D O C U M E N T IS T H E P R O P E R T Y
OF H E R B R I T A N N I C MAJESTY'S
C ( 7 4 ) 140
COPY
GOVERNMENT
NO
2 D e c e m b e r 1974
CABINET
ENERGY
SAVING
M e m o r a n d u m b y the S e c r e t a r y of State f o r
1.
Energy
I p r e s e n t e d a n i n t e r i m p a c k a g e of p o s s i b l e n o n - b u d g e t a r y
energy
s a v i n g s t o t h e E c o n o m i c S t r a t e g y C o m m i t t e e on 4 N o v e m b e r a n d t h e
w a s f u r t h e r d i s c u s s e d at C h e q u e r s o n 17 N o v e m b e r ,
subject
In c o n s e q u e n c e I n o w
attach a d r a f t s t a t e m e n t w h i c h I w o u l d p r o p o s e to m a k e to the H o u s e ,
2.
T h e p a c k a g e e m b o d i e d i n the draft statement r e p r e s e n t s , I b e l i e v e ,
a b o u t t h e m i n i m u m that w o u l d b e l i k e l y t o b e a c c e p t a b l e t o o p i n i o n a t home/
and a b r o a d a s a s e r i o u s r e s p o n s e to the s i t u a t i o n i n w h i c h w e n o w find
ourselves.
T a k e n t o g e t h e r w i t h the B u d g e t m e a s u r e s and t h e s a v i n g s that
have a l r e a d y b e e n a c h i e v e d it c a n b e p r e s e n t e d a s a significant s t e p t o w a r d s
t h e i n t e r n a t i o n a l g o a l of a r e d u c t i o n o f o i l i m p o r t s b y t h e i n d u s t r i a l i s e d
c o u n t r i e s i n 1975 and
3.
subsequently.
T h e s t a t e m e n t d o e s not a t t e m p t to quantify the t o t a l s a v i n g s t o b e
expected f r o m the present p a c k a g e .
M a n y of the e f f e c t s a r e
cumulative
o v e r t i m e , and m u c h depends on the r e s p o n s e w e s e c u r e in i n d u s t r y ,
c o m m e r c e and the h o m e .
B u t I a m s a t i s f i e d t h a t , p r o v i d e d w e f o l l o w up i n
s p e c i f i c d e c i s i o n s the intention t o e l i m i n a t e s u b s i d i e s in the n a t i o n a l i s e d
e n e r g y i n d u s t r i e s , the total saving should e x c e e d the t a r g e t set b y the
E c o n o m i c S t r a t e g y C o m m i t t e e o f s a v i n g a t l e a s t £100 m i l l i o n a y e a r o n the
balance of payments.
Looking forward,
o u r a i m o v e r the n e x t f e w y e a r s i s
t o s a v e 10 p e r c e n t o f o u r t o t a l e n e r g y c o n s u m p t i o n .
it would a m o u n t to £700 m i l l i o n on o u r o i l i m p o r t b i l l .
If t h i s w e r e
achieved
T h e bulk of this w i l l
h a v e t o c o m e - a s t h e £150 m i l l i o n a l r e a d y s a v e d h a s c o m e * f r o m t h e
d e c i s i o n s of i n d i v i d u a l c o n s u m e r s h e l p e d and a d v i s e d b y the G o v e r n m e n t as
necessary.
This is a task in which m y A d v i s o r y Council w i l l have a
significant part to play.
4.
were:­
T h e m a i n i s s u e s which w e r e i n dispute in o u r e a r l i e r
discussion
i.
L e a d content of p e t r o l
I w o u l d h a v e p r e f e r r e d a r e v e r s a l of the step t a k e n l o w e r i n g the
l e a d c o n t e n t i n p e t r o l f r o m 1 N o v e m b e r 1974.
