Grand Committee
Arrangement of Business
The Deputy Chairman of Committees (Lord Geddes)
My Lords, as is customary on these occasions, I must advise the Committee that if there is a Division in the House, the Committee will adjourn for 10 minutes.
Electoral Registration Data Schemes (No. 2) Order 2012
(12 years ago)
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Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Electoral Registration Data Schemes (No. 2) Order 2012.
Relevant Documents: 10th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire
My Lords, The order will provide the legal basis for a further electoral registration data-matching trial, by enabling the sharing of specified data between several data-holding public authorities and some 22 local authority electoral registration officers. The work that we plan to do under this order will form a significant part of our planning for the implementation of individual electoral registration.
The Committee will be aware that this is the third draft order of its kind since the summer of last year. It may be helpful if I were briefly to recap the story so far, before I go into detail about what the present order will do.
The first order—the Electoral Registration Data Schemes Order 2011—allowed us to carry out a set of data-matching schemes and evaluate the results. In those schemes, we were trying to find out whether matching their registers against public authority databases would help electoral registration officers to find potential electors who were missing from the register, so that they could contact those people and invite them to register. We were also trying to find out whether data matching would help registration officers to find entries on their registers that might be inaccurate or fraudulent, so that they could investigate them and then, if necessary, take steps to remove them.
We learnt a lot from those first schemes about the challenges of data matching and about the techniques and the technology that we would need to put in place if we were to do data matching more effectively and on a larger scale. When the schemes were over, the evaluations told us that more piloting work would be needed if we were to ascertain the potential of data matching, and data mining, for finding potential electors who are missing from the register.
What last year’s schemes did reveal, however—rather unexpectedly, it is fair to say—was that data matching might give us a way of confirming the majority of existing electors on the register in the transition to individual registration. If that turned out to be correct, most of the electorate would not have to register individually as soon as individual registration is introduced. That would be more convenient for electors; and for electoral registration officers. There would be significant savings in time and money which would enable EROs to concentrate on those whose details could not be matched and those who were missing from the register altogether.
We needed to test our understanding, however, and we needed to do it quickly so that, if this was shown to work, the necessary systems could be put in place in time for the transition. The second order—the Electoral Registration Data Schemes Order 2012—approved by the House in the summer, was sought mainly to enable that testing, and the schemes for confirming existing electors are now in progress. That order also allows us to carry out further testing of data matching for finding missing potential electors and inaccurate or fraudulent entries; but only in the areas specified in the order, and only using data held by the Department for Work and Pensions. But I told the Committee in the summer that if we decided to extend the schemes to include further areas or data sets, a separate order would be laid before your Lordships at a later date. We are now ready to do that further testing, hence the order now before the Committee.
This latest order will allow EROs in the areas listed to compare their registers against specified public authority data sets. The public authorities which have agreed to make their data available for these schemes are the Department for Work and Pensions, for areas that were not included in the previous order; the Department for Education or, for schemes in Wales, the Welsh Government; the Student Loans Company; and Royal Mail Group. The schemes will target three particular groups where there are high levels of under-registration: people who have recently moved home; young people of 16 to 18 years of age who are just going on to the register; and students. They will complement a programme of work that the Cabinet Office has in hand to maximise electoral registration among groups identified as currently under-registered and at risk of falling off the register during the transition to individual registration.
The main purpose of the schemes will be to see how far data-matching helps EROs to improve the accuracy and completeness of the register by finding people who are missing from the register and finding entries on the register that should not be there. The schemes will also help us to design, develop and test the technology that we will need if data-matching is to play a significant part in future arrangements for electoral registration.
In addition, the order will enable EROs in four lower-tier authorities in two-tier local government areas to match their registers against education data held by their county council, to see whether it helps them to find 16 to 18 year-olds who are not yet registered. Registration officers in unitary authorities already have access to such data because it is held by the same authority that appointed them, but their counterparts in two-tier areas have no right to access the same kind of data if it is held by a different council. The results of these schemes will help us to decide whether it would be worthwhile to legislate to correct this anomaly.
The order will also enable us to augment the work that is already being done on confirming existing electors, by allowing us to carry out a statistical analysis to find out how far other public authority data sets might add to the match rate obtained from DWP data. The Higher Education Funding Council for England has agreed to make its data available for this purpose alone.
As in previous instruments of this kind, the draft order requires that before any data can be transferred, a written agreement must be in place between the ERO and the data-holding public authority setting out the requirements for the processing, transfer, storage and destruction of the data. It sets 17 July 2013 as the date by which each of the schemes must have been evaluated by the Electoral Commission. I also assure the Committee that after the pilots have ended and the evaluation is complete, the data created and held for the purposes of the pilot schemes will be securely destroyed.
The Information Commissioner’s office has been consulted on this draft order. The office has welcomed the fact that the current phase of pilot schemes has identified a much narrower range of data, and that the schemes will inform the extent to which personal data to be collected from electors can be minimised. I hope that the Committee will recognise the value of this further work for improving the accuracy and the completeness of our electoral registers.
I would like to make some additional points which I hope will help the Committee. All of this feeds into the wider context of digital transformation and the development of what in the trade is called “identity assurance”. This morning, I had a useful briefing from the government digital service on exactly this matter. Further down the road, there are delicate issues about the balance between the use of public and private databases, to which we will want to return in that wider context. I reiterate that the current electoral register has deteriorated quite badly over the last 25 years —especially in its coverage of vulnerable groups. We are very conscious of that and are therefore strongly committed to this move toward individual electoral registration and to using this transformation to maximise the accuracy and completeness of the electoral register. I hope that the Committee will accordingly approve this order.
Lord Rennard
These orders are clearly welcome to me, as they show potential ways forward for increasing voter registration and improving the accuracy of the electoral register. It seems to me, however, that further pilots are clearly needed, because earlier pilots were certainly not considered to have been a complete success. The Electoral Commission raised serious concerns about the reliability of the earlier pilots because they had,
“an absence of a clear, common, methodological framework”.
This, it said,
“had a significant impact on our ability to draw clear conclusions about the effectiveness of data matching as a tool for maintaining the accuracy and completeness of the electoral registers”.
The Electoral Commission has raised a number of concerns about this next set of pilots, of which, I am sure, the Minister will be aware. In particular, will he tell us how closely the IT systems to be used in these pilots will match the IT systems being developed for eventual use in implementing individual electoral registration? It is clear that they are not the same systems, as the eventual IT systems to be used are not yet ready. Does he therefore accept that there is a significant element of risk in making an assessment of these pilots and drawing conclusions about the effectiveness of the IT systems that will eventually be used?
The commission raised a number of concerns about the methodological framework for the pilots. I am sure that the Minister will assure us that the Cabinet Office will do its best to address them. He has told us that the commission will evaluate these pilots by 17 July 2013. It seems to me that the crucial issues of the completeness and accuracy of the electoral registers will depend on the relative success or failure of approaches being taken in these pilots and other measures which are yet to be announced. It certainly will not be before these pilots can be evaluated that we will know whether a register based exclusively on individual electoral registration will be fit for purpose. That is why the existing Bill must provide for Parliament to decide whether the process has been sufficiently successful for our elections and for future boundary reviews to rely exclusively on it; just as Parliament will also have to approve any decision to abandon the annual canvass.
