Energy: Voltage Optimisation

Debate between Lord Marland and Baroness Smith of Basildon

Monday 12th March 2012 Lords Chamber

[Lord Marland]

I am sure I echo the sentiments of the House when I say that to have French support for anything is rather unusual but extremely valuable. I thank my noble friend very much.

[Baroness Smith of Basildon]

My Lords, I share with the noble Lord the fact that I am not quite scientific either. However, notwithstanding Wikipedia, all we are talking about is being as conscientious about energy efficiency coming into a building as we are about using energy in the building or losing it through poor insulation. The noble Lord has made several references to the Green Deal. Is he aware that currently voltage optimisation us not eligible under the Green Deal for commercial or domestic buildings? When he holds his workshop it would be helpful if he could look at changing the rules of the Green Deal. DECC has saved £19,000 a year on its energy bills, and many businesses would find that advantageous.

[Lord Marland]

I am grateful to the noble Baroness, as always, for her support on the Green Deal and for the work that she has carried out on it. As I said, the reason for the workshop is to look very carefully at the issue to see whether it can form part of the Green Deal. When we have come to our conclusions, I will be very happy to share them with her and with the noble Baroness, Lady Worthington.

Fuel Poverty

Debate between Lord Marland and Baroness Smith of Basildon

Thursday 16th February 2012 Lords Chamber

[Lord Marland]

I am pleased that the noble Lord felt he was being of assistance. I am not entirely sure that it quite fits with my dictionary’s definition of “assistance”, but I take on board what he said. He is bowling a straight military medium over and we are quite used to it. I shall consider the word “assistance”.

[Baroness Smith of Basildon]

My Lords, some of the people who I most worry will not be able to afford the heating they need are those on pre-payment meters. The noble Baroness, Lady Stowell, told me in a Written Answer on 19 February that pre-payment meter customers now pay on average £20 less than standard credit customers for gas and electricity. However, Charles Hendry, the Minister in the other place, told MPs that in 2011 pre-payment meter customers would pay on average £90 more than direct debit customers and a maximum of £170 more. Therefore, pre-payment meter customers pay more. Will the Minister explain why pre-payment meter customers pay less for their energy but so much more for their bills, and what can be done to ensure that those who have the least are not paying the most?

[Lord Marland]

I will not get into the crossfire of the detail on that because I do not have the facts in front of me. However, we all know that energy bills have gone up. They will obviously affect pre-payment meters because you have to put more in to supply the energy bills. The big point that I am making here is that we are completely focused on reducing energy bills, which is why we have a raft of measures. The warm home discount is worth £1.1 billion. The core group rebate of £120 goes to 600,000 pensioners. There is the winter fuel allowance of £200. Cold weather payments worth £93 million have already been paid this winter, and £100 million has been paid under Warm Front. A huge number of initiatives are in place to protect the consumer and we are very committed to doing so.

Energy: Tariffs

Debate between Lord Marland and Baroness Smith of Basildon

Monday 30th January 2012 Lords Chamber

[Baroness Smith of Basildon]

To ask Her Majesty’s Government what estimate they have made of the costs they will incur by appealing the court rulings on solar panel tariff payments.

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

My Lords, we estimate that the Government have incurred costs of approximately £66,400 to date. This includes the cost of the recent Appeal Court hearing. However, if the Supreme Court agrees to hear our case, we will incur more costs.

[Baroness Smith of Basildon]

My Lords, I am slightly thrown by that Answer from the Minister, because exactly the same Answer was given a week ago to my right honourable friend Caroline Flint in the other place. At that stage, the Government did not know that they had lost the appeal. They have now lost the appeal and have to pay the costs of the other side as well, and have incurred additional costs at the Supreme Court. My Question asked,

“what estimate they have made of the costs they will incur by appealing the court rulings”.

I think they will be significantly higher than the figure of £66,000 or so which the Minister has just given me.

Even at this late stage, does the Minister really think that it is good use of government money to keep chasing this merry-go-round of court decisions that the Government are losing? Would it not be better to sit down with the industry and negotiate a way forward? Everyone accepts that there need to be some cuts, everyone accepts that there need to be changes, but should we not try to do this in a way that does not cost jobs and that protects the industry?

