Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2013

Baroness Verma Excerpts

Thursday 24th January 2013 Lords Chamber

Moved By

[Baroness Verma]

That the draft Regulations laid before the House on 10 December 2012 be approved.

Relevant document: 15th Report from the Joint Committee on Statutory Instruments

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma)]

My Lords, the Government are today bringing before the House amendments to the Green Deal framework regulations. We have been further developing the framework over the past few months, in readiness for the full launch later this month. This has resulted in a number of SIs being developed and laid before the House. These changes are necessary to optimise the legal framework and are taking advantage of learning we have already gained.

However, before we begin to debate, I would like to take the opportunity to speak about the Green Deal—the transformational energy efficiency programme. I am delighted that it will be going live next week, unlocking unprecedented opportunities for both consumers and businesses alike. The Green Deal will provide a stable, transparent and long-term policy framework which consumers can trust and in which businesses can invest. It will allow consumers to pay for some or all of the cost of energy-saving property improvements through savings on their energy bills. The Green Deal can be used to lever in billions of pounds of private investment to improve the energy efficiency of UK properties. It will empower small and medium-sized businesses to enter a new market as well as offer consumers more choice and innovation than before. There has already been interest from industry in getting involved in the Green Deal and it is exciting to see a steady stream of participants becoming approved and using the Green Deal quality mark prior to launch on 28 January.

We already have 462 installer organisations registered, and 2013 is already off to a flying start with local authorities playing an active role in helping to kick-start our “go-early” initiative. The Government have supported this by providing £22 million to stimulate early demand for the Green Deal in seven core cities and to help other local authorities drive energy efficiency-boosting initiatives. Our cash-back scheme, worth £125 million, launched on 14 January will reward households taking early action to improve their properties through the Green Deal. Households making a number of improvements could receive more than £1,000, and £2.9 million will be spent on a communication campaign that will help to build understanding and trust in the Green Deal.

I will now introduce the statutory instrument that will form the basis of our discussion. We are making a small number of amendments to the Green Deal framework regulations which, subject to the outcome of today’s debate, will come fully into force on 28 January 2013. The framework regulations create an authorisation regime to regulate the conduct of Green Deal market participants and ensure that consumers are protected. They cover conditions that must be met when a Green Deal plan is established and how it should be disclosed. The amendments we propose will make enhancements to the Green Deal framework. We have increased the frequency of some reporting requirements from annually to monthly for all Green Deal participants. These include the number and value of plans, cancelled plans, and the number of resolved and outstanding complaints. This is to ensure that we can monitor compliance to protect customers without imposing undue burdens on business and to protect the reputation of the Green Deal itself.

Other changes enable us to streamline key processes. We are improving the clarity of our complaints system by defining when a complaint should be directed to Green Deal assessors and when to the providers. Further to ensure effective policing of activity in the market, Green Deal accreditation bodies have been added to the list of organisations that can report a breach of regulations by a participant to the Secretary of State.

In addition, an important technical update is being made to the circumstances under which an energy performance certificate must be updated by the Green Deal provider or customer. These include where an energy efficiency measure has been removed, where the provider has changed and where the liability of the bill payer to make payments has changed. This update will ensure that customers and businesses have access to up-to-date energy efficiency information for their property.

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 them to the House.

--- Later in debate ---

[Baroness Verma]

My Lords, I thank the noble Lord for his very warm welcome of the Green Deal. I expect he will be by my side when the launch goes ahead next Monday. The invitation is there for the noble Lord to join me, as it is for the noble Baroness.

The noble Lord has posed a huge number of questions and I have tried to note down as many as possible. However, the likelihood is that I may have to write to him on some of them.

I shall start by responding to the noble Lord’s point about high interest rates. As he will be aware, the rate is to be set by the Green Deal Finance Company and no doubt will reflect a safe and competitive level. The rate has not yet been confirmed, but I expect that to be done in the next day or so. The noble Lord will have to wait just a little longer for a response to that question. However, I take on board his point that the rate has to be competitive. That fits in with our wish to try to ensure that we meet the golden rule, which he rightly raised—namely, that no bill payer should pay more than what he or she is currently paying. That is absolutely the right way to look at this.