When the Minister responds, I hope that he will provide some clarity to the Committee about when the Bill will come back and we can debate further the issue of when it may be considered safe to rely exclusively on an electoral register based on IER. In the mean time, we have to hope that the transition will be as successful as possible, as quickly as possible, in terms of the stated aims of improving the completeness, as well as the accuracy, of the electoral register. It seems to me that these aims are best served by testing as many potentially relevant databases as possible. Use of the DWP database will help to ensure that, for example, people who are retired will be registered. The DWP is clearly happy for its database to be used in that way.
However, I understand that the Department for Transport has not given permission for its database at the DVLA to be used in a similar fashion. Both databases are national, government databases and both, of course, will have significant levels of inaccuracy. Surely, it would be better to use them both rather than just one of them. Perhaps the Minister will explain if the DVLA database will be used in due course. It would be very disappointing and quite unacceptable if the Government, having been asked repeatedly to use the DVLA records, were to argue in the future that the fact that there had been no pilots with the DVLA data was the reason for not using the DVLA database for the final process of transition to IER. The DVLA holds data on millions of adults, which is reasonably up to date, because it is a legal requirement to notify the agency if you move.
I very much welcome the addition to the list of databases secondary schools and academies, the Higher Education Funding Council for England, the Student Loans Company and the Royal Mail Group. The presence of educational institutions makes particular sense when it comes to adding so-called “attainers”; that is, young people who are coming up to voting age. I hope that the presence of those institutions in this list is an early sign that the Government will accept that the use of secondary schools’ pupil information must be integral to the IER regime, as it is in Northern Ireland.
It seems to me that in this respect we have at least had a four-year pilot in Northern Ireland. My understanding is that it has been very successful in engaging with 16 and 17 year-olds to add them to the register. We learnt today from the report of the Electoral Commission on registration in Northern Ireland that it was probably unwise to abandon the annual canvass there.
Lord Maxton
My Lords, perhaps I may surprise the noble Lord, Lord Rennard, by saying that I agree with at least two points that he made. First, it would be useful to know when the Bill, to which the order is relevant to some extent, will return to the House for debate. It is important that we take decisions on this matter, but the Bill seems to have disappeared into the mists somewhere—not even of time. Secondly, why is the DVLA not involved in this? It works with other bodies in matching data. As an elderly person, I have to renew my driving licence every three or four years. I can just put my passport number on my application form. The photograph for my driving licence is taken from the Passport Service. Two different organisations are already using matching techniques. Why can they not be used for electoral purposes as well?
I largely welcome the order because it is the right approach to use other databases to add people to the register. If I had my way, I would have people added to the register and then invited to take their names off it, rather than the other way around. It is more important that people are able to vote than it is to check whether they are committing an act of fraud. Too often, this Government seem to be more concerned about fraudulent elections than about ensuring that people can vote.
Lastly, I make my usual case that none of this would be necessary—I will not mention ID cards because for some reason they are not considered politically correct—if we had smart-card technology with a central register. Everybody with a smart card would have enormous benefits, not just in terms of electoral registration but with a whole range of matters such as social security, old age pensions or whatever. We could also involve the private sector with banking. If we did that, we would not have this problem and would not be going through this process. We would have a central register and every British citizen would be registered to vote. When they voted, they would produce their ID card and that would be that.
Baroness Hayter of Kentish Town
My Lords, I thank the Minister for introducing the order. It is very difficult to disagree with one word said either by the noble Lord, Lord Rennard, or my noble friend Lord Maxton. I have no shame in using the expression “ID card”, and the Minister is no doubt ruing the day when the Government decided that they did not want to continue with that scheme.
We warmly welcome the measure in broad terms; it is necessary, whether or not the ERA finally goes through. We hope that the process will happen in any case, because it is about finding those who have a right to be on the electoral register but are not there at the moment. It may be that it should have started earlier, but we welcome it all the same.
We have just a few questions. First, as I asked on the previous occasion, has there been any discussion with the political parties about the pilots? As I have said before, and as the evidence we have heard today from the noble Lord, Lord Rennard, shows, political parties understand these issues really well and it would have been good if they had been involved in discussions on the pilots to make them as good as possible.
Secondly, like the noble Lord, Lord Rennard, we have a slight lack of confidence in whether the methodology is sufficiently robust. It looks slightly hit-and-miss, with various areas choosing which bits they would like to do. I hope that it is a little more scientific than that, which it needs to be if the conclusions are to be robust. Perhaps the Minister could assure us that the methodology is sufficiently robust to enable lessons to be learnt and that a sufficient number of authorities are participating for any general conclusions to be drawn. I had not thought of the issue of computer-matching which the noble Lord, Lord Rennard, raised, but, even without that added dimension, we need to be sure that the range is broad enough for us to be able gain good evidence.
Thirdly—this is again related in part to what the noble Lord, Lord Rennard, said—to whom will the Electoral Commission report on its evaluation? Is it only to be to Ministers or will it be to the House? What happens if the pilots prove either too expensive per new elector identified or if, as has been suggested, database problems seem insurmountable? What happens if unforeseen data-confidentiality issues arise, or if some other weakness is identified? Is there a plan B to locate unregistered voters?
Fourthly, it is essential, as the Government’s own Explanatory Notes suggest, that the 22 areas have sufficient expertise and staffing to make the pilots meaningful. What assurance can the Minister give us that they will be sufficiently resourced?
Fifthly, what lessons have the Government learnt from the pitiful turnout for the recent police and crime commissioner elections? Can the Minister assure us that these pilots are not displacement therapy for the embarrassment caused by those unnecessary elections? In case he needs reminding, the elections cost £100 million, which would have paid for 3,000 police officers. It would be interesting to hear whether he thinks that at least some good has come out of those elections in terms of lessons for systems of electoral registration.
The Minister might also like to take the opportunity to say a little more about the Electoral Commission’s report on continuous electoral registration in Northern Ireland—to which the noble Lord, Lord Rennard, referred—which was published today. According to the commission, the report,
“provides clear lessons for Great Britain as we move to individual electoral registration”.
Electors in Northern Ireland are now only registered once and only have to re-register if their personal details change.
This new report assesses the effectiveness of such continuous registration in Northern Ireland. It shows that the electoral register is now only 71% complete and 78% accurate, whereas the previous assessment in 2008 estimated the register to be 83% complete and 94% accurate. It appears that this significant and worrying decline is because the processes used to manage the register are unable to keep pace with people moving home or people becoming newly eligible to join the register.
We will obviously return to this in due course, with suitable amendments to the Electoral Registration and Administration Bill. Again, as has already been mentioned, the Minister will recall that we spoke of our deep concern about the provision in the ERA Bill for the annual canvass to be abolished. We trust the Government will reassess this provision in the light of the Northern Ireland example. Hitherto, the Minister has called Northern Ireland in aid as a defence for the Bill, but I think today’s findings are a little worrying—particularly about people moving, because within certain parts of Great Britain, our population mobility is even higher than in Northern Ireland. Therefore, this continuous updating would be particularly important. However, none of this undermines the general support for these plans to take place.