[Lord Marland]

My Lords, I must admit that I was hoping that the noble Baroness would say well done on incurring only £66,400 of costs. It is a curious old world when we save the consumer £1.5 billion at a cost of £66,400 and are told that we should declare to the nearest penny. Let us look at what we are taking to court. This is one of the most ridiculous schemes that have ever been dreamt up. It is already going to cost the consumer £7 billion for £400 million of net present value.

Storage of Carbon Dioxide (Inspections etc.) Regulations 2012

Debate between Lord Marland and Baroness Smith of Basildon

Monday 23rd January 2012 Grand Committee

[Baroness Smith of Basildon]

My Lords, like other noble Lords I have a few questions and points of clarification. First, I welcome the Minister’s opening comments on CCS. He is looking puzzled and I am wondering what on earth I said. He reaffirmed the Government's commitment to a CCS project. He is nodding now, so I must be correct on that. Perhaps he could say something further. My concern is how, when the budget has been raided by the Chancellor and £1 million taken from it, the Government can fulfil that pledge. As the Minister has renewed the pledge, will he give us an idea of the timescale? We know that because Longannet was pulled there have been changes. Does the Minister have any idea of a timescale for when we will see the start of the first CCS project?

I will not labour the points on Scotland because they have been better made by other noble Lords. Have the Government given any consideration to the impact that a referendum on independence would have, and to whether the legislation would have to come back to this House or whether further legislation would have to be put in place? Do the Government have a plan B should that scenario come into effect?

The order distinguishes between routine and non-routine inspections. There will be regular, routine inspections, and if the regulatory authorities are made aware of potential problems, there will be non-routine inspections. I am not clear whether there will be a facility for spot checks: that is, unannounced inspections. If all inspections are announced, there will be time for facilities to get their house in order and make changes, whereas an inspector needs to see what is normal custom and practice in the association or organisation. If they are not aware of any specific problem and there is no routine inspection scheduled, can they make an unannounced spot check to ensure there are no problems?

The order talks about how an inspector would make a report and it would be made publicly available—in what format? Would local authorities in that area be informed that an inspection had taken place and what the results were? Would it be given to Ministers? How would we make the information about that inspection publicly available?

The order does not make clear how long it should take a company to comply with any requirement the inspector has made following an inspection. This is not an operation that can be shut down if there are any safety issues, so it seems very important that if requirements are placed on the operator, they should be undertaken as a matter of urgency. However, it does not say anywhere in the order what the timescale should be or if indeed the inspector would make a recommendation on the timescale. Given that the original inspection report would be made publicly available, would the requirement for compliance be made publicly available as well? If there were requirements made of a company and it had to fulfil certain conditions within a certain period of time, would that information be available in the same way—whether or not they had complied?

Finally, the bit that slightly puzzled me was under new Regulation 20, “Offences”, which says:

“It is an offence for a person … without reasonable excuse to fail to comply with a requirement imposed under Schedule 3”.

What is a reasonable excuse? How dangerous will it be not to comply with any requirements that are made? Should it therefore be an offence with strict liability; that is, whether somebody is mad, bad, ignorant or careless, it is still an offence not to comply with any requirement? I cannot think what would be a reasonable excuse not to comply with a requirement made following an inspection. If the Minister can say something on those points, it would help me to understand the order better.

[Lord Marland]

My Lords, thank you very much indeed for your excellent questions, and I am delighted that we have the expertise of the noble Lord, Lord Oxburgh, who has more knowledge about this subject in his little finger than I do in my entire body.

As always, the noble Lord asked a very salient question, which of course we can answer. I would like him to understand—perhaps he will nod at me if he does—that we are talking about offshore storage because onshore storage is not contemplated at the moment. The Energy Act 2008 allows for either Scottish Ministers or the Secretary of State to license a site that is partly in the area of the authority and partly in the other. In that regard, there is a memorandum of understanding that will govern the co-operation, so I hope that that satisfies the noble Lord—and deals with one of the questions asked by the noble Baroness, which I will come on to in a second.

