Energy Bill [Lords]

Debate between Barry Gardiner and Andrew Percy

Wednesday 14th September 2011 Commons Chamber

[Andrew Percy]

I thank my hon. Friend. I am aware of his work in this area. He has said exactly what I am going on to say. It is important to ensure that the scheme is as attractive as possible to the poorest households, which, as he knows, are at the greatest risk of fuel poverty.

The alternative to a single scheme interest rate is risk-based pricing. In my view, green deal finance providers must not be able to price green deal finance packages based on the perceived default risk of the original occupier, given that the work done will stay with the property probably long after that household has moved on, sold up or moved to a different private rented property. It would be unfair and illogical to allow that to happen, given that there is no way of predicting the default risk of any future occupants. We cannot price with accuracy on that basis.

[Barry Gardiner]

I perfectly understand the hon. Gentleman’s point that the debt will be tied to the property and that the rate should be based on an average, but does he not accept that there is a very real tension between the need to persuade householders to embark on the green deal in the first place, which will happen only if they can see financial gain for themselves over the period that they propose to occupy the property, and the potential financial gain to the average family in the future? His proposal may create tension between the ability to sell the property and fairness to subsequent occupiers.

[Andrew Percy]

That, of course, is exactly what the golden rule is designed to protect against. My concern is that we offer residents—people living in the properties now—an equal interest rate across the whole area. We need to avoid people in more affluent areas being encouraged to take up the green deal by a lower interest rate than is offered to people in poorer areas or those perceived to be a higher credit risk, particularly tenants. There is a risk that landlords might be put off the green deal if they perceive that the cost is based on the occupancy of a particular tenant.