Lord Wallace of Saltaire
I thank noble Lords for their comments. We are a small group, but it is very good to have an expert and interested group in this extremely important and difficult transition from a very elderly system of household registration to a necessary, but not entirely easy, system of individual electoral registration.
I will try to answer some of the questions that have been raised. The government digital service is working actively on IT systems and the compatibility between one system and another. I was amused this morning to have a government digital service team arrive with a Mac presentation that they wanted to put on the House of Lords Microsoft-based video system. They are well aware of these problems; there will be full end-to-end testing of the IER digital service before the introduction of IER. This is not necessary for the purpose of the data pilots, but from the briefing that I have so far had from the government digital service, this is very much one of the things that they are actively working on and are confident that they are making progress in resolving. As I commented to the noble Lord, Lord Maxton, earlier, I was struck by the different cultures of the government digital service and the House of Lords; we had forced two members of the government digital service to put on ties and suits to come to the House of Lords this morning and they felt extremely uncomfortable in this unusual clothing. We intend to be able to integrate IT systems at the local level and a considerable amount of work is under way.
I have been asked by several noble Lords to provide more clarity on when the Bill will come back. I can, with great assurance, tell them that the answer is “soon” and that I look forward to a more precise explanation of when soon will be, since that will also assist my diary.
I was asked about the role of the Electoral Commission and whether its report would be published. The report will be made to the Secretary of State, but in the nature of the relationship between the independent body, Parliament and government, it will of course also be published.
On the question of the Department for Transport and the DVLA, the latter’s database was used for the original data-matching pilots but is not currently available to us. Discussions are vigorously under way between the Cabinet Office and the Department for Transport, and we hope that we will regain access to the database at a later date. I am well aware that the DVLA database, as the noble Lord, Lord Maxton, commented, is accessed by other agencies including private insurance companies. It is not an entirely closed system and we very much hope that we will be able to resolve the issue.
Lord Tyler
On the point about the DVLA, I wonder whether my noble friend would accept that the Committee would like to strengthen his arm in any discussions with the Department for Transport and the DVLA. It is extremely important that the Cabinet Office recognises that the priority must be people who are not sufficiently well attended to in the registration process. As he said, the current register is deteriorating fast, particularly for those who are young and mobile in the inner cities. The priority must be to go to those databases that tend to pick out those individuals. Clearly the DVLA is one of them, but so, too, are the tenancy deposit scheme and the credit agency schemes. I hope that the Minister and his colleagues in the Cabinet Office will accept that those must be the priorities. There is a democratic deficit among young people in inner cities, who are the most mobile part of the population. It is natural that they should be the priority, and that is where we should put most emphasis. I hope that the Minister will take back from the Committee’s proceedings that we would like to strengthen his arm, and those of his colleagues, in dealing with the Department for Transport and the DVLA.
Lord Wallace of Saltaire
I am very happy to take that back. I will report back to my colleagues on the strongly held sentiments. Perhaps I may take the questions about tenancy and deposit schemes and credit agencies at the same time. The initial assessment by the Cabinet Office of the suggestion from my noble friend Lady Berridge that tenancy deposit schemes might be used was that it was not sufficiently obvious that the processes of these databases could be adapted to support IER. However, that does not exclude renewed consideration.
Of course, the question of credit agencies takes us over the boundary between public and private. Credit agencies are part of the private sector. The issue is part of a broader discussion that we all need to have with the likes of the noble Lord, Lord Maxton, and others, about the extent to which, as we move into a new world of data transmission and availability, private and public databases can be used for identity assurance. That was the basis for the briefing I received this morning from the government digital service. It would be helpful to organise a meeting for Peers as a whole on the work that it is doing—for longer-term and wider purposes than this Bill alone—on these issues. Private databases are increasingly useful, but their use raises questions about civil liberties and public and private interests with which we need to be concerned.
Lord Rennard
The Minister suggested that there was a great gap between private sector credit reference agency databases and public sector databases. Would he not accept that private sector databases used by credit reference agencies are already used extensively by public local authorities? Many local authorities use data held by credit reference agencies to determine whether there may be more than one person living in a household, in particular when someone is claiming a single person’s council tax discount. Credit reference agencies may have information suggesting that more people are present in the house, and revealing who they are. Local authorities, which are public sector organisations, are already using the data from private sector credit reference agencies. Would it not be logical for electoral registration officers to do what their colleagues in finance departments are doing to identify the existence of people who are there but who are not on the electoral register, and invite them to be on the electoral register? I am not aware of any objections from civil liberties groups to any of these existing practices.
Lord Wallace of Saltaire
I thank my noble friend for that strongly worded intervention. I take that on board as one of the issues that we are edging towards. The civil liberties lobby may not have caught up yet with the point that he is making, but I expect that it will do so soon. There are some very broad issues here that we have to be concerned about. I point out, as he has done, that one of the principles of our system of electoral registration is that it is in the hands of local authorities. We do not have a central database, so what one local authority does with credit agencies may be rather different from other local authorities do.
On the question of why this particular collection of local authorities was chosen, the answer is that these are the ones that volunteered to take part. They seem to us to be relatively representative, but this is the nature of the system under our current legal arrangements. Happily, the selection of local authorities is sufficiently wide that we and the Electoral Commission are persuaded that they will provide us with sufficiently reliable information.
Baroness Hayter of Kentish Town
Is the Minister concerned that they are, in a sense, good local authorities? The fact is that if they volunteer to do this they are probably doing quite a lot in any event, and therefore probably not the ones that are of concern to us. I was very glad that they volunteered, by the way.
Lord Wallace of Saltaire
As I have discovered, the world of electoral registration officers and their staff is a wonderful subculture of its own. They interrelate across the board, and they know which are the good local authorities and which are not. I am less worried than I was when I started in this process after having discovered this wonderful population of people, for whom I have a great deal of respect, having been briefed by a number of them.
My noble friend Lord Rennard asked me for an assurance that the databases chosen are properly representative of the UK population. We are pursuing the greatest diversity possible in databases, which is why I take on board what has been said about the DVLA; the wider the collection of databases that we use, the more likely it is that we will catch students, attainers, rapid house-movers and others. That is precisely what we are trying to do.
The noble Lord, Lord Maxton, made an interesting comment that he might perhaps wish to pursue further: he would like an opt-out electoral registration system rather than an opt-in one. That is a point of some significance that would bear some consideration and further thinking. There are some large issues there on voluntary registration and the balance between voluntary and compulsory, which are not currently within our remit in the Bill.
Lord Maxton
It is right that registration should be compulsory, but voting should not.
Lord Wallace of Saltaire
These sorts of interesting questions are considered by the behavioural insight team at the Cabinet Office, which plays around with tipping people’s balance in favour of doing one thing rather than another, and the noble Lord is certainly beginning to touch on them.
No, we do not rue the day when ID cards were dropped, but we are persuaded that developments in the computing and electronic world, and the way in which it is possible to use digital databases and compare among them, is opening up the possibility of providing identity assurance and a simpler relationship between the citizen and state, which would not only be more efficient but astonishingly cheaper than the original ID scheme. Again, this is something that needs further exploration, and I will do my best to provide one or more briefings for interested Peers.
