Examination of Witnesses Question Numbers
180-193)
MR BRIAN
SAMUEL AND
MR MATTHEW
WRIGHT
12 DECEMBER 2007
Q180 Jo Swinson: That label that
you had, the ESR label, it is very, very simple. There is hardly
any information on it at all, no carbon brands or anything. Was
that deliberate? Why have you gone for a very simple label? What
is the advantage?
Mr Wright: I think it is because
it is the idea that it is only applicable to the top 20% in any
category. So I think what we have got to look at is that you have
got an underpinning of the EU label as such. In particular areas
in the EU label everything, because of the nature of the process,
and it is quite slow, there is a sort of skewing of all the products
now into A, maybe AAA, maybe AAA+ and various other things. So
what the ESR enables you to do is to actually stretch out that
top category so that for consumers it is very clear as to what
are the leading energy saving products in that category.
Q181 Jo Swinson: We spoke to the
Secretary of State for Defra just last week and he had this idea
and he said that in addition to the energy rating it might be
useful to have the average cost of running the appliance per month
somewhere on the label. What do you think of this idea? Is it
workable?
Mr Wright: I think there are two
elements there. What price are you going to take as your unit
price for electricity at any one time? I think the element which
is important there is that it comes back to the idea that it is
money-related, so I think we have always got this duopoly to think
about. There are consumers who are motivated by money, and by
and large that is the majority of the market, and there are those
who are buying products purely on environmental grounds, which
is a much smaller area of the market. So some retailers are exploring
this at the moment, so that what you can go to some retailers
and see is an average cost of this product to use when it is used
and also an average cost of this product when it is on standby,
but I think it is more complicated than it appears to be.
Mr Samuel: If I could just add
to that, I think the key mechanism is to get people to change
their behaviour. The most important thing about certain products
is how you actually use them, so if you have a price for a product
that is on 24 hours a day then that perhaps could be quite useful,
but if it is a washing machine or a washer/dryer it depends how
you load it, at what temperature you wash clothes in it, whether
you hang the clothes out or tumble dry and how often you use it,
so it does not actually provide that information. What I think
would be far better is to have a mandatory roll-out of smart metering
with consumer displays that provide real-time information in-house
as people use those appliances.
Q182 Mark Pritchard: Would you say,
just to interject, that basically that idea is a dead duck?
Chairman: Whose idea?
Mark Pritchard: The Secretary of State's
idea.
Mr Samuel: I think it has some
merit in the sense the price information is what is important
to consumers and I think when you look at differentials between
standby and on/off et cetera, again there are some merits.
We need to explore it a little bit further, but I think it would
be very difficult and I think there are perhaps better ways of
providing information.
Q183 Mark Pritchard: So do you think
it is going in the wrong direction?
Mr Samuel: I think in general
probably.
Q184 Mark Pritchard: We have got
very limited time, gentlemen, because there is going to be a vote
shortly. On your family of labels, you touched on it earlier and
I just wonder whether you can elaborate a little more?
Mr Samuel: Yes. It was an idea
really about the fact that there is a proliferation of labels
and looking at how best to manage that. Obviously you could regulate
but there are issues around consumer choice. I think what would
be useful is if you identified a smaller number of core labels.
For example, if you had a single label then how would you actually
take energy content and rate the importance of energy content
or carbon content?
Q185 Mark Pritchard: You say a smaller
number of labels. It is interesting—and you were here when
Mr North from Tesco was here—he was not in favour of a single
label, although he was not against it in principle, but he did
not want proliferation. You have said there is proliferation and
that the family needs to be a small family rather than a large
family. Do you think Government should be leading on this and
defining first of all what sustainable is, and secondly how large
that family of labels might be?
Mr Samuel: The simple answer is,
yes. I think there needs to be stronger leadership on labelling.
If you have got labels in the marketplace that already work, use
them, invest in them, incentivise in them.
Q186 Mark Pritchard: I actually disagree
with Dr Knight when he says that he thinks the current labelling
of fish, for sustainable fish, and the other sort of family of
labels that exist currently are working, to paraphrase him, quite
well. Do you think they are working quite well?
Mr Samuel: Some are working well
and obviously I would say—
Q187 Mark Pritchard: How does that
fit with consumer confusion, which apparently is also prevalent?
