Examination of Witnesses (Questions 120-139)
MR TREWIN
RESTORICK AND
MR SIMON
ROBERTS
1 NOVEMBER 2006
Q120 Mr Drew: Before I bring in Mr
Lepper, may I welcome Mr Roberts. I know you were slightly delayed.
It would be helpful to us if you would explain who your organisation
is and then I will ask David Lepper to ask a question.
Mr Roberts: My name is Simon Roberts.
I am Chief Executive of the Centre for Sustainable Energy. It
is a charity company limited by guarantee. It is based in Bristol,
as it has been since 1979 when it was originally formed. We have
got 34 staff and student placements and we work across a range
of issues delivering energy advice and projects directly to the
locality in the Bristol and Somerset area. We are also working
with other organisations around the country helping them apply
the understanding of how to engage people with issues around energy
saving and renewables. We do a lot of training of people, both
council members, local authorities and other community organisations,
to help stimulate their activity. We also undertake a lot of policy
work and research analysis. I have just come from Ofgem, where
we have recently been appointed as the external evaluator for
the energy demand reduction pilot, or Smart Metering pilot, that
they are just about to kick off. We have been evaluating 22 different
bids from different people about how to do that.
Q121 David Lepper: I will ask something
I was going to ask later on, but, in view of what Mr Restorick
has just said (and you will have heard it, Mr Roberts) about media
advertising campaigns run by the Government, do you feel they
are actually pointless or is it a question of refocusing the spending
on that kind of media campaign, or should the money, as you seemed
to be suggesting, be transferred to other ways of trying to change
people's behaviour?
Mr Restorick: I think we all know
how limited government resources are. It is a question of where
government puts its effort. From our perspective, government's
efforts, we feel, should be concentrated on making it easier for
people to do the right things. For example, there are 50 odd million
people in this country. Campaigns to promote them to turn their
televisions off rather than leave them on stand-by are fairly
hard work. There are probably about eight or nine manufacturers
of television sets. Government efforts could better be directed
to encouraging those television companies, or forcing those television
countries, not to have that wasteful facility there in the first
place. We would like to see a government effort in that direction,
but there is definitely a role. You cannot legislate on people's
lifestyles on all the aspects of where their lifestyles impact
upon climate change, you have to win their hearts and minds, and
I really do not think government media campaigns or even government
"Thou shalt do this or do that" will work in encouraging
people to change their behaviour. I am not aware of any successful
government behaviour change initiative which has not been based
on a fear: "If you do not put your seatbelts on this will
happen. If you do not do that, this will happen."
Q122 David Lepper: Can I ask if Mr
Roberts agrees with that?
Mr Roberts: I do. What tends to
happen is that they end up spending a small amount of money buying
rather cheap TV slots, which generally means not a lot of people
see them but at least they can turn up on a reel for the minister
to look at. I think there is a sense of wanting to be seen to
be doing something rather than actually doing something which
is controlled; thoughtful interventions to stimulate a change
in people's behaviours and attitudes. I think there is an assumption
that you achieve that through advertising, and so they put some
money into in, and then very little assessment of whether that
has actually been achieved from the advertising that has been
done, which is what Trewin was saying as I was coming in. In relation
to that as well, bearing in mind how little they actually spend,
the likelihood of it really having an impact is very limited and
the messages they tend to put across are ill-thought through,
I think would be the best way to describe them. Take the latest
one that is coming out about "Save your 20%": for most
adults in this country the idea of percentages sends them into
a cold shiver, because they remember them from school, they cannot
quite work out what it was and most people do not have a very
good sense of what 20% is, so there is an immediate turn-off effect
in relation to that, and I do not think there has been enough
thought about what you are trying to tap into and how you stimulate
change in behaviour and attitude. As Trewin said, there is a lot
of evidence around that working through communities with the grain
of people's lives, with existing communication structures that
they trust and believe in rather than waiting to come up on television.
Most people these days, with 38 channels, or whatever it is, to
choose from, are very adept at avoiding advertising and particularly
adept at avoiding government advertising.
Q123 Mr Drew: Mr Roberts, you have
just come from Ofgem, as you say. In your critique, you were not
really that well disposed towards some aspects of the Government's
approach to this area, particularly what you see as an obsession
with the gas and electricity industries. Would you like to just
explain why you think the Government is wrong in this particular
approach that it takes and what you would prefer to see instead?
Mr Roberts: I do not think it
is a problem having an obsession with the gas and electricity
industry. Maybe what they are obsessing about in the gas and electricity
industry is the way they have structured, for example, the role
of the regulator, where they have introduced a sustainable development
duty. They have introduced a need to protect the interests of
consumers but actually have not defined what those interests are.
If you ask most consumers, they would have a significant interest
in the protection of the environment, in the provision of affordable
warmth for the population, and so forth. I do not think it is
a problem that they are looking at the electricity and gas market.
