Energy Bill [HL]

Part of the debate – in the House of Lords at 7:00 pm on 29th March 2004.

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Photo of Lord Ezra Lord Ezra Shadow Minister, Trade & Industry 7:00 pm, 29th March 2004

My Lords, Amendment No. 195B deals with a strategy for microgeneration. I declare an interest in the subject as I did in Grand Committee. I am interested in particular in the promotion of small-scale generation of electricity.

I emphasise that those who are involved in microgeneration were extremely pleased that the Chancellor mentioned in the recent Budget that it was intended to reduce the rate of VAT on microgeneration equipment from 2005 onwards subject to current tests being carried out successfully. This is an important step forward.

We consider that it should be complemented by another step: to devise a strategy for microgeneration development. When I moved a similar amendment in Grand Committee, the Minister said that he thought it unnecessary because the subject of microgeneration was being dealt with in a number of other ways. My response was that while that is no doubt the fact, it would be helpful if all these strands could be brought together in one document. It would help to focus attention. It would help to achieve what the Government attach great importance to; namely, to increase domestic energy efficiency.

This equipment will be available towards the end of this year and during next year. The sale of increasing quantities of the equipment will help to achieve not only a great increase in energy efficiency in the home—it will enable electricity as well as heat to be produced—but will also contribute to a reduction in CO2 emissions. There is substantial scope for the sale of such equipment in the boiler renewal market. It amounts to about 1 million items per year. So there is a substantial prospect of great improvement in the efficiency of domestic energy consumption through the promotion of this type of equipment.

The Government have already taken one step to promote this concept and I hope that they will be prepared as a second step to devise a strategy for microgeneration which will bring together all that is being done elsewhere, focus attention on the issue and enable us to go forward on the twin planks of government energy policy: to increase energy efficiency, in particular in the domestic market; and to reduce emissions. This development would help to achieve both objectives. I beg to move.