Sustainable Energy Bill

Public Bill Committee, 24 June 2003.

Standing Committee C

Sustainable Energy Bill

Brian White (Labour, North East Milton Keynes)

I beg to move,

That during further proceedings on the Sustainable Energy Bill the Bill be considered in the following Order: Clause 1, New Clauses relating to annual reports on sustainable energy aims, Clause 2, New Clauses relating to domestic energy efficiency, Clause 6, Clause 3, New Clauses relating to CHP, Clause 4, New Clauses relating to impact assessments, Clause 5, New Clauses relating to the use of certain money held by the Gas and Electricity Markets Authority, Clause 7, New Clauses relating to money, Clause 8.

I have moved the order of consideration to ensure that the new clauses are debated in the same order as we agreed at the beginning, and at the right point.

Question put and agreed to.

Clause 1 - Sustainable Energy Policy

Eric Illsley (Labour, Barnsley Central)

I remind the Committee that with this we are taking the following:

New clause 1—Annual reports on progress towards sustainable energy aims—

'(1) The Secretary of State must in each calendar year, beginning with 2004, publish a report (''a sustainable energy report'') on the progress made in the reporting period towards—

(a) cutting the United Kingdom's carbon emissions;

(b) maintaining the reliability of the United Kingdom's energy supplies;

(c) promoting competitive energy markets in the United Kingdom; and

(d) reducing the number of people living in fuel poverty in the United Kingdom.

(2) ''The reporting period'', for the purposes of subsection (1), means the year ending with 23 February in the calendar year in question.

(3) Accordingly, the report must be published in that calendar year within the period beginning with 24 February and ending with 31 December (''the publication period'').

(4) A sustainable energy report may either be published as a single report or published in a number of parts during the publication period, and any such report or part may be contained in a document containing other material.

(5) A sustainable energy report must be based on such information as is available to the Secretary of State when the report is completed (except that if it is published in parts, each of those parts must be based on such information as is so available when that part is completed).

(6) For the purposes of this section a person is to be regarded as living in fuel poverty if he is a member of a household living on a lower income in a home which cannot be kept warm at a reasonable cost.'.

And the following amendments thereto:

Amendment (a), in

line 3, after 'towards', insert—

'( ) each of the following aims (''sustainable energy aims'')'.

Amendment (b), in

line 10, at end insert—

'( ) each of the following goals (''sustainable energy goals'')

(i) the generation of 20% electricity from renewable sources by 2010;

(ii) the generation of 10GWe of electricity by combined heat and power by 2010;

(iii) reductions in emissions of carbon dioxide of 20% based on 1990 levels by 2010;

(iv) reductions in emissions of carbon dioxide of 60% based on 1990 levels by 2050;

(v) carbon savings as a result of measures to improve domestic energy efficiency of 5 MtC by 2010 and a further 4 MtC by 2020.'.

Brian White (Labour, North East Milton Keynes)

It seems a long time ago that we debated this new clause at length. In that sitting, I outlined the reasons why I was happy to accept the new clause in place of my original clause 1. I am also happy to report that agreement has been reached on amendments to the other clauses. Although there are points to be made on those clauses when we come to them, we should make progress. I set out previously why the new clause would be improved by my amendments and why I was surprised that the Government were resisting them, given that, on Second Reading, they committed themselves to producing an annual progress report, and said that they were willing for it to become a legal requirement.

The new clause goes a long way towards achieving that, and I am pleased that the Minister's comments indicate that the four overall aims of the energy policy in the White Paper will be covered. I am grateful to him for his reassurance that every commitment in the White Paper would be met and for his reaffirmation of the goals, aims, objectives and targets. I am also grateful to all hon. Members who pressed for that.

We have rehearsed the arguments, and I thought that a good case was made for my amendments. However, we should not risk the Bill falling on this issue; a general reporting duty in legislation is better than no reporting duty. The Government are committed to report on detailed targets, so I shall not press my amendments and will accept the Minister's new clause.

Stephen Timms (Labour, East Ham)

Let me begin by reiterating what my predecessor, my hon. Friend the Member for Cunninghame, North (Mr. Wilson), said a couple of weeks ago. I, too, am delighted that the Bill is before the Committee. It has taken longer than he or I would have wished for the detail to be sorted out, but with the cross-party consensus that has been stimulated by it, my hon. Friend the Member for Milton Keynes, North-East (Brian White) will be able to secure some worthwhile legislation in his name as a result of our deliberations.

I am pleased that he will not press the proposed amendments. I know that he and others rightly attach great importance to the Government reporting on delivery of all the energy White Paper commitments against all our targets and goals. That is our firm intent. The reporting requirement in new clause 1 fully

reflects the spirit of the clause while avoiding an overly prescriptive approach. It encompasses all four of our sustainable energy policy goals—cutting carbon emissions, maintaining the reliability of energy supplies, promoting competitive markets and tackling fuel poverty—in a way that will be durable.

Andrew Robathan (Conservative, Blaby)

I am interested in what the Minister says. He was not at the sitting the week before last. We all agree with the spirit of the goals, but the problem is that there is very little agreement as to how to achieve them. The purpose of targets, surely, is to know what has to be achieved across the country in order to work towards it. The spirit is fine words, but not a lot of substance.

Stephen Timms (Labour, East Ham)

I do not agree with the hon. Gentleman. The substance is here as well. We shall report on progress towards the achievement of all 135 of the commitments in the White Paper, and that will provide the information for which members of the Committee and those outside the House are looking to the Government to provide. We are providing a framework against which we can report fully and openly on the development of sustainable energy policy and on progress towards the aims that all of us share. That is the right way forward. I am particularly grateful to my hon. Friend the Member for Milton Keynes, North-East for the spirit in which he has approached the discussions, some of which have been heated. I am delighted that we have reached a position on which all of us agree. I commend the new clause to the Committee.

Andrew Robathan (Conservative, Blaby)

I have to say that we are very disappointed. I do not disagree with a word that the Minister has said in relation to the spirit surrounding the better use of energy, sustainable energy and conservation of energy. The point that we argued two weeks ago, however, was that fine words are one thing, but concrete targets—and this Government love targets—are quite another.

Gregory Barker (Conservative, Bexhill and Battle)

My hon. Friend has just said that the Government love targets. I think that he should use a different tense. The Government loved targets. They used targets with complete indiscretion and showered them all over the place. It was only after a few years in government that they realised that targets had to be met or people would think that they were not achieving anything. Having woken up to that rude fact, they are now slamming the gears into reverse and shying away from any target whatever.

Andrew Robathan (Conservative, Blaby)

I agree entirely with my hon. Friend. That was the point that I was developing. The following targets have been set: 10 per cent. of generating capacity provided by renewables by 2010, 20 per cent. by 2020, 5 GW of combined heat and power by 2000, and 10 GW by 2005. Those targets were in Labour party manifestos and bandied around by the Government, and yet sadly, when it comes to achieving them, the Government seem to bolt for cover. There is no point in making such grand pronouncements, and saying how much one wishes

to achieve targets, if one will not put one's money where one's mouth is.

I regret the way that this situation has come about. We have had a long discussion, and I know that the hon. Member for Milton Keynes, North-East, to whom I pay tribute, has been trying very hard to get the Government to budge on the issue. However, by removing the great chunk represented by clause 1, we have ended up with what can only be described as a watered-down, pale shadow of the original intention of the Bill. I very much regret that.

I have yet to decide what to do, and I shall have to see how the debate goes. I regret the position that we are in because, if one believes in sustainable energy—and the Government say that they do—it is no good having fine words; we must have concrete action. That is reflected by the energy White Paper as a whole. It full of aspirations and has pretty pictures of windmills, but there is not much in it. The Bill is now a damp squib, which is very regrettable.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I join the hon. Member for Blaby (Mr. Robathan) in saying that it is a disappointing day for those of us who are strong supporters of the Bill. I am sure that the hon. Member for Milton Keynes, North-East must be among the most disappointed in the Room.

The Minister referred rather glibly to the 135 targets in the White Paper. Of course, it is a White Paper, and the difference between that and a Bill, which becomes an Act, is that a White Paper can be set aside without so much as a glance if the Government choose or if they believe that circumstances have changed, whereas an Act of Parliament cannot be. It would have been of great significance had the Government been prepared to accept proper, defined targets that offered the possibility of measuring the outcomes.

I have a great deal of time and respect for the new Minister. I am sure that he will learn a great deal about the subject in a very short time, but he would accept that any Government, let alone his own, would be well equipped to produce an annual report that says, ''We have made substantial progress towards our aims set out in the White Paper.'' Surely he can see that he has foregone a wonderful chance to set a measurable target to which the Government could work and design their policy.

We are dealing with the question of spirit, as the hon. Member for Blaby put it, and with good intentions and good will. Phrases such as ''substantial progress'' can be touted without producing the policy changes that are needed to deliver what I am sure the Minister wants to see, what was set out in the White Paper and what I know the hon. Member for Milton Keynes, North-East intended should happen when he presented the Bill to the House, which is the UK moving towards achieving its carbon reduction targets as set out in the Kyoto agreement. I find it depressing that the promoter of the Bill says that he does not intend to press the new clause and the amendments today. That is far from incorporating the spirit of our aims into the Bill, so I find it a dispiriting morning. It would seem that the Government have forced the promoter, against his

better judgment, to give up one of the fundamental intentions and benefits that would have flown from his original Bill.

It is with great disappointment that I heard the words of the Minister and the hon. Member for Milton Keynes, North-East. It is a moot point whether there is now a Bill of substance and body that merits the support of the House.

Gregory Barker (Conservative, Bexhill and Battle)

Like Committee members from all parties, I share a great disappointment at the climbdown in the face of such Government obstinacy and such a failure to incorporate meaningful, ambitious targets that would have signalled a step change in Government energy policy. There is only one question that we have to ask to get to the heart of such Government intransigence. Why do they not want the targets set in the Bill? That is simple. Either the Government do not think that they can meet those targets, or they are reluctant to introduce them, because they fear there is a good chance that they will not meet them. They are not prepared to put their shoulder to the wheel to ensure that they will be met. They are not prepared to be sufficiently ambitious in policy terms and to match those ambitions with real resources.

This all comes down to how ambitious the Government are in the field of sustainable energy—how committed they are to the sustainable energy agenda and the issue that Committee members are grappling with. I am sure that the Minister wants to make progress and that he shares the broad aims of the Bill. However, that is not what we are here to do. We are here—at least, I thought we were—to tie the Government down to making real progress in a challenging area. Progress will not be made simply by wishing for it, or by warm intentions; it will be made only if there is a real, meaningful change in how the Government make energy policy across Departments.

