Energy Bill [HL]

Debate between Baroness Smith of Basildon and Lord Jenkin of Roding

Tuesday 4th October 2011 Lords Chamber

[Baroness Smith of Basildon]

My Lords, the noble Lord, Lord Marland, is to be congratulated on his presentation of the amendments, and it is important that we also place on the record the fact that we welcome many of the government amendments before us. We still consider that more could have been done by the Government to make the legislation as effective as possible, but we welcome the direction the Government have moved in.

A number of issues were first raised in your Lordships’ House, and even if the Government did not concede the point at the time, it is clear that the Minister listened and that changes have been made in the other place. Specifically on the Green Deal, there is a clause that states the ambition of the Bill. Important consumer protections are now in place, particularly on the impartiality of the assessors, as well as the issues around apprenticeships. Further on in the Bill, the suggestion in amendments put forward by my noble friend Lord Judd in relation to the national parks has been taken up.

The noble Lord, Lord Marland, referred to the collaboration and co-operation that has marked the course of the Bill. I concur entirely with that, and I acknowledge his willingness to engage in debate, which was welcome. As successful as we have been on seeing a number of improvements made to the Bill, there were times when my persuasive powers failed. He knows that we do not give up easily, and I am sure that as this legislation is implemented we will all want to monitor its effectiveness and see how improvements can be made. We understand very well that this is a framework Bill and that further secondary legislation will be brought forward. I hope that we will be able to continue the collaborative approach we have seen during the course of this Bill. Given that the statutory instruments will be unamendable, it would be helpful to have discussions prior to them being brought before the House in order to get the best results possible. We have made it clear that we want the Green Deal to be successful, and early discussions on the 52-plus sets of regulations that will be tabled would be in the best interests of moving forward.

I turn to the amendments in the group before us. I welcome the introduction of the energy efficiency aim as set out in Commons Amendment 97. This was first raised in your Lordships’ House, and it would be a lost opportunity if it was not anchored in existing environmental legislation. The Government have said that they want to be the greenest Government ever, so tackling climate change has to be at the heart of any Government who seek to be responsible on the environment. Although I know that the Government do not like targets, they have often proved to be the best way of achieving stated aims. We have always recognised the potential for this legislation to be a good tool towards fulfilling the Government’s environmental objectives, including the carbon target set by the last Labour Government. This government amendment on energy efficiency aims sets down the right sentiments and heads in the right direction.

Amendment 96A is one that will assist the Government in measuring the success of the Green Deal by including in the annual report the number of homes that have had energy efficiency measures installed in that and in previous years as part of the deal. I acknowledge that the noble Lord agreed to this when we discussed it in Committee and possibly again on Report, but knowing how many homes have taken up the opportunity to subscribe to the Green Deal will allow the Government to take action in order to improve take-up, if necessary, and gauge success. I would be grateful if the noble Lord could respond to that. We all know how difficult it can be to wade through government reports to find exactly the figures we are looking for, but this would be a simple figure to illustrate how successful the project has been, and to take action if it has not.

I welcome the fact that the Government have taken on many of the concerns raised in your Lordships’ House and elsewhere about protection for the consumer. One area on which I badgered the Minister was the impartiality of the assessors. I know he felt that I went on at some length and rather laboured the point in Committee, but clearly the Government have listened and brought forward Amendment 4, which requires,

“green deal assessors to act with impartiality”,

and that is very welcome. Some concerns remain on this point; that is why I have tabled Amendments 4A and 4B, which are about monitoring and enforcement. I know that those details will come forward in regulation, and I welcome further discussions prior to those details coming forward.

The two amendments seek only to strengthen the points that the Government are making with this amendment. My amendments would have the effect of ensuring that the code of practice will extend to any arrangements for monitoring and enforcing impartiality. Amendment 4B is seeking to give the consumer the information on which the assessment will be made. That strengthens the consumer in that they know what to expect from the assessor and the methodology used. It would make it very much harder for an unscrupulous assessor to give bad advice and provide bad options for customers. One reason this amendment is so important is that the debt stays with the property, not with the individual who originally incurred that debt. It might be many years before any problems or difficulties came to light. It is better to take preventative action at an early stage rather than to wait until there is a problem, which might be quite difficult to resolve. The amendment also fulfils the Government’s objectives of openness and transparency.

I welcome the Government’s clarification to the Labour amendment passed in the Commons committee on Green Deal apprenticeships. I appreciate that the Government were not fully behind this proposal initially, but following the success of the amendment and voted on by Conservative Members in the House of Commons —albeit, I think, accidentally—the Government have responded well, for which I am grateful.

