Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
London Assembly 29 January 03 Item 7 Appendix Subject: Clean Energy Report Number: 8 Date: 14 January 2003 Report to: Environment Committee Report of: Head of Assembly Support 1 Clean Energy Motion 1.1 At the meeting of the Assembly held on 11 November, the following motion was referred to this Committee for consideration and report: “That this Assembly supports the domestic energy efficiency target set under the Home Energy Conservation Act 1995 of a 30% improvement by 2011 based on 1996 levels; notes that a virtually identical target has been suggested in recent reports by the Performance and Innovation Unit and the Energy Saving Trust; stresses the importance of this target for reasons of reducing the emissions of greenhouse gases; ending fuel poverty and ensuring the business certainty needed to stimulate long-term investment by companies producing energy saving goods. The Assembly therefore welcomes the consultation recently announced by the Treasury into ways in which fiscal measures and policies can be used to stimulate domestic energy efficiency and so resolves to 1. Support the Clean Dozen list of policies supported and being promoted by a number of organisations including the Association for the Conservation of Energy, Friends of the Earth, Greenpeace, Help the Aged, the RSPB and the British Energy Efficiency Federation as well as Energy Efficiency Advice Centres and urges the Treasury to support and implement those measures expeditiously. 2. Write to the Chancellor of the Exchequer informing him of the Assembly’s support for the Clean Dozen 3. Write to local MPs asking them to support the Clean Dozen and to write to the Chancellor of the Exchequer informing him of that support 4. Let the HECA Partnership of NGOs know of this decision.” Proposed: Darren Johnson Seconded: Jenny Jones 2 Background Information 2.1 To assist the Committee determine its report to the Assembly, the following background information is attached at the Appendix to this report: City Hall, The Queen’s Walk, London SE1 2AA Enquiries: 020 7983 4425 minicom: 020 7983 4458 www.london.gov.uk The Mayor’s response to the Treasury’s consultation on “Economic instruments to improve household energy efficiency” A paper originally supplied to the Assembly by Darren Johnson in support of his Motion. 2.2 Joanna Dawes, the GLA’s Energy Strategy Lead, will attend the meeting to answer Members’ questions. 3 Strategy implications 3.1 Measures to promote home energy conservation are included in the Mayor’s draft Energy Strategy. 4 Legal implications 4.1 There are no relevant legal implications. 5 Financial implications 5.1 There are no relevant financial implications 6 Recommendation 6.1 That the Committee considers the Motion and reports its views back to the Assembly. Background Documents None Contact Officer Andrew Smith tel. 020 7983 4425 [email protected] Page 2 of 4 Mayor’s Response to Treasury Consultation Paper Economic instruments to improve household energy efficiency Household Energy Efficiency This response to the Consultation Document Economic instruments to improve household energy efficiency is submitted on behalf of the Mayor of London. The comments are based on Mayor’s draft Energy Strategy. Energy efficient products A reduced rate of VAT applies to the installation of insulation materials, draught stripping, hot water and central heating system controls by contractors. The 5% reduced rate also applies to the grant-funded installation of central heating systems, heating appliances, factory-insulated hot water tanks, micro CHP and renewable energy heating systems. It does not, however, apply to DIY installations. The 5% reduced rate of VAT should apply to modes of installation and the full range of energy efficient and energy saving installations. The Government should also press for a reduction of VAT on such installations to 0%. The current EU VAT directives fail to support the objectives of EU energy policy. Efficiency of housing stock The Mayor’s view is that economic instruments could and should be used to encourage householders to carry out work that leads to improvements in the energy efficiency of their dwelling. Appropriate instruments in this case would be to allow qualifying spending to be offset against personal tax liability. This would convey a very clear message to the ‘fuel rich’ that improving the energy efficiency of their homes is in the public interest as well as in their own interest. However, many people in London are non-tax payers or only pay the very lowest rate of tax because of their low income. For these people, the grant support of 50% which is available for photovoltaic installations should be extended to other innovative products such as micro-CHP and heat pumps. It is quite true that such work is often carried out around the time of moving home. However, an instrument targeted at home movers could give the impression that this was the only time that they needed to think about energy efficiency was when they moved home. An ability to offset expenditure against personal tax liability would provide a reminder every year. The Consultation Document refers to schemes in other countries that use some form of energy audit to assess the scope for making energy efficiency improvements in a given dwelling, and also to a draft EU Directive which would require the regular energy auditing of buildings which has recently been adopted by the Council of Ministers. It comments that the administrative costs for the householder would need to be taken into account. One way of doing this would be to refund the stamp duty paid on house purchases if the required improvements were carried out within six months. A barrier acknowledged in the Consultation Document is the lack of incentive in the private rented sector for landlords or tenants to invest in energy efficiency. The Mayor’s view is that an economic instrument that would allow landlords to offset the cost of energy efficiency improvements against their tax liability would help to overcome this barrier. Page 3 of 4 Training There is a generally acknowledged shortage of skilled installers of energy efficient equipment. The suggestion in the Consultation Document that a tax incentive might be provided for the training of contractors to carry out work such as cavity wall insulation is strongly supported. Page 4 of 4