I am sure that it will be difficult to meet challenging targets. In ensuring that they are met the apparatus of government will be required to apply itself and Ministers will be required to expend political capital. However, surely that is what Ministers are here for, and that is why Governments stand for election. We enter politics to effect change. I am sorry that the Bill will now water down to wishy-washy commitments the very things that nearly all Committee members believe in strongly. At the end of the day we will not have a real agenda for change, or an ambitious programme mapping out an exciting but demanding future. Instead, there will be more warm words that could mean nothing.

Question proposed, That the clause stand part of the Bill.

The Committee divided: Ayes 4, Noes 6.

New clause 1 - Annual reports on progress towards

Clause 2 - Domestic energy efficiency

Eric Illsley (Labour, Barnsley Central)

With this it will be convenient to discuss the following:

New clause 7—Domestic energy efficiency—

'(1) The Secretary of State shall take reasonable steps to achieve the carbon saving aims in relation to the energy efficiency of residential accommodation specified in any policy document for the time being designated by him.

(2) The Secretary of State shall within two months of the coming into force of this Act designate the following documents as policy documents, namely

(a) The Energy White Paper presented to Parliament in February 2003 Cmd 5761; and

(b) The Climate Change The UK Programme presented to Parliament in November 2000 Cmd 4913.

(3) The Secretary of State may, at any time,

(a) withdraw the designation of any document under this section provided that he shall not do so if this withdrawal would result in there being no designated document under this section

(b) designate such other documents as he sees fit as policy documents.

(4) The steps to be taken by the Secretary of State pursuant to subsection (1) above may include steps relating to the heating,

cooling, ventilation, lighting and insulation of residential accommodation.

(5) In deciding what steps to take and the extent to which to take those steps in order to achieve any carbon savings pursuant to subsection 1 above the Secretary of State may make an assessment of the steps being taken or reasonably expected to be taken in Scotland, Wales and Northern Ireland and any reasonable assessment of the carbon saving that may be expected to result from those steps taken or reasonably expected to be taken.'.

New clause 8—Energy efficiency of residential accommodation: Secretary of State.

New clause 9—Energy efficiency of residential accommodation: National Assembly for Wales.

New clause 10—Energy efficiency of residential accommodation: energy conservation authorities.

Clause 6 stand part.

Brian White (Labour, North East Milton Keynes)

New clauses 8 and 9 are identical except that one relates to the role of the Secretary of State in England and the other to the National Assembly for Wales. New clause 10 finds a way of dealing with the second part of clause 2 and with the original clause 6. It therefore replaces both clauses. New clauses 8 and 9 replace the Second Reading clause 2(1) that relates to energy efficiency.

My advisers spent hours negotiating with officials on the clauses and one said that the most difficult issue was the drafting of the duty in clause 2. As we have said, the phrase ''take reasonable steps'' involves a weak requirement. I have been unable to find a form of words that might be more acceptable to the Government but that retains the sense of there being a requirement to take action. Twice, we thought we had agreed on a more robust version and I tabled new clauses 5 and 6, which have now been withdrawn. We agreed, at one point, about a new clause that was almost identical to new clause 7. It was tabled by my hon. Friend the Member for Bury, North (Mr. Chaytor) and others.

Sadly, the Department for Environment, Food and Rural Affairs found a way not to proceed on those lines, so we are left with the new clauses. I can see that the proposal is weaker, but it still takes us forward—just—which is why I tabled the new clauses. They require the Secretary of State and the Assembly to specify energy efficiency aims for England and Wales and there is a duty on the Secretary of State and the Welsh Assembly to take reasonable steps to achieve those aims.

In the light of the previous debate, the Committee may say that the aim is weak, feeble and virtually meaningless and that is theoretically possible for two reasons. I therefore ask the Minister to consider two points. First, if he were to take the sense of the previous debate, he would know that, if he sets weak and meaningless targets, the White Paper's credibility will be undermined. Secondly, the Government have made statements over the years about the desirability of sustainable energy. Therefore, they have a commitment that they wish to achieve. For those reasons I am optimistic that the aims that the new

clauses set will not be weak or meaningless. However, I look to the Minister to confirm that the Government are serious about taking energy efficiency measures forward.

We need the carbon savings from energy efficiency that are set out in the White Paper; without them our long-term carbon savings objectives cannot be met. The White Paper states that such savings are the cheapest and easiest way to achieve some of the carbon reductions that are required. I therefore call on the Government to confirm the aspirations in chapter 3 of the White Paper. I assure all members of the Committee that I shall continue to be at the forefront of the campaign to ensure that energy efficiency aims will enable us to deliver on CO2 targets, especially those urged by the performance and innovation unit's report. New clauses 8 and 9 will be a step forward. They do not have the same stride as the original clause, but they are not the end of the campaign. As the hon. Member for Bexhill and Battle said, they are what is needed if we are to be serious about sustainable energy.

New clause 10 is based on a clause in the Home Energy Conservation Bill proposed by the then Minister of State, the right hon. Member for Oldham, West and Royton (Mr. Meacher), last year. I pay tribute to the hon. Member for Brighton, Kemptown (Dr. Turner) for his efforts last year and to those members of the Committee that considered the Bill. Unfortunately, the Bill failed to become law, but much work was undertaken. The wording of new clause 10 is slightly different from that used in last year's Bill, but the strategy is identical.

Under the Home Energy Conservation Act 1995, the previous Government, like this Government, set guidance targets for local authorities for more than 30 per cent. improvement in domestic energy by 2010, based on 1995 levels. Many local authorities have responded extremely well to those targets and I pay tribute to them and to their officers. More than 100 local authorities have supported the Bill. However, some have reported domestic energy efficiency improvements of less than 5 per cent. in eight years. That is not only unsatisfactory; it is appalling and such practices cannot continue.

One matter that worried me was that the Local Government Association tried to undermine its councils by telling the Office of the Deputy Prime Minister that it objected to the proposals. Despite the fact that I am a vice-president of the LGA, no one from the LGA had the courtesy to tell me what action had been taken, even though it was instructed to do so by its executive committee. No one has been to see me yet. If we are to help local government, local councils need better services than some LGA officers are providing at present. As someone who spent days trying to set up the LGA five years ago, it pains me to say that.

New clause 10 provides a lever to rectify the situation. It would enable the Secretary of State in England and National Assembly of Wales to set new and binding targets for specific local authorities, after consulting the LGA and the Welsh Local Government Association. It is intended that the measure will act as

a spur to give the authorities renewed public targets. Many authorities will respond positively, adopt the targets and strive to achieve them. The clause would have a beneficial effect.

Residents and local organisations will be able to lobby their local council to adopt measures to meet the published targets and councils should have no objection to that lobbying. In fact, many will welcome it. In addition, when taking steps to meet the targets, councils will have to take measures that will achieve the fuel poverty targets set under the Warm Homes and Energy Conservation Act 2000. That is important because we all want to see an end to fuel poverty. Co-ordinated action between local and central Government is an essential factor in climate change, and a key step forward.

Andrew Stunell (Liberal Democrat, Hazel Grove)

I know that, in due course, the hon. Member for Bury, North will want to speak to new clause 7. However, I wish to say a few words about the new clauses to which the hon. Member for Milton Keynes, North-East has spoken. I am also a vice-president of the LGA. It seems that it lets anyone in these days. I agree that we have not received any communication from it. I suggest that, in all probability, its action was born out of sheer frustration at the way in which it saw the Bill being taken off course by the negotiations that the hon. Gentleman had with the Government. However, as it turned out, those negotiations were unsuccessful.

Brian White (Labour, North East Milton Keynes)

I do not want to undermine the hon. Gentleman's faith in the LGA, but it was the other way round. The LGA was part of the problem, not the solution.

Andrew Stunell (Liberal Democrat, Hazel Grove)

In which case, the LGA needs a few more vice-presidents like the hon. Gentleman.

The new clause is concerned with domestic energy efficiency. By every reasonably objective standard, the biggest gap in energy efficiency in this country is in the domestic sector, which is very difficult to get to with policy. The incentives to save energy in the domestic sector have reduced recently, because prices for the consumer have fallen. There are great difficulties in finding incentives to encourage the private sector supplier, generator or distributor to put any effort into promoting efficiency in the domestic sector because, in so far as they are successful, they will sell less of their product.

The Government need a strong regulatory and legislative framework for the domestic sector above all other types of activity. They also need to be proactive in changing the culture and setting a pattern of behaviour, not only for the individual consumers but for local authorities and all those agencies that may be brought to bear on the topic. The Government of course have some measures—I am sure that the Minister will remind me of changes to building regulations, for example—that will, over the course of about 150 years, make a real difference. But we must reach some targets much sooner than that, and that means that there should be a requirement in clause 2 to set about the project robustly.

As I understand the matter, we are in an extraordinary situation, in that the original Bill—

supported by the promoter and, I strongly suspect, the whole Committee except the Minister—in large part does what I have described. New clause 7 does a large part of that too and also has the benefit of being promoted by both the promoters and, at one stage, the Government. However, we are to be invited to reject new clause 7 and to vote for a watered-down version that will go a long way short of achieving the aims set out in the original Bill.

There are a limited number of ways in which one can express one's disappointment and regret at what has happened. However, I ask the Minister to reflect not on the partisan, party political points being made but on the fact that the Government's own targets, expressed wishes and aspirations, as set out in the White Paper, will become harder to achieve if the Bill is watered down and weakened. The Government are undermining their own policy objectives and making it more difficult for the country to achieve its Kyoto targets and outcomes.

On time and development, the hon. Member for Milton Keynes, North-East tried to persuade us to agree to the changes on the bases that half a loaf is better than none, and that he will carry on campaigning. I am delighted that he is going to do that, because it means that next year we shall get yet another private Member's Bill—last year, it was from the hon. Member for Brighton, Kemptown, this year is from the hon. Member for Milton Keynes, North-East, next year, who knows who it will be? This time next year, we shall be in exactly the same place with the Minister of the day—I hope that the current Minister is still in place then, although Ministers rotate rapidly—no doubt saying, ''The intentions are good and the aspirations are fine, but it would not be appropriate to have targets, trust us.'' Meanwhile, another year will have ticked past with nothing done and the problem of domestic energy efficiency left on the back burner.

The promoter's heart is in the right place, but I am afraid that he has been somewhat seduced by his contact with the Government. I understand that there has been a stormy relationship between the Minister and him, but we have to remember that it is often the case that people in abusive relationships return time after time. However, the sense of frustration and disappointment as yet another year goes past and yet another private Member's Bill comes up and gets de-gutted by yet another Minister with responsibility for energy is beginning to get us down. I hope very much that the promoter of the Bill and the Minister will take to heart some of the deeply felt opinions that have been expressed that if anything is to be achieved, they will have to be a bit braver than they have been this morning.

