government, in promoting energy efficiency, recognising that all those parties have a role to play. The trust is a catalyst for the promotion of energy efficiency, with the aim of bringing about self-sustaining markets for energy-efficient goods and services, particularly in the developing competitive energy markets.
The role of the trust has continued to evolve. The Government are now providing funding of up to £50 million from 1996 to 1999 to enable the trust to develop a programme of work, to assist the market to
work in the interests of customers. A key feature is the development of partnerships which will bring in funding from third parties: Government money being used to maximum advantage, to kick-start initiatives which should become self-financing. I am pleased to say that the work programme, launched in April, is developing well, and will continue to contribute to further savings in carbon dioxide emissions.
The hon. Gentleman referred to the private Member's Bill introduced by the hon. Member for Nottingham, South (Mr. Simpson) to amend the Home Energy Conservation Act 1995, in particular to add houses in multiple occupation to the definition of residential accommodation, and thus require local authorities to identify and report on energy conservation measures for such houses too. The hon. Gentleman will know that the Government support that Bill, and I am glad that it is making good progress.
The hon. Gentleman referred to VAT. He will know that that subject has been raised on a number of occasions with my right hon. and learned Friend the Chancellor. The Government's long-standing policy is one of a simple taxation system, with just the standard rate of VAT operating in conjunction with the zero rate. The 8 per cent. reduced rate for domestic fuel and power is the exception. Long-term retention of that, as the hon. Gentleman will know, was not of the Government's choosing. I understand that my right hon. and learned Friend has no intention of extending that unique reduced rate to other areas of spending.
My right hon. Friend the Paymaster General has set out the Government's view that, notwithstanding all the arguments made by the energy efficiency industry, it would be difficult to set a special rate for energy-saving products. To try to do so might well achieve little and would certainly complicate the operation and administration of the tax. There seems little doubt that it would give rise to disputes about the energy-efficient qualities of various products--about the boundaries between those goods and services that should and should not be included.
The hon. Gentleman asked about the costs to local authorities of implementing the Home Energy Conservation Act 1995. The specific new duty on local authorities is to prepare one energy conservation report covering relevant properties in their area, and £3 million has been made available for that purpose under the new burdens procedure.
Future work under the Act will take the form of updates to energy conservation reports. That will form part of the existing housing investment programme process, which is, of course, an exercise that local authorities already have to go through and are well geared up to carry out. The alignment of the process with HIP was specifically designed to minimise the extra work for them.
The new burdens procedure is designed to meet the cost of new activities, but it does not involve new money. Specifically, it means that, within the Department of the Environment's budgets, if we were to agree to providing further resources to local authorities in relation to the Act, it could come about only by our finding savings elsewhere within the energy efficiency budget. We can only switch resources from one programme to another.
I am grateful that the hon. Gentleman has not sought to challenge the actions we are taking to improve energy efficiency. He has suggested a number of ways in which
he believes that we should do more and said that more resources should be committed to it. I have to say that, however much I might agree with him in principle, budgets are not unlimited. One of the hard jobs of being in government is to make difficult decisions about conflicting priorities.
We remain fully committed to tight control of public expenditure, and spending on energy efficiency has to compete with a wide range of other priorities. We have to make judgments about what is affordable. We have some scope for redeploying uncommitted resources among different parts of my Department's programme, but new resources can only be sought via the annual public expenditure survey discussions.
I recognise the hon. Gentleman's concern about the reduction in the HEES budget, but I can only say that future levels of funding have to be determined annually, via the public expenditure survey.
The hon. Gentleman has raised many issues and has expected me to compress my answers into a short time. This is an important subject and I welcome the hon. Gentleman's commitment to it. He should rest assured that the Government in general, and I in particular, remain as committed as ever.
It being Two o'clock, the motion for the Adjournment of the House lapsed, without Question put.
| Next Section
| Index | Home Page |