On the question of whether we have discussed this with political parties, the answer is yes, of course, on a number of occasions. I particularly enjoyed the meeting which Chloe Smith, myself and a number of others had with the HS Chapman Society—a body of electoral agents chaired by the noble Baroness, Lady Gould—at which we had some fairly sharp questions, including some to registration officers about the particular details in the Bill. We fully understand that political parties have a great deal of expertise. I am told that the noble Lord, Lord Rennard, has a little expertise in this area himself.
I was asked by the noble Baroness, Lady Hayter, about the lessons that the Government have learnt from the low turnout in the PCC elections: I would want to add from the low turnout in by-elections as well. The lesson that we all need to learn from the declining turnout—this is a matter which all political parties need to talk about—is that people are less and less engaged in politics, and that we have to fight very hard, which necessarily means on an all-party basis, to re-engage our disillusioned electorate and persuade them that it is worthwhile to support candidates for election and to take part in the political process. We should also recognise that we have to overcome the barriers which an increasingly cynical media place in front of us as we attempt to do that.
I was asked to comment on the Northern Ireland report out today. I recognise that it is a sobering report, which raises a number of questions. I take the point made by several Peers about the relevance of the annual canvass for this. We will, of course, as well as the Electoral Commission, take that into account. I think it shows just how difficult the task is to maintain a complete and accurate electoral register. As we go through this transition, we have to make sure that we make every effort possible to arrive at as complete a register as we can. Having made those points I hope that the Committee will accept this order.
Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012
(12 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Charitable Incorporated Organisations (Insolvency and Dissolution) Regulations 2012.
Relevant Documents: 10th Report from the Joint Committee on Statutory Instruments
Lord Wallace of Saltaire
My Lords, the next two instruments on the Order Paper form part of a package of secondary legislation that will enable the implementation of the long-awaited charitable incorporated organisation. The package builds on the framework introduced by the previous Government in the Charities Act 2006, which is now consolidated in the Charities Act 2011.
The CIO is the first legal structure in England and Wales designed specifically and only for charities. Just over 80% of registered charities currently have an unincorporated structure, either as a trust or unincorporated association. But an unincorporated structure exposes trustees to potentially unlimited financial liability and means that contracts have to be entered, and property held, in the names of individual trustees. Many charities have sought the benefits of incorporation through incorporating the charity as a company limited by guarantee. This brings the benefits of limited liability for members, protection for trustees and, as the company has its own legal personality, makes it easier to enter into contracts and to hold property. I have to say that, before I began to get into the whole charities world, I had not realised just how many charities hold property.
The downside of incorporating a charity as a company is that it results in dual-regulation and registration under company law and charity law. The CIO is a structure that has the benefits of incorporation but is registered and regulated solely under charity law by the Charity Commission. It will represent a significant reduction in red tape for charities that want the benefit of limited liability.
Although the CIO model is intended to be a relatively easy way to set up and run a charity, it also has to be robust enough to inspire public confidence. As it has the benefits of limited liability, the CIO framework needs to provide the right level of protections for third parties which may wish to do business with the CIO, in particular lenders and contracting authorities. We believe that the draft package of secondary legislation achieves the right balance between ease of operation on the one hand and third party protections on the other. I hope that it will help noble Lords if I give a brief explanation of the instruments before us today.
Lord Hodgson of Astley Abbotts
My Lords, I welcome the regulations. They are an extremely useful and important addition to the charity regulation framework. I have carried out two reports for the Government, the first called Unshackling Good Neighbours and the second the review of the Charities Act, Trusted and Independent—I should like to say to the Minister how helpful his staff were in the preparation of that; they worked very on it and were of great assistance. In both those reports, it was clear that the absence of any legal air cover was a considerable deterrent to people serving as trustees. People feel, rightly or wrongly—despite the lawyers saying that there are no cases—that there is a risk. The regulations provide an important bit of air cover that will encourage them to come forward and serve as trustees.
I hope, however, that the Government will not forget about the importance of finding ways in future to afford additional protection to volunteers. I know that the provision of protection is not part of these statutory instruments and I understand why it could not be included. However, volunteers remain concerned about what they see as counterintuitive judicial decisions that leave people feeling exposed when they are undertaking one sort of volunteering activity or another.
These statutory instruments are important, valuable and welcome. As my noble friend on the Front Bench said, the protection carries with it privileges—and with privileges comes responsibility. We need to stress this is because there cannot be a register of charges. Therefore, to some extent creditors between each annual report are flying blind. That is inevitable; we cannot get round it. We must emphasise to trustees of CIOs that they have a responsibility to behave properly. It would be a terrible shame if this new and very valuable corporate form were to be damaged by early malfeasance and misadventure. Equally, it would be helpful if the Minister would confirm that the normal provisions of corporate behaviour will apply to trustees of CIOs. As any director of a limited company knows, trading while insolvent is the most serious thing for which you are personally liable. This should apply to CIOs that act improperly.
I was pleased to hear the Minister talk about the ability to disqualify trustees of CIOs, and to apply the disqualification regulations to them. Perhaps I could nudge his elbow again. The Charity Commission is very limited in its powers to stop trustees of charities—not CIOs—who have behaved badly from becoming trustees of other charities. Trustees can move around quite easily. We need to find ways to ensure that the Charity Commission can keep the rotten apple out of the barrel, and prevent it finding somewhere else in the barrel a bit later.
I share the Minister’s view that this has been a long time coming. The Charities Act became law in November 2006. It is now the end of November 2012. Even by the standards of Whitehall, progress can best be described as glacial. As he warned us, some timetabling issues lie ahead. The Explanatory Notes make it clear that new CIOs will come into force reasonably quickly. Perhaps the Minister will confirm when the commencement provisions will be laid. Obviously we are some way away from the conversion of existing CIOs. After six years it is not surprising that there is a certain amount of pent-up water behind the dam. I hope that the Government will find ways to encourage the Charity Commission to use modern, online techniques and proceed as quickly as possible to a situation where every trust that wishes to convert to a CIO is able to do so.
Perhaps I may raise with the Minister another bee in my bonnet. It concerns repetitive, duplicative and overlapping returns. I am not sure where we are on the return that a CIO will make to the Charity Commission. We want to make sure that it is as focused as possible. Less is often more. There is the example where we have our credit cards changed and we get four pages of closely packed type telling us that there have been changes, not particularly identifying what is what and what has been changed.
I hope that when the new forms are prepared, we really focus on what is needed, not just have a splash of paint across the whole of the subject. Information takes a lot of getting together for charities; it is a great source of economic friction for them. Sometimes they feel that a hell of a lot of information has to be collected for not much purpose other than ticking a box. We want to ensure that we are gathering information that really helps the monitoring—for the public and the supporters of those organisations to decide whether they are good and worth while.
The Minister will not expect me to leave the subject without saying that, for a year and a half now, we have been pressing the Charity Commission and Companies House to find a way to agree an individual return. There are more than 30,000 charitable companies who are making two separate returns. It cannot be beyond the wit of man, let alone the wit of Companies House and the Charity Commission, to find a single form that could serve both purposes. That would be 30,000 forms in the bin.
