RT HON HILARY BENN MP, MS SUSANNA MAY AND MR PAUL CHAMBERS

20 FEBRUARY 2008

  Q40  Lynne Jones: Will you publish the terms of reference of that review?

  Hilary Benn: I am sure we will do so.

  Q41  Lynne Jones: Because time is of the essence if we are going to meet our targets, how speedily could we actually move, not necessarily for large-scale installations but for small domestic and community installations? How quickly could we move to a feed-in tariff?

  Hilary Benn: I do not know because it depends how quickly the review is undertaken. One thing that has happened since the Committee published its original report and we responded, of course, is the renewable energy target package that has been published by Europe. You will have seen what the Prime Minister and John Hutton, I and others have said, that we need to get our skates on because, you are absolutely right, we are very low in the renewable energy league table, in part because we had North Sea oil and gas, that is part of the explanation, but we are going to have to do a lot, lot more and we are committed to do so. The banding of the ROCs is part of the response to that and I think that has been widely welcomed, not least the higher band being given to micro-generation and other of the newer forms of renewable energy.

  Q42  Lynne Jones: Do you think that is going to be as effective as a feed-in tariff, doubling the ROCs?

  Hilary Benn: I think ROCs clearly do not work for the domestic sector.

  Q43  Lynne Jones: Ofgem says that and lots of people are saying that.

  Hilary Benn: Which is why, the Government having said we are now going to look at feed-in tariffs, that is a recognition that—

  Q44  Lynne Jones: You said that in December and it is now towards the end of February. Has any work started on this?

  Hilary Benn: I am sure in BERR work has been done in anticipation of what—

  Q45  Lynne Jones: We keep getting announcements, "We are going to look at this".

  Hilary Benn: With respect, you have now got a date which is in the summer when the review is going to be undertaken, but I accept entirely the point you are making that we need to get on with it.

  Q46  Lynne Jones: Turning to the EU target, the UK has been allocated 15 per cent and I think the initial ministerial response was that it was a good start. Is the Government going to accept 15 per cent or are you going to regard that as a negotiating start and look to reduce our target for the UK?

  Hilary Benn: We support what the Commission has put forward, but in the end it is going to be a negotiated package in relation to all of the Member States and one of the things we will have to look at is, is it a fair and equitable allocation out and how exactly is the system going to work, and I think that is a perfectly reasonable position to take. On the need for us to do considerably more than we have done up until now with two per cent of our energy overall and five per cent of our electricity, which is where we are currently, we are committed to do that. Quite how the negotiation is going to end up remains to be seen.

  Q47  Lynne Jones: So you cannot give us a commitment today that you will accept a 15 per cent minimum target for the UK?

  Hilary Benn: Since the package was published we have been looking at it in some detail and we are looking at what it means for other Member States. We have got the principles of fair distribution of the effort, which seems to me to be entirely reasonable as one of the things that you should take into account. I cannot tell you today where it is going to end up because that will be the product of a negotiation. Are we committed to do very considerably more? Of course we are.

  Q48  Lynne Jones: It would not be difficult to do very considerably more, would it? This Government claims to be at the forefront in taking a leadership role and yet we are not in this area. You cannot even commit us to our share of 15 per cent of the 20 per cent target when other governments have got in excess of 20 per cent.

  Hilary Benn: What I cannot do is commit the Government today to the outcome of what will be a negotiated package for obvious reasons.

  Q49  Lynne Jones: I am just surprised that you cannot accept 15 per cent as our reasonable share. In the speech you made to the Oxford Farming Conference in January you actually mentioned 3,000 farmers in Germany already using anaerobic digestion to produce biogas and biofertiliser. They are also financing some of those installations using feed-in tariffs because the government gives preferential rates for the feed-in tariff for combined heat and power. You are using examples yourself from Germany and yet it does not seem to me that we are really learning the lessons so that we can be, as they are, at the forefront in terms of renewable energy and energy efficiency. This disappoints me from the point of view of a member of the same party as this Government.

  Hilary Benn: With respect, I would not accept that we are not learning the lessons. Self-evidently we are not in the same place as Germany and, as a result, we have got a lot to do to catch up. That is the first point. Since you raised anaerobic digestion, in the banding of the ROCs that we announced very recently AD will now benefit from the double-ROCs. The second point is in my speech to the NFU Conference—

  Q50  Lynne Jones: Most of these are very small installations again.

  Hilary Benn: You have got to make a start and do more. I announced that we are going to put £10 million out of the domestic environmental transformation fund into building more commercial scale demonstration plants, including for agriculture. One of the ways in which we could bring together two interests on aerobic digestion is this: on one side you have got farmers with farm by-products and if you think about the Nitrates Directive where there is going to be a bit of an issue, and we have been consulting on what we do because of the need to improve the coverage over here, and on the other side you have got food waste. Can we be more creative about linking together the food waste that comes from local authorities and the waste that comes from farms through the medium of anaerobic digestion? The steps that we have taken, which I have just alluded to, do demonstrate that we are committed to doing more. The consultation is going to take place on feed-in tariffs and that does provide an opportunity because I have looked at the evidence from Germany and elsewhere and there is no doubt, particularly in relation to the domestic sector, because despite the efforts we have made, the fact that agents can pool ROCs, you can claim monthly now and we are trying to move to an accreditation online to make it easier for people to come together and use ROCS, the truth is it is not a system that lends itself very easily to the kind of thing that we have spent time this afternoon talking about, hence having a consultation on what role feed-in tariffs can play and the Government recognising the argument that you and others have put, including the Committee in its report.

