Great British Energy Bill

Debate between Baroness Noakes and Lord Teverson

Committee stage
Tuesday 17th December 2024 Lords Chamber

[Lord Teverson (LD)]

My Lords, perhaps I could come back into the real world. I agree with the amendments and their purpose but let us be clear: there is a duopoly in this Parliament that stops negative or fatal resolutions ever being passed in either House. We may say that we agree that an affirmative or negative resolution is needed on something equivalent to secondary legislation. In this Parliament, the practical effect—in relation to what is already in the Bill—is zero because the Labour and Conservative Parties have a duopoly agreement that they will not vote fatally on secondary legislation Motions. To the outside world, all the rhetoric in this debate looks great but, even if it went into the Bill, the effect would be zero. I wanted to make that point because I believe that if you look at this with a democratic point of view from outside this building, the workings of secondary legislation in this Parliament would be seen as completely fatuous.

[Baroness Noakes (Con)]

May I just say to the noble Lord that what was proposed in my amendment was not secondary legislation? It was the simple possibility of a Motion to disapprove of something. It did not fall within the category of secondary legislation, therefore the convention does not apply.

[Lord Teverson (LD)]

I accept that point entirely, except I cannot see this Parliament rejecting such a strategy under any circumstances, however it is dressed up. But I fully respect the intentions of the amendments in the names of the noble Lord and the noble Baroness.

UK Infrastructure Bank Bill [HL]

Debate between Baroness Noakes and Lord Teverson

Committee stage & Lords Hansard - Part 2
Tuesday 14th June 2022 Lords Chamber

[Baroness Noakes (Con)]

My Lords, we are in the final lap of Committee. I shall speak also to the three other amendments in this group in my name. Amendments 54 and 58 deal with who should carry out the periodic review of the UK Infrastructure Bank under Clause 9. Clause 9 says that the Treasury must carry out the review, and my two amendments change this to “a person or persons” who are independent of both the Treasury and the bank. At Second Reading, I spoke about how the Treasury was intertwined with the UK Infrastructure Bank and in effect calls all the shots. We have covered that ground again today and I will not repeat any of that now, but all that adds up to a fact of life: that the Treasury is very closely involved in the bank and is not and cannot be a dispassionate observer when it comes to appraising how well the bank has done. The Treasury should not, as I think the noble Lord, Lord Vaux, said earlier, be marking its own homework.

In my view, it is only right that an independent person should be appointed to appraise the effectiveness and impact of the bank. Indeed, it may well be that the effectiveness or impact of the bank has been helped or hindered by the Treasury, and we certainly want to know about that. That would not emerge if the review were carried out by the Treasury. The noble Lord, Lord Teverson, has a more elaborate version of independent review in his Amendment 63, and I look forward to hearing what he has to say on it, but I wonder whether an annual report on performance is getting a bit too much like micro-oversight of the UK Infrastructure Bank.

Turning to Amendments 59 and 62, which address the timing of the Clause 9 reviews, I am grateful for the support of the noble Lord, Lord Vaux of Harrowden, and the noble Baroness, Lady Kramer, respectively, in respect of these amendments. Under Clause 9, the Treasury has up to 10 years to produce its first report and then has to produce reports at not more than seven-year intervals after that. My amendment calls for a first report within four years and Amendment 62 calls for subsequent reports at least every three years. I chose four years as the first period, rather than the three years called for by Amendment 60 in the name of the noble Baroness, Lady Kramer, because I thought that a report after three years of operation would be sensible and would allow a bit of time beyond the three years to actually make the report. But there is no magic in either three or four years: the main point is that 10 years followed by seven years is far too long. I beg to move.

[Lord Teverson (LD)]

My Lords, when the Green Investment Bank was privatised and we dealt with legislation to do that, we in this House looked at ways in which we could be sure that, with that change of ownership, whatever it would be, it remained true to its constitution, its values and objectives in that private situation. It was subsequently bought by Macquarie, which still owns the Green Investment Bank, now called the Green Investment Group. The Government at the time—I remember going through this with the noble Baroness, Lady Neville-Rolfe—were enlightened enough to set up a green share held by a non-profit organisation called the Green Purposes Company, of which I am a trustee, and therefore I declare my interest in that.

