Examination of witnesses (Questions 60
- 79)
TUESDAY 13 JUNE 2000
LORD WHITTY,
MR LESLIE
PACKER, DR
DAVID VINCENT,
MRS HELEN
LIDDELL, MR
GRAHAM WHITE
and MS SARAH
EASTABROOK
60. Although we are getting cleaner we are not
necessarily getting less energy usage. That is one of the problems
that we have.
(Lord Whitty) Well, you are, because part of being
cleaner is—
61. But there is more traffic as well.
(Lord Whitty) You will get some more traffic. Clearly
in the urban areas with fairly intensive policies we may be able
to restrict the growth of traffic. It is unlikely that there will
be, in terms of inter-urban traffic, negative growth. I think
that is probably an understatement. We are therefore talking about
trying to change the mix of vehicles on the road, both lorries
and cars, so that they are cleaner in relation to all sorts of
emissions. That does have a direct carbon benefit because we are
talking about engine fuel efficiency.
62. That is transport. The other area that you
mentioned was buildings and the domestic front as well. Can you
say anything more about anything that you are doing with the Building
Regulations to change the way, not only for new construction but
also for refurbishment, that puts a much more energy efficient
emphasis within the Building Regulations process?
(Lord Whitty) The Building Regulations apply primarily
to new build or renovation, it does not relate to repairs. We
have been through a pretty long consultation on the Building Regulations.
63. Is there a good link with home renovation
grants there with the Building Regulations?
(Lord Whitty) Not a direct link in terms of the Building
Regulations because the Building Regulations, as such, relate
to new buildings, or effectively new, or relate to existing shells
being renovated. The renovation grants can themselves specify
the form of renovation for which grants might be made. In relation
to Part L of the Building Regulations I have had a fairly lengthy
consultation and my colleague, Nick Raynsford, is on the point
of announcing a full consultation with specific changes now being
proposed. In terms of new build and renovation, I think they will
begin to make their impact felt. Am I allowed to say that Nick
Raynsford's announcement on this will be on 15th June? We are
a few days off on that, but we will see that. The other side is
house purchase, which does involve existing buildings, where the
housing Green Paper indicated that we want to introduce a system
whereby not only does the vendor have to produce a survey themselves
to speed up and help the quality of choice and advice to the buyer,
but also, within that survey, has to have, very specifically,
fuel efficiency indicators and, coupled with that, suggest how
improvements can be made. We are piloting such a scheme in Bristol
now and we should have the results of that within a few months.
That should perhaps help not only to gear buyers to the fuel efficiency
of their housing in a similar way to that which they do when they
buy a refrigerator these days in terms of fuel efficiency, but
it will specifically spell out changes that will be made to encourage
repairs in a generally fuel efficient way.
64. Finally, on the whole issue of devolution,
which is something you touched on briefly, it is, of course, mentioned
in the report that it is quite difficult to pick out the different
contributions from the devolved administrations now; we have a
European bubble and a United Kingdom bubble. Are there discussions
at that level within the devolution of the other administrations?
Are you meeting any resistance, for example, on trying to meet
the target on renewables from areas that have large up-land areas
that might be covered with windmills and, therefore, people may
be saying to you, "We are not very keen on these targets
because we will have local difficulties with them"? In what
way are you progressing at that devolved level as well as the
UK level?
(Lord Whitty) Some of these issues, like the negotiation
on the bubble or taxation issues, are, of course, reserved. Others
are clearly devolved and there will be slight differences in the
approach between the various devolved administrations. Broadly
speaking we are moving in the same direction. There are marginal
differences, for example, on how we approach the HEES scheme in
Wales, but they move broadly in the same direction. As I mentioned
earlier, the Joint Committee that we run has the devolved Assemblies
on it in relation to poverty, so there are no policy clashes,
it is just that they are gearing some of the same measures, or
similar measures, in a slightly different way.
(Mrs Liddell) I think from the energy point of view
I can certainly confirm that. I met with my opposite number from
the Scottish Parliament two or three weeks ago to talk about renewable
energy, because there are certain issues, for example, relating
to off-shore wind—which is not as near to market as on-shore
wind—that we are both very interested in. Of course, one
area that I think all of us who are interested in environmental
matters in relation to energy share a desire to see the public
more engaged in the need, for example, to choose green energy
where an option for green energy exists. Together with my opposite
number from the Scottish Parliament we hope to do some joint visits
to highlight the importance of renewables not just to the Scottish
economy, but also to our overall environmental goals.
