Memorandum submitted by the National Insulation
Association
BACKGROUND
This is a submission to the Environmental Audit
Committee's inquiry on the Pre-Budget Report 2005 from the National
Insulation Association.
The National Insulation Association is the trade
association for the fabric insulation industry, covering the major
suppliers and installers of cavity wall insulation, loft insulation,
draught proofing and flexible thermal linings.
SUBMISSION
The Government's Energy White Paper, published
in early 2003, set ambitious targets for the reduction of carbon
dioxide (CO2) emissions in the household sector by 2010—equivalent
to 20% of all current household emissions. Insulation- cavity
wall, loft and draught proofing—is expected to deliver about
40% of these savings, with cavity wall insulation predominant.
Only one third of all the households with cavity
walls have been insulated since the 1970s, so there is great potential.
Clearly, a step change in the demand for insulation measures
will be required if we are to meet the Government's Energy White
Paper commitment to insulate 4.5 million cavity walls in the existing
housing stock between 2005-10. With over 10 million cavity walls
uninsulated, there is plenty to do.
Retrofitting insulation to existing households
is a very different proposition to persuading consumers to purchase
the most energy efficient version of a product eg by changing
VAT rates to favour the energy efficient solution. Instead, we
need to create a demand for a product that is environmentally
and economically worthwhile, but which does not hold intrinsic
"must have" appeal to householders.
The insulation industry, in common with organisations
such as the Energy Saving Trust (EST), Green Alliance, and the
UK Business Council for Sustainable Development, believes that
some form of fiscal incentive is essential if owner occupiers
are to be sufficiently mobilised to invest in cavity wall and
loft insulation measures on the scale needed.
The incentive could be a rebate of Stamp Duty
or Council Tax, given on completion of specified energy efficiency
measures. Recent research on consumer attitudes to fiscal incentives
by EST has shown that such fiscal incentives would stimulate action
from those responsible for their properties and affected by the
incentive. Alternatively, the Government could take a regulatory
route by amending building regulations via various energy-related
Acts of Parliament.
A number of submissions on the need for fiscal
incentives for energy efficiency have been provided by a variety
of organisations in response to Defra's current review of the
Government's Climate Change programme. The insulation industry's
own view is that with the right scale of Stamp Duty (or Council
Tax) incentive, over 450,000 householders per annum would take
advantage of a rebate by installing improved energy efficiency
measures. This would go a long way towards meeting the Government's
energy saving targets for the household sector (at a time when
there are increasing concerns about fuel supply), and lead to
improved living conditions and smaller fuel bills for hundreds
of thousands of consumers.
In recent years, the Government has focused
firmly and acted decisively to address issues relating not only
to climate change but also fuel poverty. Home insulation is not
only beneficial for the environment, it can also play a major
part in helping to alleviate fuel poverty, and as such it is an
intrinsic element in the Government's and Ofgem's Energy Efficiency
Commitment (EEC) obligations for Energy Suppliers.
Additionally, it should not be forgotten that
the Government will benefit from additional taxes from increased
energy efficiency activity, eg corporation tax, NI employer and
employee contributions, income tax and VAT. It should also be
noted that, in general, energy efficiency installation can offer
a career to people with no starting formal qualifications and
that several industries (including heating and insulation) are
developing various training packages with the Learning and Skills
Council.
CONCLUSION
The insulation industry is keen to continue
to play its part, working with Government and other stakeholders,
to help ensure that the progress achieved to date is built-on
in the future. Energy efficiency provides a "win, win"
solution—a win for householders and a win for the environment.
Home insulation is key to that solution as the Government works
to 2010 and beyond—some form of financial incentive is essential
to ensure that the necessary investment happens.
January 2006
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