Examination of Witnesses (Questions 321
- 339)
MONDAY 21 MAY 2007
MR PETER
LEHMANN AND
MR JOHN
CHESSHIRE
Q321 Chairman: Gentlemen, thank you
very much for coming to join us. We have before us the representatives
of the Fuel Poverty Advisory Group, Mr Peter Lehmann, their Chairman,
and Mr John Chesshire, their Vice Chair. Gentlemen, you are very
welcome indeed.
Mr Lehmann: Thank you.
Q322 Chairman: You have a rather
special role to play in terms of our inquiry in that you are already
in the business of giving advice to Government on the range of
responsibilities which your Committee has in terms of dealing
with fuel poverty. You may have overheard some of the previous
discussion we had about sanctions, in other words what happens
if Government does not hit its targets and if one takes the field
of fuel poverty, what sanctions do you think Government ought
to bear in the case of them not meeting their targets in your
specialist area?
Mr Lehmann: It is probably not
for us to say what sanctions Government ought to bear. I think
what we can say is that having a statutory target has been helpful,
it has made a difference, it has given more focus, more resources,
more drive but it has not on its own been enough because it is
not quite clear to us what the sanctions are and they do not seem
to be adequate to force the Government, in a difficult situation,
to meet those targets. It looks extremely unlikely now, although
this is not yet certain, that the Government will meet its interim
2010 target. The sanctions do not appear to be adequate to force
the Government to observe the statutory target; the target has
nevertheless been helpful. I think it is probably not for us to
say what the sanctions ought to be.
Q323 Chairman: In the case of fuel
poverty, do you think that what I call the court of public opinion
is sufficiently vociferous that if a target was missed the Government
would feel some political, practical pain?
Mr Lehmann: No question it would
feel some practical pain and because of that it has made the Government
much more proactive than it would have been, but that pain is
not great enough to get them to meet the target in, admittedly,
very difficult circumstances. It is highly unlikely it will meet
the 2010 target.
Mr Chesshire: Could I add, Chairman,
there is some wriggle room in the legislation and that is `as
far as reasonably practicable'. I would imagine it would not take
a great deal of craft for a Treasury official to say a 100% increase
in gas prices and an 80% increase in electricity prices over a
period of two years stretches the Government's ability to meet
a target.
Mr Lehmann: I am not sure they
would be very comfortable in relying on that. Again, you would
need to ask the lawyers but we think they have not done everything
that was reasonably practicable. We are not in any sense criticising
them but there is no question they could have done more: more
money, more resources, more of a variety of things.
Q324 Chairman: Am I right to get
the impression that your focus, if you like, is much more on the
advice that you give to Government rather than concentrating on
what happens if Government then does not implement the policies
we suggest?
Mr Lehmann: No, I think probably
not. We are much more proactive I think than people expected,
not only in giving advice but in busting a gut to try and make
sure that advice is met by going around Whitehall, going around
politicians, trying to see where the problems are and trying to
put the case forcefully for doing something. No, it is not our
job to say to Government, "Well, you are going to have a
Judicial Review" or "You should be sent to prison or
something if you don't meet those targets" that is not our
job. It is to give advice and try and make sure that the advice
is taken where possible.
Mr Chesshire: I think there is
one issue—I am not a lawyer, I am an economist, Chairman—where
one needs to appraise Government's commitment very carefully but
if one sets a statutory objective, which they did in the fuel
poverty strategy, one would expect a business plan to emerge,
as it were, of a kind, relevant for Government and relevant for
all the principal actors. There is the Warm Front Scheme, which
is a Government funded scheme, and there is the Energy Efficiency
Commitment, which is a duty imposed upon the utilities and, in
addition, there are other budgets, such as Decent Homes programme,
for example, to improve housing in local authorities operated
by CLG. One knows broadly what the pot of cash is and certainly
we, as FPAG, have been very forceful in seeking to identify what
resources are needed to meet the likely fuel poverty reduction
target. We have benefited greatly from interaction with Defra
and DTI officials and their models and we have identified quite
a significant sum of public expenditure, and we have not been
hesitant, as it were, in drawing attention of the Treasury and
other departmental ministers involved with the PSA in this field
to the sum of money likely to be needed on all central projections
to meet the target. That has never emerged from Government, other
than at our bidding.
Mr Lehmann: I think that is a
fair point in thinking about the climate change where we say statutory
targets are not quite enough. Certainly it would be helpful if
the Government had obligations to say how it is going to meet
the fuel poverty target and whether it is going to meet it and
how it is going to do it, that would be helpful, and what the
role of different departments will be in meeting it.
