To ask the Secretary of State for Trade and Industry what assessment he has made of the merits of replacing a system of grants to encourage people to take on renewable energy and energy efficiency with one of targeted loans connected to council tax discounts for homeowners who have taken energy efficiency measures. (128073)

The Chancellor keeps national tax matters under review through the Budget and pre-Budget report processes. However, some local authorities have implemented council tax discount schemes for local residents who invest in energy-saving installations. The Government's current assessment is that the Energy Efficiency Commitment, under which major energy suppliers have to reach targets for installing energy efficiency measures in their customers' homes, offers a flexible and cost-effective means of encouraging take-up of insulation and other improvements that reduce both energy bills and UK carbon emissions over time. It also allows targeting of vulnerable groups. The Government are committed to continuing an energy supplier obligation until at least 2020. As announced at the 2006 pre-Budget report, the Government are examining finance models that best support the Energy Efficiency Commitment and encourage take-up of energy efficiency measures and energy audits.

In relation to the stimulation of renewable energy use by householders, the Microgeneration Strategy

http://www.dti.gov.uk/energy/sources/sustainable/microgeneration/strategy/page27594.html

sets out a series of measures aimed at boosting demand to help achieve the economies of scale that will lead to costs falling and negate the need for capital grants.

Key measures that will help to achieve this include:

making it easier for microgenerators to access Renewable Obligation Certificates;

working with energy suppliers to ensure that microgenerators receive a fair reward for exported electricity;

a robust accreditation scheme (to build trust in the industry);

local authorities requiring new developments to source a percentage of energy requirements from onsite renewable sources (while not in the strategy itself, the Housing Minister made a statement that she expected all local authorities to develop such requirements following work undertaken in relation to the strategy);

the removal of unnecessary controls in the consents regime (which regulates a wide range of developments by householders).