I b e l i e v e that the
m e d i c a l e v i d e n c e f o r r e d u c t i o n i s n o t c o n c l u s i v e a n d i n v i e w o f the
c o s t to the balance of payments (£13 m i l l i o n a y e a r ) , I would have
p r e f e r r e d t o r e t u r n to our e a r l i e r standard, b e l i e v i n g that this would
d e m o n s t r a t e our r e s o l v e in the d r i v e to c o n s e r v e e n e r g y .
I h a v e a c c e p t e d m y c o l l e a g u e s ' v i e w that it m i g h t c a u s e
b o t h p o l i t i c a l l y and p r a c t i c a l l y .
However,
difficulty
W e a r e in a n y e v e n t a g r e e d that
f u r t h e r r e d u c t i o n s in l e a d content should be d e f e r r e d pending a
/
thorough r e v i e w of the m e d i c a l and e c o n o m i c i m p l i c a t i o n s
\
in p r o c e e d i n g with the
ii.
involved
programme.
Speed limits
T h e p r o p o s a l s in the s t a t e m e n t - no change on m o t o r w a y s ,
on dual c a r r i a g e w a y s ,
60 m p h
50 m p h o n s i n g l e c a r r i a g e w a y s - h a v e b e e n
a g r e e d w i t h the M i n i s t e r f o r T r a n s p o r t .
T h e s e l i m i t s can be
s u p p o r t e d b y r o a d s a f e t y a r g u m e n t s and b y c o n s i d e r a t i o n of public
a c c e p t a b i l i t y o v e r an extended p e r i o d .
They will offer
some
saving
i n i m p o r t s ( p o s s i b l y o f t h e b r o a d o r d e r t o £10 m i l l i o n a y e a r ) but t h e
m a i n b e n e f i t s to fuel saving w i l l b e p s y c h o l o g i c a l ,
5.
A s c o m p a r e d with m y e a r l i e r p r o p o s a l s I have t o u g h e n e d up the
statement on two points :­
a.
First,
I n o w p r o p o s e t o u s e the p o w e r s c o n t a i n e d i n the F u e l
a n d E l e c t r i c i t y ( C o n t r o l ) A c t to i m p o s e m a x i m u m h e a t i n g
on a l l b u i l d i n g s o t h e r than l i v i n g a c c o m m o d a t i o n .
standards
I w o u l d of course,
a l s o p r o v i d e blanket e x e m p t i o n s f o r the s i c k and d i s a b l e d , f o r young
c h i l d r e n , t h e a g e d and f o r p r e s e r v i n g m a t e r i a l s and e q u i p m e n t ,
b.
Second, I p r o p o s e s i m i l a r l y to use statutory p o w e r s to
p r o h i b i t f l o o d l i g h t i n g of b u i l d i n g s ,
s t a t u e s , b r i d g e s , e t c at a l l t i m e s
and to r e s t r i c t e l e c t r i c i t y f o r e x t e r n a l a d v e r t i s i n g and e x t e r n a l
display lighting during daylight h o u r s .
into f o r c e i n the N e w
6,
former,
Both r e s t r i c t i o n s would
Year,
N e i t h e r m o v e w i l l m a k e m u c h d i f f e r e n c e to e n e r g y s u p p l i e s - the
e v e n a s a v o l u n t a r y s c h e m e , i s l a r g e l y s e l f - e n f o r c i n g and t h e
latter represents a v e r y minor use of e l e c t r i c i t y .
r e f l e c t a p u b l i c m o o d and w i l l c a r r y
7.
come
N e v e r t h e l e s s , both m o v e s
conviction.
A t the C h e q u e r s m e e t i n g on G o v e r n m e n t strategy,
I w a s asked to
e x a m i n e u r g e n t l y t h e q u e s t i o n of a t w o - t i e r p r i c e s y s t e m f o r p e t r o l w i t h a
low-priced Nation
1
and a h i g h p r i c e f o r f u r t h e r s u p p l i e s .