David Chaytor (Labour, Bury North)

I wish to speak to new clause 7. I share some of the frustration and disappointment that the hon. Member for Hazel Grove (Mr. Stunell) has expressed. The original clause 2 was excellent in its own right. It is specific and it sets out where we must improve domestic energy efficiency. It was a matter of deep disappointment—I speak on behalf of most members of the Committee—

that we discovered that the Government were not willing to support that clause.

It is crucial to reiterate the overriding importance of improvements to domestic energy efficiency in a sustainable energy policy. Where I would differ slightly from the disappointment of the hon. Gentleman is that the position has changed since last year and the equivalent private Member's Bill, because we now have the energy White Paper, which sets a series of targets for renewables and CHP, and a series of figures for energy efficiency. The difficulty is that the White Paper, which is excellent in many respects, has only estimates of the savings that could be achieved through domestic energy efficiency, without a firm commitment to achieving them or even to setting a target for achieving them.

At the first sitting of the Committee, the then Minister explained in a reasonable way the Government's reluctance to commit themselves to targets that were too specific. That was based on two concerns. One was that the probability, or the possibility, of not achieving the target would itself be embarrassing. We know that there have been several recent examples of that in different areas of policy. I do not think that the embarrassment of not achieving the target is as great as the Government feel that it is. Perhaps Ministers are more sensitive to that. If there was a record of achievement that almost met the target and enabled people to see that things were moving in the right direction, that would probably be quite acceptable to the majority of hon. Members and the general public.

Andrew Robathan (Conservative, Blaby)

The hon. Gentleman has covered the crux of the matter, which is that Governments do not like targets, when every hon. Member in the Room would support working towards them. If we did not achieve targets, but saw the Government striving their utmost to reach them, the Opposition might all be able to weigh in for the good of the country and the planet. That would be better than the Government saying that it is too difficult to have a target. We all want to see the targets achieved, so what is the problem with having them in the Bill?

David Chaytor (Labour, Bury North)

The hon. Gentleman makes an important point. I agree with him entirely. What hon. Members and the general public are looking for is direction of travel and significant progress in that direction. Hitting the target at exactly the right time is in reality slightly less significant. Nevertheless, a wider debate must take place throughout the Government about the role and function of targets, and the consequences of not achieving them.

Things have moved on in domestic energy efficiency since last year's private Member's Bill. We now have the White Paper. It does not under-estimate the challenge that faces us in improving our domestic energy efficiency. One of the most telling statistics in the chapter on the subject in the White Paper was the table that shows that, of all the Organisation for Economic Co-operation and Development countries, the United Kingdom is 14th in energy intensity. We

are the 14th least effective nation in making the most of our energy supplies.

If we are to achieve the stringent targets for CO2 savings that are included in the White Paper, which specifically states that

''savings of this magnitude would need roughly a doubling of the rate of energy efficiency improvement seen in the past thirty years'',

we must take ambitious steps. I therefore tabled new clause 7, which ties the Government into the CO2 savings that are referred to in the White Paper, while accepting that they are reluctant to adopt a particular target for energy efficiency improvements per se.

I shall reiterate one point, which was mentioned by the hon. Member for Hazel Grove. I understand that last week, new clause 7 was agreed between the promoter of the Bill, my hon. Friend the Member for Milton Keynes, North-East, and the then Minister and his officials. It seems to me that if the new clause was good enough last week, it should be good enough this week. I shall be interested to hear the Minister's response to that.

The value of new clause 7 is that it clarifies some of the weaknesses in the White Paper, and ties the Government not to a specific energy efficiency target but to introducing energy efficiency measures that would achieve the necessary CO2 reductions. It reiterates remarks that have been made by several Ministers in recent weeks about the importance of the savings proposed in the White Paper. I understand that on 18 March, the then Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Scunthorpe (Mr. Morley), stated in response to a parliamentary question that

''a strategy for achieving these savings is set out in the Energy White Paper.''—[Official Report, 18 March 2003; Vol. 401, c. 639W.]

On 2 April, the former Minister for Energy and Construction, my hon. Friend the Member for Cunninghame, North, at a gathering of representatives of the energy efficiency industry, who were concerned at the signals sent to their members by the lack of targets said:

''It is Government policy to achieve those objectives''—

the energy objectives—

''so your members should take paras 3.5 and 3.6 as read and invest accordingly.''

I also understand that the head of the Government's sustainable energy network reiterated at the Energy Efficiency Partnership for Homes conference on 20 May that

''the White Paper explains the way to deliver CO2 savings.''

Thus, there have been several statements by Ministers and Government officials that reiterate the importance of the savings referred to in the White Paper, even though they are not explicitly listed as targets.

I should also like to pick up on the Minister's indication at the conference of representatives of businesses working in the energy efficiency field that it is critical to send the right signals for business confidence. The Government alone cannot deliver those objectives—they are dependent on those who work in that field. They depend on the investment made by manufacturers, whether they be

manufacturers of more efficient appliances, of boilers, of control systems for central heating, of ventilation or air conditioning, or of insulation materials. If the Government send a confused signal to those manufacturers, they will be reluctant to invest and there will not be a cat in hell's chance of achieving the necessary CO2 reductions.

Andrew Stunell (Liberal Democrat, Hazel Grove)

Is the hon. Gentleman aware that a meeting was held last week between the manufacturers of condensing boilers and micro-CHP and Lord Whitty, and that the manufacturers came away very disconcerted at the apparent lack of focus and intention as a result of that meeting?

David Chaytor (Labour, Bury North)

I was not aware of that meeting, and I am not privy to Lord Whitty's diary. The point is important, however, as it indicates the dangers of sending out the wrong signals and is another important argument in support of new clause 7. We should offer the manufacturers of condensing boilers and others working in the energy efficiency technologies more reassurance so that they can plan their investment programmes more effectively.

David Drew (Labour/Co-operative, Stroud)

My hon. Friend's argument is compelling. Does he agree that the voluntary sector is especially affected by the need for clear signals? We all know about the warm front scheme and its potential budget cuts for next year. If we raise expectations, we must be clear about having to deliver them. If people expect new central heating or to have their central heating improved, we must give clear reasons why they can expect that to happen. If not, we will end up in a very difficult situation.

David Chaytor (Labour, Bury North)

My hon. Friend makes an extremely important point. The wider issue is that improvements in domestic energy efficiency are an entirely win-win situation. No one is opposed to improving domestic energy efficiency, apart from the most irresponsible suppliers of fossil fuels, whose only interest is in selling more energy without considering its use or the wider consequences for climate change of a profligate use of energy. Everyone gains by improving domestic energy efficiency. I deeply regret the fact that the Government do not yet seem to have appreciated that fully, or to understand fully what a huge amount of political capital can be accrued in the industry and among consumers for an ambitious programme and ambitious aims.

To return to the role of the voluntary sector and to local authorities, the proposals in new clause 7 are crucial if the Government are to meet the fourth objective of their energy policy to eliminate fuel poverty. For a wide variety of reasons that we do not need to go into, we know that energy prices will rise in the years to come.

For several years, we have been living in a fool's paradise of unjustifiably low energy prices. We have been conditioned to believe that energy prices can continue to fall year after year, but history teaches us that when energy prices are low, people become more profligate in their use of energy and take less heed of the importance of conserving energy. That period of low energy prices is now passing. The price of all forms of energy will increase in the next few years, and the

consequences will be quite dire if no correcting action is taken to achieve fuel poverty targets.

The only way to achieve our fuel poverty targets in an era of rising energy prices is to make more efficient use of energy.

Gregory Barker (Conservative, Bexhill and Battle)

I am listening carefully to the hon. Gentleman's extremely articulate and eloquent explanation. I know how much thought he gives to these issues because he contributes so much to the Environmental Audit Committee, which he has just joined. Without interrupting his flow and before he concludes his remarks, will he say why he is withdrawing the motion and whether he believes that what is left in the Bill goes any way towards meeting the ambition and strategy that he outlined this morning? I am puzzled about where all this is taking us? The hon. Gentleman has described so well for the record what we have to do and why we have to do it that I am struggling to put myself in the position of backing him, agreeing to the withdrawal of the motion, and voting for a quisling version of a watered-down Bill.

David Chaytor (Labour, Bury North)

The hon. Gentleman is making assumptions about what I intend to do. It would be misguided of me to respond to his question before I have decided what I will do. Having said that, I accept that the hon. Gentleman has made an important point. The description of the new clause that my hon. Friend the Member for Milton Keynes, North-East has tabled as ''quisling'' is a little harsh. The hon. Gentleman will know that if one is not able to achieve 100 per cent.—or even 85 per cent.—of what one has set out to achieve, sometimes 70 per cent. is better than nothing.

I have tried to argue the positive reasons for supporting new clause 7. However, I also wish to reassure the Minister that accepting new clause 7 would not lead him into any difficulties. Safeguards have been built in. New clause 7 refers to ''reasonable steps''. We all know that ''reasonable'' is an extremely useful word, and that one person's conception of what is reasonable is not always the same as another person's conception of what is reasonable. New clause 7 also provides for the taking into account of any likely costs, so that if totally unexpected costs arose, that would not cause a major problem.

The new clause specifically ties the Minister to the current policy document; currently, that document is the White Paper. The objectives are defined as carbon savings, but if the Government decided that the objectives in the White Paper had to be changed, the new clause would provide the flexibility for such a change. I hope that if changes were made to the White Paper, a more stringent policy would emerge. However, to be more realistic, the clause allows for a relaxation of the ambitions of the White Paper.

Having made those few remarks, I reiterate the crucial overriding importance of improving domestic energy efficiency, and—as the White Paper states—doubling the rate of that improvement over the next 30 years. If the wording of new clause 7 was acceptable last week, it should be acceptable this week.

Andrew Robathan (Conservative, Blaby)

That was an extremely thoughtful and sensible speech by the hon. Member for Bury, North. It pains me to ever agree with the Liberal Democrats, but the hon. Member for Hazel Grove made a similarly sensible speech with which I disagreed with very little. It is nice to see the Liberal Democrat representation present today. Last week, they were very much missed.

This is not a partisan matter, although we are in a partisan place. Everybody in the Room, including, I suspect, the Minister, believes in much the same ethos. The question is how we get a better sustainable energy policy. If anyone is not convinced of the reality of climate change, they should look at what is happening to the climate in the United Kingdom. It is not just nostalgia that leads me to remember that I went tobogganing every winter when I was a child. Climate change is here; it is happening. We see it in droughts in March; in muggy, clammy Mays, when they used to be fresh; and in snow in Jerusalem. This is such an important matter that we should not make too many silly partisan points.