The noble Lord, Lord Teverson, invited us to consider who these inspectors are. Of course, they are the same people because they have significant expertise in the oil industry, where I believe we are a leading light in health and safety and have a very strong knowledge of inspectorates. I remind noble Lords that we are going slightly into the unknown here. A lot of good work has been carried out by friends of the noble Lord, Lord Oxburgh, in this area. It is not a proven technology but we have got as close as we can and we are lucky to be able to borrow on the great expertise we have in the North Sea. We did not go into consultation because this is quite a simple subject. We do not really need to consult on it. I am afraid that our department consults far too much and this is something that we should reduce a bit. I hope he will be satisfied that, for a change, we are not consulting—it seems to go on forever and take up a lot of our officials’ time so this is one that we will miss.

Stress testing of the whole thing is the sort of factor we will look for in the inspection regime report. That goes from capture down through the pipelines, to ensure that there is no leakage, that the gas is being transmitted effectively all the way through the process and that it is working because there can be solidification. Then, as the noble Lord rightly pointed out, there may be leakage from offshore storage. We must vigilantly check that all the evidence supports the storage facility being able to contain it and that there is no seepage which inevitably leads to pollution. We are informed that that will not happen but we want to make absolutely sure. They will have to be vigilant in this, particularly, as I said, because it is a demonstration project at this point.

My noble friend the Duke of Montrose asked whether the Scottish Executive are up to speed. We have been working closely with the Scottish Executive. As my noble friend knows, the winner of the first competition was in Scotland. The Scottish Executive have been working closely with us on this throughout and harmoniously—you might say for a change. Our department has a very good relationship with Scotland.

That brings me to the noble Baroness, Lady Smith of Basildon. What more can I say than what I said the other day? The Government are committed to the CCS demonstration project. The Treasury has committed £1 billion. As the noble Baroness knows, I was responsible for negotiating if not achieving the outcome of the first demonstration project. It is important that we get the thing moving quickly. On Thursday last week, I went through the timelines by which we expect to achieve this. We set ourselves an exacting target of being able to appoint or acknowledge the winner of the new process in June or July of next year. That is a very exacting timescale. We had an industry day in December and are having another one this month to set out the framework within industry. We have a lot of interest—from small and large-scale companies. I will not go into that now because it is unfair on those that are competing. The competition starts by March and they have until the middle of June and July to put in their bids. Our current timeframe is that we will announce that winner by the end of September.

[Baroness Smith of Basildon]

So it is March 2012 that you will invite bids?

[Lord Marland]

It is all in 2012. I am sorry that I did not clarify that but that is the case. As I said, a lot of people are interested in competing—which is encouraging.

On the referendum issue, regulation is in place within Scottish powers so that that is dealt with. On the whole business of inspection, clearly an inspection is annual but the inspectors have—and should have, as the noble Baroness said—the right to carry out spot checks. As the noble Baroness indicated, that is to ensure that this should not be telegraphed and they think, “Ooh, we have to get ourselves ready for the inspection”. An awful lot of people will spend a lot of time on this because it is very important that the inspection is right. The noble Baroness then moved on to ask whether the information will be publicly available. The short answer is yes. The reports of any non-compliance with the recommendations will be put on the public register so that it will be there for all to see.

She then mentioned reasonable excuse and I had to invite a comment from my officials. I will quickly go through what they said. There is an existing regime to deal with operator failures to comply with licences directions of the Secretary of State. A reasonable excuse might be that there is a good safety reason for not complying during an inspection period with inspectors’ request, for example, to switch off the equipment. If the inspector has requested that the equipment is switched off, that would be a reasonable excuse. However, there will not be many reasonable excuses. I hope that that answers the many excellent questions asked.

[Lord Marland]

The noble Lord asks an interesting question. I am grateful that he should have given me an elephant trap—which I did not fall into—and dug me out of it. As he rightly says, the current thinking for the previous competition for the demonstration project was entirely for offshore. It could be that there is an onshore project in this competition. It is not thought to be likely at the moment, but it could happen. We would then have to recognise that problem. However, the issue here is not so much about onshore and offshore; it is whether we have the skill and the quality of inspectors. This is a unique process in the large scale; in the small scale it has been proven. All the way along the piece, therefore, we have to ensure that it is being inspected, managed and contained properly. That is why we are giving the inspectorate, which has been so successful in its oil activities, the opportunity as individuals to carry this out.