I take the noble Baroness’s point that my amendment is slightly more complicated and maybe slightly more micro, but it is there for a different reason. That company was set up in a similar way to the way described in this amendment, and what we do in the Green Purposes Company is certainly not to act in any way prior to investment—we are not part of any investment committee; we do not get involved in that. What we do, at the end of a year, is to assess whether those investments that have been made by what is now the Green Investment Group comply with its green objectives and the mission of the bank.

With the co-operation of Macquarie, that process has worked very well. As I said, we assess performance against the bank’s objectives and have four meetings a year with senior management—they are optional; we just decided to do that operationally—and then publish a letter in the annual report of the bank, making that assessment of the investment in general. It is a fairly short letter, but it provides total transparency and a completely independent view of whether the bank has met those objectives through its investments during the year.

Having agreed to and implemented this model, we have talked to Treasury officials about it in the past—it has been considered and, I think, welcomed by the Environmental Audit Committee at the other end—and to the Finance Minister John Glen. It is a successful assessment method; it is transparent, tried and tested and is a model laid down by the Government themselves. This is a really good way forward and I would very much like the Minister to consider it as a way that we can make sure there is independent, regular assessment, post investment, of how the bank is performing without getting into too much of the micro area in the report. I agree that, if that was too much part of the reporting structure, it could be onerous and reduce transparency.

Energy Bill [HL]

Debate between Baroness Noakes and Lord Teverson

Monday 24th January 2011 Grand Committee

[Baroness Noakes]

My Lords, we are sticking for the time being with Clause 36(5). I have another suggestion to make. The report that is required under this subsection focuses on property characteristics and on landlords, but it does not seem to say anything about tenants. If landlords enter into a Green Deal scheme, it will mean that the energy bills of tenants will increase and thus tenants’ willingness to pay is an important element which should not be ignored. The theory is that the golden rule will not allow a Green Deal to go ahead if the energy savings do not cover the additional cost of energy bills, but it is less than clear that tenants will see the analysis in that way. They will have different time horizons from, say, owner-occupiers, and almost certainly different appetites for risk. While tenants in the private rented sector are clearly not homogenous, I imagine that significant numbers do not have the ability to analyse a Green Deal and its potential impact on their household finances in their rented accommodation, or whether, even if they could analyse it, they would be comfortable with it.

The purpose of the amendment is to ask the Minister to explain what role the Government see for tenants in decisions under this clause. It seems that they have no existence in the context of a scheme, yet they are the ones who will be paying the energy bills. I beg to move.

[Lord Teverson]

My Lords, I welcome this amendment from my noble friend. It is important that tenants are actually mentioned, which is the emphasis here. The broader point is that although tenants are not a homogenous group, because of the differences that arise in the sector, there certainly will be people who cannot and never will be able to afford their own homes as opposed to more transient people who have not bought a property perhaps, because they are seeking to move on. The group will be different in many ways. I therefore support the idea that the review should try to identify the particular hurdles faced by this group in asking their landlords to make the improvements through the providers of the scheme. It is an important area and one it would be useful to understand if and when the report is produced.

--- Later in debate ---

[Baroness Northover]

I understand what the noble Baroness is saying. These are all areas which the department is looking at. However, I point out that the Bill already ensures that sitting tenants must give their express consent before a Green Deal can be taken out, so if a tenant feels that it is to their detriment, they have the right to refuse. Similarly, landlords must make clear to new tenants if a Green Deal is attached to a rental property before they sign a contract.

Given that these consumer safeguards are already in place, and bearing in mind what the noble Baroness is saying, I hope that at this stage she feels able to withdraw her amendment.

[Lord Teverson]

I ask the Minister what happens when we have a change of tenancy and the golden rule is met by the first tenant whose energy use is quite high, so it works, but the new tenant is a lower energy user. They may be a smaller family or a smaller household or have a different preference as to how they spend their money. The golden rule that was met by the first tenant might not be met by the second and yet, because there is such a competition for rented accommodation, you will possibly get a position where the incoming tenant, although warned, will just say yes anyway.

I wonder if the Minister could remind us—or me—if there is an opportunity for the Green Deal to be renegotiated at that point or does the higher electricity rate stay the same all the way through? This may be important in terms of this change and whether subsequent families could be put into energy poverty.

