Energy Bill [HL]

Debate between Earl Cathcart and Lord Dixon-Smith

Monday 24th January 2011 Grand Committee

[Lord Dixon-Smith]

I feel compelled to intervene because I am not quite sure whether we are going in the direction in which this Bill should be aimed. I go right back to Clause 1(2),

“An energy plan is an arrangement made by the occupier or owner of a property for a person to make energy efficiency improvements to the property”.

The occupier of a property may well be the tenant. We have made a great deal of the efficiency or inefficiency of certain landlords. They do not just occur, sadly, in the private sector; there are good and bad landlords in the public sector. There are good and bad tenants in both sectors. The essence of this scheme, however, was that if the landlord did not want to do something the tenant could. I thought that the essence of the scheme was that it was voluntary but if I listened to my noble friend Lady Maddock correctly, and I am not sure that I did, she seemed to be thinking that perhaps local authorities should be in a position to compel.

I am not sure I agree with that because that is not within the original purpose of the Bill. But maybe I have misunderstood the Bill or maybe I have misunderstood the noble Baroness. I am not sure which; I am becoming rather confused. That is why I am speaking. I thought that this Bill was designed to give the property occupier—if the owner happened to be there, that would be fine and good—the right to take action which is in his own interest. If that is so, it is perfectly true that he would probably have to get the consent of his landlord because almost all tenancy agreements that I have seen say that any alterations to the property must be made with the consent of the landlord. I cannot conceive, as the noble Baroness, Lady Smith of Basildon, has said, that any landlord is ever going to refuse to have this sort of action taken in a property in their ownership. She is absolutely correct to say that action like this must enhance the value of the property one way or another.

That is not the bit that concerns me. It is that we seem to think that we should be giving local authorities powers to compel landlords to take action, but they are landlords themselves very often. I am quite happy that they should be compelled to take action for themselves, but I thought that the essence of the Bill was that this was an arrangement essentially between the consumer of energy and the energy supplier. If that is the case, I am very concerned about these amendments because they seem to imply something else.

I am anxious to see homes having their energy efficiency improved as soon and as rapidly as possible. However, it seems to me that the process suggested, and which I thought lay behind this Bill, would be likely to achieve that faster than any action implying that compulsion might come from somewhere else would be likely to do.

[Earl Cathcart]

My Lords, I have not spoken on this chapter before but I welcome provisions in the private rented sector. I am not attacking the noble Baroness, Lady Smith, but I recall it being said that nothing would happen in the private rented sector until 2015 when the regulations can come in. That is assuming that landlords do not allow all this to happen, as my noble friend said. There are many landlords and, as the noble Lord, Lord O’Neill, said, not all of them are unscrupulous. I like to think that a lot of good landlords will want their tenants to use these provisions because, as my noble friend Lord Dixon-Smith said, it will increase the value of the property; it will make the tenant warmer; it will increase the well-being of the tenants; and it will make them want to stay longer. A lot of landlords and tenants will want to do this deal well before regulations have to come into place.

I want to play devil’s advocate here, following what my noble friend Lady Noakes said in her Amendment 20M, which talked about,

“consideration of the willingness of tenants”.

Clause 37(2) requires local authorities to issue notices to the landlords of each domestic private rented property,

“(c) which falls below such level of energy efficiency … as is provided for by the regulations”.

Subsection (3) states:

“The notice is one requiring the landlord to make to the property such relevant energy efficiency improvements as are identified by the notice”.

I might be splitting hairs, but should not subsection (3) read:

“The notice is one requiring the landlord”,

to allow,

“such relevant energy efficiency improvements”,

to be made to the property,

“as are identified by the notice”?

My thinking is that it could be the tenant who wants this done and the landlord who is dragging his heels, and that therefore one needs this notice to make sure that the landlord allows the tenant to sign up to the Green Deal.

Energy Bill [HL]

Debate between Earl Cathcart and Lord Dixon-Smith

Wednesday 19th January 2011 Grand Committee

[Lord Dixon-Smith]

Perhaps I could intervene as well at this point. This illustrates the classic difficulty of legislating in a way that is dependent on regulations, which we cannot possibly see at this stage. A critical issue is whether the Green Deal has a fixed rate of interest. Each individual deal must be based on a fixed interest. If the system fails to have a fixed rate of interest, a deal may show a clear saving when it is begun—particularly because interest rates are low and one could probably get financing for this sort of thing at 3 or 4 per cent—but, if interest rates rise to 5 per cent and the borrowing rate goes up to 8 per cent, that could completely take out the effect of the savings over a period of time. There is a real issue, which comes back to the fact that we are, as with all legislation of this sort, flying blind. We need to think seriously about interest rates. If the deals vary with interest rates, their attractiveness will be considerably eroded.

[Earl Cathcart]

I asked my noble friend whether the cost of the assessor could be rolled up within the Green Deal loan. The assessor may charge £100 or £120 plus VAT, which, if the cost is up front, may be a deterrent to the very people whom we want to take up this deal.