Examination of witnesses (Questions 100
- 119)
MONDAY 9 MARCH 1998
SIR JOHN
BOURN, KCB,
MR ANDREW
TURNBULL, CB,
CVO, MR
BRUCE SHARPE,
MR JOHN
CLOUGH, MBE
and MR FRANK
MARTIN
100. Will it or will that go back into reserves
and are we going to see the reserves go up?
(Mr Turnbull) It will mean that for the money
the price per job will be lower and, therefore, within the money
they will be able to afford 440,000 homes rather than 400,000.
101. So you can assure the Committee today
that those 40,000 homes will appear, because that is the figure,
rather than watching that growth of reserves going up to save
for the rainy day in 2000?
(Mr Turnbull) This will be reflected in the number
of homes done. The fee that is paid to Eaga is a fixed grant per
quarter plus 2.7 something per cent of the amount of grant. The
amount of grant that we are paying is still roughly £68 million,
therefore the fee that they get will stay the same but they will
have to administer an extra ten per cent of grant applications.
That is, in a sense, one of the risks to which Eaga is exposed
in a change in the scheme of that kind.
102. Can I ask then that you will deliver
the additional 40,000 homes that have now become available through
the extra finance?
(Mr Clough) Yes, that is our intention.
103. So it will happen, it will not go into
reserves?
(Mr Clough) Our fee is based on value of grants,
not number of grants. We will pursue, as we have done over the
years, a very efficient operation. Our aim is to deliver as much
of these funds as possible to the low income sector.
104. I have just got one more area. On the
question of jobs on page 29 you say that one of the objectives
of the whole scheme in 1990 was to create jobs in the energy efficiency
industry. Page 31 shows that the number of jobs lost in that industry
was exactly the same as the number you created. You failed in
that objective: why?
(Mr Turnbull) The reduction is in the whole insulation
sector, not just in the domestic insulation sector. We have created
an industry that barely existed or was very small in 1991. This
is simply putting it in the context of the changes that have taken
place in the insulation industry as a whole. The 5,600 jobs are
in the domestic sector. The reduction is in the wider insulation
industry.
105. But in effect we have got a no increase
in jobs in that sector?
(Mr Turnbull) In the insulation sector as a whole,
but that is reflected by all sorts of things like the number of
homes being built in the private sector, the amount of building
going on in the economy generally.
Mr Hope: Thank you.
Maria Eagle
106. Mr Clough, I wonder if you could tell
me if you turn to page 15, paragraph 1.8, what the aims of NEA
are?
(Mr Clough) Firstly, I have no connection with
NEA but my knowledge of the sector extends to Neighbourhood Energy
Action which is a national charity. They campaign for warmer homes.
107. You have no connection with them you
say?
(Mr Clough) I have no connection apart from on
a working basis NEA are very much involved in this area of work.
108. Does Eaga have a connection with them?
(Mr Clough) The only connection between Eaga and
NEA is based in its constitution. As I explained previously we
have a board of non-executive directors. That number was originally
five, that number is now eight. Two of those non-executive directors
are nominees of NEA. They do not need to be in the employ of NEA
or on their governing council, they simply have to be nominations
of. To take that one stage further, the two nominations made by
NEA are Andrea Cook and Robert Jones. Andrea Cook is also a director
of Neighbourhood Energy Action. She is the non-executive Chairman
of Eaga.
109. So there are some links. In fact, NEA
established Eaga, is that correct?
(Mr Clough) Yes.
110. That is another significant link I
would have thought. In terms of membership of NEA, do they take
individual members or corporate members?
(Mr Clough) I believe they have both.
111. What percentage are corporate of their
membership?
(Mr Clough) I am sorry, I do not have that information.
I am not part of NEA.
112. You see paragraph 1.8 says that NEA
campaigns for warmer homes. If you are a company that deals with
insulation one might see the point of campaigning for warmer homes,
it can actually improve your business. It says that NEA has extensive
contacts with installers working in the scheme, over 90 per cent
of whom are NEA members.
(Mr Clough) Yes.
113. So an awful lot of your installers
are NEA members.
(Mr Clough) Yes.
114. And NEA set you up to run the scheme.
(Mr Clough) They set us up as an entirely independent
organisation.
115. Yes, I accept that, but there are interesting
connections nonetheless, are there not?
(Mr Clough) Yes.
116. You do know what percentage of your
installers are NEA members, do you?
(Mr Clough) No.
117. Do you ask them?
(Mr Clough) We ask them to notify us of any membership
of organisations whether they be trade or otherwise and we collect
that.
118. Can you tell us when you have checked
it out?
(Mr Clough) Yes[4].
119. Also, I do not know whether or not
you can find out from NEA for us what percentage of NEA members
are firms who are your installers. I would be interested to know
that.
(Mr Clough) I will certainly double check that[5].
4 Note by Witness: Our records show that 77
per cent of companies working in HEES are members of NEA. Back
5
Note: See Evidence, Appendix 1, p. 22 (PAC 221). Back
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