[Baroness Smith of Basildon]

I am grateful to the noble Lord for answering the questions. Perhaps I may press him for clarification on one that he did not answer, which I am sure he just forgot. On reports of inspections being made publicly available, my question was not whether they would be—it is quite clear that they will be—but how they would be made publicly available. The noble Lord said that it would be by the public register. Is that a document that is easily available to local authorities and to those of us who have an interest? It is not something I have come across myself or read before. Secondly, if an inspector imposes conditions or requirements to be met within a certain timescale, will the information about whether and when the installation complies with any requirements for an inspection also be made publicly available? Otherwise it seems to me that the inspection report would be available, but the consequences from it would not be. I would like reassurance that both would be made publicly available.

Electricity and Gas (Carbon Emissions and Community Energy Saving) (Amendment) Order 2011

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 14th December 2011 Grand Committee

[Baroness Parminter]

My Lords, on our Benches we certainly support the measures in the order. I have three quick questions for the Minister.

It is important that the Government are seen to support a fair and workable distribution of conditions for suppliers participating in environmental and social schemes. In looking at the options, did the department consider a more tapered introduction, say with a small 50,000-strong block of customers rather than the cliff edge of 250,000? If it was considered, why was that approach not adopted? If it was not, might it be as the Government look at future schemes in the area?

My second question is: what estimates are there of the number of new suppliers that will enter the market as a result of this change in regulation? There is no guarantee that smaller suppliers will mean a reduction in the price of a householder’s bills, but we all know that we need to try to cut energy bills and end the dominance of the larger six.

In that regard—supplementary to it—I say that the Minister might find it hard to answer that question because, even if we change this regulation, that will not be the only barrier that prevents people coming into the market. Many of the other barriers, such as liquidity, are outside the Government’s control. Might the Minister take this opportunity to comment on what negotiations or discussions he has had with Ofgem about some of those other barriers to entry into the market, and about whether it intends to act on them in the near future?

[Baroness Smith of Basildon]

My Lords, I thank the noble Lord, Lord Marland, for his introduction. This change is relatively moderate, minor and technical but it is generally welcomed. The issues that I want to raise are similar to those raised by the noble Baroness, Lady Parminter. Although I welcome the change, I am not sure how much impact it will have, and I have given some indication to the noble Lord of the questions with which I shall probe him for explanation.

Raising the threshold of CERT and CESP from 50,000 to 250,000 customers will benefit smaller suppliers that have reached, are about to reach or are just over the threshold and would struggle to meet the obligations imposed on them, but how many energy suppliers will that affect? I assume that the department has made some assessment or estimate of how many energy suppliers have reached that level and will benefit from not having to fulfil the obligation under CERT or CESP at this time. Any information that the Minister has on the scale of the impact and an indication of the number of companies or customers would be welcome.

The noble Baroness, Lady Parminter, also raised the issue of the impact there could be on bills. Has any assessment been made of the smaller companies, having been relieved of the obligations, passing on the savings that they make to customers? If smaller companies no longer have those obligations, presumably that will assist them with their profit margin. Is it expected that the customer will receive some benefit? My understanding is that, in effect, the larger companies pick up the tab of the obligations not being undertaken in future by smaller companies. Is there any expectation of additional cost being passed on to the customer from the larger companies?

It may be more to do with my lack of computer skills than the DECC website, but I could not find the consultation there. The Minister rightly laughs at me, but I challenge him to find it. I was interested to see whether any responses to the consultation had not been satisfied by the order. The issue that has been raised already is tapering, but I am not sure about it because I could not access the consultation. Did the Government consider tapering the threshold for obligations? Even under the new proposed higher level, which we welcome, there is still an issue about there being an absolute limit at which substantial obligations come into force. Were there representations and responses from the smaller suppliers about a more gradual and graduated approach? If so, were they considered by the Government and what was their reason for rejecting any such taper?