I think what we have been saying in our evidence is that the focus
on energy supply only captures a very small aspect of what it
is that creates energy demand and creates carbon emissions in
this country. You have got the built infrastructure, the appliances
we are all using and the behaviour of the people who are using
them to factor in as well. Yet, we have got a regulatory structure
and a governmental, departmental structure which tends to focus
very much on the regulation of markets for electricity and gas.
And, as anyone sitting in front of you will say, it is the old
adage: people do not want electricity and gas, they want the services
that can be provided by feeding them through those very appliances
and heating systems and built infrastructure. What I would say
in relation to the regulatory focus, it historically, and I think
still, has a tendency to focus on consumer interests as defined
by the price they pay and as defined by the ease with which they
can switch supplier, and I think those are minor concerns, the
second in particular being a relatively minor concern for most
households because half of them have not switched at all, and
the first of which is a concern but there is only a limited amount
of impact that the regulator seems to be able to have over that
anyway. I think giving them a much wider brief, defining sustainable
development more clearly for them, defining consumer interests
in relation to sustainable development, what it means to protect
the future consumer's interest, for example, to include very much
more strongly a push on reducing carbon emissions, for example,
would make a lot of sense. I do not think it is new legislation,
I just think within the environmental and social guidance they
[the Government] could provide much clearer guidance of what they
mean by "consumer interests". It is the Government's
role to do that, I think, not necessarily the regulators.
Q124 Mr Drew: Clarify in my mind
at least, are you seeking use of market-based solutions but, obviously,
looking across the terrain believing that government is, as you
say, too interested in the regulatory process with gas and electricity,
or do you see a role for direct government intervention in terms
of at least some rationing of those resources.
Mr Roberts: I do not think there
is a market in this country that is not regulated in some way
by government. It is just a question of where you decide to draw
the ring round it. Market mechanisms have their role, but I think
there is too little attention to the potential to regulate inefficient
appliances and wasteful appliances out of the market. We spent
a lot of time regulating dangerous items out of the market. I
cannot buy a television without a plug on it, even though I know
how to wire a plug, but I can buy one which has a stand-by consumption
which is 40% of its on-consumption. It seems to me that the fact
that you have to leave it to the market in one case but we regulate
very carefully on heath and safety in another is something which
needs to change. If you start to look at the latest findings in
relation to climate change, it is probably the most serious health
and safety issue we have got facing us and it would be nice to
see some of the attention that has gone into regulating dangerous
products out of the market in other fields to come into the appliance
market and really force out things. We are about to introduce
a ban on smoking in pubs. More or less every pub in the country,
I suspect, is about to buy a whole series of patio heaters to
heat the outside so that smokers can carry on smoking outside.
We should be acting now; otherwise something which has a very
positive public health benefit will end up with an unintended,
potentially quite negative environmental benefit. We have a market
in electricity and gas, so we `leave it to the market' without
actually recognising all these other tools and levers that Government
has got. I think that was the Chief Executive of the National
Consumer Council who said of climate change that this is a significant
problem, and we should throw the kitchen sink at it and use every
single policy tool and lever we have got. In some cases you regulate,
you provide a market mechanism within that regulation and you
ban the most inefficient products in the first place.
Q125 Mrs Moon: How you do all of
this without impacting on those who are the most vulnerable is
one of the things that concerns me. Those who are buying a new
television set, if you had your mechanism that stopped it having
a stand-by, you could get to those, but the majority of people
would still have their television set with a stand-by capacity,
and you have to reach them too, you have to get across to them.
I know when I talk to school kids and I suggest that one of the
things they can do is, the next time they need to pop into town
to do something, they can ask mum and dad not to take them in
the car, they react with absolute horror. One of the things that
I think Global Action Plan has suggested is that we use some of
the major incidents that happen, some of the major droughts and
storms and hurricane weather and floods, whatever, to get the
message across. Equally, others are saying, "Hang on, that
is alarmist and it leaves people feeling disempowered. In the
face of flood, what does my turning the light off mean? In the
face of a drought, what is the point?" What evidence is there
for your argument that the alarmist approach will actually get
across to people? I remember, I am old enough to remember sadly,
the AIDS advertising. Do you remember the big black monolith that
was going to fall on you if you did not use a condom? It worked
for a very short period and then it went out of people's heads.
What way can we do it?
Mr Restorick: It is probably the
way our evidence is written, but we were trying to suggest the
opposite. I am very concerned about the way the whole debate on
climate change is being framed at the moment. We have seen unprecedented
media coverage, the majority of which shows you melting ice-caps
and disaster all around. For the average person, that just overwhelms
them. The production of the Stern Report was surrounded by a plethora
of new stories about green taxes. So, for the average punter out
there, on the one hand they are seeing world disaster and on the
other hand they are seeing, "And the way we get out of it
is we are going to charge you taxes for things we are not taxing
you at the moment"—two messages which are going to
put everybody off. If you are talking about any sort of process
to get people engaged, that is the total opposite. What we were
trying to say, though, is that those major disasters such as flooding
and drought, et cetera, are in the news all the time and actually
what you need to do is to give people some hope and a route from
seeing that happen through to something practical and positive.