With that rather disobliging remark at the end, I entirely welcome the regulations, but they will reach their full flowering only when every charitable trust that wishes to convert anywhere in the country, whether old or new, big or small, rich or poor, can do so. I hope that the Government will ensure that pressure is kept on the Charity Commission so that that happens as soon as possible.
Lord Methuen
My Lords, as chairman of the trustees of an almshouse trust, we have been considering going the alternative way of incorporation. We welcome the measures and shall be examining them at our meeting on 7 December. We think that this is a much better way to go than the current incorporation methods. We welcome the protection that this will give our trustees and hope, as the noble Lord said, that it will encourage more people to come forward as trustees.
Baroness Hayter of Kentish Town
My Lords, I will try to resist the temptation to say that if the wit of man cannot get those two bodies to work together, perhaps the wit of women in the two organisations may be able to achieve that.
First, I should declare my interest as a trustee of various charities now and of even more over many years previously. Indeed, I have been caused much pain at earlier times by running non-incorporated charities, which often meant scuttling around London trying to get trustees’ signatures on property deals and, sadly, occasionally, trying to get death certificates for recently deceased trustees, often at a very sensitive time for the family, because there was some urgent legal or Charity Commission document that needed completing. In one case, I was dealing with a potential £1 million liability on individual trustees—one of them at that time a Member of your Lordships’ House—who, before I had advised them, had signed a document for a rather silly 25-year lease with, I believe, the Duke of Westminster, on a rather large property in Grosvenor Crescent. I should add that, once I took over, we rapidly incorporated it and that was the end of that.
I very much welcome the introduction of the charitable incorporated organisation structure, which, as has been said, will make this easier to access and cut out dual regulation on SORPs as well, on all the accounting rules which are also not quite the same for the two types of organisation.
As both the Minister and the noble Lord, Lord Hodgson of Astley Abbotts, said, the regulations are long overdue in introducing the new regime. They were legislated for in 2011, but the first will roll off the assembly line only early in spring of 2013. Given the Government’s desire, I am sure, to champion enterprise and the big society, we hope that they will move as fast as they can to facilitate the work of charities.
As the noble Lord, Lord Hodgson of Astley Abbotts, has said, the slow introduction has been a source of frustration for many charities, some of which unfortunately could no longer afford the wait or uncertainty and have had to incur the expense of becoming a company limited by guarantee under the existing rules. Nevertheless, single registration will undoubtedly reduce administration time and costs, with only one annual report and all that sort of thing, so we welcome it.
Lord Wallace of Saltaire
My Lords, I thank the noble Baroness, Lady Hayter, for her questions. She asks fewer questions than many Front-Benchers from the Opposition, and they are always extremely well thought through. She explains what she is asking, so it is possible to write down each question as she asks it—unlike some of her colleagues, who fire questions so rapidly that it is impossible to write them down or remember them afterwards.
I am extremely grateful that, some years ago, I became a trustee of two musical charities before I realised that I would have to learn so much about the enormously complicated world of charities. I am even more surprised to discover now as I read through the material that what I thought were two small charities—one with a turnover just short of £500,000 and the other with a turnover of about £250,000 a year—rank as medium, or even on the fringes of large charities. There are many that are much smaller than that in terms of their turnover.
I apologise that it has taken so long to come to this, but if the Government are at fault, it is partly because they have spent such a long time consulting all the affected parties. It is also the case that the insolvency issues have been extremely complicated, and getting the question of insolvency and dissolution right—which involved an external review by insolvency and charity law specialists—was something that we wanted to make sure we achieved. Charities law, as Members of the Committee will know, is a very complex and specialised field—it is only about 500 years old as it has slowly developed—so when we make changes, we want to make sure that what we are doing will stand for a considerable period.
I take the point made by the noble Lords, Lord Hodgson and Lord Methuen, about encouraging volunteers to come forward and limiting the liability of trustees and other volunteers. We note and welcome the two reports by the noble Lord, Lord Hodgson, Unshackling Good Neighbours and his very large and worthwhile review of the Charities Act 2006. We are alive to his concerns and, while we cannot at this point say anything specific, we hope that there will be a response to this in reasonable time.
The noble Lord, Lord Hodgson, also raised the question of powers to ban trustees. The Charity Commission has very wide powers to suspend or remove trustees; we nevertheless recognise, as he pointed out in his Charities Act review, that there are one or two gaps in the Charity Commission’s powers, and this is something that we look to address. Of course, the conversion into charitable incorporated organisations will do something to resolve this issue.
The noble Lord, Lord Hodgson, also raised the provision of training for trustees of charitable incorporated organisations. That is something on which we will have to consult the Charity Commission. I take the point, however, that if company directors are now to receive more effective training, that should apply also to trustees. From my own limited experience, I have learnt that one needs someone with considerable legal skills as well as someone with very useful accounting skills on any board of trustees of a charity with a reasonable turnover.
The question of when charitable companies will be able to convert to charitable incorporated organisations has been left to the last phase. According to my notes, charitable companies will be able to convert in the course of 2014, which will also be phased in by size of turnover. Separate conversion regulations will be laid in 2013.
The noble Lord’s point about repetitive reports and returns will of course be eased by the transition; indeed, part of the purpose of moving towards charitable incorporated organisations is precisely to simplify the level of returns that charities and charitable companies have to provide and to reduce duplication.
The noble Baroness, Lady Hayter, raised the question of shell charities and their necessary continuation. This is a very complex area, particularly, as she remarks, because of the issue of legacies and wills that have been written a very long time before. I am not entirely sure what the answer to this is, and I will write to her with more detailed concerns.
I am very struck by the issue of what one might call moribund charities. I am struck by the fact that some of the new community foundations in Yorkshire have been doing useful work in discovering charities that are in effect simply sitting on assets that are no longer used, and persuading them to dissolve or merge into the community foundations and use those assets now for more appropriate, but related, functions.
The noble Lord, Lord Hodgson, asked why we do not have the general regulations and the commencement order, and how that will all be brought into force. The general regulations are subject to the negative resolution procedure and therefore cannot be laid in draft. They, along with the commencement order and the draft instruments that we are considering today, will all be made at the same time once both Houses have approved these affirmative instruments. A draft copy of the general regulations is annexed to the Explanatory Memorandum to the dissolution regulations.
I hope that I have covered all the necessary points. On the question of criminal liability if, on the dissolution of a CIO, one of the trustees is unaware of an insolvency event, I congratulate the noble Baroness on the detail and technicality of her question, and I hope she will accept that I will have to write to her with the answer.
Having answered those points, I hope that all Members of this Committee will welcome this order; it has taken rather longer than many of us would have liked but it is now coming in. It is actually a major and very constructive development for the charity sector. I therefore hope that it will receive a welcome and that we will begin to see this new form of charitable status taking effect over the next three to four years.
Charitable Incorporated Organisations (Consequential Amendments) Order 2012
(12 years ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Wallace of Saltaire
That the Grand Committee do report to the House that it has considered the Charitable Incorporated Organisations (Consequential Amendments) Order 2012.
