Energy Bill [HL]

Lord Hunt of Chesterton Excerpts

Monday 17th January 2011 Grand Committee

[Lord Hunt of Chesterton]

My Lords, I wonder if I could support this amendment but also refer back to the Minister’s remarks about the Bill. I have just begun to realise that the Bill is about the Green Deal for certain properties. You have to have an eligible property, and the noble Lord explained very clearly that this is a commercial operation that will not apply to quite a number of properties. That is a very important point. The preamble states that the Bill will:

“Make provision for the arrangement and financing of energy efficiency improvements to be made to properties”.

In fact, the improvements will be made only to certain properties.

You may have a house which, as I mentioned on Second Reading, is subject to flooding. As the noble Lord, Lord O’Neill, said, there are going to be houses and properties that are not very appropriate. I think it is very important to say that this is a selective Bill; indeed it is an experimental Bill. Of course, “experiment” is not a word used very often in legislation. We used to use it on Cambridge City Council—because that was Cambridge—and it worked quite well.

We are approaching a new and complex situation and we are going to define this for certain properties with certain types of energy. It is clearly not going to be a Magna Carta, a democratic right, where everybody in the UK can have a Green Deal. I think that that should be made very clear, or clearer. For example, when we come to renewables and low-carbon technologies, as I think the Minister said, certain ones will be approved and certain ones will not be approved, and that is also part of the spirit of the Bill.

As I understand it, the point about this experiment is that some of these investments will not be undertaken by people unless there is a long term. As I understand it, the philosophy of the Bill is that you will approve certain kinds of insulation and energy systems, but you must obviously improve them in such a way that an investment can be made with the energy companies; and there will be cases where this is not true. However, you cannot have is an experiment to approve something for a certain period and then say, “I am going to disapprove that”, because obviously investments must be made. Therefore the timeframe in which you make your approval should be reflected in the Bill, otherwise people will not know what they are doing. That is my view on how we are proceeding, and I think it might be helpful if we made it clear that that is the nature of this Bill.

[Lord O'Neill of Clackmannan]

I support this amendment. It is important that the possibility of renewable energy making a contribution is recognised. It is essential that we try as best we can to make this legislation as explicit as possible. Certainly, when one talks of renewables, one is talking not just of combustion but of other methods such as ground source and air source heat pumps which, I have to say, can only make a bit of a difference. Although they take the chill out of the house, they do not really warm it in the way that we would want, because there has to be other insulation and it tends to be background heating. Nevertheless, they are important, and if we could reduce dependence on oil-fired heating, it would be very useful.

My sister-in-law lives in an oil-fired house in a village just outside Edinburgh, and the oil delivery vehicle had considerable difficulty getting to her house this winter. Indeed, the amount of diesel or petroleum that was used by the company to deliver the oil must have added quite considerably to the CO₂ emissions of that type of heating. We tend to forget the bigger picture. When we have a debate at this early stage in the Bill considering the Green Deal, there may well be other forms of reducing CO₂ emissions which do not spring immediately to mind and may not be included in what will probably be a too neat and tidy box-ticking form of assessment of carbon reduction techniques.

It is important that we make it explicit that renewable technologies across the board should be open to consideration and that the specific circumstances of the properties as yet to be defined are taken into account as well. It certainly might be important, if you have hard-to-insulate houses, that you could get additional forms of heating that might enable what is traditionally a rather expensive form of heating, namely electric central heating, to kick in at some of these rural properties.

Equally, at this stage, in the absence of a definition of eligible properties, we ought to take account of the fact that a number of renewable technologies work when you have not one house but half a dozen of them working together and sharing. These are commonplace in Scandinavia where the climate is more extreme than ours, but the houses tend to be better built and to have more efficient heating systems.

We have to look at this in the absence of a proper definition of “eligible property”. We might need to look at what could be a co-operative venture; that would lend itself to social housing projects but it may well also lend itself to certain village contexts as well. It would therefore be useful to underline the prospects and the possibilities for renewables.