W o r k on this i s in
hand i n t e r d e p a r t m e n t a l l y b u t the i s s u e s a r e c o m p l e x a n d i t i s i n a n y c a s e
c l e a r that w e could not introduce such a s c h e m e , as a going c o n c e r n ,
some months.
for
I w i l l bring a paper to m y colleagues as soon as possible
but b e l i e v e f i r m l y t h a t t h e p r e s e n t s t a t e m e n t s h o u l d n o t b e d e l a y e d w h i l e w e
m a k e u p o u r m i n d s on f u r t h e r
say,
steps.
In the m e a n t i m e I would p r o p o s e to
if a s k e d , that the p o s s i b i l i t y o f a s c h e m e of t h i s kind i s under
consideration.
I could also,
if m y c o l l e a g u e s w i s h e d , r e f e r s p e c i f i c a l l y to
the s c h e m e in the s t a t e m e n t a s b e i n g a p o s s i b i l i t y under
8.
I invite my
:.y
consideration.
colleagues:­
a.
T o a g r e e to the p r o p o s e d p u b l i c stand on l e a d in p e t r o l .
b.
T o a g r e e to the p r o p o s e d n e w speed l i m i t s .
c.
T o a g r e e that statutory p o w e r s should be u s e d to set
m a x i m u m heating standards in i n d u s t r i a ! a n d c o m m e r c i a l p r e m i s e s .
.
i 1 '
' ' - //' - '
d.
T o a g r e e that conspicuous f o r m s of public lighting should be
r e s t r i c t e d in the way proposed.
1
e.
:
T o d e c i d e w h e t h e r a r e f e r e n c e to the p o s s i b i l i t y of a t w o ­
t i e r p r i c e s y s t e m f o r p e t r o l should b e included i n m y
statement.
f.
T o e n d o r s e m y s t a t e m e n t g e n e r a l l y and t o a p p r o v e its
d e l i v e r y to the H o u s e ,
tf :
' -^') I-/
E G
D e p a r t m e n t of
Energy
2 D e c e m b e r 1974
3
V
early
' ' K &i
f
' ':Bi
ANNEX
ENERGY SAVING:
DRAFT STATEMENT
W i t h p e r m i s s i o n Mr Speaker
energy s a v i n g .
I would l i k e
t o make a. s t a t e m e n t
on
2
As t h e House knows our i m p o r t h i l l f o r o i l t h i s y e a r i s l i k e l y
By t h e end of the p r e s e n t d e c a d e we s h o u l d
to exceed £ 3 4 . b i l l i o n .
no l o n g e r b e n e t i m p o r t e r s o f e n e r g y .
We a r e t h e o n l y major
i n d u s t r i a l c o u n t r y i n the W e s t e r n W o r l d w h i c h h a s t h i s p r o s p e c t .
3
Despite
this
t h e need t o r e d u c e our i m p o r t b i l l
is
acute.
k
P r o g r e s s h a s of c o u r s e a l r e a d y been made.
I t i s estimated for
example t h a t v o l u n t a r y c o n s e r v a t i o n measures t h i s y e a r have a l r e a d y
saved a b o u t 2% o f our normal e n e r g y consumption - w o r t h about £150
m i l l i o n a t c u r r e n t import p r i c e s .
5
These s a v i n g s a r e a good b e g i n n i n g .
more i n t h e y e a r s a h e a d .
But we need t o do much
//",
6
My r t Hon F r i e n d , the C h a n c e l l o r of the E x c h e q u e r , made i t
p l a i n i n h i s b u d g e t s t a t e m e n t t h a t t h e Government i n t e n d s t o enstire
that e n e r g y p r i c e s a r e b r o u g h t a s q u i c k l y as p o s s i b l e t o a l e v e l w h i c h
reflects true costs.
The b e s t a d v i c e we have i s t h a t a move t o such
p r i c e s might s a v e a t l e a s t £50 m i l l i o n - and p e r h a p s a good d e a l more ­
on our i m p o r t b i l l i n a f u l l y e a r .