Mr Samuel: Yes, there is confusion.
Q188 Mark Pritchard: It cannot be
working that well?
Mr Samuel: There is a large number.
I am not an expert in the different types of labels. What I can
say is that there are too many. There are opportunities to actually
streamline them in certain areas. Food is very difficult, but
energy saving is easy because there is a single one at the moment,
so why build any more? If you have something around the sustainability
of stocks, for example, why have a separate label for fish compared
with something else? Again, organic is a clear area where you
can perhaps have some incentives for some consolidation. So a
smaller number but more focused.
Mark Pritchard: Okay, understood. Thank
you.
Q189 Chairman: I am just very conscious
about this division which is coming up at any minute and there
are two issues I want to just ask you about very quickly, if I
may. One was about participation in the schemes and whether or
not it is enough to remain on a voluntary basis. The other one
was this issue in respect of the ESR label. Basically, it is all
very well and good to have a label, but what is required by way
of regulation and incentives to accompany labelling? In these
last few minutes I would just be grateful if you could just summarise,
and if we do run out of time it may be that you might wish to
perhaps submit some further written evidence on those two issues,
the voluntary aspect of it and what needs to be going hand-in-hand
with labelling.
Mr Samuel: Okay, very quickly,
and if I have time I will come back to some of my points. You
could have a mandatory label potentially if it complies with World
Trade obligations. That is a key issue. You would need to refine
the scheme. It is a very robust scheme and perhaps if it was a
mandatory scheme some of the requirements may be too stringent.
Because it is a voluntary scheme there is an incentive for people
to participate. If it is a mandatory scheme we may need to consider
some of the impacts around that. I think the other thing is that
we would need to resource-up substantially, therefore you might
want to prioritise at least initially which products you would
want to make mandatory. So yes, we are quite interested in that
idea. Looking at what other incentives are needed, I think greater
fiscal incentives. You need to incentivise the good and penalise
the bad, so I would like to see a stronger linkage between Energy
Saving Recommended products and, say, reduced VAT, for instance,
and I think there is a little bit of a door open now at the Commission
level potentially for that to actually happen.
Q190 Chairman: Would that be done
through Europe, do you think, rather more than through the UK?
Mr Samuel: I think it probably
would have to be. Europe obviously has to approve it, but the
UK should be pushing for it.
Q191 Chairman: Do you see signs of
that from within the Treasury? Interestingly, we had a Treasury
minister here this morning giving evidence to our main Committee
in respect of the Comprehensive Spending Review, et cetera.
Do you feel there are sufficient incentivisations within the
Treasury to support what you are suggesting?
Mr Samuel: Again, the short answer
is no, I do not think there is sufficient incentivisation.
Q192 Chairman: What more needs to
be done?
Mr Samuel: I think certainly a
lot more pushing needs to be done. I think you need to link larger
products, for example micro-generation could be linked into council
tax rebates, insulation could be linked into council tax rebates,
and then also the use of the carbon emission reduction target,
formerly the energy efficiency commitment. Why not link that solely
to Energy Saving Recommended products in those categories they
exist in? At the moment the only one you have got that in is lighting
and obviously you could then make that quite socially progressive
as well and aiming it at the priority group. So moving forward
in time, energy efficiency targets and fuel poverty, there is
quite a bit of debate around that but clearly more needs to be
done for the priority group in fuel poverty, so why not use instruments
like that to actually incentivise more energy efficient appliances
at the same time?
Q193 Chairman: Is there a mechanism
that is actually there at the moment, a sort of framework within
which those proposals you have got could be explored?
Mr Samuel: Yes, there is a framework
within that and that is through CERT when it comes into place
in 2011, but also you have got the 2008 and 2011 as a window of
opportunity when some decisions can still be made and we would
certainly like to see, for example, washing machines incentivised
through that to be ESR and only ESR.
Chairman: I am so sorry about this, but
what I would like to suggest is that if you think there are issues
which are really burning issues which we should have covered in
our short session this afternoon and we have not, we would be
very, very pleased to hear from you, particularly in respect of
what more Government needs to be doing to support and promote
environmental labelling. Thank you very much.
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