I do not imagine that we can accurately factor in the feed-in tariff at this stage because it is an inexact science. There is every likelihood that feed-in tariffs will go down in value as time moves on. They are a selling point for renewable technologies and we might not want to be too dependent on their contribution to at least an element in the Green Deal. Maybe I am running away with myself here; maybe renewable technologies could have a contribution to make through the feed-in tariff and making the whole package that much more cost effective.

Again, in the absence of adequate definitions, the more explicit we can be in the initial stages of this legislation, the better it will be for our understanding of the potential that we could achieve through the Green Deal, either for individual properties or for a group of them. This group in particular is often the forgotten minority when we are dealing with not just fuel poverty but expensive-to-heat houses; because of their employment circumstances, people have to live outwith the gas grid and are condemned to paying outrageously high fuel bills, which takes up a disproportionate amount of their income. The amendment would help us to concentrate our minds on some of the opportunities, as well as the challenges, that properties of this nature would provide.

--- Later in debate ---

[Baroness Noakes]

My Lords, the noble Lord, Lord O’Neill, prompts me to rise in respect of some of the amendments tabled in the names of his colleagues on the opposition Front Bench—namely the may/shall amendments. The noble Lord, Lord Davies, and I have done many may/shall amendments over the years together and I remember enjoying every single one of them.

The noble Lord, Lord O’Neill, says that the 101 rule of amendments is to table the may/shall amendments. The noble Lord, Lord Davies of Oldham, and I have done many may/shall amendments over the years together and I remember enjoying every single one of them. The noble Lord, Lord O’Neill, says that the 101 rule of amendments is to table a may/shall amendment. I am afraid the noble Lord, Lord O’Neill, and indeed the noble Lord, Lord Davies of Oldham, are going to have to go back to school and retake 101, because the modern formulation is “must”. Noble Lords will find that that is what parliamentary draftsmen now use, and it is used in this Bill. I am afraid that noble Lords opposite have been producing amendments from another era, and I think that they can try a little harder. However, I would like to raise a more substantive point, if I may come to the amendment tabled by the noble Baroness, Lady Finlay of Llandaff, which is clearly extremely well intentioned. I have a slight concern about requiring Green Deal installers to fit any particular kind of alarm. I have every sympathy with requiring them to make that available if the person entering the Green Deal wants it, and indeed possibly other things like smoke detector alarms to the extent that they are not already fitted in the property. However, I do have a concern about absolutely requiring the installation as part of a Green Deal package. I think that it would fit better if it was an optional extra, which gives an opportunity for that to be plugged.

[Lord Hunt of Chesterton]

Picking up on the point that the noble Baroness, Lady Finlay, made, she used the word “ventilation”. I keep looking through the Bill to see where the word “ventilation” is. I made this point on Second Reading. It is really important that when you are considering the energy of a house, you consider ventilation. You gain or lose a huge amount of heat in that way. Nobody could possibly have an energy system without that. Obviously, one aspect of ventilation is to do with energy; another aspect is to do with safety, comfort and so on. Some kinds of housing would require new ventilation, and that should be part of the cost. I also raised the point on Second Reading as to whether this could be included as part of the Green Deal funding. From a technical point of view, it seems that it would be very eccentric not to include that, so I hope that that is considered as part of the Bill. It may be that ventilation and safety should be considered in a more general clause.

[Lord Marland]

My Lords, I thought that I had an explanation of why there are so many amendments, but my noble friend Lady Noakes has put the cat among the pigeons by reversing what I thought was the case; but, as I said, we will get there in the end.

Clause 3 gives the Secretary of State powers to establish in regulations a scheme for authorising persons to act as Green Deal assessors, Green Deal providers and Green Deal installers, and provides for a code of conduct regulating these Green Deal participants. Subsequent Clauses 4, 5, 6, 7 and 8 deal with each step of this process in more detail and make provisions for customer redress. Correspondingly, Clause 28 enables the Secretary of State to delegate related regulatory functions to a public body.