Relevant Documents: 10th Report from the Joint Committee on Statutory Instruments
Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012
Baroness Verma
That the Grand Committee do report to the House that it has considered the Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012.
Relevant documents: 10th Report from the Joint Committee on Statutory Instruments
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)
My Lords, one of my department’s key priorities is reducing carbon emissions from energy-inefficient homes and reducing the number of households in fuel poverty. The Green Deal programme and the energy company obligation are designed to meet these joint objectives and give consumers access to a range of funding streams for energy-saving improvements in their homes.
The Green Deal is an innovative financing mechanism that enables consumers to pay for the cost of energy efficiency improvements over time through savings in their energy bill. Since the Green Deal legislative framework came into force in October, we have seen more than 270 separate installer organisations register to deliver Green Deal measures and more than 140 expressions of interest from potential Green Deal providers, with 13 already authorised.
The energy company obligation, which is worth an estimated £1.3 billion per year, will work with the Green Deal and require energy suppliers to support those living in harder-to-treat properties and assist low income households, helping them to heat and insulate their homes. We estimate that the ECO subsidy will support the installation of more than 1 million insulation measures by March 2015, which will drive the uptake and development of solid wall insulation technologies. We have ensured that at least 40% of ECO support will be targeted at low-income households, and that support is worth around £540 million per year. It will assist around 230,000 low-income households each year and will make a huge difference to the lives of those who need it most.
I am grateful to the Committee for allowing us to debate these statutory instruments together. I will briefly describe the purpose of each of them. First, the Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012 essentially relates to the energy performance of buildings regulations, which cover energy performance certificates, and are already a common feature of the property landscape. It is important that the Government amend the regulations relating to EPCs by 28 January 2013, which is when the Green Deal plans can begin to be made, to ensure that the EPC framework can be used to disclose the key terms of the Green Deal plan to subsequent bill payers when, for example, a property is sold or let out. This will be an essential element of our approach to consumer protection under the Green Deal.
Our initial legal view was that Regulation 42 of the Green Deal regulations did not need to be in force before we amended the EPC regulations. However, this is highly complex legal territory and, having given further consideration to the issue and in order to avoid any doubt, we have concluded that the amendment that we are considering today should be brought into force before 28 January 2013. In fact, it will come into force on the day after it is signed by the Secretary of State, following its approval by Parliament. This means that we can create a clear window of time within which the separate changes to the EPC regulations can be made. As the amendment that has been made is simply a change of date, I propose not to take up much of the Committee’s time on this instrument in these remarks.
The draft Electricity and Gas (Energy Companies Obligation) Order 2012, known as ECO, places three obligations on energy suppliers that have more than 250,000 domestic electricity and/or gas customers and have supplied more than the specified level of energy in a relevant period. The obligations are a carbon saving obligation, a carbon saving community obligation and a home-heating, cost-reduction obligation.
The ECO order was successfully debated in this House before the Summer Recess. It is brought back now for consideration in light of the technical amendments that we have identified as essential to its effective operation. These technical amendments centre on an “in-use factor”, which is used to reduce the amount of energy that a particular energy efficiency measure is calculated to save, compared to its theoretical assessment. The inclusion of an in-use factor will reflect that measure’s likely actual performance when in situ in a property. The previous ECO order did not incorporate the provisions necessary to ensure that in-use factors were applied, which created a degree of uncertainty for obligated parties. I apologise to the Committee that we did not identify this technical inconsistency earlier. However, as soon as we did we took the necessary steps to correct the position. My department immediately launched a short consultation to address the anomaly and provide greater clarity.
The overwhelming majority of respondents—about 80%—agreed with the three proposed amendments on which we consulted. The following revisions have therefore been made to the draft ECO order that we are considering today. In-use factors have been included for the scoring measures installed under the carbon emissions reduction obligation and the carbon-saving community obligation, and a schedule of fixed in-use factors for specific measures has been added. The draft order now provides for ECO-eligible measures installed from 1 October 2012 to count towards a supplier’s eventual ECO obligation.
We have made a number of other small amendments to the ECO order. These are not changes of policy but will provide greater clarity for energy suppliers and Ofgem in administering the scheme, to ensure that ECO delivers the policy objectives that were set out in the Government’s consultation response and impact assessment. The changes make explicit that ECO affordable warmth assistance should be targeted at individuals living in private-tenure properties and will provide clarity on the treatment of excess actions carried forward from the current CERT and CESP schemes. They also make it clear that the supplier can be credited for both space-heating savings and hot-water savings in a case where a measure delivers both—for example, a boiler or central heating system.
The regulations will help to improve the energy efficiency of homes across Great Britain, reduce our carbon emissions and, crucially, help households to manage their energy bills. I commend the regulations and order to the Committee.
Lord Grantchester
I thank the Minister for her explanation of the statutory instruments before us. It will be good to take up the challenge of the Green Deal with her, as it was with her predecessor. There is nothing wrong with the ambition to tackle energy efficiency and the nation’s housing stock. We on this side of the House continue to support the objectives of the Green Deal. It is a vital part of energy demand reduction and energy efficiency improvements to meet greenhouse gas emissions targets and promote energy security and climate change mitigation.
The Green Deal framework regulations were largely debated and agreed in July, so there is no need to revisit our discussions. However, we have the opportunity to press the Minister on progress, to voice some of our continuing concerns, most notably about finance and the Green Deal Finance Company, and to assess the Green Deal’s interrelationship with the energy companies obligation order.
The Green Deal regulations merely bring forward by six to eight weeks the date of the coming into force of some features of Regulation 42. The ECO order allows in-use factors to be used in the assessment of outcomes and benefits under the golden rule. The amendments drew comment in the 14th report of the Secondary Legislation Scrutiny Committee. It stated that it hoped that Her Majesty’s Government’s use of secondary legislation would not increase with further corrections and amendments. I do not criticise the coalition for this; after all, mistakes are a defining characteristic of this coalition. We raise concerns to be helpful to the Minister’s department, and note that a further suite of legislation relating to the Green Deal is expected shortly. It will concern the Consumer Credit Act and will contain guidance on the Green Deal generally, and for Green Deal providers on the confirmation and disclosure process.
I note that plans are intended to go live and to be signed up to from 28 January 2013. Perhaps I may ask the Minister when the House may have sight of them. The seriousness of the situation is underlined by the fact that CERT and CESP are due to finish at the end of December this year. While there may be some allowances for outstanding obligations to be carried over, nevertheless the uncertainty that this generates in the industry critically undermines confidence. If there continues to be slippage, there is a heightened risk of job losses and layoffs in the gap that will open up between the end of CERT and CESP and the implementation of Green Deal plans. While the date in January to allow plans to be signed up to is consequential on finance plans from the Green Deal Finance Company, perhaps I could ask the Minister why improvement plans that participants are content to pay for immediately and without finance may not be signed up to immediately.
There is widespread concern at the lack of clarity concerning interest rates, finance charges and penalties yet to be brought forward by the Green Deal Finance Company. It is largely academic to draw up Green Deal plans when the full cost alternatives are not yet available. We remain concerned that, to many people, the Green Deal may not be a good deal, especially when finance costs are included at a rate between 5% and 8%—which the Minister conceded in July was not an unreasonable figure, to use his words. When will the Government use their shareholding in the banks to inform them that they can do more for less, in the same way as every other company in the country is having to do?
