Energy Bill [HL]

Debate between Earl Cathcart and Lord Jenkin of Roding

Wednesday 2nd March 2011 Lords Chamber

[Lord Jenkin of Roding]

Another issue that this group of amendments raises was discussed in Grand Committee. Much of the detail of this legislation will be found in regulations, and indeed we have been told that there are to be 19 different sets of regulations. I think we have accepted that that is an inevitable feature. My noble friend assured the Grand Committee, and indeed the House at Second Reading, that there would continue to be a great deal of consultation, and I take some comfort from that.

I have had a report of a meeting, held by the senior official in my noble friend’s department who is in charge of this activity, which was attended by 60 to 70 industry representatives. Apparently, she said that DECC is completely open-minded on the details and is listening to every point of view that is put forward—“listening” being the important word—and I welcome that. Furthermore, all the evidence will be published so that in due course we shall be able to see that other matters will be brought forward for continuing consultation. That is a reassuring point. Indeed, the issues raised by my noble friend Lord Deben and the noble Lord, Lord Whitty, are exactly what those sitting in the official Box will pick up on. They will recognise that when they come to draft the regulations, these things will have to be dealt with properly. From what I have heard from industry representatives, I am reassured about what the process actually is, and perhaps my noble friend will take some comfort from that.

[Earl Cathcart]

My Lords, I should like to speak to Amendment 6, tabled by the noble Lord, Lord Whitty, which deals with making,

“specific provision for the green deal to address situations of fuel poverty”.

With this in mind, will householders in fuel poverty be able to afford the cost of the assessor? I believe that this cost, which might be £80, £100 or £120—I do not know—could be a barrier to the take-up of the Green Deal. £100 may be the entire weekly income of some householders in poverty, so rather than spend £100 on the assessor, they will choose to buy food or whatever. I suggested in Committee that this cost could be rolled up into the Green Deal so that no one has any up-front costs. The Minister’s response then was:

“As for rolling up the costs of the assessor, we would not encourage that, but there may be a framework in which it could happen. We will need to look into that further”.—[Official Report, 19/1/11; col. GC69.]

I wonder whether my noble friend has been able to look into it further and whether he can give me any comfort on the matter.

Energy Bill [HL]

Debate between Earl Cathcart and Lord Jenkin of Roding

Wednesday 19th January 2011 Grand Committee

[Lord Jenkin of Roding]

The noble Lord, Lord Whitty, may be pleased to hear that when I read through the Bill I put a question mark against the reference to a fee in subsection (5). Like him, I would like to know what this is about. I would envisage, particularly if there is a change of ownership, that a new owner might prefer and be prepared to pay off the debt that is on the house so as to be shot of that. I would be very distressed if that were going to attract a fee. Like the noble Lord, Lord Whitty, I am not clear what this fee refers to and I look forward to hearing what my noble friend has to say about that.

Having said that, I think that if one is entering into an agreement that may well last 25 years, it is asking too much to expect any provider to offer a loan at a fixed rate of interest over the whole of the 25 years. The noble Lord, Lord Whitty, did realise that that might be difficult for the Government to accept. One inevitable consequence is that the interest rate on the loan would have to be higher than it might otherwise be. He knows much more about this than I do, but you can have tracker bonds that will follow the rate of interest, and obviously, if interest rates are low, you will start very low. However, you are actually recognising that if interest rates go up—and whether we will face this later this year remains to be seen—inevitably then the rate on the loan goes up. It will be for the provider to propose a rate of interest for the loan and for the improver to agree. Simply starting from the proposition that there would have to be a fixed rate over the whole period may, I think, be going, as the noble Lord indicated, a bit too far.

[Earl Cathcart]

My Lords, I was wrestling with an amendment—it was going to be a probing amendment—to the effect that a landlord of private rented property should not be liable for the Green Deal if the property becomes vacant. I realise that this amendment might better be put in Chapter 2, when we are discussing the private rented sector, but it did not seem to fit there and seems to fit much better in Clause 5, which deals with the terms of the plan and in particular the persons liable to make any payment under the Green Deal.

When a private rented property becomes vacant between lettings, does liability for the Green Deal loan repayment fall to the landlord, bearing in mind that energy bills are likely to be minimal between lettings? It seems obvious that if the property is vacant, it would fall to the landlord to carry on paying any energy bills for the duration of the vacancy, even though they are minimal, but does he become liable for the Green Deal? And if so, does the repayment of the loan instalments get adjusted downwards, bearing in mind the very small energy bills while vacant and the golden rule? Secondly, what happens if the landlord cuts off the energy supply and reconnects when a new tenant arrives? The energy bill would be zero but there would still be interest to pay. Would this fall on the landlord and what about the golden rule here? Could this act as a disincentive to landlords to take up the Green Deal, or do the Government think it will act as an incentive to landlords to reoccupy the property more quickly, bearing in mind that the landlord may have to carry out repairs, maintenance and redecorations between lettings?

There is a provision in Clause 15(3)(d) of this Bill to suspend Green Deal payments. Does this suspension provision apply when a property becomes vacant, and, if so, what would this do to the repayments? Would it increase the term of the agreement and increase total liability due to interest accrued during the suspension? I ask all this because it does not seem to be at all clear as to how this would work and what the figures would be like for the landlord in the event of his property becoming vacant. I would be grateful for clarification.