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9.45 p.m.

Baroness Hamwee: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Hamwee.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 1 [Interpretation]:

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The Earl of Caithness moved Amendment No. 1:

Page 1, line 13, after ("measures"") insert ("means measures to encourage the increased efficiency of energy use in residential accommodation for the purposes of—
(a) reducing the consumption of finite energy supplies, especially those causing pollutant emissions,
(b) supporting trade and industry in energy efficiency services and products;

The noble Earl said: In moving Amendment No. 1, I shall speak also to Amendment No. 2. First, I must apologise to the noble Baroness, Lady Hamwee, and my noble friend the Minister for not being present at Second Reading, and I hope that they will forgive me on this occasion. Also, I should declare two interests; one as a consultant to a solar energy company and another as a director of Eurosolar UK, which is a non-party organisation designed to promote the use of renewable energy.

I know that many people throughout the country still feel that when the words "renewable energy" are mentioned, they do not apply to this country. Their eyes tend to glaze over and they are quite happy to burn fossil fuels. But my anxiety is that fossil fuels in this world are finite and a serious problem is looming ahead of us. My main concern with the Bill is that it does not tackle the essential problem which faces us; that is, how to reduce the amount of carbon dioxide that we pump into the atmosphere.

The advantage of renewables is that they do not pollute. That is why they will become of increasing interest in this country and throughout the world. I am sure that there is a ground-swell of opinion that wants to take the whole idea of renewables forward, just as it did not so long ago with unleaded petrol. On that point, perhaps I can ask my noble friend the Minister what will happen to the non-fossil fuel levy with the privatisation of the nuclear industry? No other measure has perhaps been so significant in encouraging renewables industries in this country as the non-fossil fuel levy. It is an example of Conservative policy at its best. It produces an incentive for the private sector to conduct research, to spend money, to make the investment and, when that investment produces the goods—in this case electricity free of pollutants—it receives the benefit of the levy.

Can my noble friend confirm that the levy will continue at the same level hypothecated at the moment, which is 1 per cent. of the 10 per cent. non-fossil fuel levy? That will be important because it gives this country a huge opportunity to become world leaders in renewable energy. Also, has my noble friend available the energy ratio for 1993—that is, the amount of energy needed to produce a unit of GDP? That is a true indication of the energy being used by a country and gives a better indication of where a country is going.

The Bill does not fulfil the criteria that I have laid down. I do not believe that it will lead to the kind of reduction in carbon dioxide emissions anticipated by some of its proponents. Therein lies the rub, because a good many people will say, "We now have the Home Energy Conservation Act. We can sit back and not do anything more". That would be a serious setback in our fight against global climate warming. In addition, it does

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not cover enough of the industries which generate carbon dioxide. As the noble Baroness said at Second Reading, it covers between a quarter and a third of carbon dioxide emissions, including an allocation from the power stations for domestic use. If one takes houses by themselves, which is the remit of the Bill, the total is probably under a quarter. There are huge areas of industry and transport which should also have been covered by the Bill and which I would wish to cover. But, quite rightly, the rules of the House prevented me from widening the scope of the Bill.

What will the Bill give us? It will give local authorities lots of work to do. It will give them new duties. They will be able to produce lots of reports at great expense to council tax payers. I seriously believe that that money could be better spent elsewhere. I do not know what the cost of these reports will be or whether Richmond council believes that the cost can be justified against the better use of expenditure.

If it is argued that energy conservation leads to a reduction in carbon dioxide, that is not supported by the facts. The ENDS Report in 1993 looked into a study conducted by the Building Research Establishment on behalf of the DoE's energy efficiency office. The study evaluated the impact of work carried out under the home energy efficiency scheme. It had been anticipated that the average household would potentially save £44 a year on its winter fuel bills, equating to a reduction in CO 2 emissions of 0.7 tonnes per year. But what happened in reality is that we did not get that saving because people liked the extra warmth and so consumed just as much electricity and produced just as much carbon dioxide. In fact, 77 per cent. of households in practice opted for increased warmth and the actual reduction in fuel bills was only £9—not the £44 that was envisaged—and the CO 2 reduction was just 0.14 tonnes per year and not 0.7 tonnes. That is the complacency factor which I feel the Bill will set more in concrete.