What we were trying to suggest is that if the Government, for
example, were to say, "We have hundreds of thousands of employees.
We are going to run behaviour change initiatives within our government
departments. We are going to insist as part of curriculum activities
that schools have a process of engaging with their students in
change", so that those structures are there, so that when
there is a disaster or when there is a problem, you can say, "This
is why you should be getting involved in your local community
initiative", or, "This is why in your Women's Institute
group you should be addressing these issues. These are the things
you can do and here is the route to help you do that", so
that people do not feel disempowered and turned off from all those
things that you mention. My fear at the moment is that people
increasingly are going to be disengaged. We were saying in our
evidence that you need to be aware that that is what is happening
and think about ways that you can break down that disconnect between
global problems and what you can do as a person.
Q126 Mrs Moon: Yet, at the same time,
the minute government suggests it might do something like that
(and I think of the example of the story that went out that there
were going to be additional taxes depending on how much rubbish
you had in your bin), you then get the horror stories, you get
the allegations of "nanny state" and you get, "It
is all a con anyway." How do we get that balance? Last night
a colleague was telling me of a primary school in her constituency
where the pupils were desperate to recycle paper in the school
and also the plastic drinks bottles that they have on their desks,
but the local authority will not collect them, they will not recycle
them. I have got publicans in my constituency who are desperate
to recycle their bottles from their pubs, but there is a charge
from the local authority to recycle their bottles, whereas, as
a council taxpayer, I get mine taken away for free. They also
pay council tax, but they are expected to pay to have their bottles
taken away. It is that joined up thinking that we seem to be unable
to reach. How can you help us get there?
Mr Restorick: I think there are
two elements to that question. The first one is the "nanny
state, Government interfering in my life" question. I would
answer that by putting an alternative approach to you. Say there
is this global disaster and the Government, instead of spending
10 million pounds on X advertising campaign, has actually said
to, say, the Women's Institute groups who we are working with
at the moment, "There is £10,000 for you to invest in
your groups to address these issues." So, the advertising
campaign says, "If you are a member of the Women's Institute,
use this money to create a group locally to address that issue
positively." That is the way that government can help people
to create change. In terms of your second issue, that is the question
about what is government's role in ensuring that they make it
as easy as possible for people to do the right things, you picked
up the issue of schools. The legislation on schools is ridiculous
in that some local authorities treat schools as businesses, others
treat them as households. That is one small example. I could list
about 60 or 70 examples where there are anomalies in the way that
policy has been set out which actually makes it very, very difficult
for people to do the right things, and, when you make it difficult
for people to do the right things, they eventually give up.
Mrs Moon: Chairman, would you authorise
us to have sight of some of those 60 or 70 examples?
Q127 Mr Drew: It would be very useful
to see that. In passing, I went to an event last night and was
talking to a representative of the waste industry, and this was
a gentleman who is French but who works both in France and in
this country. Madeleine was there as well. He made the observation
that in France he knows what will be collected, wherever he is,
which plastics are recyclable. In this country, wherever he goes,
there is a different level of consistency, sometimes it is collected
sometimes it is not, sometimes this is collected sometimes not.
Why is that?
Mr Restorick: Exactly.
Q128 Mr Drew: You say it is the case,
is it the British psyche?
Mr Restorick: No, it is in the
way that different local authorities have decided to introduce
facilities in the area. Some have been doing this for years and
years, have incredibly advanced systems, have good deals with
their waste contractors, have excellent systems in place. Others
are Johnny come Latelys and they are scrabbling around. It is
not just that there are differences between different local authorities,
but they have different legislation for homes and schools and
businesses, so even in one place you do not know what you should
be putting into what container. There is inconsistency even within
a locality, but it is the way that the responsibility for that
has been passed down totally to the local authorities, and each
local authority has put different energies and different interpretations
into what they think should be happening.
Mr Roberts: Can I comment on this
point about how we get the message across. I think we are in a
very difficult situation. I think there has been a failure so
far to find the right formulation of the way to express this issue
to people so they can understand what it is we are trying to deal
with. We have been starting to get to it in the sense of an increasing
emphasis from government on the need for everyone to act, a sense
of collective endeavour. This has been increasing though it tends
to be talked to in terms of every individual must act rather than
communities must act together and thinking about ways in which
you can stimulate that, such as the initiative we run called Community
Action for Energy. That is on the one side. But I also have a
sense that in order to do that you have got to frame it in a certain
way rather than it feeling like we are all on the Titanic, which
is how it presents. As Trewin was mentioning earlier, the kind
of doom and gloom mongers (someone described them recently as
the climate pornographers), the kind of awful picture we are going
to have of this world that is not worth living in. The danger
of that is, if you think you are on the Titanic, you have got
two options: go to the life rafts or go to the bar, and an awful
lot of people would choose to go to the bar because you might
as well enjoy it while you can because, it does not matter what
we do, there are not enough life rafts anyway. That is how a lot
of that image comes across. I think it would be time well spent
to think about how to formulate the importance and value of collective
action, because if individuals are asked whether their actions
make any difference, they say, "No." They are actually
right; an individual's action makes almost no difference at all.