Q325 Mr Gray: Surely those are political
things and surely the Government doing what is right in regard
to fuel poverty or with regard to climate change is a matter for
the electorate who judge the Government at subsequent general
elections. You do not put that into law and require the Government
to do those things, you merely hope and pressurise the Government
to do it so that they then do the right thing, is that not reasonable?
Mr Lehmann: That is not for us
to say. There is a statutory target on fuel poverty. It is there
in the legislation, in the Warm Homes and Energy Conservation
Act. It is there, our job is to advise the Government how to meet
it. I would say it has been helpful, we would not have achieved
as much without that statutory target.
Q326 Chairman: Can we probe you a
little bit about your role. I was interested in the way you have
said "We have been proactive". You said "We've
been round to different departments almost drumming up the cash,
saying `Come on, let's have the resources to make the fuel poverty
targets reality'". The Bill, as it is currently drafted,
in terms of the Climate Change Committee is very strong on advice
and totally silent on anything else it ought to do. When you were
established did you have any statutory requirements other than
giving advice?
Mr Lehmann: No, we did not. We
took it upon ourselves and we have been encouraged, I should say,
to a degree but sometimes this is not comfortable for Government.
But, all credit to them, they have encouraged us to try and get
around and try and keep awareness of the issue, to engage. As
you know, the prime responsibility for fuel poverty lies with
the DTI and Defra but other departments are also involved. It
is particularly with other departments where we have been saying,
"There is this problem here; you need contribute." It
is not just money; it is sometimes other policies as well. Those
with responsibility for the policy, DTI and Defra, have been quite
keen that we have been supplementing their efforts with other
departments but we have also said to Defra and DTI, "You
are not doing enough" in some cases. We took it upon ourselves
to do that because we did not see any point in just giving advice
and disappearing into the ether and this approach has been encouraged.
Q327 Chairman: Have you come across
examples where the Government has set off in a policy direction
that is diametrically opposed to the one you think they ought
to be going in? Could you give us a for instance and what you
did about it?
Mr Lehmann: There are a number
of examples. It is more where we have thought something needed
to be done and they have not done it. The best example is the
problem of the poor paying more. Low income customers generally
pay more per unit for their gas and electricity than other customers.
That has got worse. Customers with prepayment meters now pay a
stunning £120 a year more than customers on direct debit,
on average, for their gas and electricity. We have said that something
has to be done about this. There are several possible solutions
that lie between different departments and agencies, Ofgem primarily,
the DTI, the Treasury, DWP. We have said this needs to be tackled
and really not very much has been done. There are some small signs
that things might be starting but not much.
Mr Chesshire: Another example
would be extension of the gas network. I do not mean to every
individual farmstead but certainly to well identified clusters
of population, say, of 500 or 1,000 people or so, which the Design
and Development Unit in the DTI reckons might well be cost effective
on environmental and on fuel poverty grounds, but insufficient
resources have been available from the Treasury. We have supported
the case that the Design and Development Unit has made but money
has not been forthcoming from the Treasury.
Mr Lehmann: It looks like there
might be a bit of progress, not from the Treasury but via Ofgem.
We have been banging our heads against a brick wall for a long
time. It looks like there is a chink of light now.
Q328 Mr Gray: It is obviously regrettable
from your standpoint and from the standpoint of the people you
represent. Surely that is the nature of government? Government
has to make difficult decisions between all sorts of competing
different pressures and sometimes one interest group or the other
will benefit from it. What we are talking about here with regard
to climate change is removing that political dimension of whether
or not one should do the right thing for global warming away from
a political decision and making it statutory, making it a governmental,
statutory requirement that they must achieve a 60% reduction by
whenever it is. The pressing question in your area of responsibility
is do you think that it would be possible to imagine something
similar being done with regard to putting something on the statute
book which would prevent the government from doing the wrong thing,
as it were?
Mr Lehmann: That is a good point.
It is there. This little Act did just that. It is a statutory
target.
Q329 Mr Gray: You were just saying
all these things you felt the Government was doing wrongly.
Mr Lehmann: Nevertheless, that
is the whole dilemma. They have a statutory target but they may
not meet it and they may not do the things needed. That is the
important lesson. On its own, a statutory target is helpful but
probably not enough.
Mr Chesshire: The reason we were
keen to submit evidence to you was that we think there are some
analogues. It is for you to decide quite how close they are. I
have jotted down the Fuel Poverty Advisory Group and the Climate
Change Committee. Both are non-departmental, public bodies. They
are likely to be paid. We are unfortunately not paid. Is there
a statutory target enshrined in legislation? Yes, for both cases.
