Energy efficiency Bill hits Treasury blockage

A Private Member's Bill to oblige local authorities to prepare plans to improve the energy efficiency of housing and reduce carbon dioxide emissions is in danger of being blocked by the Treasury. Although the Bill has extensive all-party support and backing from more than one-third of the UK's local councils, the Treasury is insisting that no new money will be found to implement it, despite offsetting savings it will bring in public expenditure elsewhere.

The Energy Conservation Bill (ENDS Report 228, p 35 ) had its second reading in the Commons on 4 February and an easy Committee stage on 16 February after the Government missed a deadline for tabling amendments. Environment Minister Robert Atkins revealed in Committee that the delay had been caused by Treasury objections to the Bill.

Although the Bill has backing from almost 400 MPs, Ministers have been citing a host of reasons why it is unnecessary, inappropriate or too costly, giving every sign that they will seek to emasculate it on 22 April, when it reaches its crucial Report stage.

The Bill, which is being promoted by Alan Beith (LibDem, Berwick-upon-Tweed), would oblige each local authority in the UK to prepare a plan to improve the energy efficiency of heating and lighting in domestic premises in its area. It would also require the Secretary of State to set a deadline for councils to complete their plans, and subsequently a timetable for implementing them.

The Bill's twin aims, explained Mr Beith on second reading, are to alleviate fuel poverty and reduce carbon dioxide emissions. More than seven million people suffer from fuel poverty, and 40,000 die each winter because their homes are inadequately heated. The domestic sector accounts for a quarter of the UK's CO2 emissions.

The Bill would not, he said, "make large open-ended commitments to public spending. It ensures that we take an essential first step to work out what the energy efficiency of our housing stock is, both public and private, and where resources could most effectively be channelled to improve it."

Replying for the Government, junior Environment Minister Tony Baldry said that the Bill "might impose unnecessary and additional burdens on local authorities and central Government." But if it was amended so that the duties "were turned into powers which enabled authorities to take the schemes forward where they thought that that was in the best interests of their residents, our concerns would be largely met."

In fact, the Government amendments tabled belatedly at Committee stage showed that it is intent on culling the legislation. In particular, they would ensure that the legislation would not apply in Scotland and Northern Ireland. Ministers are also opposed to being placed under a duty to set deadlines for completion and implementation of the plans.

Ministers have cited several reasons why local authorities should not be required to prepare energy efficiency plans. On the one hand, they claim that councils are already committed to improving energy efficiency, as evidenced by the fact that some 250 have signed up to the Government's "Making a Corporate Commitment" campaign. However, when the Department of the Environment (DoE) asked all the signatories last summer to live up to their commitment by making public their energy saving targets, just 17 authorities did so (ENDS Report 229, p 26 ).

On the other hand, the Government says it is "worried about putting a duty on local authorities to investigate housing that is not in their ownership," Mr Atkins told the Committee on 16 February.

This view has been challenged on several counts. First, a sample survey of only about 2-10% of the properties in an area will be needed to establish the energy efficiency of the housing stock. Secondly, as Mr Atkins himself observed, official guidance was issued last year to local authorities to survey the energy efficiency of public housing for the purpose of their annual bids for housing investment programme (HIP) support.

Thirdly, councils are already under a duty to carry out an annual review of housing conditions in both the public and private sectors and report their findings to the DoE - and so, it was argued, what the Bill requires would not be as novel an intrusion as Mr Atkins suggested.

Cost was the third ground of objection. According to one of the Bill's supporters, the Association for the Conservation of Energy (ACE), pilot studies by two councils have shown that the costs of preparing energy efficiency plans would be between £0.53-1.00 per dwelling - about £50,000 in each of the two areas concerned, or £11-23 million across the UK.

However, Mr Atkins argued that "it is possible that those costs would not be representative of what is incurred elsewhere", and that councils would face extra costs in consulting on their draft plans, keeping them up to date and implementing them. In fact, ACE's figures incorporate the costs of consultation and updating.

MPs were quick to challenge the Minister's view that the costs would be "significant" and an "unnecessary burden". Some councils will have to survey the energy efficiency of public housing anyway to prepare their HIP bids, so not all of the costs imposed by the Bill would be truly new expenditure. And, as several MPs pointed out, the Government was ignoring the savings that would be made by the National Health Service if the regular winter increase in cold-related medical conditions was reduced by warmer dwellings.

Mr Atkins was eventually reduced to arguing that "we want that expenditure [on energy efficiency surveys] to take place, but the Government are not in the business of putting a further duty on local authorities to do something that they may choose not to do."

Mr Beith countered that "we cannot talk of placing a burden on local authorities when so many of them are determined that they want the Bill." By mid-February, 167 councils had voiced support for the legislation. A permissive Bill which simply empowered them to prepare energy efficiency plans, he added, "would add nothing to the stock of legislation."

That view has been supported by, among others, Lord Moore, the Chairman of the Energy Saving Trust, which was set up by the Government to promote energy efficiency in households and small businesses. In a letter to the Environment Secretary quoted during the Bill's second reading, he accepted that some councils "will perform the activities described in the Bill of their own volition. However, previous experience suggests that these councils will be the exception rather than the rule."

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