7
To r e l y on t h e p r i c e mechanism a l o n e however
Government have t h e r e f o r e c o n s i d e r e d what f u r t h e r
r e i n f o r c e t h e p r e s s u r e s of p r i c e .
i s n o t enough.
The
s t e p s , i t can take t o
8
My A d v i s o r y C o u n c i l of E n e r g y C o n s e r v a t i o n h a s a l r e a d y p r o d u c e d
a number of s u g g e s t i o n s f o r t h e Government t o c o n s i d e r and i t s work
v a i l grow and d e v e l o p over t h e months and y e a r s a h e a d .
The m e a s u r e s
and p r o p o s a l s I announce t o d a y t h e r e f o r e must b e r e g a r d e d as an i n t e r i m
package.
9
The m e a s u r e s t h e Government h a s d e c i d e d
to
adopt now
are:-
Eirst:
To i n t r o d u c e a l o a n scheme w h i c h w i l l p r o v i d e a s o u r c e
of f i n a n c e f o r e n e r g y s a v i n g i n v e s t m e n t in i n d u s t r y , t o e n s u r e
t h a t such i n v e s t m e n t s a r e n o t h e l d back by c a s h f l o w p r o b l e m s .
Loans w i l l be a t f a v o u r a b l e r a t e s of i n t e r e s t .
Any e x p e n d i t u r e
in t h i s f i n a n c i a l year w i l l be covered by a l a t e s p r i n g
supplementary.
I e x p e c t t o make a v a i l a b l e £3m a y e a r f o r t h i s
purpose.
F u l l d e t a i l s o f t h e scheme w i l l b e announced s h o r t l y .
Second:
The Government w i l l u s e i t s p o w e r s t o e n s u r e t h a t t h e
n e x t round of o i l p r i c e i n c r e a s e s b e a r s more h e a v i l y on motor
s p i r i t t h a n on o t h e r o i l p r o d u c t s .
T h i s move w i l l seek f u r t h e r
t o d i s c o u r a g e i m p o r t s o f motor s p i r i t and c r u d e o i l u s e d t o
p r o d u c e motor s p i r i t , w h i c h c u r r e n t l y c o s t u s a b o u t
a year.
D e t a i l s w i l l be announced when t h e P r i c e Commission h a s f i n i s h e d
£500m
1
i t s work on the p r e s e n t round o f company a p p l i c a t i o n s f o r p r i c e
increases.
/f"The House w i l l a l s o w i s h to know t h a t t h e Government
a r e c o n s i d e r i n g the p o s s i b i l i t y of i n t r o d u c i n g a t w o - t i e r p r i c e
system f o r p e t r o l w i t h a b a s i c r a t i o n a v a i l a b l e at one p r i c e and
a d d i t i o n a l s u p p l i e s a v a i l a b l e a t much h i g h e r p r i c e s .
I would
welcome v i e w s on t h i s p r o p o s i t i o n / 7
Third:
The Government has r e v i e w e d t h e programme f o r r e d u c i n g
the l e a d c o n t e n t of p e t r o l .
The r e d u c t i o n which t o o k e f f e c t on
1 November has added more than £10m a y e a r t o our i m p o r t b i l l and
f u r t h e r s t a g e s of the programme c o u l d be v e r y much more e x p e n s i v e
than t h i s .
Ve do not i n t e n d . t o go b a c k on what has b e e n done so
f a r b u t have d e c i d e d t h a t f u r t h e r p r o g r e s s s h o u l d b e d e f e r r e d u n t i l
a t h o r o u g h r e v i e w o f a l l the m e d i c a l and economic i m p l i c a t i o n s
o f p r o c e e d i n g w i t h t h e programme has been u n d e r t a k e n .
. .. /,
/ . ; : \ ' " ' . %
%
.
.....
' '
w
Fourth:
About 3 m i l l i o n t o n s o f , ' c o a l e q u i v a l e n t a y e a r i s u s e d
i n Government, c i v i l and d e f e n c e b u i l d i n g s .