  Q51  Lynne Jones: Are not some of the programmes that would encourage this, like the BREW programmes, being cut?

  Hilary Benn: We will be announcing tomorrow decisions on the Defra budget. One of the principles that I have looked at in taking those decisions, and it raises a broader point of principle, is to what extent is it right and proper, and in a sense this goes back to Miss McIntosh's original question, for the Government to fund free of charge a lot of advice and to what extent is it right and proper to ask people, big business or others, to make a contribution. I make that observation because if you take the advice which is currently being given for free and then look at the scale of the task that we have got and say if we carry on with that approach what the Government will then have to spend directly to continue to provide free advice to an even larger and larger number of people, or take another example which is incentives for people to invest in loft insulation where the money comes in the form of a grant from the Government, again if we are going to make progress you are talking about larger and larger sums, is that the most sensible approach? Is it right to consider other ways in which that kind of advice could be paid for? Can you think of other ways of incentivising people to invest in improving the energy efficiency and reducing the CO₂ emissions from their houses? That is why the Green Homes Service and trying to develop a market in which someone will come and do the work and provide a basis on which you can pay it back seems to me, thinking about the tasks we have got, to be a sensible way forward.

  Q52  Dr Strang: As was referred to earlier, there is a range of Government schemes all intended to help us achieve our climate change targets and the scheme I would like to ask you about briefly is the Low Carbon Buildings Programme. As I understand it, since the scheme was re-launched last May the monthly expenditure under the scheme has been reduced so I would like to ask you about that, what your comment on that is and if you have any plans to change that. Why is it less and how should we view that?

  Hilary Benn: I think since May 2007 about £2 million has gone out to 2,000 households. The problem, bluntly, was this: previously the money was going out of the door very fast and not all of it, as I understand it, was actually being spent which meant difficulties for managing the cash flow, so we had a look at it and made the changes, the two principal ones being the cap on the amount, which is the £2,500, and, secondly, you had to get planning permission if that was required because people were applying in advance of doing that. So you have moved from one situation to another situation, which is the one that you describe. That is on the household bit and then, of course, there is the phase two which relates to communities, the charitable and public sector where matching funding is required. We are going to review how it is working. I would also refer to the point I made a moment ago.

  Q53  Lynne Jones: It is not working.

  Hilary Benn: Pardon?

  Q54  Lynne Jones: It is not working.

  Hilary Benn: On the one hand it was just whizzing out the door, and that created difficulties. Mr Chambers might want to say something about this. Then we made the changes which have had the result which underlies your question and in the light of that experience we need to see whether we have got the balance right in trying to fix the problem that there was in the first place. That is the first point. The second point is the one I made a moment ago, which is, is that the right incentive structure to use to make these things happen as opposed to generating the kind of market I talked about or, indeed, looking at feed-in tariffs as a way of encouraging investment in renewable and micro-generation in the domestic sector.

  Mr Chambers: Just to elaborate on that point about unspent money. Because particularly quite a lot of homeowners could not get the measures installed in time or some other problem happened quite a lot of cash ended up effectively coming back many months later which made it very difficult to manage the programme and that is one of the things that has been sorted out by having to do more in advance before the application.

  Q55  Dr Strang: When you said the money was speeding out the door, by that did you mean that the money was going out too quickly at that point and you were not happy you were getting value for money? I was not quite sure what you meant when you said it was speeding out the door.

  Hilary Benn: As I understand it, when it was open for bidding it was a cash flow management difficulty in part.

  Mr Chambers: One of the issues was that the monthly allocation was fully allocated just a few hours into the first working day of each month which caused huge frustration from lots of people who could not even get online and could not get their applications in on time. That was creating a lot of frustration among people who were trying to apply but the money was gone, so they also took away that monthly application process.

  Q56  Dr Strang: I presume the £2,500 cap is something you are going to stick with, you have no plans to review that?

  Hilary Benn: Having had one problem in dealing with it, having looked at how it is working now, it would be sensible to reflect on has that change worked or not and, therefore, what should we do in the future.

  Q57  Dr Strang: The aim will be to improve the uptake, or one of the aims?

  Hilary Benn: With the money you have got allocated for the programme obviously you want to get it out the door and used for the purpose for which it has been set aside, of course.

  Q58  Lynne Jones: As I understand it, you have got an £18.7 million budget over three years and the report recently by the Energy Saving Trust said you are going to be £10 million under-spent. Are you going to spend that money or are you just going to say this is the end of the programme and you will take the money back?

  Hilary Benn: I do not know because that decision has not been made yet. That will be part of the process of reviewing how it is going, which seems to me a pretty sensible thing to do.

  Q59  Lynne Jones: It is not going, it is £10 million under-spent.

  Hilary Benn: That is why you need to look at what we are going to do.