The hon. Member for Milton Keynes, North-East has done an excellent job in bringing the Bill before the House. It is enormously important, and his heart is in the right place. He may have been somewhat seduced by too close contact with Ministers, but perhaps that is one of the disadvantages of politics. Similarly, I have no doubt that the Minister's heart is in the right place. I would like him to put his words and actions where his heart is. I turn to the departure of the hon. Member for Cunninghame, North, who was on the Committee when it met two weeks ago. I much regret his departure, not because I am sorry to see the new Minister, but because his heart was in the right place and he was working hard for what all of us in the Room believe in. I suspect that his frustration with other Departments may have been part of what was behind his decision not to go on—although, of course, I cannot speak for him.

We must ask why the Government are trying so hard to water down the Bill. The Government have form. Last year, there was a bizarre occurrence involving a similar Bill. The hon. Member for Brighton, Kemptown talked out his own Bill on the promise, I understand, of a ten-minute Bill. I do not know whether that was the case and because the hon. Gentleman is not present I do not want to malign him, but it was pretty strange.

No Governments—this goes for Conservative as well as Labour Governments—like having duties imposed on them. We understand why. God willing, after the next election I shall be the Minister with responsibility for energy. If I were, I would not like having duties imposed on me either. I understand that dislike. However, we want real obligations in the Bill. If I were the Minister, I would accept that.

Do we have time to move more slowly in good spirit and with good intentions? I have mentioned climate change. The hon. Member for Milton Keynes, North-East referred to a 5 per cent. increase in the efficiency of housing stock over eight years. That is just too slow. It is not good enough. Climate change is here and

energy efficiency improvements have to be here is spades as well, because things can only get worse.

New clause 10 places obligations on and gives targets to local authorities, to which the hon. Gentleman referred. Why are the Government so keen not to have obligations themselves? If obligations are good enough for local authorities, they should be good enough for Governments.

We are talking about domestic energy efficiency. We all know that our housing stock is woefully inefficient. Two years ago, I bought a farm in my constituency. I lived in the farmhouse for 18 months. I am glad to say that we have now moved to a warm, well insulated, relatively well thought-out building with a photovoltaic roof. However, when I lived in the farmhouse, the wind came in through the holes around the cellar and went out through the holes in the roof. We had central heating, but it was pretty antiquated and if it was going full blast, it just took the chill off the house, which was really damp. That is an extreme example.

It is partly a cultural and educational thing. Far too much of our housing stock is in a similarly appalling condition. The hon. Member for Hazel Grove referred to culture and the hon. Member for Bury, North to education. I vividly remember an article in my local newspaper, the Leicester Mercury, which featured a man complaining about his central heating in his council house. It had been off for two days and there he was, in December, sitting in his vest in his drawing room, complaining about it.

Every single individual in the country must learn that we do not need to have our living rooms heated to 80º. We should put on extra jerseys and have well insulated and ventilated houses. We should not expect to be able to live in T-shirts in the middle of December. It is a bit of a bugbear of mine, but it is important. [Interruption.] Sadly, I did not hear the intervention. We are talking about the education not just of local authorities, but of individuals.

I want to ask the Minister about the point made by the hon. Member for Milton Keynes, North-East about new clause 7. Was it agreed? I have looked at it and it is pretty innocuous. I do not see why anybody should get frightfully upset about it. What was the problem that the Department for Environment, Food and Rural Affairs had? New clause 7 wisely keeps referring back to the Government's energy White Paper and their climate change programme that was presented to Parliament in November 2000. What possible problems can the Government have with that?

Andrew Stunell (Liberal Democrat, Hazel Grove)

Will the hon. Gentleman comment on the irony that the Department of Trade and Industry, which is responsible for the generation and supply side of the industry, is in favour and the Department for Environment, Food and Rural Affairs, which has responsibility for efficient use of energy, seems to be objecting?

Andrew Robathan (Conservative, Blaby)

The hon. Gentleman makes an excellent point. If we care about the environment, surely we should be heading that way. If the Department of Trade and Industry can come on

board, surely the Department for Environment, Food and Rural Affairs can as well.

An excellent point was made about business investment and in this country we have a bad record. Some of us attended the debate on energy policy a couple of weeks ago when it was pointed out that Britain had been at the forefront in the development of wind energy 20 or so years ago, but, sadly, is now in the rearguard. I suspect that throughout the Committee and the country among those who care about the matter there is grave disappointment about the watering down of the Bill. I pay tribute to the commitment of the Bill's promoter—I am not weeping crocodile tears—but if the Bill goes through in the way that the Government want, is it really worth having with such watered down clauses?

Huw Edwards (Labour, Monmouth)

I thank you, Mr. Illsley, and the Committee for the opportunity to be here and I congratulate my hon. Friend the Member for Milton Keynes, North-East. I was a member of the Standing Committee that considered the Bill to which he referred earlier, which was introduced by our hon. Friend the Member for Brighton, Kemptown. I seem to recall speaking to a clause similar to new clause 10, which is effectively the fuel poverty clause. It was a pleasure to be on the Standing Committee that considered that Bill but it was disappointing to have to vote against my hon. Friend when he had to talk his own Bill out. That was a disappointing experience and I hope that we have—

Brian White (Labour, North East Milton Keynes)

I assure my hon. Friend that I shall not talk this Bill out.

Huw Edwards (Labour, Monmouth)

I am grateful to my hon. Friend. I and, I am sure, the Committee are mightily relieved to hear that. It is a terrible dilemma when we are asked to do something like that.

New clause 10 relates to the directions that the Government would want to make to local authorities in England and Wales—I speak as a Member representing a Welsh constituency—to co-ordinate activities in their local communities for developing local strategic partnerships to achieve the aims of the Warm Homes and Energy Conservation Act 2000 to eradicate fuel poverty. I have had an interest, but no expertise, in the matter for a number of years. I used to be a social policy lecturer and sometimes lectured on the theme of hypothermia and social policy. The seminal work in the area was a study called ''Old and Cold'' by Malcolm Wicks, the same Malcolm Wicks who is now my hon. Friend the Minister for Pensions. I sometimes take particular pleasure in reading the recommendations made to Government by academics who subsequently become a member of the Government. When we were here last year with the right hon. Member for Oldham, West and Royton (Mr. Meacher) who had made many pertinent recommendations to Government in his social policy research—he was at York university, as I was—we were able to quote some of the recommendations that he had enthusiastically advocated when he was an academic, but was reluctant to implement when he was a Minister. I hope that he will be able enthusiastically to advocate those recommendations again.

Andrew Robathan (Conservative, Blaby)

Is that not a lesson for us all?

Huw Edwards (Labour, Monmouth)

Indeed it is. Perhaps another lesson is not to wish to be a Minister and to keep one's integrity by making recommendations to Government from the Back Benches, maintaining some consistency in our academic and political careers.

Fuel poverty is a serious problem and relates to insufficient income to keep one's home warm and dry. It was a particular problem and was investigated in the 1970s. The focus of ''Old and Cold'' was hypothermia among the elderly. Our concern now is fuel poverty as it might affect all aspects of all age groups, and it is a considerable problem.

There is a particular problem in Wales. My constituency, Monmouth, is relatively affluent, but it has pockets of deprivation, and one is in a wonderful community called Llanelli Hill. I do not know whether hon. Members know south Wales, but if they go up the heads of the valleys road, past Abergavenny, they will be getting to the true valley communities. One of the first is Llanelli Hill. Then one moves towards Blaenau Gwent and Torfaen. When those communities are shrouded in mist, one is aware that they can be very deprived in terms of the environment. They are former mining communities. Often, houses were put up rather cheaply in the early part of the 20th century. They are poorly insulated and suffer from energy inefficiency. That is the very type of property that we expect this legislation to address.

Hon. Members may also know north Wales. Blaenau Ffestiniog is the traditional centre of the slate mining community. I think that it has the highest rainfall of anywhere in Britain. The hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) is not on the Committee, but I am sure that he would speak fondly of the richness of that community. It is the type of community to which such legislation should apply.

To the previous Government's credit, they introduced the Home Energy Conservation Act 1995. It is to the credit of this Government that we have the Warm Homes and Energy Conservation Act 2000. The aim of the clause is to apply those measures to local authorities to achieve the aims of eradicating fuel poverty by 2016 and, in respect of the most vulnerable, by 2010.

I was particularly interested in the comments made by my hon. Friend the Member for Bury, North about the likely rise in energy prices. That will have a significant impact. It is to the credit of this Government and previous Governments that since studies were conducted in the mid–1970s—25 or 30 years ago—a number of measures have been introduced to improve housing conditions, social security provision, public health provision and the co-ordination of health and social services. That ensures that fuel poverty is dealt with in different ways.

The aim of this measure is to give local authorities the lead role in co-ordinating activities with public bodies, voluntary bodies, public health agencies, advice agencies such as welfare rights agencies,

agencies that represent people in the area of disablement, refugee organisations, community groups, energy suppliers and local businesses. The need for a more co-ordinated approach is at the core of the Bill.

It is estimated that more than 200,000 homes in Wales need support under the Home Energy Conservation Act 1995, of which 150,000 come into the category of social housing, 84,000 are in owner occupation and 23,000 are private rented accommodation.

I noted the comments made by my hon. Friend the Member for Milton Keynes, North-East about the Local Government Association. I place on the record my great respect for the officers of the Welsh Local Government Association—

Andrew Robathan (Conservative, Blaby)

Vice-president?

Huw Edwards (Labour, Monmouth)

I am not a vice-president, but I know one or two of the leading officers well and I know their commitment to working with local government and, within the new democratic framework in Wales, with the National Assembly for Wales. It is to the Assembly's credit that it has made social inclusion one of its central themes covering all policy areas. This legislation will give the Assembly duties to work with local authorities in Wales to achieve greater home energy conservation and to eliminate fuel poverty by 2016. I am therefore pleased to support new clause 10.

Gregory Barker (Conservative, Bexhill and Battle)

I pay tribute to the hon. Member for Monmouth (Mr. Edwards) for the articulate speech that he has made and for bringing the Committee's attention back to fuel poverty. May I say how disappointed I was, having moved the amendment to put the teeth back into the Home Energy Conservation Bill last summer, to see that Bill eventually fail through the machinations of the Government Whips and the collaboration of its sponsor? When I made a brief contribution earlier, I asked why the Government were shying away from targets, which is particularly apposite when examining targets around fuel poverty.