It is only when it is combined with others—which is better
when it is within a community setting because then they understand
other people are doing it—that it does make any difference.
So, people are right to think that changing their light bulb to
a compact florescent will not stop Bangladesh from getting inundated—that
is a correct decision—but if everyone was doing it, it starts
to have an effect. On the one side we need to get across how that
collective endeavour makes a contribution to a global problem,
but the other side you get is, "But we cannot act unless
everyone acts. We have got to have China and India coming on board",
and that is one of the main spin problems I had with the Stern
Report on Monday. Whilst it is a fantastic bit of work, it also
carried a symbol, "We have all got to be acting", which
immediately undermined any sense it is worth us doing anything
in the meantime. I think we have got to find a formulation which
allows us to get the sense of why it is important for the UK to
act, why within that the UK needs individuals acting collectively
and everyone taking their responsibility from regional government,
local government down to individuals and communities, and why
it is important for the UK to act within a global setting where
we have got to set the pace for everyone else to come along and
where potentially we can gain some benefit from doing that by
being in the lead. At the moment it is bit all over the place
and, depending on whose report comes out, it goes one way or the
other. The politicians, the leadership, which we fail to see quite
often because people flip as soon as they get some negative publicity
about doing this, that or the other, they go, "Well, when
we said that we did not think we would. We would not ban patio
heaters. Why would we want to do that?" You need to see a
bit of leadership and see past the Daily Mail headlines into something
which is actually about providing real people with some guidance
and leadership in how they need to be taking their lives forward
in what is going to be a very different world. I was talking to
someone the other day after the Stern Report came out. In effect,
we are in a situation here where the burglar is already in the
house. The choice we have got is whether they just nick the TV
or wreck the whole place. That is the kind of scale of choice
we have got now. We have got problems already. That image alone
starts to make you think, "We should get the burglar out
of the house", or, "We cannot do anything about it,
we should just give up." We have got to find a formulation
with government, other agencies like Global Action Plan, like
CSE and others, spending a bit of time thinking about how you
get that across, how you formulate it, how you spin the words
and make the stories work as each report comes out, each finding
comes out, so that it reinforces that sense of collective endeavour,
reinforces the need for UK leadership for real reasons rather
than just for political, vanity reasons is all going to be important.
I do not think we have got there yet and I think government would
do well to spend some time thinking that through and standing
a little aside from their own egos and views in relation to this
to try and come up with a formulation which sustains, irrespective
of who is there, who is making the speech, who is carrying the
message, because it is something that goes beyond individual politicians
or individual parties.
Q129 Sir Peter Soulsby: I think that
has been very interesting in terms of discussion, given what the
messages are and the impact that they have. Can I ask you about
some of the measures that might be necessary to make some of the
really big changes in people's behaviour, to really get people
prepared to abandon the car and use public transport or to invest
in microgeneration in their property or make some other big-scale
investment in energy saving in their property. What is needed
in terms of government action or government policy change in order
to bring about those big changes? Is it predominantly changes
in the tax regime, public standards, bans? What is needed in order
to bring about those big changes?
Mr Roberts: I come back to my
throwing the kitchen sink at it. I am not sure it is big changes,
I think it is an awful lot of small changes, and that is part
of the problem that we have. Actually seeing individual things
going on, the little bits of change, it is not a question of not
ever driving your car again, it might be a question of taking
30%, 40% fewer trips by car in a week, or something like that,
and there are a number of schemes around, the kind of work that
Trewin's organisation does, the kind of work we have been doing
as well, where you actually work with people, engage with community
organisations and so forth, to get them to set their own goals
for what they are going to achieve and work with each other to
see how they can learn from each other, gain from each other's
experience and take forward different things, but also to give
people a range of choices. We might talk about vulnerable rural
households, for example, where reliance on a car is very different
from what it might be in an urban setting. You have to tailor
it, which means that you have to get it down to the local community
level. But I do think we need something where the Government sees
its responsibility and acts upon it to provide for taking action
to be as straightforward as possible. Asking people to make choices
in showrooms about how energy-efficient the appliances they are
going to buy are seems to be a rather wasteful way to do it when
there are two of us saying you can get the manufacturers to do
it in the factory. You have got six energy suppliers who have
already transformed the energy insulation market in this country
through the Energy Efficiency Commitment, but we have a government
that seems rather feeble in terms of the kind of targets it is
setting in relation to the Energy Efficiency Commitment such that
60% of the second round of the Energy Efficiency Commitment, which
was going to be a three-year programme, was achieved in the first
year. So, somewhere they got the numbers wrong in terms of how
far you could push it, how much you could do. You have got to
put in place a whole range of different areas to make it as easy
as possible for people to take this action. But I think that when
it comes down to it, unless you, in effect, engage those people
with the grain of their lives, through schools, through community
organisations, through the places where they are already having
conversations with each other, then you are not going to get those
kinds of changes, and you need to have resource going into stimulating
that kind of activity, soft resources I am going to call it, people
actually going out and having those conversations, kicking those
conversations off.
