Energy Bill [HL]

Lord Dixon-Smith Excerpts

Monday 17th January 2011 Grand Committee

I am very happy to support my noble friend in her attempt to amend the Bill. I would like to think that the amendment is so uncontroversial that those who have previously sought to make the Government’s intentions explicit, and who have sought to require Governments to be more accountable, are able sign up to it. I realise that we will not be voting for it at this stage. It may well be that at Third Reading such an opportunity will arise. But it is important that we get an indication from the Minister—paid or unpaid—that there is an intention to enter into the spirit of this legislation in a more meaningful way than the somewhat inadequate words of the first clause would suggest.

[Lord Dixon-Smith]

My Lords, I feel tempted to rise for the fly that has been flicked over us, as you might say, even though I suspect that it is probably uncatchable. To explain my attitude to all this—particularly to the noble Baroness, Lady Smith of Basildon; she and I share a certain amount in our background—I should explain that I was once responsible for the total built estate in Essex. Part of that responsibility was structural maintenance, and the other part—even 30 years ago when I was doing it—was energy efficiency, not least of the problems being because we had many buildings erected under a very different regime in the 1950s that were extremely energy inefficient.

The point that I really want to make is this: in those days, energy efficiency was constantly measured and schemes for improving the energy efficiency of buildings flew in and out of our programme with monotonous regularity, because they were always dependent on showing an economic return. Interest rates in those days changed with monotonous regularity, and the consequence was that a scheme that might be eligible for consideration one month would go out six months or even three months later, because there was no longer an economic return. However else we look at the question of energy efficiency in housing, economic return will still be the driver on which individuals will make up their minds whether to participate in the scheme. Not least of the problems that the Government face in proposing a scheme of this nature, particularly at present when interest rates have been consistently low for a long period, is that it is almost impossible to judge what view people will take if interest rates go up to 5, 6 or 7 per cent. That would not be unforeseeable if the economy changes, particularly if inflation stays consistently high. That is one difficulty that the Government definitely have to face.

My problem with the amendments comes down to a slightly more difficult point. It is all very well for the Government to propose a scheme, but it depends on voluntary participation. People have to say that they wish to take part; there is no mechanism for compulsion, and rightly so. To ask the Government to predict what sort of savings in carbon emissions they expect as a result of the scheme is setting an impossible task. I do not see how it can be done. In any event, however significant the scheme may be in the context of the Climate Change Act and its 2050 target, it will play only a minor part. That target was specifically mentioned by the noble Baroness, Lady Smith, as a reason behind her amendment, but the critical issue in relation to it will be what happens to carbon dioxide.

If you remove carbon dioxide from electricity generation, you can turn a house totally into a zero-emissions house. The energy efficiency does not need to alter one iota if it is an all-electric house. At that point, you fall back on what I have already said—that the decision on whether to participate in an energy efficiency scheme is entirely and properly a responsibility of the householder. Therefore, I have a fundamental difference in approach.

I sometimes wonder when I see amendments like this how the proposers thought we would ever achieve the present state of development that we enjoy in this country, which is very sophisticated. The more sophisticated our society becomes, curiously, the more sophistication and complexity seems to be demanded in our legislation, which in fact makes legislation more difficult to implement. We have something here which depends on volunteers, and we already have a mechanism for annual reporting because the Government’s carbon performance has to be reported annually to the climate change committee. It seems to me therefore that the background to these amendments is superfluous. In order to keep legislation simple and understandable, I hope that the final decision will be that these amendments should not become part of the Bill.

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

My Lords, this is the first Bill that I have been involved with, so please be patient with me, if you would be so kind. It is good for this House that the Energy Bill is starting here, and I thank all noble Lords for their well thought out and helpful amendments. We may, of course, resist some of them, but they will be given respectful consideration and full discussion. I would also like to thank the opposition Benches for their constructive approach to this through the noble Baroness, Lady Smith of Basildon. I would particularly like to thank my officials, who have worked through the weekend and have had to respond to amendments tabled as recently as this morning. So they have put in a tremendous amount of hard work. I would also like to thank my unpaid friend Lady Northover, who joins me not as a rich person who can afford things—as the noble Lord, Lord O’Neill, thinks—but as someone who believes in public service.

Throughout our consideration of this Bill my door is always open, as is my limited mind, and should you wish at any time during this Committee to discuss any issues, I would be delighted to do so. So thank you in advance, all of you, for your support. I would also like to thank the noble Lords and the noble Baroness, Lady Smith of Basildon, for bringing forward these amendments which seek to provide clarity about the purposes of this part of the Bill, to ensure that those delivering the Green Deal have regard to those purposes, and to require annual reports on progress.

Amendment 1 seeks to put in statute the purposes of the Green Deal and to require relevant persons to have regard to these purposes in fulfilment of their functions. The Green Deal is indeed central to the carbon reduction target contained in the Climate Change Act and to the elimination of fuel poverty. I welcome the opportunity provided by this proposed amendment to provide clarity on the purposes of the policy.

There are, however, difficulties with this proposed clause as an operational clause, many of which my noble Friend Lord Dixon-Smith has alluded to. The Green Deal is about establishing a commercial framework in which businesses can take the lead in delivering a new type of finance package designed to address climate change and fuel poverty. However, most of the regulatory functions which will be performed by specific bodies under this Bill are for consumer protection. For example, those persons running accreditation schemes ought to be focused on setting and enforcing standards to protect customers, not having to have regard to a trade-off between high-level policy aims such as carbon reduction and operational issues such as enforcing standards. We should resist an overarching purpose because we do not want to open an opportunity to challenge inappropriate commercial practices on the basis that the end justifies the means if the overarching purpose is achieved.

--- Later in debate ---

[Lord Davies of Oldham]

I apologise to the noble Baroness; it was late notice, but we understood that in the latest official groupings Amendment 1B was to be degrouped. If it is not on the official groupings list, I present my apologies to her in pre-empting that position. It was our intention to keep the Welsh amendment separate because although he indicated aspects of principle on which he did not agree with our other amendments, he indicated that Committee stage is a time when we can consider issues in the round. Although he has indicated his reservations about the previous amendments, it is only appropriate for me to emphasise the importance of Amendment 1B and say that in our general consideration, we recognise the position of Wales.

The Scottish position is covered by similar provisions in the Climate Change Act 2008, so issues with regard to Scotland do not need to be considered specifically in this legislation. Issues with regard to Wales do need to be considered, however, particularly against a background where—as the Minister knows only too well, with the impending referendum on the powers of Wales—this is quite an important year for the devolution settlement. My noble friend Lord O’Neill identified the fact that there is a vast difference between the objectives and aspirations that the Welsh Assembly Government might have and their ability to translate these into achievements in terms of the resources which they have at their disposal and can command. That is an issue to be settled much later this year.

When the Minister is considering the issues which my noble friend has raised on the Green Deal, I suggest that he respects the position of Welsh Ministers and the role of the Welsh Assembly. I beg to move.

[Lord Dixon-Smith]

My Lords, I was trying to get in before the noble Lord sat down. I assume from what he said that Welsh Ministers have seen this amendment and support it.

[Lord Davies of Oldham]

If we won the argument substantially with the Government on the main proposals of the Bill, I have not the slightest doubt that the wisdom of Wales would be such that Welsh Ministers and the Welsh nation would recognise the values in the Bill which would be translated into meaningful structures for them. However, we have not yet consulted Welsh Ministers on the amendment.