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11.58 am

Mr. Cynog Dafis (Ceredigion): Thank you, Mr. Deputy Speaker, for calling me to speak for the second time today. I congratulate the hon. Member for Bury, North (Mr. Chaytor) on raising this matter and on making a first-rate speech. Energy efficiency--with development of renewable resources and efficient production of energy from conventional sources, such as combined heat and power--is an essential component in a wider sustainable energy policy.

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As chairman of the parliamentary group on renewable and sustainable energy, I am aware both of the tremendous developing consensus in favour of putting sustainable energy policy at the heart of Government consideration and of the compelling case for doing so. That case is well understood by the Minister, who I understand is sympathetic to that view.

Energy efficiency has been debated repeatedly since I first entered the House in 1992 and the overwhelming case for taking it seriously has been well established. It offers gains in respect of the environment, health and quality of life. There are environmental gains in manufacturing and installation and economic gains as a result of reduced costs. Real, sustainable development of energy efficiency is clearly at the heart of Government policy, but the cuts to the budget of the Energy Saving Trust tend to belie that. The Government will have to reverse those cuts if they are to be taken seriously.

Much has been achieved in recent years, but it has been by dint of constant and intense pressure from various lobby organisations and through the work of voluntary organisations such as Neighbourhood Energy Action and the Association for the Conservation of Energy. It was no small task to get the Home Energy Conservation Act 1995 on to the statute book. It took at least three years after I introduced a similar Bill that was blocked by the previous Government. Progress has been made through constant pressure and attrition, and it is still far too piecemeal and insufficient. It is not commensurate with the scale of the challenge or the opportunity to take the matter seriously.

Energy conservation needs to be built into economic and employment policy and social and environmental policy in a structured way over a set period of time. We need a coherent process and a substantial programme and that is what the Warm Homes and Energy Conservation (Fifteen Year Programme) Bill is all about. I am certain that it is the right way ahead. The Bill would contribute to Government policy, it is eminently compatible with the themes that the Government have established and I strongly support it.

12.1 pm

Mr. Harry Barnes (North-East Derbyshire): In introducing the debate, my hon. Friend the Member for Bury, North (Mr. Chaytor) said that Derbyshire is one area that suffers particularly from fuel poverty. Although I accept what my hon. Friend said about national programmes and the need for co-ordination, I should like to refer to local initiatives in Derbyshire and Nottinghamshire that are attempting to tackle fuel poverty.

In 1996, the Nottinghamshire and Derbyshire local authorities formed an energy partnership to offer local residents advice on energy saving. North East Derbyshire district council obtained a grant for those arrangements and now runs a mobile service. Local authorities also employ advice officers. It is an important initiative, but it is limited by the fact that it is an advice service.

More funding is required to deploy energy-saving methods in order to tackle fuel poverty among many needy people. The local authorities in Nottinghamshire and Derbyshire attempted to do that under a programme known as the home energy conservation action bid. They sought to set up an energy service company, supplying

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energy-saving goods such as low-cost cavity wall insulation, that would work with the electricity and gas companies to provide cheaper fuel. It was planned that the company's profits, with additional money to be raised from the private finance initiative, the national lottery or European funding, would help to tackle many of the problems that need to be addressed.

Although most local authorities in Nottinghamshire and Derbyshire have been working together on the project for a considerable time, they now realise that they have entered a legal minefield and have had to withdraw the service. I should like my hon. Friend the Minister to examine the information that the local authorities have sent to her office. A change in the law is required to make it easier for such initiatives to be established; they would fit in with the wider concerns that my hon. Friend the Member for Bury, North raised.

12.5 pm

Mrs. Linda Gilroy (Plymouth, Sutton): I congratulate my hon. Friend the Member for Bury, North (Mr. Chaytor) on initiating the debate.

The Warm Homes and Energy Conservation (Fifteen Year Programme) Bill, which I shall present this afternoon, has been mentioned. It would require the Secretary of State to draw up and facilitate the carrying out over a period of 15 years a programme of action to provide at least 500,000 households each year with a comprehensive package of home insulation and other energy efficiency improvements. More than 200 hon. Members have expressed their support for the Bill and eight national organisations are working with me and support it. They are Friends of the Earth, the Association for the Conservation of Energy, the Child Poverty Action Group, Church Action on Poverty, Help the Aged, the National Housing Federation and Neighbourhood Energy Action. I pay tribute to all those organisations which have long track records in arguing for and taking practical steps to end fuel poverty.

Much has been achieved. Neighbourhood Energy Action is working to insulate 400,000 homes this year. Estimates suggest that as many as 8 million homes are still in need of energy-saving measures, which could reduce their heating bills and allow their occupants to afford the warmth that they need.

As we know, the home energy efficiency scheme is currently under review. One of its present limitations is that it does not reach to the private rented sector. By giving the Secretary of State responsibility for a programme of measures and ensuring that funding is available, we can ensure that the Government take an effective long-term view of this and other problems. By dealing with at least 500,000 homes over 15 years, we should eliminate fuel poverty in 8 million homes and end the misery of cold winters for as many as 15 million people and thereby dramatically reduce the United Kingdom's shameful winter death record.

The cost of the programme has been estimated as £1.25 billion. We believe that the Government already pick up a bill of about £1 billion through funding energy efficiency programmes or financial payment programmes such as VAT compensation and cold weather payments.

By introducing a requirement for a long-term approach, my Bill would ensure that maximum value for money is obtained from such expenditure in lowering fuel bills in a

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way that is permanent and sustainable. I hope that my Bill will focus discussion with the Government on finding new ways of funding that work more effectively. My hon. Friend the Member for Stroud (Mr. Drew) mentioned the home improvement agencies and equity release. Exploring the possibility of ethical bonds is another possible source to add to the funding that is currently available.

I hope, too, that the forthcoming consultative paper on utility regulation will include some proposals to help engage fuel companies to address the challenge of funding such measures. The hon. Member for Ceredigion (Mr. Dafis) mentioned the cut to the Energy Saving Trust; I hope that its budget will be restored.

I congratulate my hon. Friend the Member for Bury, North on initiating the debate and appreciate his support and that of other hon. Members for my Bill.

12.9 pm

Mr. Colin Breed (South-East Cornwall): I should like to concentrate on the regulation aspect of the issue. Although a number of issues need to be considered in tackling fuel poverty, the way in which regulation operates is clearly important. Regulation needs to be focused much more on being consumer friendly than on protecting the financial security of the privatised utilities.

The eradication of fuel poverty requires the measures that have already been discussed this morning, but regulation must be part of the process. Consumer choice is often more like supplier choice. Suppliers choose which are the best customers to supply with the best schemes. The advances in technology that allow companies to identify the customers that they really want have marginalised other customers and promoted the very fuel poverty that we are trying to eradicate.

The unit cost differentials between those able to pay their bill by direct debit and those who must use prepayment meters must be eradicated if we are to move against fuel poverty.

Regulation tends to increase the cost of fuel in more remote and rural areas, where wages are often lower, by imposing almost mandatory transmission costs which operate against the best interests of those in remote and rural areas. They have to pay more for the transmission of the very fuel and energy that they require. Regulation is part of the solution. I hope that the Minister will consider it in conjunction with those matters that have already been mentioned this morning.

12.10 pm

Mr. Christopher Chope (Christchurch): I shall remember this excellent debate for the description by the hon. Member for Bury, North (Mr. Chaytor) of his Government's £485 million Exchequer grant to reduce VAT on fuel from 8 to 5 per cent: a triumph of political symbolism over sensible environmental policy.

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