The P r o p e r t y S e r v i c e s
Agency a r e p l a n n i n g t o spend up to. £5m a y e a r o v e r t h e n e x t f e w
y e a r s on improved c o n t r o l equipment, d r a u g h t p r o o f i n g and a d d i t i o n a l
insulation.
These and o t h e r m e a s u r e s aim t o a c h i e v e e v e n t u a l l y
s a v i n g s o f around £20m a y e a r o r more than 20% o f c u r r e n t
e x p e n d i t u r e in t h i s a r e a .
:
;
t
:
Fifth:
P u b l i c a u t h o r i t i e s o t h e r than Government, f o r example,
l o c a l a u t h o r i t i e s , u s e some 17 m i l l i o n t o n s of c o a l e q u i v a l e n t a
year.
And a f u r t h e r 20 m i l l i o n t o n s i s e s t i m a t e d t o b e u s e d i n
public sector housing.
The Government a r e opening u r g e n t
d i s c u s s i o n s w i t h l o c a l a u t h o r i t i e s and o t h e r s c o n c e r n e d t o see how
f a r and i n what ways s a v i n g s can b e a c h i e v e d i n t h i s i m p o r t a n t a r e a
of our l i f e .
Sixth:
Speed L i m i t s :
e x c e s s i v e s p e e d w a s t e s p e t r o l , as w e l l as
costing l i v e s .
The Government have t h e r e f o r e d e c i d e d ; t o r e d u c e
the maximum speed l i m i t s on s i n g l e c a r r i a g e w a y r o a d s t o 50 mph
and on d u a l c a r r i a g e w a y s other t h a n motorways t o 60 mph.
Speed
l i m i t s on motorways w i l l remain u n c h a n g e d .
My r i g h t Hon F r i e n d
the M i n i s t e r o f T r a n s p o r t w i l l make a f u r t h e r s t a t e m e n t on t h i s
later today.
Seventh:
S i r we w i l l i n t r o d u c e compulsory l i m i t s on h e a t i n g l e v e l s
i n b u i l d i n g s o t h e r than l i v i n g accommodation and a l i m i t e d r a n g e
of f u r t h e r exemptions d e s i g n e d t o p r o t e c t the young, the o l d , the
s i c k , t h e d i s a b l e d and c e r t a i n t y p e s o f m a t e r i a l and e q u i p m e n t .
These s t a n d a r d s w i l l i n v o l v e a maximum h e a t i n g l e v e l of 6 8 F - 2 0 G .
Government o f f i c e s a l r e a d y work to a minimum s t a n d a r d offi 6 5 F and
my r i g h t Hon F r i e n d t h e S e c r e t a r y of S t a t e f o r the Environment and
I w i l l be c o n s i d e r i n g w i t h the i n t e r e s t e d p a r t i e s , i n c l u d i n g t h e
N a t i o n a l V h i t l e y C o u n c i l S t a f f S i d e , how s a v i n g s can be s e c u r e d b y
c l o s e r adherence to t h i s s t a n d a r d a s w e l l as b y s u s t a i n e d s a v i n g s
efforts.
0
0
0
I have r e j e c t e d i m p o s i n g c o m p u l s o r y l i m i t s on p r i v a t e h o u s e h o l d s
but s a v i n g s i n t h e home a r e as v a l u a b l e as t h o s e e l s e w h e r e .
I
appeal f o r the maximum v o l u n t a r y s a v i n g s .
2
Eighth:'
In a l l a r e a s of our. n a t i o n a l l i f e g r e a t e r a t t e n t i o n
needs t o be f o c u s s e d on the c a r e f u l use of e n e r g y .
My A d v i s o r y
C o u n c i l h a s s u g g e s t e d t h a t company a n n u a l r e p o r t s s h o u l d s t a t e
t h e e x p e n d i t u r e i n c u r r e d on f u e l and t h e s t e p s taken t o s a v e
energy.