Mr Chaytor
65. Before we leave Climate Change I would like
to ask one very specific question that has not been touched on
so far and that is the fuel duty escalator and its role, or lack
of role, in the Climate Change Programme. If the fuel duty escalator
remains in a state of suspension, does it not follow inevitably
that there will be a significant increase in consumption? Does
it not send the wrong signals to people about the use of a private
car?
(Lord Whitty) The total cost of motoring is, of course,
an issue that we have to address. It is actually the price of
the fuel, not the taxation on the fuel, that is the issue. Over
the period up until we suspended the operation of the fuel duty
escalator for most of that period the real price of oil was falling
and therefore the tax was making up for that. Since that we have
had a significant fuel price rise in the system. So what actually
alters behaviour is the price that people pay for petrol at the
pumps. That is why we are keeping it continually under review.
If it appears that the fuel price goes down, it may well be that
we will then trigger a form of the fuel duty escalator again.
One of the important things of that discussion is that if we do
control it again and have a real increase in the fuel duty escalator
itself we have a degree of hypothecation back into traffic saving
transport measures, either on public transport, on new roads or
more control of road systems. We have a mechanism not only to
maintain price signals which will, at the margin, limit the use
of the car, but also a mechanism that recycles that into measures
which will themselves be energy saving.
Joan Walley
66. I would like to go back to the comment which
our DTI Minister just made in respect of public awareness and
the talks that you were having with your Scottish counterpart.
One of the things which has really hit me in the face when talking
about the whole issue of renewables has been the huge opportunities
for competitiveness in terms of new jobs that could be created
if we could overcome this distance from market of the emerging
renewable technologies. I understand that quite a lot of work
has been done on this, specifically in Scotland, and that in itself
that could be one way of getting across the public awareness agenda
simply because we can create, as has been the case in Denmark
and Germany, so many new jobs if only we could get round this
problem of ensuring the competitiveness that much quicker and
that much sooner of renewable technologies.
(Mrs Liddell) I think that is one of the reasons why
I am heartened by the extent to which some of the major companies
are becoming involved in renewable technologies, because they
are much better at marketing that than we are. We are amateurs
at this game compared with the professionals. I was pointing out
to one oil major just the other day that as I travel around Europe
and watch BBC World or Sky News I see items on renewables
by that company in other parts of Europe but I never see them
on British television. I think all of us need to work together
to try and get the green agenda higher up and also to make it
clear to people that they do have green options and they do have
options of choosing renewable energy. I know, for example, with
the decline in activity on-shore as a consequences of the maturity
of the United Kingdom continental shelf a number of the large
fabrication companies are looking at the opportunities that renewables
may bring along, and off-shore winds springs immediately to mind,
but there is still a way to go in terms of the research effort
that is required on that. I am optimistic, and I am not by nature
an optimist, that the industry is addressing the opportunities
that are there for them.
Chairman: You are a politician, you must
be an optimist, surely?
Mrs Brinton
67. Can I take us very, very briefly back to
the issue of the fuel duty escalator? I was sitting here and I
do not think I quite believe what I actually heard from Lord Whitty,
because certainly when the Chancellor announced the scrapping
of the fuel duty escalator I actually thought, and I think everybody
else thought—MPs from all parties and the general public,
many of whom have been very exercised against the fuel duty escalator—that
in fact that was it, dead and buried.
(Lord Whitty) That is not what the Chancellor said.
The Chancellor said that decisions will be taken on a year by
year basis and if we raise them over the rate of inflation that
money will be hypothecated back into transport purposes. So he
is clearly envisaging that there will be certain price situations
and fiscal situations where we would indeed use the fuel duty
over and above the rate of inflation. What has gone is the automatic
escalator which, in any case, was only going to run for another
18 months. That is what has gone.
68. Can we assume that any change will be open
and transparent consultation?
(Lord Whitty) Exactly the same level of consultation
and transparency as all fiscal decisions are taken.
Mrs Brinton: Thank you very much.
Christine Russell
69. I think both of you this morning have emphasised
in a number of points the need to have cross departmental working
when it comes to energy policy and energy efficiency programmes.
You will obviously know that in the Committee's report we actually
recommended a small dedicated unit to tackle energy efficiency
implications because of the spread across all the ministries.
In your response you actually said that the matter was under review.
Is it possible for one of you to give us an up-date this morning?