The Government have our congratulations on setting up the Green Investment Bank legislation that is currently in your Lordships’ House. This is the Government’s own seedcorn. What plans do they have to utilise the Green Investment Bank to underwrite the Green Deal, and how will that work? Do they realise that the public’s attitude to debt has changed and that trust in banks is severely shaken?
Concerning the second order, the ECO is intended to work in tandem with the Green Deal policy to enhance further the installation of cost-effective energy efficiency improvement measures, especially those not fully financeable through the Green Deal alone, including measures to help those in fuel poverty and properties in communities in rural areas. The revised order is to ensure that in-use factors are applied when calculating carbon savings attributable to measures installed under ECO—that is, carbon savings that reflect actual performance once installed in domestic properties. Once again, guidance is eagerly awaited by the industry. This revision seems to be in response to the concerns raised about the golden rule. That the golden role may not apply once measures have been completed not only further undermines consumers’ confidence in the Green Deal, it could open up the Green Deal and even the Government to challenges for misselling. As the potential forthcoming Government, we would be especially keen to avoid that mistake.
Concerning the link between the Green Deal and ECO, I remain unclear about under what process the ECO may be triggered and hence the costs mushrooming out of control, leading to extra charges on all consumers’ bills. Does the take-up of measures under ECO expand in line with the poor take-up of the Green Deal plans? Will an attitude be encouraged that if consumers decline the voluntary take-up of a Green Deal, the energy companies under ECO will be obliged to undertake the plan anyway? If expenditure to alleviate fuel poverty is reducing as the definition of those qualifying is tightened up, how will that be financed other than by mushrooming domestic bills, already put under great stress by the actions of this Government? Can the Minister clarify the situation?
I understand that part of the delay in getting Green Deal plans going is that the software to set up the register is itself yet to be set up. I understand that the application of the golden rule and its interpretation, as applied to the specific property in question, is the problem. That seems core to the operation. Can the Minister throw any light on that?
I know that the Residential Landlords’ Association is keen to see and discuss the regulations for the private rented sector, particularly regarding the compulsion elements. I know that the Minister will agree that every encouragement must be given to the sector to get on with improvements before compulsion.
In conclusion, we continue to be concerned that the Green Deal may not be the game-changer that we all wish it to become. It is a huge undertaking, yet the prize of whole streets’ and districts’ housing stock being upgraded, without exception to tenure or to the ability to pay, remains the objective that we all applaud.
Lord Moynihan
My Lords, I shall briefly make a couple of comments and ask one question of the Minister. I am glad that there is continued all-party support, under her new leadership in this area, for the Green Deal and for the work of the Green Investment Bank, which I strongly echo. I hope that, as the Government have been reconsidering elements of the energy Bill, when we finally read it this week we will see a greater emphasis on energy efficiency measures. It is so important that we see energy efficiency embedded in energy policy, as much as we focus rightly on the need to ensure that we have the correct balance between nuclear, renewables and fossil fuels in a policy geared towards ensuring that we have security of supply at a competitive price.
I welcome the Minister’s clear explanation of the measure before the Committee today. In her opening comments, she made an interesting point: she said that during the consultation exercise undertaken on the three measures that we are considering, 80% were in favour. It would be helpful if we knew the genesis and gist of the 20% who were against the measures, so that we can take that into consideration before reaching a determination.
Lord Whitty
My Lords, I associate myself with my noble friend Lord Grantchester’s questions, which should throw some clarity on this issue, and with the underlying point made by the noble Lord, Lord Moynihan, about energy efficiency in general. Like other colleagues, I strongly support the concept of the Green Deal and wish to see it in operation as rapidly as possible. Now that we have a clear start date, the company is in place and the assessors are coming online, we stand a good chance of being able to start from that date.
The problem for the Government is that the start-up will be relatively slow. It is still not clear to the general public what the Green Deal is about. I think that I am right in saying that the Government are still setting their face against having a public information campaign on the Green Deal, which seems to negate all the good work that the department has done to get all its ducks in a row by this point. If we do not make a real effort—and it will be quite an expensive effort—to tell the public what is on offer, I fear that take-up will be even slower.
That leads me to my central point, which is broader than these regulations. I recognise that they involve some tidying up and corrections, as well as bringing some technologies into play, so I approve of their general direction. What is needed to surround them, though, is, first, a bigger commitment and information and, secondly, frankness about how quickly the Green Deal will not only have an effect on general energy saving and cost saving for householders but, more particularly, have an effect on and be available to the more vulnerable of those consumers.
The interplay between the ECO and the Green Deal is intended to replace CERT and CESP, and is also intended effectively to replace Warm Front. The total number of households covered by those provisions together, even after being run down over the past couple of years, is still close to 200,000. For those groups in fuel poverty, by the old definition at any rate—and I suspect that it will also be true under the new definition—I do not see how the Green Deal is going to replace a figure of that magnitude. When we are considering this, it would be useful to know the Government’s overall assessment of the impact of this on fuel-poor households, and of how far that and other measures will approximate what went before.
Having said that, I approve, broadly speaking, of the regulations and I approve of the Green Deal. However, we have to be clear that we are covering the hiatus period which, even if takes off faster than I am assuming, will cover the next 12 months at least. We also have to be clear on how it affects help to the fuel-poor who, at the moment, are still growing in number by any definition.
Baroness Verma
My Lords, I am grateful for the Committee’s comments and, of course, am glad that it has largely accepted the regulations. Noble Lords opposite are a little too pessimistic. On the one hand, they agree with what we are doing but on the other they are saying that we cannot deliver. I have said very clearly that, first of all, it is always helpful if Governments—be they coalitions or whatever—own up that there has been a mistake. At least I am standing here big enough to be able to do that. I am often disappointed when noble Lords opposite forget that many mistakes were made during their time in government. They have still failed to own up to that. That was just the cheap point that I wanted to get across following the cheap point that was thrown at me. I am always very glad that the noble Lord is optimistic in thinking that they are going to be in government next time. I wait to see that day.
Coming back to some of the questions that noble Lords have raised, I will first respond to the noble Lord on how fuel poverty is being tackled when eligibility is being tightened. The criteria for eco-affordable warmth are being better targeted; they are being targeted on low-income, vulnerable households that are in the greatest need of assistance, including—this time around—the elderly and disabled.
The Deputy Chairman of Committees
My Lords, a Division has been called. It is remarkably bad timing as far as this Committee is concerned. The Committee stands adjourned until 5.17 pm.
The Deputy Chairman of Committees
My Lords, it is now 5.17 pm, so the Grand Committee can recommence. The noble Baroness, Lady Verma, was in full flow and I am sure that she will continue in that way.
Baroness Verma
My Lords, we will target eligibility criteria for ECO affordable warmth predominantly on private tenure, where concentration of fuel poverty is almost double that found elsewhere. I am sure that noble Lords will agree that we need to ensure that those who require it the most and are least able to afford it should be at the forefront of our schemes.