The impact assessment commented on the costs. Is there any impact on carbon or is this measure carbon- neutral? Paragraph 3 of the Explanatory Memorandum, which is headed: “Matters of Special Interest to the Joint Committee on Statutory Instruments”, made the point that there was a delay in the Government announcing their intention to pursue this order change —that was announced in June—because they were considering wider possible changes to the CERT scheme. They are ongoing and are being pursued at the same time as the amendments presented here because they are under strict time constraints. If the Minister could expand on that and say anything about the changes that the Government are looking to introduce, that would be helpful.

Finally, I welcome the Minister’s comments about how essential it is to have market reform if we are to do anything to benefit consumers and assist them with energy prices. As he said, this is just one step. It is a small step but it is welcome. If he can reassure me as regards the points that I have raised, I would be grateful.

[Lord Marland]

My Lords, I am very grateful for what appears to be a very harmonious coalition of views from all parties, as always. I thank the two noble Baronesses for their comments, particularly the noble Baroness, Lady Smith of Basildon, who I gather has been suffering from a bad cold. However, she made it here today to keep baiting me, as she normally does. I hope that she is feeling well and recovers in time for Christmas.

Before I respond to the points that have been made, I wish to give noble Lords an overall feel of things. CERT and CESP end next year. We do not want to do anything too radical because we all know that we have the ECO coming next year, so we did not think that it was necessary to bring in a tapering scheme for example, but we are consulting on it for the ECO. I know that the noble Baroness, Lady Parminter, knew the answer to that question before she asked it, as, I believe, did the noble Baroness, Lady Smith. We are consulting on that. As I say, there is only a year left. The whole idea of this is to increase competition and not radically to change what is fundamentally a good policy. As the noble Baroness, Lady Smith, said, getting value for the consumer is at the forefront of all our parties’ minds.

Ofgem is about to publish its views on how we can get liquidity into the market. We welcome the fact that it is looking at that. Currently, seven suppliers in the market will benefit from this change. By increasing competition through increasing the threshold we want to encourage other suppliers into the market. I cannot tell noble Lords offhand how many will join this merry thing but others will be looking at it very closely. Seven suppliers is actually the same amount again as there are in the big six, so that is positive competition. The noble Baroness, Lady Smith, loves asking about our website because she knows that I have never seen it in my life. I am sure that it is very good. We consulted in December 2010 and announced our interim views in June 2011 and now we are bringing the measure into law. The noble Baroness wishes to intervene. She is going to ask me about the website again.

[Baroness Smith of Basildon]

I just wanted the Minister to clarify whether the consultation responses were on the website. Perhaps my efforts to find them on the website were completely hopeless.

[Lord Marland]

We know that the noble Baroness is not completely hopeless. I look to my officials for information. I am told that there was a summary of responses on the website. As noble Lords know, I am not an expert on that, but it is history now, is it not?

Energy: Tariffs

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 6th December 2011 Lords Chamber

[Baroness Smith of Basildon]

To ask Her Majesty’s Government what action they will take to ensure that all energy companies provide a straightforward and easily understood tariff structure for customers, in the light of the report by Ofgem published on 1 December.

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

My Lords, the Government welcome proposals published last week for consultation by Ofgem to simplify tariffs and billing information. The proposals should make it much easier for consumers to understand and compare tariffs. It is for Ofgem, as the independent regulator, to take forward the proposals.

[Baroness Smith of Basildon]

My Lords, some things work better in principle than in practice. Is the Minister aware that Ofgem admits that its proposals to do the very things he just outlined may not be implemented until after winter 2012, and even then, only if the industry fully gets behind the changes? Given that the Daily Telegraph today reports that energy company profits are higher now than at any time since privatisation, and have risen by 40 per cent in the last three months alone, are the Government ever going to do anything to tackle this problem and help customers?

[Lord Marland]

The Government are going to do a lot to help customers. Ofgem’s proposals to simplify bills and make them transparent are ground-breaking—particularly the proposals to have standing order charges on the bill and set by Ofgem. Make no mistake: the Government’s entire policy is based on what is to the benefit of the consumer. That is at the heart of every decision we make. In the consultation process, this Government will be talking through the proposals with Ofgem. It is not surprising that they will not be implemented until 2012 because they are under consultation. Until the consultation is over, and Ofgem has had reports from the electricity companies, we will not be able to see the final outcome.