We must get rid of the myth that energy conservation equals energy saving. It might increase the comfort—that, in itself, is no bad thing—but it does not attack the main problem. The Bill should encourage a change of fuel source; and that it signally fails to do. That is the importance of Amendment No. 1. It is the setting in the amendment of the measures for reducing the consumption of finite energy supplies and supporting the trade and industry concerned with energy efficient services and products that I believe is so important. If that is spelt out in the Bill, the true purpose will be identified.

Having used the words "energy efficiency measures" it is right to define those. I have done that in Amendment No. 2. I have suggested there not a complete definition—one cannot get a complete definition—but signposts that local authorities and the Secretary of State should look for. The definition is:

    "the most effective way of utilising energy for heating, lighting, refrigeration and other energy consuming functions".

Again, we are slightly misled on this aspect. Perhaps I may take the example of our hot water systems. As a result of the European directive, we can now buy a boiler with an energy efficiency rating on it. But that is not the end of the story. We go home, put the new boiler in and we think

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we are doing a good job. But we have not actually looked at the water that the boiler is heating or what the result is, because I do not believe that it is well known that for every millimetre of scale on the boiler tank, on the coil in the immersion heater or in the kettle, one is reducing the energy efficiency by 10 per cent. Therefore, a mere five millimetres of scale on the boiler or in the kettle—I looked into mine at the weekend and I should not think that there was much short of five millimetres there—equates to a 50 per cent. reduction in energy efficiency. Therefore, although I thought that I was doing quite a good job, I was using much more energy, and causing the emission of much more carbon dioxide from the power station, in order to get that kettle to boil. It is exactly the same with our boilers.

It is important to stress what energy efficiency means so that those who will be responsible for the reports, as outlined in the Bill, and the Secretary of State, can home in on what really matters and not just on the gloss on the surface. I beg to move.

The Minister of State, Department of the Environment (Viscount Ullswater): I shall deal with Amendment No. 1 first. That amendment, moved by my noble friend Lord Caithness draws the Committee's attention to two particular aspects of energy efficiency. One is the need to reduce the demands placed on finite energy supplies, which also give rise to harmful emissions. The second is the role which trade and industry can play in providing energy efficiency services and products.

I fully agree with my noble friend that these are important matters to take into account in any energy efficiency strategy. As I hope to reassure the Committee, they are matters which are already covered by the Bill, and the Government certainly hope that they will be covered in energy conservation authorities' plans under the Bill. However, I believe that the definition in the Bill is already wide enough to allow this and that the amendments proposed by my noble friend are not therefore needed. The involvement of businesses in energy efficiency in general and in partnership with local authorities in the context of the Bill was the subject of some discussion in another place. The conclusion there, which I believe was the right one, was that the Bill as it stands gives authorities full scope for involving businesses and products in the measures they include in the reports they prepare under the Bill.

My noble friend mentioned the scope for the greater use of energy from renewable sources. The Government's new and renewable energy policy is to stimulate the development of new and renewable energy sources wherever they have prospects of being economically attractive and environmentally acceptable. It will be open to authorities to include reference to such measures in their energy conservation reports, and I will certainly see that their attention is drawn to the possibility in the guidance to be drawn up. Guidance for local authorities is available from the Department of Trade and Industry.

Turning to the reduction of emissions which are harmful to the environment, reductions in the demand for energy which we all hope and believe will result from measures identified as a result of the Bill will of course lead to improvements in this area. Clause 2(3) (b) of the

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Bill requires that energy conservation reports must include an assessment of the extent to which emissions of carbon dioxide would be decreased as a result of the measures set out in them. This is a sure way of ensuring that authorities focus on the benefits of carbon dioxide reductions. Reports may also include an assessment of decreases of emissions of oxides of nitrogen and sulphur dioxide.