The Government have not been totally silent on fuel poverty and I pay tribute to the progress that they have made. They brought in the Warm Homes and Energy Conservation Act 2000, which imposes a statutory duty to end fuel poverty in vulnerable sectors and in all social housing by 2010. The Government have made repeated promises that they would achieve that target on the wider definition of fuel poverty, which is 10 per cent. of disposable income, rather than 10 per cent. of total income, needing to be spent on keeping warm. That promise was reiterated most recently by the right hon. Member for Oldham, West and Royton at the annual conferences of National Energy Action and the national right to fuel campaign.

Again it appears that the Government are starting to slip, slide and backtrack away from a target because they are not making progress, are not putting the effort in and are not backing their promises with resources. The fuel poverty advisory group's

recommendation that at least 50 per cent. more resources are needed if the 2010 target is to be met has been ignored. The FPAG has advised the Government that at current rates of progress 2.3 million vulnerable households, which contain 3 million people, will still be in fuel poverty by 2010, which will lead to the Government missing that target by a wide margin.

The Government's statutory duty under the Warm Homes and Energy Conservation Act 2000 to end all fuel poverty in all sectors by 2016 is equally under threat. The White Paper claims that 3 million people in the UK are in fuel poverty, 2 million of whom are in the vulnerable sectors. Even if one accepts that low figure, the Government have still ignored and abandoned 1 million vulnerable people by using the narrower definition of fuel poverty, which is 10 per cent. of total income rather than 10 per cent. of disposable income—they have untruthfully claimed that that definition is normal. They have also broken numerous ministerial promises to end fuel poverty on both definitions. They have abandoned a further 1 million households by ignoring evidence from the NEA, which has been reiterated by the FPAG, that 1 million households in social housing who comply with the Government's specified decency standards are in reality still in fuel poverty.

Furthermore, no new resources were announced in the White Paper to achieve the 2010 target, despite the recommendations by the FPAG and others that I have mentioned. Perhaps it is not surprising that the Government do not want to see binding, ambitious targets on the face of the Bill. More than that, they are backing away from the spirit of their existing commitments. It is particularly worrying that the turf warfare raging between DEFRA and the DTI has resulted in collateral damage to the wider agenda of eradicating fuel poverty, promoting sustainable energy and coming up with an ambitious programme for Britain's renewables sector.

All those things are vitally important, but they are casualties of DEFRA's inability to get its act together and the inability of the Secretary of State for Environment, Food and Rural Affairs to marshal her Department behind the promises that the Government made when they came into office. The Ministers in that Department have been unable to deliver on their manifesto objectives and previous promises. DEFRA, which is at the heart of the Government, is slowing down the machinery of the whole Administration.

Andrew Robathan (Conservative, Blaby)

Does my hon. Friend agree that the recent departure of the right hon. Member for Oldham, West and Royton from the Government, which was portrayed as a resignation, showed a certain feeling of frustration on his part?

Gregory Barker (Conservative, Bexhill and Battle)

I agree that the right hon. Gentleman must be a very frustrated man, but also a very liberated one. I look forward to hearing more from him on the subjects that he covered while in office. His departure has also ripped a fig leaf away from that Department and the whole Government: it leaves them naked before the environmental lobby, and it exposes their shortcomings.

I am very disappointed that we will not get what we hoped to see in the Bill, but I look forward to seeing which way the Committee votes.

David Drew (Labour/Co-operative, Stroud)

I am delighted to serve under your chairmanship, Mr. Illsley, and I will not keep the Committee long. I rise in support of new clause 7, which was introduced by my hon. Friend the Member for Bury, North. I do not want to add much to his very eloquent explanation of why it is important, if it is at all possible, to toughen up the wording of the Bill.

Sometimes the Government actually do not realise when they have successes on their hands. They ought to tell people about those successes and work upon them. By pure chance in the past few days, I managed to get hold of ''Warm Front: Helping to Combat Fuel Poverty'', a report by the National Audit Office. The report is interesting. It is critical in some respects about the way in which money is spent, but last year we managed to introduce a range of measures into something like 370,000 households. That is a considerable number, but there is a lot more to be done.

The main point about the report is that increasing energy efficiency, as my hon. Friend rightly said, is a win-win situation. In a sense, it is a win-win-win situation because energy efficiency leads to conservation that meets our international obligations, it helps individuals, and it builds industry. When I intervened on my hon. Friend, I made a point about the voluntary sector in response to his mention of the private sector.

It must be remembered that, for all the work that the Government do, they target their resources, and there has to be a clear commitment by the individual household. My hon. Friend the Member for Monmouth made a compelling point about what type of houses need to be energy efficient and have fuel poverty measures applied. We know that the most vulnerable people live in the oldest property. If we are serious about dealing with fuel poverty, that is the problem that we have to attack. As we know, those people will not necessarily fit into the right category of benefit support, or meet the criteria of the scheme. Such matters need to be taken into account.

I am clearly aware that such features have to be introduced according to the way that we operate in the House. I am always aware that the passing of legislation may be the stick, but the carrot has to be the way in which people change their mindsets, and we must ensure that we do the best we can. I hope that the debate has been useful, that the Government treat seriously the new clause of my hon. Friend the Member for Bury, North and that the required work is taking place.

I see that my hon. Friend the Minister has a copy of the NAO report, and I apologise if I put my foot in it because I did not notice the embargo on it. I still think that it is useful for us to know what is being done. The Government ought to take credit for it. When we have done good things, we should say, ''This is working and we are going to put more resources into it.'' The qualification is that we have had to reduce

slightly the funding for the warm front scheme next year because of DEFRA's budgetary problems. However, everything can come together; there is a need for coherence and legislation can provide a coherent framework. I hope that the Minister will give a good hearing to our plaintive pleas and will give the Bill the teeth that it needs to make the differences that all of us want to see.

Sue Doughty (Liberal Democrat, Guildford)

I, too, would like to see the clause agreed. It has reasonableness stamped all the way through it. It is not trying to tie the Government down beyond what is practical. It recognises that situations change, new technologies come along, and the Minister might decide that the targets could be tougher. In fact, it is almost too reasonable. Last year, I debated the Home Energy Conservation Bill believing that it would really work towards helping the fuel poor and alleviating the situations that we heard described earlier, only to find that nothing would be done for the fuel poor because it was talked out—nul point so far as they were concerned.

Sustainable energy is essential and the Government's energy White Paper was most welcome in that it made reference to it. However, as somebody with only a couple of years' experience of Parliament, I still get very confused. How is it that the Government put targets in their White Paper, but when other targets are introduced in a private Member's Bill we suddenly find ourselves with something referred to as aims, which are not even very well specified? I came into Parliament to pin people down as to what they were going to have to do. I thought that that was what the legislative process was about.

Brian White (Labour, North East Milton Keynes)

A noble concept.

Sue Doughty (Liberal Democrat, Guildford)

Yes. I agree with the hon. Gentleman, and I am sorry that he has associated himself with so much of the watering down of his own Bill. I know that he worked tremendously hard to ensure that there was something concrete in the Bill—nothing unreasonable or irrational, but an enactment of part of the White Paper that would take us one stage further. I have a lot of sympathy with the view of the hon. Member for Bexhill and Battle about targets. The Government are obsessed with them; hospitals quail under them, as do schools. I have been in and out of my local schools during the past few weeks thanking teachers for their achievements despite the targets that the Government rain down on them all the time.

Yet when a target comes near, the Government duck. In fact, they crawl and hide. Committee sittings are constantly rearranged so that the Government can try to find the fig leaf of which we have heard, and attach it in the right place to achieve the shred of decency that they seek. I am not convinced that the fig leaf is where it should be. This is a Bill that—

David Chaytor (Labour, Bury North)

Will the hon. Lady tell us exactly where the fig leaf should be?

Sue Doughty (Liberal Democrat, Guildford)

I would like to, but, being in a Room full of men, I feel that I really must draw a veil over the matter now. However, the Bill is scarcely a macho Bill.

Some comments have been made about fuel poverty, which is desperately important. Over the past few months we have seen the contrast between what the true price of energy is, and the problems with British Energy and the money spent on bailing it out. We have never really paid the true cost of nuclear and we know that adjustments need to be made in the market, both in renewables and in traditional fuels, to get the right price for energy. All the time we say, ''We can't do this, because it would affect the fuel poor.'' The reality is that some of the objectives in the Bill to do with energy efficiency, CHP and home energy conservation, which we looked at last year, would go a long way to dealing with fuel poverty and reducing the amount of fuel that people need, and in that way we might see a more sensible approach to energy pricing.

One cannot take such things one by one, but having the original objectives of the Bill in place would have helped with the wider argument on energy as a whole. We need to work on that. I am happy to support the clause, but would still be fascinated to know why DEFRA is not happy—I am sure that the Minister will refer back to what happens in that Department. If the rumour that DEFRA lawyers were not happy is true, the question of who actually runs DEFRA arises—we know that it changes from week to week. It is possible to achieve a sensible compromise in DEFRA through what I think is now known as the domestic kerbside recycling Bill. That Bill was watered down, but some teeth were left in place—there are to be two sorts of recycling, which means that a vehicle will have turn up at the premises to bring about kerbside recycling. I do not think that the Bill will lead to any vehicle turning up to do anything by the time it has been so watered down.

On the whole, we are likely to support the Bill in order to get something on the statute books, but what poverty of ambition the Government have. I am afraid that I must say to the promoter of the Bill that it is a compromise too far—I am sorry to say that in view of the enormous amount of work that he has done. I hope that the Minister, who is an intelligent, thoughtful person, might be able to lift his sights to the horizon a little bit to see what we can do to give the Bill teeth, because it underpins so many other things that we need to do to improve the position not only of business, but, importantly, of the least privileged in our society.

Stephen Timms (Labour, East Ham)

I welcome and support new clauses 8 and 9, tabled by my hon. Friend the Member for Milton Keynes, North-East, which have the aim of introducing a new duty to take reasonable steps to achieve energy efficiency for residential accommodation that has been designated for the purposes of the legislation. I must say to the Committee and to the hon. Member for Guildford that I think that that is a worthwhile and significant step. I am absolutely sure that we shall hear a lot more about that duty in the years ahead. Just as hon. Members in this debate have looked back on significant legislative changes on fuel poverty by this Government and the previous Government, the

provisions will be an important step in improving energy efficiency, and are a good illustration of the progress that will be made if and when the Bill reaches the statute book, as I very much hope it will.

Taking forward work on energy efficiency is a key part of our work in following up the White Paper on energy, which it is my job to deliver.