Mr Restorick: From our perspective
people are massively confused. They know that their lifestyle
has some impact on carbon emissions and they know that they should
be trying to reduce those carbon emissions, but where do they
put their emphasis? You see stories about wind turbines, stories
about solar panels, and people are baffled and there is a plethora
of government agencies out there offering advice, there is a plethora
of local authorities, there is a plethora of NGOs offering advice.
Is there any consistency? No. What we have found is that when
you go into a household and do a full carbon audit on the household
and you say to the household, "Your household produces eight
tonnes of carbon, you produce three tonnes through your heating
and these are the four things you could do to cut your heating.
If you invested in this renewable technology, which is the right
one for your area, it would cost you this much and you would get
the money back at this point", if people had that simple,
tailored advice, one piece of trusted, audited information on
their homes, then they are likely to take action. We have done
these audits for journalists all over the place and they are shocked
when they find out. To give one example, we went to one home and
they had energy efficient light bulbs everywhere. They thought
they were the greenest house in the country, I think. For some
bizarre reason, they left the immersion heater on all the time
because they thought it used more energy than if they turned it
on and off. Actually they were using more carbon than a typical
household, but they thought they were doing the right thing. They
had no idea at all, and it was only when we went in and said,
"We are going to audit your carbon and go through your lifestyle
choices", that they actually clicked. All they had to do
was switch one switch and then they did become an incredibly green
house. Legislation, government advertising, whatever, would not
have got that piece of information across to those people.
Q130 Sir Peter Soulsby: That is fascinating,
because I am sure that description of people's confusion is pretty
accurate. What can the Government do to bring some more clarity
into this and to make it easier for people to understand what
really works and what really is worth doing?
Mr Roberts: To start off they
could fund the provision of advice better. We scrabble around
for funding for our energy advice service. We get some of it from
the Energy Saving Trust, we get some of it from some local authorities,
we piece together a mosaic of funding for other schemes to operate
in the locality, but none of it pays to develop the kind of relationship
you need to have with the householder to give them some information,
give them a bit of advice, maybe visit their home if they need
it, but then follow it up. It is all a kind of one-night-stand
type of activity at the moment. You need to develop long-term
relationships to get these things working because you are talking
about changing people's habits, not simply making them do one
thing and then forget about it again. I think there is a major
issue around the level of funding being provided and the expectation
created through those funding streams of what the funding is for,
which is effectively to give some advice out and let it go. As
we said in our evidence, the fact that as yet we do not have a
robust set of evidence carefully researched, robust academic evidence
of the impact of that kind of soft activity on carbon emissions,
means that the officials find it much harder to justify funding
for it compared with something hard. We have seen the Low Carbon
Buildings Programme, a grant programme for grants for micro-renewables
in people's homes and community buildings. It is entirely capital
grant, there is no spend for advice to go alongside it, and yet
most of those people will be doing things which are probably not
most suitable for them and where they would actually benefit significantly
from having someone out there in their communities or working
with their communities to stimulate better understanding and potentially
organise more community based initiatives so that you get costs
down, share experience, build supplier bases on a more localised
basis and make sure you have got high quality installations and
high quality utilisation of those installations once they are.
At the moment we focus only on giving grants out, or measly funding
for the provision of advice and the soft community initiative
engagement type of activities, which, I think, when it comes to
it, is actually where most of this stuff will get driven from.
Mr Restorick: Can I add two quick
things on that. The first thing is it is not necessarily about
more money. If you look at the whole plethora of advice available
to households, you have got things like the WRAP scheme where
local authorities are bidding to have door knockers go and knock
on doors and talk to households about their waste. If you talk
to the water companies, a lot of the water companies are investing
in people to go out and talk about using water better. The poor
householder is getting four knocks on the door from different
agencies saying, "Have you thought about this, have you thought
about that." They must be completely confused. Why can we
not just pool all that resource and say, "Here is somebody
who can talk to you about how you can make your home more comfortable,
do less damage to the environment"? It may well be that waste
is a minor part of their issue and it could be energy that is
really important to them, rather than these different agencies.
Just to back up Simon's point about the fact that there is a total
lack of evidence to support this, that is completely true in this
country.
Q131 Sir Peter Soulsby: I wonder
about the role of utilities here and whether you are able to suggest
whether there are ways in which regulations can be designed to
encourage energy services rather than energy supply. Is there
something specific there that the Government can do?