My noble friend Lord Moynihan asked about the 20% of respondents who did not agree with including the in-use factor. They wanted it to be a changeable rather than a fixed factor, but they did not disagree with the principle.
The noble Lord, Lord Grantchester, asked whether the software was ready. The software tool to be used in people’s homes is fundamentally an issue for the companies providing the Green Deal, but it is important that it be properly tested and approved to ensure that it generates the correct results. I understand that several tools are undergoing a process of technical validation and we expect to see them on the market in the very near future.
The noble Lord, Lord Whitty asked about the impact on fuel-poor households and how expenditure compares with that in previous schemes. Our figures suggest that total fuel poverty spending was £760 million in 2009-10 and will be £828 million in 2014-15, which represents a 9% increase in spending over the period. It will be a more effective way of assisting low-income, vulnerable households than existing schemes because energy suppliers will be incentivised to deliver a package of measures to help households to heat their homes more affordably, rather than just delivering single measures to individual dwellings.
The noble Lord, Lord Grantchester, asked if we were planning to lay regulations amending the Consumer Credit Act. Using the power in Section 30 of the Energy Act 2011, amendments to the framework regulations will be laid to the framework in December. We have laid a revised draft Green Deal code of practice today and recently we published Green Deal provider guidance. If the noble Lord has not had sight of that, I am sure that he will be able to access it.
I have additional information for the noble Lord, Lord Grantchester, on the Consumer Credit Act. It will be for the purpose of dealing with situations where there is more than one debtor under a Green Deal plan, which I think he was quite concerned about. If one bill payer moves on, but the Green Deal has arrears, there will be a format for us to ensure that we can respond.
The noble Lord, Lord Grantchester, also asked how the ECO subsidy would interact with the Green Deal because of the golden rule. There will be occasions when it will not be possible under the golden rule to cover the full cost of installations of more expensive measures. Therefore, the ECO subsidy will work with Green Deal finance for these measures and will take it into account when calculating the Green Deal finance package for the household.
The noble Lord, Lord Grantchester, asked several more questions and I hope that I will be able to answer most of them. If I do not, I will ensure that the noble Lord is written to. He asked how the Green Investment Bank would underwrite the Green Deal and how that would work. I may suggest to him that this is a negotiation process between the Green Deal Finance Company and the Green Investment Bank. It is an agreed priority for the Green Investment Bank, but these are commercially confidential negotiations, and they are ongoing. I cannot comment further on them.
The noble Lord, Lord Whitty, said that no one really knows about the Green Deal. We have been working closely with local authorities and consumer groups but until we are able to offer the Green Deal, which will go out in January, we do not want to raise the expectations of people and then tell them to wait. We have worked closely to ensure that all the processes we need to ensure that the Green Deal is kick-started in a very progressive, productive way in January are in place. That work has been going on for several months.
I urge the noble Lord, Lord Whitty, to be less pessimistic about the response that we are going to get to the Green Deal. I assure him that many of us, particularly Ministers, have been to a number of events to raise the profile of the Green Deal. In October, it was kick-started when people could sign up to become suppliers, assessors and providers, but the programme will not start until January 2013. The noble Lord needs to sit and wait, and to watch this space. However, I urge him to be optimistic that people will benefit hugely from the Green Deal and that we are working very well and very closely.
Lord Whitty
My Lords, I am prepared to agree with the noble Baroness that everything is being put in place, and you could not expect and would not want a huge take-up right at the beginning. My point was that, because all the other schemes will have finished by 28 January, there will be a hiatus between that and Green Deal reaching its forward drive path, if everything goes well—I certainly wish it well. Therefore, in 2013 we will see a dip in the number of households treated, particularly in relation to fuel poverty. It may well be that by 2014, if all goes well, the situation will have improved. However, for the next year and a half, the Green Deal uptake, and in particular the uptake by the fuel-poor, who are heavily concentrated in the private rented sector, which is the most difficult to address and where there are most reservations among both landlords and tenants, will not be that fast. I am not complaining about that; I am just saying that there will be a big problem over the next 18 months in the achievement of energy efficiency and fuel poverty targets.
Baroness Verma
Perhaps I may reassure the noble Lord that we have looked at those factors. People on the current schemes will remain on them and will be protected until the Green Deal takes over. Unless I am corrected by officials, the noble Lord can feel reassured that there will not be the hiatus that he assumes. If I do not receive inspiration immediately, I will write to the noble Lord—but I see that inspiration is on its way. The Warm Front will continue until March 2013.
Baroness Verma
Yes, Lord Deputy Chairman, it is. We expect that ECO companies will continue to work on affordable-warmth schemes. That will start very soon. If there is a dip, the Warm Front scheme will remain open, and applications for funding will remain in place until the end of the financial year. I suspect that that has not satisfied the noble Lord. Therefore, I will write in greater detail and clarity to him to ensure that when he takes this great Green Deal programme of ours back to the people he wants to talk about it with, he will have absolutely the right information at his fingertips.
Lord Moynihan
If I am right, the noble Lord, Lord Whitty, also talked about the wider and more general issue of communicating guidance on the Green Deal scheme, and of the importance that has been attached to this by all sides of the Committee and of the House. Will the Minister give us a little more information about what is intended on that? I found it very welcome that in section 8 of the guidance notes there is an indication that it is under way and that it is a priority of DECC. I agree with the noble Lord, Lord Whitty, that public information campaigns on this will be very relevant to its uptake and success.
Baroness Verma
Absolutely. My noble friend—and the noble Lord, Lord Whitty—raised a very important point. Obviously I have not made myself clear. I will undertake to write to all members of the Committee, setting out exactly what we undertake to do about guidance for consumers and suppliers.
I will finish by addressing the point about job losses raised by the noble Lord, Lord Grantchester. I reassure the noble Lord that under the schemes that we are putting forward, we will see a rise in job creation. In the installation sector alone we expect to see jobs for 60,000 people. The noble Lord should be much reassured that this is a wonderful platform for job creation, particularly for the small and medium-sized sector.
Lord Grantchester
I accept what the Minister says. We do not doubt that as Green Deal plans build up, as my noble friend suggested, there will be wonderful opportunities. We wish to see—and will applaud—all the job creation that this will entail. My point was similar to that of my noble friend Lord Whitty, and related to the gap that might open up before the plans are implemented. The installers may get very nervous about the continuing employment of people under CESP and CERT, which are coming to an end. A gap may open up that will make them extremely nervous when it comes to keeping those people on.
Baroness Verma
Although I cannot give the noble Lord figures at this moment, I can reassure him that we have no shortage of people signing up to the Green Deal. They fully recognise that there will not be a gap; there will just be a movement from one scheme to another. By and large, the noble Lord’s worry is perhaps slightly unjustified. I therefore commend these regulations to the Committee.
Motion agreed.
Electricity and Gas (Energy Companies Obligation) Order 2012
Baroness Verma
That the Grand Committee do report to the House that it has considered the Electricity and Gas (Energy Companies Obligation) Order 2012.
Relevant documents: 10th Report from the Joint Committee on Statutory Instruments.
Motion agreed.
The Deputy Chairman of Committees
My Lords, that completes the business of the Grand Committee this afternoon. The Committee stands adjourned.