Both fuel poverty and climate change are two of the four key objectives
of energy policy, the others being competition and security of
supply. They are given equal weight in the White Paper, the energy
review and so on. We have a PSA target for fuel poverty split
between the DTI and Defra and trickle down responsibilities elsewhere
across government so it is a joined up governmental approach.
There is an Interdepartmental Ministerial Group for fuel poverty
which draws in ministers across Whitehall, not just in Defra and
the DTI. We produce an annual report and so will the Committee.
Does the Government have to respond to it? Yes, it does. Do we
have a budget? No, we do not have a budget but we are able to
draw on Whitehall research resources and a number of members of
the Committee belong to charities or research organisations that
can fund research. In the Bill they are proposing a budget of
£500,000 for research by the Committee itself. There is a
small difference there. Are we appointed by ministers? The chair
and I were interviewed by ministers but, as you probably know
from our evidence, the member organisations of the Fuel Poverty
Advisory Group are appointed by Ministers and they can choose
the individual who represents them but normally it is at chief
executive officer level. Do we meet ministers informally and formally?
Yes, we do, both at dinners and away days or they come along to
the Committee. There is an issue of transparency, looking at the
proposals in the Bill. We are reasonably transparent. We have
a high profile. We do not publish our minutes on a website. I
am not quite sure what the Climate Change Committee is going to
do there but they do emphasise the need for transparency in that
area. I went down a whole check list and certainly in these two
parallel areas of energy policy objectives there are close parallels.
I would not want to over emphasise the fuel poverty level.
Q330 Mr Gray: All of those things
you describe, with the sole exception of the statutory target,
are things that are equal rather than, for example, the Local
Government Association. In other words, they are normal, governmental
decision making processes. The sole thing that you have is the
statutory obligation and the question is whether or not that is
a sensible or logical thing to do. Would it not be better to leave
it as a normal process of government and politics, to bring pressure
to bear on the government to do the thing that is right? To what
degree is the fact that you have a statutory obligation written
down of particular benefit? Surely all those other things you
describe—access to ministers and so on—are the things
that make a difference?
Mr Lehmann: No, I do not think
so. I am going to be very firm about that. There is no question
in our minds that the statutory target has made a significant
difference. Firstly, it has secured a great deal more resources
for the Warm Front Programme than would have been the case. There
is absolutely no doubt about that. We had to fight very hard.
We had to also say that quite a lot more money is being made by
the oil and gas companies offshore and the Chancellor might think
about taking some of that money back and putting it into fuel
poverty programmes. He did that. That would have been much harder
without the target. Ofgem issued some guidance that enabled companies
to introduce some tariffs for low income groups, not adequate
necessarily, but that again would not have happened without that
statutory target. The gas network extension proposals that are
now coming through via Ofgem would not have happened without that
statutory target. It looks as if there are going to be some more
steps taken—we do not know the details yet—for the
Department for Work and Pensions to share information on who might
be eligible under the fuel poverty programmes. All those things
come into conflict with some other government objectives or do
require resources. Having that statutory target has helped to
give an edge to the argument.
Q331 Chairman: Would you refresh
my memory? Who set your target?
Mr Lehmann: The Government set
it.
Q332 Chairman: Looking at the Bill,
the difference here is that the Climate Change Committee are supposed
to provide information to government about what the level of the
carbon budget should be. In other words, they are in the target
setting business which is rather different from yours.
Mr Lehmann: Absolutely. When there
have been issues about definitions of targets, we have said, "We
have done a bit on that but that is not our job. Here is the target.
We have to see it is met."
Mr Chesshire: I do not think the
difference is that great. The Government has set a target of a
60% carbon reduction by 2050. You are right. The Committee can
influence the glide path, as it were, and does have a role on
some of the later, intermediate dates.
Q333 Chairman: The reason why I fix
on that is that one of the areas that has become something of
a controversy is the nature of the budgetary period and the nature
of the target setting process within it. Over what period of time
does the target you have over fuel poverty go?
Mr Lehmann: There are two. The
final target that is in primary legislation is in 2016 but the
Government was obliged to set an interim one for 2010 which it
did and that is the one on which there has been all the focus
from 2004 to 2010, so a six year horizon. That was a good horizon
because it was far enough away for us to be able to influence
and change but near enough that people could see it coming.
Q334 Chairman: When did the period
start?
Mr Lehmann: About 2004/5.
Q335 Chairman: Effectively, you have
a five year period?
Mr Lehmann: It may be six.