I believe you said that all the arrangements and programmes for
promoting energy efficiency were under review as part of the discussions
on the Climate Change Levy.
(Lord Whitty) Yes, they are under review in relation
to better Climate Change Programme, to which we will return following
this consultation in the autumn, and in relation to the fuel poverty
programme, which again we will be issuing the strategy on in the
autumn. There may be institutional aspects of that. In terms of
your specific proposal, it was not so much a dedicated unit partly
within one or other ministry or within the Cabinet office, it
was actually talking about the Sustainable Energy Agency. That
did not find favour amongst them.
Chairman
70. We actually rejected a sustainable agency
per se. What we said was that there was a need for inter-departmental
co-ordination because one thing we found when we were in Nottingham
and places like that was that very active local authorities and
group partnerships in the private sector and so forth were trying
to bring about energy efficiency schemes, but they said the paper
work, and the need to get lots of different bits of money from
different parts of the Government was so huge that many people
would simply not carry on, given the difficulty, and, therefore,
as a unit it was necessary to speed willing people through the
system.
(Mrs Liddell) You are right that this is an area that
does require a great deal of government focusing. I have to say
that I have not found any shortcuts from direct ministerial involvement.
Larry and I work, as I think you can see, very closely together,
but it is getting that to the end product as it interfaces with
the public or with industry that is important. I am not necessarily
convinced that setting up a special unit would fulfil the function
that you quite rightly wish to see achieved. I think there might
be a bit of a tendency to assume that everything can be shuffled
off into that unit. For example, we talked about the work that
I have to do within the Government in relation to ensuring that
fuels are available through the DETR for the cleaner car technology
initiatives that we are seeking to progress. So my anxiety of
having a specific unit is that it might end up as a corral that
lets everybody else off the hook rather than seeking to put in
place better structures right across the board, not just in this
area, but across government. I think we still have to get a much
more acceptable way of dealing with regulation, with bureaucracy,
with form filling and making sure that people have single routes
into government structures and energy efficiency. Obviously as
structures change and as work goes on new ways of delivering have
to be found. At the moment I am comfortable that my officials
liaise effectively with DETR officials, and I hope vice versa,
but the end result, in terms of the interface with the public,
is perhaps the area that requires greatest concentration.
(Lord Whitty) We are very anxious, for example, in
relation to those small firms and in relation to the households
that are supposedly being targeted under various programmes, that
when somebody is identified as potentially eligible for HEES the
person who transmits the information also makes them aware, and
are themselves aware, of other programmes which they might also
benefit from. Similarly, in relation to the small firms and energy
efficiency best practice and making sure that that is all in one
place and not have several different fancy names which have different
routes to achievement. We are aware of the problem and it would
be fair to say that we have both experienced the same amount of
feed back as you have from potential end users.
71. I am glad that you are aware of the problem,
because this is essentially about identifying the barriers which
customers, ie the local authorities, the public at large or the
private sector may find in utilising the schemes that you have.
I am glad you both feel that there are barriers and difficulties,
because we certainly got that impression from talking to people.
If that problem can be addressed we might make more rapid progress.
(Mrs Liddell) I think it is also true to say that
the industry itself has to take that into account. It is important
that the energy companies actually liaise with local authorities.
There have been some good initiatives that we have seen, whereby
meter readers can be trained to identify the signs of fuel poverty,
health visitors can keep us informed about which homes are not
adequately insulated, so it is not just a question of DETR and
DTI co-operating on a policy level, we need to flag these issues
up as a mainstream part of government thinking, not least in relation
to social exclusion.
Christine Russell
72. Can I ask Lord Whitty what the purpose of
the meeting in Nottingham with the local authority was that you
referred to in your opening words? Although it was before my time
on the Committee, when Members of the Committee went to Nottingham
they were very impressed by the energy efficiency partnerships
that they found there. Can you tell the Committee what the meeting
in October is going to be about, what attitude you have towards
these partnerships and whether you are activity seeking to develop
them further?