Appropriate regulation of the Green Deal participants is vital if the customer is to be able to trust in the quality of the Green Deal itself. At the heart of this clause, therefore, is the ability to issue a code of practice with which Green Deal participants must comply.

I will now speak to Amendments 2B, 2C, 2E, 5A, 7B, 7BA, 7C, 8A and 8B, as they all relate to how we best protect Green Deal customers. I welcome the thrust of all these proposals, but I do not think they are ones that we should incorporate into this clause or elsewhere in the Bill at this time. Let me explain why. Amendments 2B, 2E, 5A and 8B seek to ensure that the scheme and code of practice hold customer protections. I would like to thank all noble Lords for highlighting through their amendments the importance of the framework regulation described in Clause 3. It is vital therefore that customers are able to recognise that the scheme benefits from quality assurance and is properly regulated. Without this degree of confidence the Green Deal simply does not work. More importantly, we must ensure that the consumer does not suffer from mis-selling in any way. This means that there must be accurate consumer information provided from suitably qualified and trained people. We cannot afford to make the same mistakes that have been made elsewhere, notably in Australia, where the Green Start scheme was axed due to quality-related problems.

I reassure noble Lords that we will indeed be using powers established by this clause to protect customers. However, we will do so only where existing legal provisions or other mechanisms for securing consumer protection are not already in existence on this basis. I hope that on this basis, the noble Lord will feel able to withdraw the amendment.

Amendment 7BA seeks to have carbon monoxide alarms installed in properties as part of the Green Deal. The noble Baroness, Lady Finlay of Llandaff, discussed the risk of carbon monoxide poisoning on Second Reading, and I am extremely grateful to her for raising this important issue. The risks of carbon monoxide poisoning are potentially very grave, and I recognise the important role played by alarms in saving lives.

The Bill establishes the framework for installation but the detail of these conditions and the measures will be set out in secondary legislation following consultation with stakeholders. This will allow us time to consider in more detail whether the suggested approach would be the best and most cost-effective way of addressing carbon monoxide build-up. I am grateful for the additional comments of my noble friend Lady Noakes; they will help us decide how we can best help and consider this vital suggestion by the noble Baroness, Lady Finlay of Llandaff.

I fully take on board the comments of the noble Lord, Lord Hunt of Chesterton, about ventilation. We shall consider those during this process.

On Amendment 7C, Clause 3 gives the Secretary of State powers to establish in regulations a scheme for authorising persons to act as Green Deal assessors, Green Deal providers and Green Deal installers, and for a code of conduct regulating these Green Deal participants. It also allows for a body to be authorised so that its members are in turn authorised to act as Green Deal participants. We are committed to underpinning the Green Deal with high standards, but it is important not to be held to a requirement if, in time, a different approach becomes relevant or necessary. This approach is reflected throughout the Green Deal provisions of the Bill.

Finally, Amendment 8 seeks to require that any services provided or products sold by Green Deal participants, in addition to those paid for through Green Deal finance, should also be subject to the Green Deal regulatory framework. Amendments 2C and 7B similarly seek to extend the Green Deal framework specifically, the accreditation of Green Deal participants and any marketing requirements under the code of conduct to apply to energy plans—energy efficiency improvements offered by Green Deal participants without Green Deal finance.

The amendments raise an important issue—the need to safeguard against homeowners being sold measures by Green Deal providers that, unknown to them, do not benefit from the same regulations as Green Deal. However, it does not follow that the whole of the Green Deal framework could be applied appropriately to any other product or service.

I reassure noble Lords that we will be able to require, through the overall scheme and code, that customers are made fully aware of the difference between those measures being offered that fall under the Green Deal scheme with all its safeguards, and those that fall outside. We will not accept companies using Green Deal accreditation as cover for less appropriate goods and services. Furthermore, Clause 3(7) extends the scheme or code to energy-efficiency plans that are not Green Deal plans and provides a power to impose additional requirements on energy-efficiency providers.