My final amendment relates to Commons Amendment 18, which proposes the new clause headed “Exercise of scheme functions on behalf of the Secretary of State or a public body”. We have discussed previously what public bodies could be involved. I am seeking clarification on whether they include charities, social enterprises and other non-profit-making organisations. I suspect that they do, but from the wording it is not clear. Furthermore, could the Minister clarify whether the Government intend to consult Green Deal participants and consumer groups about any proposals in this area to ensure that we get it right and that we take on board any comments that they have at an early stage?

I know that the Minister understands the concerns that I have raised with him directly about the financing arrangements. I remain concerned that the interest rate for any loan or credit agreement on the Green Deal is not a fixed loan as the legislation stands at present. The Minister has said to me that he takes the view, understandably, that the Government cannot intervene in the finance market in this way. I put a further point to the Minister for consideration. The Government have already intervened in the market by creating a new system of a loan or credit agreement attached to a property rather than to an individual. That is different from most loans and most credit agreements. So someone who purchases a house that already has a Green Deal credit arrangement has no say in the terms and conditions of that loan. They have a say if they have taken over the house and the terms and conditions of any mortgage that they may undertake, but not on a loan that is part of the Green Deal. Many people may well be reluctant to take on such a long-term loan or credit agreement that could run for another 10 or 15 years without knowing what the rate of interest could be and having had no say in the terms and conditions of that agreement. Given those unusual circumstances, it does not seem unreasonable that the interest rate should be fixed, so that someone coming along in the middle or at some stage in that loan knows what the interest rate will be for the remainder of that loan, given that it was taken out by another individual.

I hope that the Minister can reflect further on that point. I think it would be very helpful and perhaps lead to a greater take-up of the Green Deal, because it would not put prospective participants of the Green Deal off by worries about what would happen if they want to sell their property afterwards.

My final comment on this group of amendments is about the regulations, repeating the points that I made earlier. It would be very helpful if the Minister could give a commitment that he is happy to discuss any secondary legislation prior to it being tabled in the House. The spirit of collaboration and co-operation that we have had so far for this Bill has been very welcome and has led to significant changes that have improved it. We are grateful to have been part of that and welcome the Minister’s comments on those proposals.

[Lord Jenkin of Roding]

My Lords, I will be extremely brief. The Commons amendments, particularly those in this group, make considerable improvements to the Bill, and it was very welcome to hear the noble Baroness, Lady Smith of Basildon, say that the Opposition are finding it easy to accept these amendments.

I also thank my noble friend Lord Marland for the amount of trouble that he and his officials have taken with what is, at first sight, a pretty formidable list of amendments that have come from the other place. When I picked up the paper initially from the Printed Paper Office, I thought that we might be here for a week. But he has taken a huge amount of trouble to explain what the amendments are all about, which will make our debate very much simpler.

I want to raise two points on this group of amendments, which I have discussed with my noble friend. I have always found it difficult to understand why, if somebody chooses to pay off a debt early, they are subject to some sort of penalty. I would have thought that if you pay off your mortgage early, as I did some years ago, the lender then has more money to lend to somebody else. Why should one be expected to pay him compensation because you have repaid him early? Can my noble friend justify why that is particularly relevant in this case? He also talked about the regulations that will be limited to Green Deals of a specified length and so on. Is he able to give us any guidance as to how that will work?

The second point is much more relevant. From the beginning it has been recognised that a body will have to be appointed to manage the Green Deal oversight and the authorisation scheme, because that will be fundamental to securing the consumer protection that, quite rightly, the noble Baroness has referred to. Can we yet be told anything about who that will be or to what body this vital task is going to be entrusted? We have now come to the final stage of this Bill. It has gone on for a long time and we still know nothing about who is going to run the scheme. It is obviously going to be under the general supervision of Ministers, but a body will be delegated to manage the Green Deal oversight and authorisation scheme. Can my noble friend tell us anything more about that at this stage?

Energy Bill [HL]

Debate between Baroness Smith of Basildon and Lord Jenkin of Roding

Tuesday 8th February 2011 Grand Committee

[Baroness Smith of Basildon]

I rise to speak—or not, as the case may be. One of the oddities of procedure in your Lordships’ House is that sometimes it seems that we have to say the exact opposite of what we want to say in order to have the opportunity to, in this case, congratulate the Minister. I have had to give notice of my intention to oppose the Question that the clause stand part of the Bill, which is the opposite of what I want to do. In fact, I congratulate the Minister: he will recall that, under Schedule 7 to the Public Bodies Bill, I have proposed an amendment to delete the Coal Authority from that Bill. It seemed to me that any change to the functions of the Coal Authority should be undertaken not by secondary legislation—by order—but by primary legislation. That is exactly what the Minister has done in Clause 100 of this Bill, so I merely congratulate him as it is the appropriate way to make such changes. I hope that he will either support my amendment to Schedule 7 to the Public Bodies Bill or take other action to ensure that the Coal Authority is no longer in it.