Turning to the second part of the first amendment supporting trade and industry in energy efficiency services and products, there is again much being done. The existing definition of energy conservation measures is deliberately widely drawn and can cover both advice on energy efficiency goods and services to consumers and advice to providers of goods and services on how they can help with initiatives. Of course, local authorities cannot recommend particular products or service providers but they can draw consumers' attention to what is available so that they can make an informed choice.

The home energy efficiency scheme, which my noble friend mentioned, provides help with loft insulation and draughtproofing to elderly and low-income households and operates to national standards and through approved network installers, giving reassurance to those who might be daunted by the prospect of identifying what needs to be done and arranging for the work to be carried out.

My noble friend suggested that the comfort level then rises —so be it—but I believe that other areas also need to be considered. Education and improved information is an important element in energy efficiency in the home. Most people would consider the fuel consumption of a car when considering making a purchase. I hope that it will become as natural to look at the energy consumption of different models when buying a new refrigerator or washing machine. In terms of more efficient appliances, the UK implemented the first energy labelling directive on 1st January 1995. This requires energy information labels to be fitted to all domestic freezers and refrigerators. It enables consumers to compare the energy efficiency of different models, and manufacturers and retailers are already responding to the measure by positively marketing products which use less energy to do the same job. Directives covering other domestic appliances are to follow.

There have also been initiatives to promote energy saving lightbulbs. For two successive years, the Energy Savings Trust has run highly successful promotional schemes in collaboration with the lighting industry to cut the price of energy-saving light bulbs to consumers. Over one million lamps were sold between October and December last year, five times the normal sales levels.

In that connection, my noble friend asked whether the non-fossil fuel levy would continue. Renewable energy will continue to be supported by the fossil fuel levy on electricity bills. I cannot give my noble friend a date or say that it will continue indefinitely, but it certainly will continue.

I turn now to the second amendment which my noble friend grouped with Amendment No. 1. The amendment would add to the Bill a definition of the term "energy efficiency". I congratulate my noble friend on drawing up

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such a definition. However, I believe at least in the context of this Bill that the attempt is unnecessary and one which is possibly fraught with danger.

The term "energy efficiency" is used in Clause 2(2) of the Bill, which requires that an energy conservation report shall set out measures which the authority considers practicable, cost-effective and likely to result in significant improvement in the energy efficiency of residential accommodation in its area. I think that we could all explain in ordinary language what we mean by that but, as my noble friend will appreciate, it is not the same thing as having a definition enshrined in statute which might be restrictive.

In talking about "energy effiency" in ordinary language, we mean measures which will result in an equal or greater level of comfort or service being secured for the use of less energy. There are a number of ways in which this can come about. Choosing equipment which performs a task using less energy is one. A refrigerator which runs on less electricity or a low-energy lightbulb are examples. Preventing the waste of heat or light by behavioural changes is another. Setting and using controls properly, drawing curtains to minimise heat loss through windows, and turning lights or appliances off when they are not needed are all examples in this area. Then there are physical measures to prevent the waste of energy used for heating such as loft insulation, draughtproofing and cavity wall insulation. The elderly and disabled can get help with loft insulation and draughtproofing as well as energy advice under the home energy efficiency scheme which has already helped over a million households. I think that we can safely leave the term "energy efficiency" without definition.

If noble Lords are concerned that authorities will not cast the net wide enough in seeking energy conservation measures, it will be possible to indicate in guidance the whole range of initiatives which are open to them. I believe that guidance is a more flexible and—dare I say—user-friendly way of doing this than enshrining a definition in statute.

Before I sit down, my noble friend asked about the energy ratio. I am afraid that I do not have the figure in my brief, but I give an undertaking to find out how the energy ratio has changed over the years and I shall write to my noble friend with the information. In the light of what I have said, I invite my noble friend not to press his amendment, which I believe would not improve the Bill.

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