Gregory Barker (Conservative, Bexhill and Battle)

Before the Minister moves on, I want to probe him a little on what he takes reasonable steps to mean. It seems that in its second term, new Labour is developing a new language of irregular verbs that says to subordinates, ''You have a binding target. I target reasonable steps.'' What does the wording mean to the layman?

Stephen Timms (Labour, East Ham)

That form of words is extremely familiar in legislation. I shall return to that subject, but I now want to respond to several points that the hon. Gentleman and other hon. Members raised about the Government's general approach to targets.

We want to achieve a step change throughout the economy in energy efficiency. We are preparing an implementation plan for delivering the strategy set out in the energy White Paper. In order to deliver our commitments, in particular in chapter 3, we will work with the energy efficiency industry, and others who have an interest, to develop that plan. We shall ensure that we provide the time to do that successfully.

New clauses 8 and 9 bring the Bill into line with policy on energy efficiency and our wider climate change objectives. The hon. Member for Blaby is right to say that climate change is happening. We need to make far-reaching changes to the way our economy works to respond to that. The new clauses are helpful steps in that direction. They provide flexibility to allow the designated energy efficiency aims to be altered and improved, and ensure that the appropriate legislation is in place for both England and Wales.

I would like to say a little more about new clause 10, which I am pleased to support. The new clause would have the effect of giving the Government power, following consultation with local government representatives, to give a direction specifying a level of improvement in energy efficiency in residential accommodation to be achieved by energy conservation authorities. It would require those authorities to implement measures that they consider to be cost effective, practical and likely to result in achieving the improvement.

The Government do not want to place new burdens on authorities without offering funding to meet them in full, so we would not issue the directions until the necessary funding could be made available. Until that time, there would be no new financial burdens on authorities. Once full funding was available, we would be able to issue directions; the authorities would have to achieve the improvements in residential energy efficiency by specified deadlines, and they would be given the funding and support that they needed to undertake that task.

New clause 10 would require the Secretary of State and the National Assembly for Wales to consult the Local Government Association in England and the

Welsh Local Government Association—we have heard a little about them today—when setting targets for improving efficiency in residential accommodation for energy conservation authorities. The direction would include a date by which the improvements were to be made, and that could be varied by the Secretary of State and the Assembly.

Under the Home Energy Conservation Act 1995, most authorities have set themselves targets, but those vary considerably. Of course, targets should reflect local circumstances, such as housing type and the state of the stock when the 1995 Act was introduced. However, an important element of the proposed approach is that the direction should be worked out in consultation with representatives from local government, rather than simply imposed from above.

Earlier, we had a good discussion about fuel poverty. I listened with great interest to, and was in agreement with, my hon. Friends the Members for Bury, North, for Monmouth and for Stroud (Mr. Drew). I am pleased that new clause 10 includes a requirement in subsection (6)(a) for local authorities to have regard to the eradication of fuel poverty in the course of carrying out their duties. The fuel poverty strategy that came from the Warm Homes and Energy Conservation Act 2000 sets a target, as we have heard, for the eradication of fuel poverty as far as is reasonably practicable. We are committed to meeting that target, and that provision will help us to do so. We have linked the proposed duties on fuel poverty action to the issue of a direction to achieve improvements in residential energy efficiency, so authorities will be required to undertake additional activities only when full funding is available.

I was grateful to my hon. Friend the Member for Stroud for drawing attention to the progress that we have made. To his credit, the hon. Member for Bexhill and Battle made that point, too. There has been a good deal of progress on dealing with fuel poverty in the past few years. The White Paper says that in 1996 there were 5.5 million households in fuel poverty. There are now about 3 million. That is substantial progress. The White Paper also makes it clear that there is still a long way to go. We must keep up the momentum. The proposed new clause would help us do that and it may, perhaps, further speed things up.

I was especially impressed by my hon. Friend's diligence in obtaining a copy of the NAO report, which is due to be published tomorrow, and for giving us a sneak preview. He is correct to draw attention to that, because it is another indication of the seriousness with which the issue is being addressed.

My noble Friend Lord Whitty has been referred to during the debate. When I was the Minister at the Treasury dealing with such things, I discussed this topic with him a number of times. No one should underestimate his personal commitment to making progress on dealing with fuel poverty. I look forward to working with him on the present matter in my current role. I am confident that we will be able to make further progress. It is vital that we do.

I enjoyed reading the comments of my hon. Friend—now a Minister in the Department for Work and Pensions—in his 1970s book on the subject, which reflect the great importance and enormous impact on millions of people and households of dealing with the matter during the years ahead.

My hon. Friend the Member for Bury, North made a good, thoughtful speech in support of his new clause 7. He reassured me that I would not run into any difficulties if I accepted his proposal. Notwithstanding that, I will resist it. It would replace the target in clause 2 with a duty to

''take reasonable steps to achieve the carbon saving aims in relation to the energy efficiency of residential accommodation specified in any policy document''

designated for the purpose of the legislation. I have made it clear that taking forward energy efficiency measures is a key part of our work in following up the Energy White Paper. We remain completely committed to the commitments made in that document. We want to achieve a step change in energy efficiency throughout the energy economy.

Andrew Robathan (Conservative, Blaby)

I had forgotten that the Minister was a gamekeeper turned poacher, or vice versa—I am not sure. I do not doubt his good faith, but I doubt his ability to deliver. If we were to accept new clause 8, to which his name is appended, we would agree to a lot of talk about the ''energy efficiency aim''. There is some doubt about that. I hope that before he sits down he will explain exactly what that aim would be.

Stephen Timms (Labour, East Ham)

Our aims are set out fully in chapter 3 of the White Paper. It is my job to deliver those aims.

Andrew Robathan (Conservative, Blaby)

When the new clause says

''at least one efficiency aim'',

does that refer to at least one of the aims in the White Paper?

Stephen Timms (Labour, East Ham)

We set out in chapter 3 what we intend to achieve on energy efficiency. The proposals in the new clause are a helpful step in that direction.

Andrew Robathan (Conservative, Blaby)

I do not doubt the Minister's good faith, but he has not answered the question. What will be the energy efficiency aim? Will it be one of the aims in the White Paper? It is mentioned in subsections (1), (2) and (3) of new clause 8.

Stephen Timms (Labour, East Ham)

I can only refer the hon. Gentleman to the White Paper, in which our 135 aims are set out fully. Those relating to energy efficiency are in chapter 3. We remain committed to all of them. The steps that we are taking in the Bill, as it is now framed, will be helpful in achieving them.

Brian White (Labour, North East Milton Keynes)

Does my hon. Friend accept that one of the fears that a number of people have is that, given the way that new clause 8 is now worded, a strict interpretation could allow the Government to do something on the building rate, and then say that that has achieved the Bill's energy efficiency aims, without doing anything else in chapter 3? Would he give the Committee an assurance that that is not the Government's intention, and that it is the Government's intention to bring forward a range of proposals?

Stephen Timms (Labour, East Ham)

I am grateful to my hon. Friend for making that helpful point. I can give indeed give him that assurance. We are committed to making progress across all those areas. I have listened to some of the points that have been made during the debate, particularly from Opposition Members, who have given me the impression that they believe that by tying the Government down—passing laws that constrain the Government—they will advance the aims of the White Paper. That is not the case. I will return to that matter because representatives of both Opposition parties made those points.

As for new clause 7, the White Paper applies to the whole of the UK, not just to England. It is important that we are clear about the respective responsibilities of the UK Government and the devolved Administrations. The amendments that my hon. Friend the Member for Milton Keynes, North-East has tabled spell that out very clearly. Those amendments make it clear that energy efficiency aims would be designated for both England and Wales, and that the Secretary of State for Wales and the National Assembly for Wales would be required to take reasonable steps to achieve those aims. New clause 7 is not as clear about that matter. There has been some debate about the discussions of the last two weeks. I have been a party to those discussions only for the latter part of that period. However, it is clear that this is a matter on which the thinking has moved over that period.

New clauses 8 and 9 are helpful in that they require the designation of energy efficiency aims that are contained in published documents that relate to the energy efficiency of residential accommodation in England. That gives us a useful and a better way forward. I reassure the Committee that my job is to deliver on the aims of the White Paper, and to work with colleagues across Government to achieve all 135 of the commitments that it contains.

In both of this morning's debates, Opposition Members have criticised the Government's approach to targets. We have heard denunciations of the Government for issuing targets; the hon. Member for Guildford was doing that a moment ago. Targets can be important, and in certain areas it is right to have them. The hon. Lady criticised us, only to call for many more targets in the area of energy efficiency. It is not unfair to ask for a little more consistency.

Sue Doughty (Liberal Democrat, Guildford)

I am interested in the Minister's interpretation of what I said. Like colleagues on the other Opposition Benches, I was drawing attention to the Government's own inconsistency in the treatment of targets. One could say that they have over-egged it somewhat with respect to hospitals and schools, and under-egged it with respect to energy efficiency.

Stephen Timms (Labour, East Ham)

I do not agree with the hon. Lady. We have been consistent. It was never the case that the Government scattered targets all over the place. It was always the case that the targets that have been set have been very carefully chosen and weighed. We have made a commitment to set clear, published targets. That is new; it has not been done before. The Government have been able to deploy a powerful mechanism that has allowed great progress to be made

in a range of areas. It is essential that the chosen targets are few and carefully selected, so that the apparatus of the Government can be behind the way in which to achieve them. More targets would undermine the prospect of progress that the much more careful approach would allow us.

Andrew Robathan (Conservative, Blaby)

As ever, I am grateful to the Minister, although his approach to the matter is tremendously inconsistent. It has been government by target; targets are coming out of his ears. The Government set their own targets in their 1997 and 2001 manifestos. The targets for renewable energy and for CHP were originally in the Bill. However, he and his Government have been determined to remove them. They are inconsistent because, having set the targets, they must be willing to live up to them.

Stephen Timms (Labour, East Ham)

The hon. Gentleman is making an error by saying that legislation is the place in which targets should be enshrined. In an earlier debate, the hon. Member for Bexhill and Battle said that passing a law with targets was making progress. The hon. Member for Guildford said that she came to Parliament to tie people down. The changes that all of us believe need to be made in the economy, the vision that is set out in the energy White Paper and the target to reduce carbon emissions by 60 per cent. by 2050 require a massive transformation throughout our economy. They require a large number of players in the private and public sectors to be imaginative and creative and to work in the same direction to achieve that goal. That is a subtle, long-term process. It is difficult.

The appearance in legislation of a particular number could easily be irrelevant to the process. We are looking for a much bigger process of transformation. The Bill, as now proposed, represents an important step in the right direction. I caution, in particular, the hon. Members for Bexhill and Battle and for Guildford against believing that, if only they could put a particular number into a Bill, it would solve the problem. We are facing a bigger challenge than that.