The noble Lord asked about early repayment penalties. Perhaps I can reassure him that we have also looked closely at these. I can tell him that the repayment formula and the penalty compensation payback are based on the consumer credit legislation that is in place, and we are not doing anything different from what is already in the marketplace.

The noble Lord asked about the forecast for take-up rates of the Green Deal. I would say to him that it has been very promising and there is a great deal of interest in it. However, as he recognises, we are proceeding with a soft launch because we want to ensure that people understand what the Green Deal is and that all the systems needed to deliver it are fully tested and in place. The noble Lord is right to say that when the Green Deal is taken up, many households will see a great difference in their energy consumption and it will impact on their energy bills—something which I know, like me, he is keen to see come down.

The noble Lord asked about monthly reporting, and we agree that this is an important element. The industry and providers have also welcomed it. He listed a number of other things that he would like to see included on the monitoring list. I may have to take those queries away simply because I was not able to write down all his points quickly enough. I shall read the report and come back to him with details of what is already part of the monitoring that has been put in place.

On the point about whether a householder who takes up a case will have their costs attached, I can assure the noble Lord that that will not be the case. If a complaint is lodged, it will be dealt with by the providers, and through DECC we will find ways of ensuring that a householder is not penalised.

The noble Lord mentioned the £125 million provision for early take-up; the cashback facility. We are expecting keen interest and we think that the £125 million for early take-up is a good way of encouraging people to take advantage of the scheme very early on. Perhaps I can link the rest of the work that we have been doing with our core cities to the £22 million referred to by the noble Lord. He referred to the fact that a newspaper had reported that it was £12 million. We have given out £12 million to seven core cities; we expect Liverpool to be added to the list of core cities. That is the £12 million, but another £10 million was also provided to local authorities outside the core cities to promote demand—hence the £22 million.

The noble Lord spoke about the expectation of job creation. We are very positive that this will generate up to 60,000 jobs in this sector, up from the 26,000 that are in place at the moment. We see this as a very positive scheme. I have listened very carefully to the noble Lord, who has, by and large, welcomed what we are doing with the Green Deal.

The noble Lord asked about the assessment costs. This is a market-based mechanism and we expect a range of models to develop. Some providers may offer assessments that have no upfront costs; others may charge, but it will be up to individuals whether to go with the first assessment or to shop around. This is something that all consumers do anyway. We encourage shopping around so that the consumer gets the best deal possible.

The noble Lord asked about the sanctions that the Secretary of State could impose. Of course, this very much depends on the circumstances. There could be a financial penalty on the provider, a compliance notice, or the withdrawal or suspension of authorisations for providers, assessors or installers. There are a number of safeguards that the Secretary of State has the power to use.

The noble Lord also asked whether Freud Communications was appointed through competition. The simple answer is yes, there was a competition. Freud was the preferred bidder.

The noble Lord asked a number of other questions that I physically was not able to note down. I am sure that the officials in the Box will have taken note of them. On those, I ask the noble Lord to allow me to write to him and put a copy in the Library. Overall, going through my own list of what I was able to note down, many of the points the noble Lord raised have been answered. I thank the noble Lord for his warm welcome of this SI and I commend—

[Lord Grantchester]

I thank the noble Baroness for attempting to answer so many quite detailed questions at very short notice. While we have this opportunity before the Green Deal is launched, perhaps I can tempt her to reflect and share with us how her department views success—what does success of the Green Deal look like? That would be really interesting to understand before it starts on Monday.

[Baroness Verma]

My Lords, if I had a crystal ball I would be able to tell the noble Lord lots of things. My own view is that, having talked to consumer groups and the industries within the sector, this is going to revolutionise the way in which people think about how to make their homes much more energy-efficient. It is about raising awareness. While we are rolling this out, we are very keen to ensure that consumers take control and have responsibility over what happens in their own properties. This approach is much more holistic. It is not just about short-term planning on, say, loft insulation; it is about looking at the whole property. I think consumers will be quite encouraged that this will be a long-term gain for them and their properties, and of course on their bills.

On that note, if I have satisfied the noble Lord, I commend these regulations to the House.

Motion agreed.