Q336 Chairman: As monitors of progress
towards that target, are you satisfied that you have roughly speaking
a five year period, because one of the tasks of the Committee,
going back to this annual reporting process, is that yes, it has
to produce a progress report. That inevitably is going to be some
time after the end of the first year of the Committee, 2009, so
being realistic it will be some time into 2010 before a report
appears. A year—perhaps a year and a half—might have
elapsed in a process where you have to get somewhere in five years.
Therefore, how do you make any mid-course corrections? Have you
had enough information en route to be able not only to
monitor progress but also, if necessary, to be able to signal
a need for change in policy?
Mr Lehmann: The answer is yes.
The formal, detailed data comes out with a huge time lag but DTI
officials have been willing to apply rules of thumb and give us
an approximate estimate very quickly. There would be a difficulty
if you come to 2010 and you might not be quite sure for a year
or two. If you are nearly there but not quite, you might not be
quite sure whether you have met the target. The changes have been
quite dramatic. We have had enough to know what is going on and
to know that we are either on course or off course reasonably
quickly.
Q337 Mr Cox: I am having a hard time
understanding, if you will forgive me, what it is you are for.
Surely a committee like yours is really there to supply the political
will that this seems implicitly to concede is not in Government
already? If Government sets itself a statutory target, why on
earth is not the in-house, paid, professional civil servant setting
up his own team within the department specifically to give it
the priority that the Government has set it and driving it through
with the appropriate political will if it is a genuine policy
which it wants to see implemented? Why does it need a committee?
Mr Lehmann: We are a broad range
of external organisations with a considerable degree of expertise.
We have the energy companies; we have the fuel poverty NGOs; we
have consumer groups, Help the Aged. There is expertise there
and knowledge.
Q338 Mr Cox: The Government can always
draw in experience from relevant bodies, companies, institutions,
individuals. Why does it need to set up a statutory committee?
You see what I am trying to tease out here? What is at the bottom
of the need for this kind of incubus on government, namely some
advisory committee sitting on the outside? They do not pay you.
They are effectively exploiting your voluntary goodwill. Why not
simply establish a team inside the department: this is the government
policy. I want to see this implemented and delivered with genuine
political drive and conviction. Draw on a wide range of experience
but you people should be working inside the department and properly
paid, should you not?
Mr Lehmann: We are not exploited.
We do it because we are happy to do it. That is not a problem.
We have no brief for whether we are here or not. It does not really
matter very much to us. We think we have played a useful role.
We have mentioned some of the things that we have done. There
is some value in having a group of people with very different
views who get round a table regularly, get to know each other
and forge sometimes a common view that they can put to government.
That can help, with some practical, external knowledge.
Mr Chesshire: It is a fair point
to pose: do we need to be a non-departmental, public body? Could
there not be some informal, advisory group to Whitehall? One of
the benefits of the membership of the group, amongst other things,
is it does include all the principal delivery agents, all the
energy supply companies and the company that delivers Warm Front,
the big public expenditure programme. It also includes a large
number of social partners and the major charities in the field
and so on, so it is a combination of expertise. One of the difficulties
of dealing with fuel poverty—I suspect this to be true of
the Climate Change Committee as well—is it is very multidisciplinary
in character. There is not a single set of disciplines. You cannot
go to a Treasury person and say, "How would you do this?"
They look at it in a rather econometric way. There are clearly
other dimensions of technology, of social policy and so on which
need to be brought together. Those sometimes are very difficult
to harness within a single government department, in my experience
of Whitehall over about 30 years. You are right. Ultimately, the
added value of a non-departmental, public body over a departmental,
advisory committee is probably slender. Peter and I have experience
of sitting across a whole range of committees.
Mr Gray: It might not even be disadvantageous.
Geoffrey's point—an extremely good point—is that if
there is public good that will be done, a government department
should be doing that albeit there are all sorts of pressure groups
out here trying to make you do it. Is there a risk that, by setting
up an NDPB of the kind that you are and of the kind that the Climate
Change Committee will be, the government tell the populus that
they are doing something useful; they are using it to camouflage
the fact that they may not be? You have a statutory duty but in
answer to the Chairman a moment ago you admitted that the government
is directly against the things that you advise. Is there not a
risk that in setting up the Climate Change Committee or indeed
your own organisation it enables the government to escape from
the political reality of the fact that they are not doing the
thing as well as they might be?
Q339 Mr Cox: You know T S Eliot's
poem? The first thing to do is form the committees.
Mr Lehmann: No, because we make
life uncomfortable. When things are not going well we make it
very clear. Look at the press release that came along with our
annual report. We are staunchly independent.
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