Memorandum submitted by the Construction Products Association (PBR08004)

 

'Facing Global Challenges: Supporting People through Difficult Times'

 

The Construction Products Association represents the manufacturers and suppliers of products to the construction industry. Through its major company and trade association members it represents more than 85% of the £40 billion industry in the UK.

 

Of the issues raised in the Call for Evidence for this Inquiry, the Association would like to focus on implications for environmental spending with particular reference to improvements to the energy efficiency of the existing housing stock.

 

Summary

 

· The additional £100m to improve the energy efficiency of existing housing is a fairly modest amount, and it is disappointing that this focuses only on insulation when much more could be achieved through a variety of measures.

 

· Investing in improvements to the existing stock will stimulate the construction industry while at the same time helping the UK meet its carbon emission reduction targets.

 

· The CERT scheme is not working as effectively as it should.

 

· The government should reduce VAT to 5% on all energy efficient products and energy saving products.

 

Main Text

 

1) The energy efficiency measures for housing laid out in the Pre-budget Report are welcome and support what the Association particularly asked for. However the additional £100m is a fairly modest amount given that 45% of all present carbon emissions come from existing buildings, with 27% from homes. It is estimated that 87% of existing buildings will still be here in 2050. Also it is disappointing the £100m focuses only on insulation when much more could be achieved with support for double glazing, upgrading of central heating boilers and other energy saving measures.

 

2) The government must do more to improve the energy efficiency of the existing stock both to stimulate economic activity in the construction industry and to help meet the UK's demanding 80% carbon reduction target. The need for action as part of the climate change agenda has been reinforced by recent reports from the CLG and BERR Select Committees and the Committee on Climate Change, December 2008 report, 'Building a Low-Carbon Economy'.

 

3) The CERT scheme is not working as effectively as it should and the targets set for the utilities are not feeding through into meaningful action on the ground in the way that the industry and those who should be benefiting from this initiative would expect. One of our major companies that supplies these insulation products reports that in October 70% of the applications from elderly people seeking funding support for improving the insulation in their homes were turned down because the energy companies had already met their targets for that month. What seems to be happening is that the energy suppliers are meeting their 'targets' in a range of different ways including offering advice on energy efficiency (which may not be acted upon) and the unsolicited delivery of energy efficiency light bulbs, which the recipients may not use.

 

4) In addition we understand that announcements made in September 2008 increasing the target funding for the CERT scheme will not come through until May 2009 because they need an Act of Parliament to approve them. Government urgently needs to review the operation of this scheme both to ensure that in the short term it is delivering the energy savings that are expected of it, and to provide a longer term commitment to manufacturers and installers to ensure they make the long term investment in the products that are needed to insulate the existing housing stock, as well as training those needed to install these products.

 

5) CERT, however, is only a small part of what can be done to improve the energy efficiency of our housing and ensure we meet our targets for carbon reduction. It makes no sense to charge a lower rate of VAT on energy than the products that will reduce the need for it, and Government should reduce VAT to 5% on all energy efficient products and provide time-limited funding support for those who wish to improve the energy efficiency of their homes up to the current requirements of the building regulations. This will particularly help SMEs in the industry as they typically undertake this type of work.

 

 

13 January 2009