[Lord Jenkin of Roding]

I understand from the impact statement on this that some possible competition issues will need to be addressed as to whether the Coal Authority will have, in some way, a preferred position as against other contractors that may compete for the business. I hope that my noble friend can give me some assurance that that will be taken account of.

Energy Bill [HL]

Debate between Baroness Smith of Basildon and Lord Jenkin of Roding

Monday 24th January 2011 Grand Committee

[Lord Jenkin of Roding]

My Lords, in reading the Bill, and in getting the substantial number of representations that I suspect that we have all had from the relevant organisations, I have been impressed by the sheer complexity of the problem that we face in dealing with the private rented sector. It covers an enormous range of properties, of kinds of tenancy, and of people who occupy the houses. One trade association, the Federation of Master Builders, told me that there are around 26 million homes in Britain, over half of which were built before the 1960s. Five million are Victorian terraced properties. The scale of the challenge is nothing short of enormous. That is what has impressed me. Yes, we have new homes coming up with new standards and owner-occupied homes, but the private rented sector offers a severe challenge to the Government and to all those working with them.

Everybody with whom I have spoken has had nothing but total support for the whole concept of the Green Deal. At the same time, they recognise that it will have to maintain a careful balance between the desire to get maximum energy efficiency from this huge range of houses and, at the same time, maintain the availability on the market of homes to rent. Some of the representations that I have heard have expressed some anxiety that, if too many obligations and restrictions are placed on landlords of rented homes, one result could be that they will simply be taken off the market. The consequence would be almost worse than the original problem.

There is no question about it: the rental market has grown substantially in recent years, largely because of the progressive removal of the controls which hampered it for so long. When I was very young, I lived in a rent-controlled property. My mother was renting and the landlord could not put up the rent at all. In those circumstances it was almost impossible for anybody to rent a house because none of them came on to the market. If the house was empty, it was immediately sold for owner occupation. One has to hold that balance carefully.

I hope that, when dealing with the amendments to the later clauses, the Committee will feel that we have to give attention to this. There has to be a proper balance between the desire to improve these houses and their energy efficiency, and making severe inroads into the rental market as a whole. I am encouraged that, both in the Bill and in one of the amendments to be moved by the Opposition, there is a recognition that this needs to be done rather carefully. A considerable duty rests on us to try to get that balance as fair as we can between the two objectives—making sure that there is a proper market in homes for rent and getting the houses improved.

I want to make only one other point, which has been made by speakers already. The biggest problems we face here are in the homes that are extremely difficult to make more energy-efficient. It has been made clear in some of the representations that the limit of £5,000, or whatever it is, would not cover those sorts of places. They are coming under the energy company obligation, or so I understand. One does need to look at all these various aspects if we are going to achieve our objective.

Like my noble friend Lady Maddock when moving her amendment, I congratulate the Government on having had the courage to pick up this ball and run with it, because it is important that we try to deal with this hugely varied sector of housing if we are to improve the lot of the tenants and at the same time save energy.

[Baroness Smith of Basildon]

My Lords, I welcome the comments of the noble Lord, Lord Jenkin of Roding, because I think they sum up some of the challenges of the legislation and why it is so welcome that we seek to make improvements in the private rented sector and indeed other sectors—the private sector and the social housing sectors—through the energy market.

It is right that we examine this in detail because the issue around the balance between the quality and quantity of housing is a fine one to walk, and we want to ensure that at all times the Government reach the correct balance. In proposing amendments and discussing and debating the clauses of the Bill, we want to ensure that the Government can fulfil the objectives they have set themselves. We entirely agree with the Government when they said that they wanted to be the greenest Government ever. When the Minister referred to that in the Chamber in our first energy debate, which seems an awfully long time ago, and I challenged him on it he said, “Like it or not”. I let him know that we do like it and that we will support the Government in these aims and wider where they seek to be as green as possible. The issue of having greener properties and more energy- efficient properties goes beyond just the idea of being energy-efficient. It goes into health, the economy and much wider. As we debate these clauses about the private rented sector I give the Minister our assurance that every time we raise an issue we do so only to improve the Bill and work with him to achieve his stated objectives.

Energy Bill [HL]

Debate between Baroness Smith of Basildon and Lord Jenkin of Roding

Monday 17th January 2011 Grand Committee

[Lord Jenkin of Roding]

Is the noble Baroness going to say anything about the second amendment in this group, Amendment 7A? I do not understand it.