The p o s s i b i l i t y of i n c l u d i n g t h i s p r o v i s i o n i n f u t u r e
l e g i s l a t i o n i s being considered.
Meanwhile B o a r d s o f D i r e c t o r s
s h o u l d v o l u n t a r i l y demonstrate t h e i r p u b l i c s p i r i t and t h e i r g o o d
s t e w a r d s h i p b y implementing t h i s s u g g e s t i o n .
1
Ninth:
As a c o r o l l a r y o f e i g h t , a l l B o a r d s s h o u l d make c l e a r
w i t h i n t h e i r f i r m s t h e i r commitment t o e n e r g y s a v i n g and s h o u l d
make someone
s p e c i f i c a l l y responsible for achieving i t .
Tenth:
Both management and employee r e p r e s e n t a t i v e s e n g a g e d i n
j o i n t c o n s u l t a t i o n i n i n d u s t r y and commerce s h o u l d see t h a t e n e r g y
s a v i n g i s made a r e g u l a r s u b j e c t f o r p r a c t i c a l d i s c u s s i o n l e a d i n g
t o e a r l y and e f f e c t i v e a c t i o n .
I have w r i t t e n t o t h e CBI a s k i n g them t o draw t h e a t t e n t i o n of t h e i r
members t o t h e s e l a s t t h r e e p o i n t s , and t o g i v e them t h e i r f u l l
support;
and I have w r i t t e n s i m i l a r l y t o t h e TUC on t h e i m p o r t a n t
contribution which union r e p r e s e n t a t i v e s can make t h r o u g h j o i n t
consultations.
Eleventh:
I have d e c i d e d t o ban a l l f l o o d l i g h t i n g o f b u i l d i n g s ,
s t a t u e s , e t c a t any time and t o r e s t r i c t t h e u s e of e l e c t r i c i t y
f o r e x t e r n a l d i s p l a y and a d v e r t i s i n g p u r p o s e s d u r i n g d a y l i g h t
hours.
The n e c e s s a r y o r d e r s f o r t h i s and t h e p r o p o s e d h e a t i n g
s t a n d a r d s w i l l be l a i d s h o r t l y and w i l l come i n t o e f f e c t i n the
New Y e a r .
Twelfth:
F i n a l l y , t o promote and r e i n f o r c e a c t i o n i n a l l t h e s e
a r e a s , t h e Government w i l l , o v e r the months ahead , d e v e l o p a
p u b l i c i t y campaign t o i n f o r m and a d v i s e i n d u s t r y and commerce,
m o t o r i s t s and h o u s e h o l d s , on how they can h e l p t h e m s e l v e s and t h e
n a t i o n b y u s i n g energy more c a r e f u l l y and e f f i c i e n t l y .
In addition,
the h e a d s o f t h e n a t i o n a l i s e d f u e l i n d u s t r i e s have t o l d me t h a t t h e y
w i l l c o - o r d i n a t e energy s a v i n g p u b l i c i t y .
1
10 Mr S p e a k e r , i t i s not p o s s i b l e t o e s t i m a t e w i t h any p r e c i s i o n t h e
energy s a v i n g s - w h i c h may emerge from t h i s ' p a c k a g e , not l e a s t b e c a u s e
many of t h e e f f e c t s a r e c u m u l a t i v e over t i m e .
But t h e r e i s no d o u b t
that s u b s t a n t i a l s a v i n g s are p o s s i b l e .
I n d e e d , i f we were t o b e a b l e
to save, w i t h i n t h e n e x t few y e a r s , s a y , 10% of our t o t a l e n e r g y
consumption - an amount which c u r r e n t l y c o s t s a b o u t £700 m i l l i o n a y e a r
to import - we w o u l d have made a major c o n t r i b u t i o n t o our n a t i o n a l
wellbeing and n a t i o n a l f u t u r e .
^ ..
3