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Energy Efficiency

Volume 400: debated on Monday 24 February 2003

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To ask the Chancellor of the Exchequer what plans he has to introduce enhanced capital allowances to encourage the purchase of (a) the most efficient domestic central heating systems and (b) energy saving products by (i) registered social landlords and (ii) energy service companies. [98667]

Budget 2001 introduced 100 per cent first-year enhanced capital allowances (ECAs) for designated energy-saving plant and machinery. The ECA scheme enables businesses to write-off the whole cost of their investment in designated energy-saving equipment against the taxable profits of the period during which the investment is made.Registered Social Landlords are non profit-making organisations and as such will not be able to claim capital allowances.In the commercial sector, energy service companies can claim ECAs on their spending on qualifying equipment and special rules enable them to claim allowances where, as part of a comprehensive energy services agreement, they provide equipment that becomes a fixture on another person's land in which they have no interest.The Government's Affordable Warmth Programme supports the installation of modern energy efficient central heating systems in low-income homes, including registered social landlord homes. The equipment is leased to the landlord and where the equipment is designated energy-saving equipment, special rules enable the lessor to claim the enhanced capital allowances. The benefit can be passed on in the form of lower rentals.The Government consulted on economic instruments to improve household energy efficiency during 2002 and a summary of responses has been published on the HMT website. PBR 2002 stated that the Government would consult further on specific measures to promote greater energy efficiency by households, once the responses to the initial consultation have been fully considered.

To ask the Chancellor of the Exchequer how the price in real terms paid by the domestic consumer has changed since 1997 for the purchase of (a) domestic electricity and gas, (b) insulation materials, (c) high efficiency boilers, (d) draught-proofing, (e) double glazing and (f) low energy light-bulbs. [98666]

The information requested falls within the responsibility of the National Statistician. I have asked him to reply.

Letter from Len Cook to Mr. David Chaytor, dated 24 February 2003:

As National Statistician I have been asked to reply to your recent question asking for the change in price in real terms since 1997 of (a) domestic electricity and gas, (b) insulation materials,(c) high efficiency boilers, (d) draught-proofing, (e) double glazing and (f) low energy light-bulbs. (98666)
The Office for National Statistics publishes separate sub-indices of the Retail Prices Index for domestic electricity and gas, but not for any of the other items to which you refer.
The following table gives the index numbers relating to the relevant sub-indices for domestic electricity and gas and for the MI Items RPI. The figures are for the annual average for 1997 and for January 2003 (the most recently published), together with the corresponding percentage change.

Average 1997 index

January 2003 index

Percentage change

All items RPI157.5178.4+13.%
Electricity140.0128.9-7.9%
Gas123.1126.4+2.7%

Between the 1997 average and January 2003 the electricity index fell by 7.9% whilst the gas index rose by 2.7%. In contrast the All Items RPI increased by 13.3%.