[Baroness Smith of Basildon]

The second amendment would also look at the size of the organisation—the kind of provider. It comes back to the same point: payment may not be proportionate, if there is the same level of fee for both the smaller charity, say, and the large company. The amendment endorses the idea of whether we consider a lower fee, a lower payment, for those kinds of non-profit or charitable organisations or organisations with charitable objectives.

[Lord Jenkin of Roding]

I am most grateful to the noble Baroness for that explanation: I had entirely misunderstood the amendment’s intention. It refers to,

“ensuring that such payment is proportionate to the size and nature of the green deal assessor and provider”.

I thought that we were talking about individuals, but the noble Baroness has made it clear she is talking about companies, not the size of the man who is doing the assessing. I realised that there must have been a serious purpose behind the amendment, and she has now explained it.

I think that both these amendments are exceedingly difficult. One can always have sympathy with charities and other people who work for good, or not for profit—or whatever it might be—but at the same time, for the most part, professional services must be paid for. Unless somebody is doing work pro bono, which lawyers and others do from time to time, professional services must be paid for on a proper professional basis. That is what we are talking about. The idea that one should have reduced costs depending on the nature of the client is a difficult concept to import.

We are concerned to ensure that this will be as simple a process as possible. I said at Second Reading that I thought this had the ability to become a much more workable and simpler scheme for all parties to understand than has been the case under the CERT scheme, but I think this amendment would add a complication which I would not support. I am sorry to disappoint the noble Baroness, but I think professional services must be paid for properly.

[Lord Marland]

I thank the noble Baroness for raising this amendment. It is critical, particularly at this time, that we take into account the charitable sector, of which she has great knowledge. Indeed, so do I to a certain extent, from involvement with a number of charities. Obviously, I can only accept amendments such as these once they have been agreed with counsel and other Ministers, but we will consider how best to take on board this policy aim, which I think all of us would endorse and support in this sector.

--- Later in debate ---

[Lord Jenkin of Roding]

There is both good and bad in this suggested new clause. The point about the first three subsections seems to me to be inherent in the nature of the scheme. However, I do not know whether this is the right way to make clear that the scheme is intended to give the consumer, the householder, the best deal available. I am sure that there will be many circumstances where the assessor will have to weigh up the situation and say, “Are we asking too much?”, which means that it could not be paid back within a reasonable time; and, “Are we asking too little?”, which means that the householder could have paid rather more. This may need to be written into the Bill in some form. With the use of the words,

“the best overall energy solution”,

you are opening up the possibility that someone will sue if they can be persuaded that they could have got a better one. Somehow one has got to try and avoid that. That is the good part.

Subsection (4) is totally impractical and undesirable. As I said at Second Reading, one of the great advantages of the Green Deal over the CERT programme is that this is not written directly around carbon savings but is intended to provide the householder—the consumer—with incentives for lower bills and warmer houses. To require that in every individual case someone has to sit down and estimate what the carbon savings are likely to be seems to me to be unrealistic. I apologise to my noble friend for using what may seem to be fairly strong words, but everyone has recognised that one of the advantages of this is that people may choose to have warmer homes and pay back rather more because they will not get as much savings as they might have had had the whole thing gone into saving energy costs. How is anybody going to conceivably estimate that at the outset?

We have a classic case here where the carbon savings, which certainly lie at the heart of this in order to achieve our carbon targets, are the consequence and not the primary objective. As I said at Second Reading, people will respond much more easily and readily to an offer of lower bills or a warmer home than they will to someone coming along and telling them that they have to cut their carbon footprint. Subsection (4) is very difficult and I would find it hard to support if it were to find its way into the Bill.

[Baroness Smith of Basildon]

My Lords, I feel that in some ways we have already had this debate during the course of the Bill. We are perhaps all looking at different ways of addressing the same kinds of issues and problems that arise. Whether or not this is the best way forward I do not know. It comes down to the fact that, in any property where an assessor looks at what could be done to achieve energy efficiency, there will possibly be several options of what can be achieved under the Green Deal, and different assessors may give different options.

The concern is: who makes the decision and what options in the energy plan can be achieved under the Green Deal? Would it be the installer, the provider, the assessor or the householder? I am not clear where the decision-making process for the best energy solution lies. I make the same point as the noble Lord, Lord Jenkin, and ask whether the best possible solution would be challengeable? Who would make the decision about the best possible solution? This brings me to the point about how decisions are made and what energy plans and efficiency improvements can be taken into account under the Green Deal. It would be helpful if we had clarity on who makes the decision on that.

I like the idea of the householder having input into that decision and of having an energy plan as well as a Green Deal plan. I would welcome the Minister’s comments on how this would work in practice.