(Lord Whitty) The answer to your last question is
yes. We were impressed with Nottingham's own initiatives in this
area and it may be one of the reasons why we are holding it in
Nottingham, but this is to pull together the local authority leaders
and chief executives of all local authorities in England so that
we can get the focus on the totality of energy efficiency responsibilities
of local authorities for their own buildings and methods of operation,
for their advice systems to small businesses in particular, and
for their tenants and other householders who fall into fuel poverty
and could benefit from some of the schemes, and also that they
can learn from each other. This is primarily, in a sense, a local
authority meeting and we will need to ensure that we are there
listening to the experiences of local authorities, because I am
sure we do not at present know everything that has been undertaken
by the local authorities themselves and the kind of partnerships
that they have set up. Until I came into this job I was certainly
not aware of the sort of innovations that Nottingham had taken,
and I am sure they are repeated elsewhere. It is a question of
raising the average standard to the best, learning from each other
and getting a more cohesive message across between government
and local authorities. We have had quite a good response to that
from many local authorities and there are very keen offices in
that area, but there are other areas of the public sector to which
we would wish to extend this generalisation of best practice,
for example, hospitals, who are huge users of energy. I visited
one hospital in the West Midlands not long ago where the enthusiasm
of one particular guy had made huge savings in their energy bills
which were not repeated elsewhere, even within that health trust's
area of operation. I think the public sector, in terms of its
direct responsibilities, does have a lead function here as well.
Joan Walley
73. I cannot help but comment on that. I agree
with you that the public sector does have a responsibility, but
I do feel that the Government missed an opportunity when it issued
guidance in respect of health authorities. It could have included
very specific guidance on that so that we could have helped many
hospitals. I think that was an opportunity missed. If I can turn
to the Climate Change Levy, you mentioned in your opening comments
that we are at the stage where we have 10 agreements and 20 in
the process of being agreed. Give us an idea of when this is likely
to be completed and finalised.
(Lord Whitty) Let me just correct you. We have 10
memoranda of understanding. Those discussions are still going
on in terms of the final agreements.
74. When is that final agreement likely to be?
(Lord Whitty) It will take a few months yet to get
the first ones of them.
75. When was it originally envisaged that it
would commence from, and are we on target?
(Lord Whitty) In terms of the presumptions of the
Climate Change Programme we are still on target. We expected these
to be quite difficult and complex negotiations and we are, therefore,
negotiating with those sectors and there are different considerations
in each of them. It will take a bit of time to finalise all of
the agreements. The presumed target in the Climate Change Programme,
which we think is still achievable, is April next year. Hopefully
it will be done before then.
76. Can I refer to a little bit of disquiet
that some Members of the Committee are picking up from those who
are now engaged in these negotiations which relates to the Parliamentary
question which Mr Meacher answered on 17th May, which is the whole
issue of whether or not this now needs to be referred to Brussels
for compliance in respect of the state aid laws. Can you put the
issue straight for us on that, please, and the timing as well?
(Lord Whitty) There is an issue in relation to state
aid and we are in discussion with the European Commission on it.
We submitted the whole scheme and the outline proposals in February
and we have been discussing with the Director General since then.
Clearly the Commission needs to be assured that this is not a
state aid by another form to those high intensity energy sectors.
We think we have pretty good arguments to put to the European
Commission that this is desirable and not anti-competitive and,
therefore, should not fall foul of the EU general approach to
these issues. At the moment I am not able to assure you that we
have concluded those discussions. We have been reasonably encouraged
by the recent changes and we need to make sure that we reach an
adequate conclusion, because the state aid guidelines are currently
under review with a view to moving them to be more sensitive to
environmental objectives in any case. We believe that as we move
down the line these will become even more compatible with EU guidelines
on state aid and the kind of questions that were being raised
with us in the first place would not, therefore, be relevant.
However, we are not yet able to report success, but we are reasonably
confident.
77. Given that you just said that April 2001
was the date when you expected to have the agreements in place,
what is the worst scenario in terms of getting agreement from
Brussels in respect of this aspect of it? Bearing in mind that
the actual environmental aspect of it is up for reconsideration
any way, what is the worst scenario in terms of timetable?
(Lord Whitty) One can envisage unlikely worst scenarios,
but our intention is that the understanding with the Commission
is that their consultation and assessment process will be finished
by the end of this year and we will be fully on target for the
April 2001 position. The absolute worst scenario I will not spell
out.
78. What is the best one then?
(Lord Whitty) We believe we will not be in that situation
and our understanding of the views of other countries and of the
environmental competition people within the Commission is that
we should be able to reach a positive solution within that timescale.
79. In view of the report that our Committee
has done on energy efficiency and the difficulties that we have
had because of on-going issues which we refered to earlier, would
it be possible for our Committee to be kept up to date on whatever
basis?
(Lord Whitty) With the relationship with the Commission?.
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