Mr Roberts: I think the Energy
Efficiency Commitment is having an interesting effect on energy
suppliers. I think it could be tightened up a lot and pushed a
lot harder. I think the Holy Grail, as I described it recently,
of energy services is something else. The issue is how you get
households to think about the whole life cost of their energy
use and the energy service they want, and I am not sure that one
can move very fast from a point where, effectively, you have got
energy companies selling a commodity to a point where they are
genuine energy services companies. I think there are an awful
lot of steps in between, and I think the next stage will be to
give the Energy Efficiency Commitment a significant ratchet up
so that they have to start thinking about how their business model
works in a world where demand is starting to reduce and, rather
than tell them that is what they have got to do, create a situation
where that is what is going on by simply pushing harder and harder
on the number of energy efficiency measures they have got to install.
Then they will start to be looking much more carefully, as one
or two of them already are, at how their business starts to look.
Maybe they should be starting to make more profit out of the energy
efficiency activity to make up for the profit they are losing
on the reduced sales, but at the moment we have not got there
yet. I think we have seen a couple of times with the Energy Efficiency
Commitment, "protest" would be strong a word, but the
bleating of the energy supply companies, and "it is all very
difficult getting people to take this stuff up—we really
should not have too high targets"—and when it comes
to it they find it incredibly easy to meet their targets. They
cut programmes at one week's notice, we found in the Avon area,
simply because they have already made targets and do not need
to carry them on. And that contrast in what they are saying on
the one hand and what seems to be going on in practice on the
other needs to be addressed by basically tightening the ratchet
much harder and starting to change the world in which they operate.
Q132 Lynne Jones: My point is on
the energy services model too, because in reality, if people are
going to greatly improve the energy efficiency of their home or
the use of low carbon fuels, then it will require quite substantial
investment, and, unless that money is going to come from the Government,
we need to find a mechanism that will enable people to afford
that investment. Of course, the energy services model would allow
that to take place because people will be charged, basically,
on their fuel bill. They will be charged a higher price for their
fuel as a means of paying off in instalments the energy efficiency
installations. That is what they are doing in California, both
in terms of, say, photovoltaic installation on a street by street
basis in low-income household areas and also in businesses. Is
that a model we could adopt here? We heard last week from the
Energy Saving Trust that, because of our competitive supply market,
it is not feasible. Is it something we should abandon, or should
we try and go down that route, which would mean that customers
would be tied into a particular supplier until, in effect, they
had paid off the cost of their installations?
Mr Roberts: I think the neat little
financial model that justifies the ESCO approach is not quite
as tidy in practice. You have to factor in the cost of the capital
to the investor, i.e. the energy supply company, and then suddenly
the costs that they need to pass on maybe do not make it look
quite so interesting to householders. You can overstate the amount
of money that people need to spend to get the first 30 to 40%
savings from their home. Cavity wall insulation—most people
would not bother borrowing the money, because it is £200,
£250 quid. They would pay for it on a credit card. They can
get it from their energy supplier.
Q133 Lynne Jones: A lot of houses
do not have cavity wall insulation?
Mr Roberts: In the South West,
for example, we have done some analysis for the Regional Assembly
and Government Office of the English House Condition Survey data
for the South West. Forty-three per cent of the houses in the
South West, which is an area with a lot of solid walls and rural
properties, 43% of the properties in the South West households
have cavities that have not been filled. That is getting on for
half of the properties have cavities that could be filled. So,
yes, there is a cohort of housing which is solid wall, difficult
to deal with and where the focus may be on the heating system,
the appliances and the lighting system, which is increasing the
bulk of what people are spending their time on and buying and
where the demand increase is coming from, but we should be getting
on and doing those simple things. I do not believe you need an
ESCO model to do that. The fact we have a competitive market,
you would have thought, would mean that those companies would
be very interested in it if they felt there was actually a market
for it, and the fact that they have not, I think, should tell
us something. I do not think most households would buy it. I do
not have a vehicle maintenance service contract. I have a car
and I have to take it to a garage when I want it fixed, no-one
provides me with mobility services, and I think we take the same
approach to energy services. For us, as energy people, if we think
about it, we might put it all in the same part of our brain. For
most people they have a house, they have the DIY they do on the
house and then they have a builder who comes and does it properly.
They have appliances that they buy in B&Q, in Tesco or in
Comet or wherever. They then have little things—disposable
light bulbs. They are all separate aspects. What we are saying
to people is we are going to treat all those as one part, the
same part of your brain, and all your behaviour and the way you
manage your heating system, we are going to say you should give
all that over to one company. It feels to me like it is an idea
too far, bearing in mind where we are at the moment. I can see
in 30 years' time that might be how the whole thing operates,
but at the moment we cannot even get it going in business where
there are not those kinds of constraints, so I think there is
a basic thing about whether that is the right model. I think we
should be looking much more at how you stimulate better understanding
amongst householders, make them more aware of the fact that energy
suppliers are offering you cavity wall insulation at a discounted
rate, not because there is a catch, but because they have been
told by government to do it, which most people do not understand.