Energy: Carbon Capture and Storage

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 2nd November 2011 Lords Chamber

[Lord Marland]

I am very grateful for the support of the noble Baroness, Lady Worthington. I can confirm that the Treasury has agreed to £1 billion of support for this, in addition, one hopes, to European money for which we are applying. In my own view, that is a very significant figure in these current times to support this project.

[Baroness Smith of Basildon]

My Lords, the Minister indicated in his Answer that European funding may be available for CCS. Given the collapse of Longannet, will the UK still be able to meet the timescale for that funding, and can that funding be used for capital support for carbon capture and storage projects in this country?

[Lord Marland]

I can confirm to the noble Baroness that that is the case. I would not say that Longannet has collapsed; we have merely said that we are not going to proceed with it. But I can confirm that that is the case.

Electricity and Gas (Internal Markets) Regulations 2011

Debate between Lord Marland and Baroness Smith of Basildon

Monday 17th October 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, I agree—perhaps unusually—with the noble Lord, Lord Dixon-Smith. When I first picked up the package of papers I saw that it was, as he said, nearly 200 pages on the order itself, and the Explanatory Memorandum. If we look further to the impact assessment and the implementation and consultation, it is quite a hefty range of documents, and I am not sure that this Committee could do justice to those documents if we stayed here until tomorrow.

It is long, detailed and fairly complex. I am grateful to the Minister for trying to bring some order to it in the comments he made, and I think there is much in here with which we are quite happy. There are some errors and disappointments, and the noble Lord, Lord Berkeley, expressed some concerns, as has the noble Lord, Lord Whitty. I was struck by one comment he made when he said that on licensing the Government felt able to go further than was in the directives, which I understand and am not unhappy about.

However, it seems to me that the area in which the Government might have wanted to go further is consumer protection and the issue around switching and information for customers. I cannot see why, or how, switching can be effective for the consumer or the customer unless they have the information and are able to understand it and make use of it. The noble Lord will recall the noble Baroness, Lady Oppenheim-Barnes, who spoke for many of us last week when her frustrations boiled over into anger as she spoke of her experience in trying to switch energy companies.

Certainly, what is here today can make it easier. But, again, at the summit today at Downing Street, Chris Huhne made a comment about making switching easier. If we are going to put so much emphasis on the ability of the consumer to save money by switching energy companies, there is far more we need to do than what is in singular. Therefore, I welcome it, as far it it goes.

I have some questions that might help me assuage my disappointment and help me understand some of the issues. I am sure the noble Lord shares my disappointment at the response to the consultation from the energy industry. I would have liked it to be a bit more positive.

We have heard comments from the energy industry that it wants to help people reduce their bills, but its response to the consultation was a bit disappointing. On the issue of switching within three weeks—which is exactly the right thing to do in that area—while their IT companies were saying it could be done, the companies themselves were expressing concern and were, I think it is fair to say, less than enthusiastic.

I would like to ask the noble Lord a few questions on consumer protection, as I am not entirely clear about the effects of implementation. Is the three-week period from the end of the cooling-off period for the customer, or from when the customer first signs the documentation required to say that they want to switch? We have had two conflicting responses on that, so it would be helpful if the noble Lord could clarify that.

Also, I noted in the consultation document that the energy companies raised concerns about making it a legal right for customers to expect their supplier to be changed within three weeks. What was the outcome of that? I have been through the Explanatory Memorandum and the order itself. I may be missing something, but if an energy company fails to meet the 21 days for switching the customer, what action can the customer or the regulator take? What are the practical implications of it?

If the only action open to the consumer is to take action against the supplier then the company will have nothing to fear. I am also unsure as to how the customer will know which is at fault: the company they are switching to or the one they are switching from. Could the Minister outline the consequences of a company failing to meet the 21 days, particularly if it is a regular failure, rather than an occasional mistake?