[Baroness Noakes]

Perhaps I may clarify the aspect of the review that I was probing. While the consent of the individual tenant to a Green Deal may be required, the point of making sure that this is covered in the review is that if there was widespread tenant apathy or unwillingness to get involved because of the issues that I have raised, there would be little point in going ahead with a regulatory approach, which is what Chapter 4 allows the Government to do. I also suggested that the tenant environment should be properly assessed before we go down the regulatory route. That is why I tabled the amendment.

--- Later in debate ---

[Baroness Noakes]

I shall speak also to Amendments 20Y and 21C in this group. These amendments concern the timing of the regulations that will affect the private rented sector. Currently, the review that is required under Clause 36 has to be published by 1 April 2014, and the regulations that will follow the review, as provided for in Clauses 37 and 40, should come into effect no earlier than 1 April 2015. The effect of my amendments would be to slip all of those dates by exactly one year.

As I understand it, the Green Deal regulations themselves are likely to come into force in October 2012. If that is the case, the review under Clause 36(4) cannot start until October 2013. The report must be published by April 2014, which gives a mere six months. Since Ministers have said that a key element will be the impact of the Green Deal, it is difficult to see whether enough data from the early stages of the Green Deal will be available to reach an informed assessment. Indeed, initial take-up may well be low among the private rented sector precisely because Green Deal providers will target the very much easier owner-occupied sector rather than try to reach this diverse group of private sector landlords with different types of tenants.

A key component of the review under Clause 36(5)(a) is a

“comparison of the energy efficiency”,

of private rented sector properties with that of non-private rented sector properties. The British Property Federation has pointed out that the most comprehensive statistics available on housing are to be found in the English Housing Survey, but they take 18 months from collection to be published. So the review that is going to be taking place in the six months from October 2013 to April 2014 will use data that are considerably out of date and will not reflect the impact of the Green Deal. Therefore, the review, based on heaven knows what information, could lead to regulations being enforced from April 2015, only one year later. Those who are involved in the private rented sector believe that more time should be made available before something as heavy-handed as regulation under this chapter is introduced.

A number of bodies have lobbied for the Bill’s provisions on the private rented sector to be modified. However, none of them has suggested a date as early as 2015. They seem to have coalesced around 2016. It is interesting that the Government’s date is 2015 while those who have campaigned most actively for action to be taken in the private rented sector are content with 2016. My amendments challenge the Government to say why the timetables set out in the Bill are fair and practical. I beg to move.

[Lord Teverson]

My Lords, I am very concerned about the amendment. This is one of the risks of the critical path that we have in the Bill. I accept that because of training requirements, the setting up of everything that has to be done, proper consultation, and because the Green Deal has to work effectively, preparation is crucial and we cannot expect it to start until 2012. That is the Government's expectation. Therefore, we have the whole of this year and some part of next year. It is logical to start the review of the private rented sector by 2013. It will not report until 2014 and therefore we could not precipitately take action until 2015.

I like the direct approach on these issues of my noble friend Lord Dixon-Smith. If the policy is not working for tenants and landlords—which is one of the key areas of policy importance—the amendment would mean that we would have to twiddle our thumbs for four years from when the Bill gets Royal Assent. That worries me. There is logic in the current timeframe. It is questionable whether that is the case in the amendment of the noble Baroness.

If the Bill goes through in its current form, it will be obvious within a year—if we are collecting any data—whether it is working in the private rented sector. Whether or not we have sophisticated analysis, we will have enough data-capture to understand whether it is starting to work. I would be fundamentally concerned, and would not believe it to be the case because of the importance of the programme, if the Secretary of State were just to sit in his chair—I know that he would not do this—and say, “I’ve got to wait until 2014 to test this thing out and see whether I need to do anything else”. Surely that will not be the case.

I could perhaps cope with local authorities not being empowered to take action before 2015, although I am very sceptical even about that timeframe. I ask the Minister to imagine what actions the Government might take, apart from the formal process detailed here, to make sure that the tenanted sector gets a move on. This is my problem with the issue. There are very good landlords. I have nothing against the private rented sector, which is crucial in delivering accommodation to families. However, the Bill’s timetable gives a signal that says, “Actually, guys, you don't have to do anything until 2015. That's when we’ll start to get angry, and until then there won't be any pressure”.