Gregory Barker (Conservative, Bexhill and Battle)

I agree that putting targets into a Bill is not enough. The Minister is missing the crucial point about the Government. After they were elected in 1997, they introduced a series of targets across a wide range of policies. In so doing, they set a new precedent. They set targets in a way in which no previous Government had ever done before. They created them as a new lever and focus for policy direction. Having set that precedent in their first term, the Government changed the political language at Westminster. In their second term, they are now suddenly wishing to revert to the status quo ante. The reason for that is their singular failure to achieve so many of the targets that they set themselves in their first term. The Government are making a rod for their own back. They set the precedent for putting down targets; now, rowing back from those targets, it is unconvincing to say that the reason for so doing is anything other than a failure of policy on their part.

Stephen Timms (Labour, East Ham)

I agree with the first part of what the hon. Gentleman said, which is that the Government

have used targets in a way that is unprecedented and changed the nature of policy making. That is true. The majority of people, not just my hon. Friends, but others as well—agree that that has been an effective step. It has been a positive and welcome change in the transparency of the policy making process. However, he is wrong to say that we rowed back from that. In the area about which we are talking today, several targets have been published. The hon. Member for Blaby referred to some that have been in Labour party manifestos and we stand by them.

Today we are resisting the view that, if only we could make many more targets, the world would be a better place. That is not right and it has never been the Government's approach. It was not the approach taken in 1997. We have always been careful and selective about the targets that are adopted, and careful to ensure that the resources of Government are behind delivering those targets. That was the approach in 1997. That is the approach today and that is the approach for which I am arguing in this debate.

On energy efficiency, I have said several times that we are committed to making progress and delivering our commitment. A properly developed, costed programme will deliver the substantial contribution that we want energy efficiency to make. We will be publishing a detailed strategy on energy efficiency within a year of the date of publication of the White Paper.

I hope that I have given some reassurance to the Committee. I believe that my hon. Friend the Member for Milton Keynes, North-East has made an important contribution in bringing forward the Bill. The many animated discussions in which he has taken part have led to the amendments and the new clauses that we are debating today. The Bill will represent a significant and worthwhile step and I hope that the Committee will support him.

David Chaytor (Labour, Bury North)

We have had a wide-ranging and detailed debate. My hon. Friend the Member for Milton Keynes, North-East has been unjustifiably accused of being a Government quisling, who was too easily seduced. Whether he was tied down before he was seduced was not absolutely clear. The Opposition have accused the Government of having their fig leaf ripped from them. Nevertheless, in spite of the rhetorical excesses of one or two members of the Committee, we have tackled the substantive issue.

I listened carefully to the Minister and was pleased to be reassured by his expansion of the significance of new clauses 8 and 9. He put a persuasive case that individual targets are best not placed in the Bill and that it is the creation of the correct institutional framework and the means to deliver policies and targets that must be its focus. I am not entirely reassured over what has happened to make new clause 7 acceptable last week, but not this week, but we will let that pass.

Andrew Robathan (Conservative, Blaby)

I agree with the hon. Member for Bury, North about how new clause 7 has become acceptable or unacceptable. I am not sure which it is at the moment. When he is talking about targets, is he aware that the White Paper refers to the achievement

of carbon savings not as an aim or a policy, but as no more than a possibility or an aspiration?

David Chaytor (Labour, Bury North)

I am entirely aware of that and I think that that is a weakness of the White Paper. We have had a considerable and interesting discussion about fuel poverty, but ambition poverty is pertinent to some of the arguments that have been advanced.

The Government have been overcautious in the details of the White Paper. The Minister will have taken on board the Committee's strong belief in the need for more stringent targets, although it completely accepts the argument that it is easy to set a target and far more difficult to create the institutional means by which that target can be achieved. Nevertheless, the Committee strongly believes that we need to be more ambitious about meeting our target for reducing CO2 emissions, and about increasing the rate of domestic energy efficiency, which will contribute to meeting that target. In support of that, I quote the new chief executive of the Energy Saving Trust, Mr. Philip Sellwood, who made it clear that the trust's view was that targets are a live issue. He said:

''We do believe there is work to be done in turning the White Paper commitments into more definite targets and identifying the resources that will make the commitments possible . . . This will require Government to set definite targets for home energy efficiency.''

The argument that it is not appropriate to include targets in primary legislation is separate from whether the White Paper's rather vague statements need to be converted into targets. However, I was reassured to hear the Minister reiterate that the taskforce charged with developing the energy efficiency programme will report according to its original target of 12 months from the date of publication of the White Paper, which should be February 2004. We look forward with great interest to the programme that will be published then.

I hope that the Minister has taken on board the strength of the Committee's view and the advice from organisations and individuals outside Parliament, especially people charged with advising Government—not least the Energy Saving Trust—and that he provides reassurance about the way in which new clauses 8, 9 and 10 will operate. So long as he does so, I will not press new clause 7.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 3, Noes 6.

New clause 8 - Energy efficiency of residential

New clause 9 - Energy efficiency of residential accommodation: National Assembly for Wales

New clause 10 - Energy efficiency of residential accommodation: energy conservation authorities

Clause 3 - Amendments of the Electricity Act 1989

Eric Illsley (Labour, Barnsley Central)

With this it will be convenient to debate new clause 11—CHP targets.

Brian White (Labour, North East Milton Keynes)

This is one of the key issues on energy policy that faces the Government. The Government have set targets in this area through their climate change programme. Some hon. Members will be only too well aware of the urgent need to give a boost to the CHP industry. There are huge concerns in the industry that the market for CHP has all but stagnated. A strong declaration of Government support is therefore vital to kick-start investment in such highly efficient technology.

I regret that we were unable to reach agreement on removing the renewables obligation. The CHPA estimates that, without it, some £100 million will drift from the CHP sector to other green technologies by 2010, acting as a further break on progress towards real breakthroughs. The debate will continue and I am hopeful that, over time, the Government will be persuaded of the merits of such a measure.

I make the point to the Minister as he learns about his new job that CHP is in crisis at the moment, and much of that results from the new electricity trading arrangements. Not accepting the original clause 3 will not make that problem go away. Many of us will be on the Minister's doorstep and that of the Treasury over the coming months. Scottish Power, Scottish and Southern Energy, Innogy, Powergen, Northern Electric and Meridian Industrial have all withdrawn from the development of their new CHP schemes. New CHP capacity fell by 95 per cent. from 2001 to 2002. I could go on, but given the time, I will not. The Minister will be aware of such statistics.

The Government have agreed that there is a need for action on CHP, and the new clause provided some assurance to the CHP industry. A proper CHP strategy is now five years overdue but the clause will help to convert some of the Minister's statements into future action. It will allow the Secretary of State to set targets for CHP in Government use. It is a useful, if minor, step forward that will help the CHP industry. The Minister has to realise the gravity of the situation facing the CHP industry, and I hope that, when he responds to accept the new clause, he will recognise the severity of the economic situation that the industry faces.

Andrew Robathan (Conservative, Blaby)

I should say that I have been a vice-president of the CHPA for many years. Regrettably, it is not an interest that I need to declare because I do not get paid for it—hope springs eternal. I instigated an Adjournment debate in October 2001 with the Minister's predecessor because NETA has had a dire impact on the CHP industry, and, at the time, was having such an impact on the renewables industry—although that has partly been allayed by the renewables obligation.

The hon. Member for Milton Keynes, North-East mentioned a few aspects of the problems with CHP. I want to tie the issue into—guess what—another Government target. Measured against targets, we can appreciate the dire situation of CHP. The Government target, which was set by the Conservative Government before 1997, was to have an installed CHP capacity of 5 GW by 2000. In 1997, the Government set a subsequent target of installed CHP capacity of 10 GW by 2005. We have yet to reach the 2000 target, which the Government accepted when they came to power, of 5 GW. Our current capacity is 4.8 GW.

That is immensely important. The hon. Gentleman pointed out that new CHP capacity fell by 95 per cent. between 2001 and 2002. That means that the amount of new capacity being installed now is miniscule. The output of existing schemes fell by 17 per cent. Some

£1 billion of investment in Government-consented CHP schemes is now stalled. The consequence of that and other things is that carbon emissions in the power sector have risen by more than 10 per cent. since NETA came in.

I return to the targets. In the previous debate, the Minister said that the Government were selective about adopting targets and that the whole apparatus of Government comes behind targets to ensure that they are reached. Well, there are two pretty plain targets that will not be reached. The whole apparatus of Government has not come behind them to ensure that they are reached.

Clause 3 would exclude CHP from the renewables obligation and largely treat it as a renewable. I am the first to admit that CHP is not renewable, but it is an efficient way in which to generate electricity, which is why it found favour with the Conservative Government and has found favour with this Government. If we are going to generate electricity—let us consider fossil fuel—it is better to do it in the most efficient way possible.

Brian White (Labour, North East Milton Keynes)

Those of us who discussed the Utilities Act 2000 made that point a long time ago in Committee. My understanding was that it was not the Government's intention at that time to include CHP under the renewables obligation. It happened by accident, rather than by design. At the time, that was not the intention.

Andrew Robathan (Conservative, Blaby)

Does the hon. Gentleman mean that it was not the intention to include CHP?

Brian White (Labour, North East Milton Keynes)

It was not the intention to have CHP as part of the renewables obligation; it was separate.

Andrew Robathan (Conservative, Blaby)

The hon. Gentleman's intervention, with which I agree, has thrown light on the confusion about whether the climate change levy and the renewables obligation should apply in relation to CHP, and whether CHP is desirable.

I will share a briefing that I received about CHP. It states that, although it understands the renewables obligation, there are times during a CHP plant's operation when excess electricity is generated in relation to the site's requirement. That excess electricity can be sold on, and if it exceeds 5 MW, the CHP operator must hold an electricity supply licence. That is when the CHP operator will become subject to the renewables obligation. The industry has estimated that, if CHP were exempted from the renewables obligation, it could result in an investment of between 500 and 1,200 MW of new CHP capacity and dramatically improve the output of low carbon electricity from existing CHP plants.

Of course, it is a difficult one. The Government have shown confusion over whether they want to meet the targets for CHP production that were named earlier. We would say that meeting them is sensible. I have form: I am a vice-president of the CHPA, as is the hon. Member for Gordon (Malcolm Bruce), although I am not its most industrious vice-president.

If the country wants the most efficient electricity generation, with the least carbon emission per unit generated, it must encourage CHP. We all agree about that. However, at the moment, the Government are emasculating the Bill. To include the CHP target in new clause 11, which will only apply to the Government estate, is pretty weak and shows confusion on their part.