The ability to switch depends on having the time, the capacity, ability and information to do so. The Select Committee in the other place has drawn attention to this issue. I have seen the new regulations and I take the point made by the noble Lord, Lord Teverson, about the checklist. What will be in it and will it be in a format that is clear, understandable and concise? A list of 58 questions and answers will not be satisfactory for any consumer. The Explanatory Memorandum states that the information will be put on the internet. If consumers have to go to the internet and wade through 58 questions and answers, it might be a week or so before they decide that they want to switch. Are the Government satisfied that the information available to the consumer will allow them to make an informed decision about their bills and supplier?

In a recent survey, Which? called the six major energy suppliers 12 times in a week and asked about the cheapest deal for the consumer. In most cases, the energy company got it wrong and failed to offer the cheapest deal. I think that EDF performed best, offering the cheapest deal in five of the 12 calls. One company said that the cheapest tariffs were available only online. Exit fees were not mentioned in a third of all cases. If the energy companies themselves are unable to give to the customer correct and accurate information about the cheapest deal, how can the consumer, who is not an expert, be expected to find them out for themselves?

It would also be helpful if the consumer was advised not to switch on the doorstep. Forty per cent of those who switch as a result of doorstep selling find that they have got not a better deal but something that is worse or no better than they have already. I would like energy companies to offer every customer the best deal available—I have never understood why there are so many different tariffs anyway.

Annex 1 to the Explanatory Memorandum outlines directive 2—the electricity directive. I am not sure why directive 1 is not there. It sets out the articles of the directive and what has to be done to comply with them. Why under Article 3(7), which requires member states to introduce a number of measures to protect vulnerable customers, is Warm Front listed as something that the Government are doing, when that programme is being phased out, indeed abolished? I am unclear why that is still in the transposition notes on action being taken by the Government. It seems unusual to refer to something that is being phased out. I appreciate that, when the consultation was undertaken, there was no intention on the part of the previous Government to get rid of Warm Front, but now that it has gone, I do not understand why it is still in the document. Since that programme is being phased out, do we have to go back to the EU and say what else we are doing?

The document also mentions the Green Deal as helping vulnerable customers. It does not say that it is a very limited measure that does not help those in the private rented sector as Warm Front did. There is a gap, because that help will take some time to come in. Can the Minister explain why that information is being given?

A further issue brings us back to Consumer Focus. Consumer Focus is going; the Government are getting rid of it. The legislation, the Explanatory Memorandum and the accompanying documents refer to the successor body. Which successor body will that be? Will it be Citizens Advice, which was mentioned during the passage of the Public Bodies Bill, or will responsibility come back to the department? I am not clear who will undertake that role and what funding will be available to ensure that it is properly undertaken.

The Minister mentioned networks, access and storage facilities. All those are referred to in the impact assessment as ensuring greater competition and falling bills. Does the Minister understand a slight scepticism being felt about that? Very few customers see their bills coming down; they may see a smaller increase. Can he give us more information on how this will impact on the consumer and assure us that the cost savings will return to the customer and not just mean larger profits for the energy companies?

The final part is on the regulatory framework. There has been a reprieve for Ofgem in the Public Bodies Bill. Is the Minister satisfied that it has the resources to undertake the additional regulatory functions it is taking on? I endorse the comments made by my noble friends, Lord Berkeley and Lord Whitty. The local estate heating system is a bit of a minefield. There are estates in my former constituency where people feel their bills are too high and want the opportunity to switch companies, but this would have the effect of increasing bills for others. This is a dilemma and more work is required.

In relation to the comments made by the noble Lord, Lord Berkeley, the impact assessment does not refer to the impact this would have on airports or ports. It talked instead about the costs to Ofgem. If there are associated costs that are not referred to in the impact assessment, or that I have missed, then there is an issue. We need to find a way of not imposing costs that would make businesses unprofitable and put them in jeopardy, particularly in times of recession. The impact assessment states that further legislation would be required. Does that mean we will have another opportunity to look at this before it is implemented? I hope that the Minister can address some of the points and concerns that have been raised.