They think, "Why on earth am I being offered this at £150,
I thought it cost £1,500 and these energy suppliers are offering
it to me, so they are cutting their nose to spite their face—there
must be a catch!" They need to understand that better and
they need better advice and guidance on an on-going basis, which,
as Trewin has been saying, is best provided through the kind of
relationships they have already got in their communities through
organisations working at the ground level building up that support
and understanding there. I do not think we need to hold on to
this idea that it will only work if we can get ESCOs working.
Q134 Lynne Jones: It is not just
advice and guidance. Most people want somebody to do it for them.
They do not want the hassle of working out what they should get,
what is the best buy and who is going to do it for them. That
end of it also needs to be in the package.
Mr Roberts: I think you can do
it. Here is an insulation contractor who is well tried and tested,
and the energy suppliers in a way have that potential to provide
that service and actually have done that in the way they have
managed EEC. Their focus on customer service has, I think, really
brought up the quality of customer service within the insulation
market over the last five years or so as the Energy Efficiency
Commitment has moved through, because they are bothered, and they
are going to get the complaints, and insulation is the kind of
"hairy arsed" end of the building trade. It is not high-skilled
work. It is not turning up every day, you are only going in for
a morning maybe, so your concern about that consumer is very limited.
Most of the work is being done on grants, so the consumer is not
necessarily even paying for it. What the insulation industry has
had to do as a result of EEC is up its standards of customer care,
so you have got something now which does feel like that. It is
just that most people do not understand why the energy suppliers
are offering it to them and they do not trust them as purveyors
of energy saving. That is very simple to address. Let us just
have clear information provided by the suppliers and the Government
that the energy suppliers have targets to meet in terms of insulation,
that is why they are offering it to you, and that is why you can
trust them. They will make sure, because of their need to maintain
that customer relationship, that you will get a decent job done.
Mr Drew: I am going to ask Roger Williams
to ask a bit more about independent advice.
Q135 Mr Williams: We are talking
about, either by regulation or by encouragement, limiting people's,
whether individuals or families, right to order their lives in
the way they want to because we believe that the situation we
face is so serious. You have been talking about energy supplies.
The real problem, though, is that the customers do not seem to
have trust in energy suppliers. They might have trust in NGOs
and charities and various organisations, and yet actually suppliers
are the people who engage most often with these individuals and
families either through their bill or through other things. What
can be done to build up trust, and trust is what is needed, between
the consumer and the energy supplier?
Mr Restorick: I think it is about
transparency about why they are doing what they are doing. I should
think most people in the UK have got no idea about the Energy
Efficiency Commitment, they have got no idea there is this requirement
of energy companies to do what they are doing, and, therefore,
as Simon said, they mistrust the message. I think there is a real
opportunity. I thought there was an interesting statement in the
Energy White Paper about the idea of having carbon trading between
the utilities. That to me seems a fantastic way to use the competitive
market that we have got to gradually ratchet up the cost of carbon
and limit the amount of carbon that the companies can have per
customer, and then you actually get trading between the energy
companies, so it is actually in their real interests to push efficiency
and it becomes a competitive advantage for them to do it. That
to me seems to be using the market mechanism in a really constructive
way to get the message across, and, if you link that market driver
with a transparency so people know that if electricity companies
are selling energy efficiency it is because they are trying make
more money or they have to because otherwise they are going to
have to spend more money, they will understand why they are doing
it. Then, all this sort of mistrust which floats around all the
utilities, you can see it with the water companies and metering,
people are incredibly sceptical: "You are just going to stick
a meter in and then you will ratchet up the cost", and the
same thing is true for the electricity companies. You need that
transparency, but I think there is a mechanism there that could
force rapid change in the energy utility side.
Q136 Mr Williams: Do you think that
customers and consumers understand the obligations that energy
suppliers have in this field and could there be a way of making
that more transparent? Would that help improve the trust situation?
Mr Restorick: No and yes.
Mr Roberts: We did work for Ofgem
a few years back looking at improving customer feedback on bills,
which in theory is coming, according to the Energy Review. I am
awaiting no doubt the three levels of consultation we will go
through before we have it. But what we found in the focus groups
was that no-one at all in any of the groups (and we ran seven
round the country) had any idea that energy suppliers were told
they had to do this, in effect, and, when they were told, they
said, "Oh, that explains it. I will check out the little
envelope stuff that is in with my bill next time", and I
think that tells a huge story. I have yet to hear a government
minister making noise about what they are doing on climate change
saying, "And we have told the energy companies they have
got to do this." There is a sense of big business-type partnership
with government that somehow we have all got to be quiet about
it and let them pretend they are doing it out of the goodness
of their heart or some corporate social responsibility doctrine,
whereas actually they are doing it because otherwise they are
going to get fined 10% of their turnover if they fail to meet
their targets. Government does not have to say they are doing
it because otherwise they are going to fine them heavily, they
just need to say they have set obligations on them so that they
are part of the solution as well. I do not hear that. I hear government
saying, "We are doing everything we can. Can we have individuals
helping too, please", because somehow in the past individuals
did not need to help, but when the Climate Change Programme Review
came out that was very much the attitude that you got from government,
the sentiment that was expressed, and I think they need to be
much clearer about what they have done, how they have aligned
other aspects of the economy like the energy market with carbon
emission reduction so that people can see what their efforts do
and how their actions fit in with what else is being proposed.