Alan Whitehead (Labour, Southampton, Test)

I want to echo the concern expressed by my hon. Friend the Member for Milton Keynes, North-East about the parlous state of the CHP industry. It is in that state despite the central role that we know CHP could play as a transition technology. It is not a renewable technology in its own right, but it could be renewable. At the moment it captures an immense amount of the real energy that is going up into the atmosphere and could be used to greatly boost the efficiency of the energy system. We ought to count it as a failure of our collective imagination that, because of the way in which we have regulated the industry—in many ways for good reasons—such energy is literally going up into thin air, and the prospect of the transitional technology moving us forward in the way in which it could do is in the balance.

The new clause provides a considerable degree of hope for the CHP industry in that the Government will nail their energy colours to the mast by saying that this is something for which CHP should be considered. However, we should not be under any illusion that that, in itself, resolves the problems that could threaten investment now or the long-term pattern of investment that will move us forward in the way that we want. As my hon. Friend said, the problem is that the investment that is being talked about now is the investment that has been queuing up to go in. It could go in; it could make a difference over a considerable period of time and it could, in this crucial period of change to a renewable energy economy, be lost for ever.

I join my hon. Friend in expressing disappointment that his Bill might not be able to make that key contribution of leverage in the debate. The clause as it stands is a welcome signal. If it is added to by further changes over the months—or one or two years ahead at most—considerable progress will have been made in the right direction. If no other thought goes into how CHP can make the changes stick in terms of its own investment over the next few years, we will lose an important stage in moving our energy economy in the direction in which we want it to go.

Sue Doughty (Liberal Democrat, Guildford)

I shall not rehearse all the problems of the CHP market. They have been put forward forcefully and we all share the concern that an industry that does so much towards carbon reduction seems to have been chopped off at the feet, the knees and higher up every time that we look at it. Year on year, it gets a worse deal. That is why the clause was so welcome: it started to redress the balance. When we consider sustainability as a whole, we see that CHP has a key part to play. We are beginning to use the term ''intelligent energy'', and that perfectly embodies the intelligent energy that will deliver on the sustainability targets that we all seek to achieve.

Again, intentions have been expressed, but there is not necessarily explicit provision made for them in the Bill. I shall not pursue that point particularly strongly, but I should like to make another one. The Government are setting targets for using CHP on their own estate. I support that wholeheartedly, but given the Government's record on delivering sustainability on their estate, I fear that those targets may never be met. The Select Committee on Environmental Audit, of which I and the hon. Members for Bury, North and for Bexhill and Battle are members, has to reopen its investigation into sustainable timber, because the Home Office, yet again, is using timber from a non-sustainable source. For heaven's sake, it is being used on a fence that will be thrown away after six months, which is even more disgraceful. I understand that the massive new Home Office building has no plans for CHP. The Government certainly appear unable to deliver—Department by Department—on the sustainability objectives that they claim to have. The Home Office is an example of that.

If we support the new clause, I hope that the Minister will comment on whether the desired result is deliverable by the Government as they currently operate.

Eric Illsley (Labour, Barnsley Central)

I appreciate that these are issues of great interest and considerable matters for debate, but the Committee has only until 11.25 am for further consideration of the Bill.

Andrew Robathan (Conservative, Blaby)

On a point of order, Mr. Illsley. I just want to confirm with you that we can return to this issue at a later date.

Eric Illsley (Labour, Barnsley Central)

Of course.

Stephen Timms (Labour, East Ham)

I shall be brief. I accept what has been said about the importance of the contribution that CHP will make to our sustainability objectives. Equally, I recognise the difficult circumstances that the CHP industry faces. However, I do not agree with the proposal in clause 3(3) and (4) to define CHP as a renewable energy source. Clearly, that would be a bit of a fiction and would not be right. The Renewable Power Association wrote to the Committee to make the point that

''the Renewables Obligation would be completely undermined, and all further deployment of renewables would cease''.

The other element in clause 3 is interesting. It relates to whether CHP should count towards the calculation of how much renewable electricity each supplier must supply. We have said that we will not make such a change without consulting on it, but we are willing to consider proposals for an appropriate means of promoting CHP in line with our commitments in the energy White Paper. There may be more to be said about that in due course.

I welcome the new clause to which my hon. Friend the Member for Southampton, Test (Dr. Whitehead) spoke. I accept that its impact will be limited, but it is potentially significant. As he said, it nails the Government's colours to the mast. I hope that the Committee will agree on that way forward.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 3, Noes 5.

New clause 11 - Chp targets

Clause 4 - Amendments of the Utilities Act 2000

Eric Illsley (Labour, Barnsley Central)

With this it will be convenient to discuss new clause 2—Duty of Gas and Electricity Markets Authority to carry out impact assessments.

Brian White (Labour, North East Milton Keynes)

When I originally moved clause 4 it was to place on Ofgem a duty to have regard to the treatment of sustainable energy policy. Also, regulatory impact assessments for Ofgem were mentioned in the White Paper. New clause 2 combines those two, and makes it clear that the authority will be required for all its important proposals to undertake impact assessments, including environmental impact assessments, unless it considers the matter one of urgency or that an assessment is unnecessary. Where an assessment is not undertaken because the authority considers it unnecessary, the authority will be required to publish a statement setting out its reasons why.

The new clause requires the authority to be given general guidance in conducting the impact assessment. Hon. Members will be aware that considerable detailed guidance is available on the procedure, scope and content of impact assessments. The assessment must include an environmental assessment, and the authority is obliged in its annual report to give details of assessments conducted. On the basis of that provision, I am persuaded that an additional duty to have regard to a sustainable energy policy is unnecessary as the key elements of sustainability—social, environmental and economic objectives—are already set out. The new clause would achieve the objective that I wanted to achieve in clause 4.

Andrew Robathan (Conservative, Blaby)

I am willing to take this at face value—I do not think that there is a Government plot, as I do with most of the clauses. However, can the Minister explain whether new clause 2 will address the major mistake that Ofgem made in the implementation of NETA?

The whole idea of NETA should have included an environmental impact assessment; it should have included the impact that NETA would have on driving down electricity prices. It has been successful in achieving that for good or ill. I do not think that the consequences of driving down electricity prices have been as good as we might wish, and we have already heard that electricity prices are bound to rise—I appreciate the reasons for that, although we are keen on efficiency and the generation of production.

There should also have been an assessment of the impact that NETA would have on CHP and renewables. It actually made renewables entirely unproductive: as the Minister knows, people were closing down wind farms because the generation of electricity was not worth it. Will the new clause

specifically address the issue that Ofgem should take into account the environmental impact of its policies? The old clause was designed to do so.

Stephen Timms (Labour, East Ham)

The new clause will place on the authority a broader requirement than the one that was originally envisaged to undertake and to publish both regulatory and environmental impact assessments, as was outlined by my hon. Friend the Member for Milton Keynes, North-East. I welcome and support that proposal. I cannot tell the Committee what would have been the case if the new clause had been in place before.

There have been some important gains as a result of NETA, but that is for a separate debate. It is right that the new arrangements should be in place. Environmental and regulatory impact assessments should be conducted.

Andrew Robathan (Conservative, Blaby)

The Minister is new to his job, but his predecessors would accept that the consequences of NETA for CHP and renewable energy were not intended. That is what I am trying to get to the bottom of. We must ensure that further actions by Ofgem do not have NETA's bad, unintended consequences on renewable energy and CHP.

Stephen Timms (Labour, East Ham)

I take the hon. Gentleman's point. He is absolutely right, it was not intended that there would be a damaging impact on CHP. Putting the proposal in place will be a defence against undesirable environmental impacts although one cannot guarantee what will happen, as we cannot predict the future. I commend the new clause to the Committee.

Question put and negatived.

Clause 4 disagreed to.New clause 2Duty of Gas and Electricity Markets Authority to carry out impact assessments

New clause 2 - Duty of Gas and Electricity Markets Authority to carry out impact assessments

Clause 5 - Gas and Electricity Markets Authority

New clause 3 - Use of certain money held by Gas and Electricity Markets Authority

Clause 7 - Money

Eric Illsley (Labour, Barnsley Central)

With this we may take new clause 4—Financial provision.

Brian White (Labour, North East Milton Keynes)

New clause 4 reflects the money resolution in the Bill.

Stephen Timms (Labour, East Ham)

I agree with my hon. Friend's proposal.

Question put and negatived.

Clause 7 disagreed to.

New clause 4 - Financial provision

Interpretation, citation and extent

Eric Illsley (Labour, Barnsley Central)

With this it will be convenient to discuss amendments Nos. 19 and 20.

Andrew Robathan (Conservative, Blaby)

Will the Minister please elaborate? Are these consequential amendments?

Stephen Timms (Labour, East Ham)

I could speak at length on each of them. I support my hon. Friend's amendments. Amendment No. 12 is a tidying-up amendment, amendment No. 19 helps to determine the extent of

the various clauses and amendment No. 20 inserts a commencement provision.

Amendment agreed to.

Amendments made: No. 19, in

clause 8, page 4, line 34, leave out subsections (4) and (5) and insert—

'(4) Except as provided in subsections (5) and (5A), this Act extends to England and Wales, Scotland and Northern Ireland.

(5) Sections (Energy efficiency of residential accommodation: Secretary of State), (Energy efficiency of residential accommodation: National Assembly for Wales), (Energy efficiency of residential accommodation: energy conservation authorities), (CHP targets) and (Use of certain money held by Gas and Electricity Markets Authority) extend to England and Wales only.

(5A) Section (Duty of Gas and Electricity Markets Authority to carry out impact assessments) extends to England and Wales and to Scotland.'.

No. 20, in

clause 8, page 4, line 35, at end insert—

'(6) Sections (Energy efficiency of residential accommodation: Secretary of State), (Energy efficiency of residential accommodation: energy conservation authorities) (so far as it relates to England) and (CHP targets) shall come into force on such day as the Secretary of State may by order made by statutory instrument appoint.

(7) Sections (Energy efficiency of residential accommodation: National Assembly for Wales) and (Energy efficiency of residential accommodation: energy conservation authorities) (so far as it relates to Wales) shall come into force on such day as the National Assembly for Wales may by order made by statutory instrument appoint.

(8) The other provisions of this Act shall come into force at the end of two months beginning with the day on which it is passed.

(9) An order under subsection (6) or (7) may appoint different days for different purposes.'.—[Brian White.]

Clause 8, as amended, ordered to stand part of the Bill.

Bill, as amended, to be reported.

Committee rose at twenty-four minutes past Eleven o'clock.