At the moment they cannot and so they just see themselves acting
in isolation without having an impact.
Mr Restorick: There was research
that was done comparing residents' behaviour in Eindhoven and
Nottingham, two very socially economically similar cities. The
people in the Netherlands were prepared to take more environmental
action than the people in Nottingham were, and when asked why,
one of the predominant factors was that people in the Netherlands
felt that they were part of what the researchers called a social
contract, which was, "We understand we as residents being
asked to do this and we know that business is doing this and local
government is doing this and national government is doing this."
In other words, "We are part of a bigger picture." When
residents in Nottingham were asked the same question, it was just
after water privatisation, their response was, "Why on earth
should I save water; it is just making X and X fat-cats even fatter",
and the whole social contract did not exist, and it was a massive
difference between the two cities.
Q137 Mr Williams: The Energy Retail
Association say they would welcome NGOs taking a lead in working
with energy suppliers in trying to break down these barriers and
make the market work better. Is that a role that you would relish?
Mr Restorick: As a humble NGO,
you have to be aware of the constraints that we operate within.
Government funding for NGOs on energy is minimal. There is the
climate change initiative, which was this year. That is the only
specific fund for NGOs to do any work on climate change. There
is no other fund. There is one other fund called the Environmental
Action Fund from Defra which partly touches on energy, but we
have no other access to funding. Simon and I, running two very
similar NGOs, have to operate as basically small business people
as well as charities. We have to earn contract income all the
time from businesses, local authorities and other organisations.
We are running around in circles to meet all this increasing demand
on us, to deal with the resources we have, to meet all the charitable
obligations that we have. It is an incredibly complex business
that we are in. We would love to have the capacity and space to
say, "Yes, we can take a strategic leadership role in this.
Yes, we know that we are trusted, for whatever historic reasons,
more than others." We can see all the positives for us being
a central element in this partnership and actually perhaps even
fronting it because the public trust NGOs, but we have not got
the resource or the capacity to enable us to take that role.
Q138 Mr Williams: If you had the
resource and the capacity, how would such partnerships work?
Mr Roberts: To give an example,
we have run an insulation scheme, basically, with seven local
authorities in Somerset called Somerset Warm & Well, which
is targeted on the vulnerable households and what are unsophisticatedly
called "able to pay households" (unsophisticated market
segmentation), basically where we have worked with a contractor,
an energy supplier and local authorities to pool pots of money
from the energy supplier in terms of Energy Efficiency Commitment
money, local authority housing improvement type grants and Warm
Front as well—the Government scheme. So, basically a surveyor
can walk down a street and have something to offer everybody down
that street. They can knock on doors and basically offer anything.
In terms of demand, they do not need to do that because there
is enough work coming through in terms of the amount of grant
available and the size of the Energy Efficiency Commitment funding
we get to keep them busy as they are, they do not have to generate
new income because we are getting referrals through. That also
provides a mechanism whereby we hold the hand of that householder
through the process; so the supplier is quite invisible to them,
they are a provider of cash. They are also a provider of cash
who has not been terribly reliable, because when they hit target
numbers they back away and say, "We do not need to do it
any more", and so you get this very stop-start approach to
funding which then threatens the local authority funding. They
think, "Can we put this in? Can we rely on this?" So,
we end up chasing around trying to find it. The income we earn
from that is effectively a small referral fee for making it work,
so we have to tap it into other things. As I say, we have got
a turnover of about 1.4 million this year. That is from about
60 or 70 different projects with different funders, some whom
are common to different projects but they are all separate contracts
and grants, which we have had to piece together to create what
we hope to do in the Avon and Somerset area where we operate direct
advice delivery, something which from the consumer's point of
view looks like a single project but actually you might have 16
different funding streams going into it.
Q139 Lynne Jones: Why do we need
NGOs? Does it not make it more confusing having all these different
participants?
Mr Restorick: For a couple of
reasons. First of all, for companies. They operate across local
authority boundaries, so it is quite difficult for a company operating
nationally or regionally to deal with many different local authorities.
The second reason why is that for most people their relationship
with their local authority is they are the people who pick up
the rubbish, they clean the streets, they provide services, and
quite a lot of people think they do not do that very well. So
there is equal scepticism: "Why on earth is the local authority
suddenly asking me about energy efficiency and stuff as there
is a company?" So, there is distrust there.
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