[Lord Marland]

My Lords, it is, as always, a great opportunity to look at the contents of the Bill. I am afraid that I agree with the noble Lord, Lord Dixon-Smith, about its size. Let us not forget that this regulation was agreed by the previous Government in 2009, at a negotiation in Europe. So I share the noble Lord’s complaint: I have inherited this vast document of noble exchanges at a very high level—beyond my pay grade—in Europe. The net result is that we have a broad regulation which we have attempted to modify and improve, taking on board what a number of noble Lords have said. We have largely accepted everything that is here, because it has been imposed upon us by the EU, through previous negotiation. We have taken four issues which we have tried to mitigate and improve on. Those are: loosening the private network owners’ situation—about which the noble Lord, Lord Berkeley, is concerned—small generation interests, gas storage, which we have tried to find a more transparent way of managing, and switching licences. These are four areas which we, as a department, have decided it would not be in the best interests of the consumer to adopt wholeheartedly.

It comes as no surprise that the noble Lord, Lord Dixon-Smith, has heard from one or two of the major energy companies, because they, quite naturally, do not like everything that is going on. We in Government—and I think that we would all in this Room agree about this—want, largely, to protect the consumer, not the provider. It therefore comes as no huge surprise that, in this particular instance, one or two of the companies are disappointed. That does not mean that we do not have to work with these big six, because they are fundamental to delivering supply and we must congratulate them on much of their work.

The noble Lord asked me a specific question in relation to ACER. The point about ACER is that it deals with cross-border issues, whereas Ofgem deals with issues in relation to the UK. ACER has, of course, a broader remit than Ofgem. My noble friend, Lord Teverson, asked about the views of the other European states. I am afraid that is way above my pay grade. Who would be able to navigate the minefield of the views of some of the European states? My concern is what goes on in this country and I know that is his primary concern despite his great knowledge of Europe.

--- Later in debate ---

[Baroness Smith of Basildon]

That is really helpful, but just for clarification could he tell me how that would fall into place and whether it would be the consumer who had to take action to ensure that happened, or whether it would be a matter for the regulator to deal with?

[Lord Marland]

I guess that it would be both, because the consumer will apply to the regulator, which would be the normal way for the regulator to impose that on the supplier.

I dealt with the question on checklists. Warm Front still exists, of course, and will do so for another year, so it is reasonable to use it. Of course, we brought in a whole load of other measures, which the noble Baroness knows. For the sake of clarity, from December 2011, 4 million of the most vulnerable energy customers in Britain will receive letters to tell them that they are eligible for free or heavily discounted insulation of their loft or cavity walls, which is the Green Deal that we were talking about earlier.

[Baroness Smith of Basildon]

That is the ECO, is it not?

Energy: Gas Supplies

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 12th October 2011 Lords Chamber

[Lord Marland]

The noble Baroness is of course known for her energy and it is not surprising that she is playing the markets. We completely agree with that. It is amazing what happens on the internet these days. This is obviously a matter for Ofgem, we are concerned that it frees up the markets so that the noble Baroness and all of us can take full advantage of competitive terms out there. Rest assured, we march shoulder to shoulder in a bonhomous way, even if she does not think so.

[Baroness Smith of Basildon]

The Minister referred to the National Grid’s winter outlook report and called its assessment benign. What it actually said was that the total energy supply this winter should be manageable under normal conditions. Given the complete inability to provide accurate long-range weather forecasts and the wild fluctuations in weather we have seen, what discussions has he had and what arrangements are in place with the National Grid and energy supply companies to ensure supplies should weather conditions not be normal?

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 4th October 2011 Lords Chamber

[Baroness Smith of Basildon]

I am grateful to the Minister, who is so eloquently reading out his script to take care over what he says in your Lordships’ House. I just want some clarification on the point about F and G properties. From what he said, it seems that it will remain legal to let an F or G property if it has had a package of measures under the Green Deal or the ECO. The deciding factor would not be whether it reaches the minimum standard that the Government have set, but whether the measures have been carried out on it. Will there be any circumstances in which it will be legal to let an F or G property?

[Lord Marland]

As I said, there may be circumstances, such as in the case of a grade 1 listed property, in which you cannot make the improvements that you need to because of the listing arrangements. Therefore, there must be some sort of caveat. However, if our annual review finds that things are falling through a loophole, we will of course act. Our attitude to this is not to allow inefficient properties and recalcitrant landlords to operate within the Green Deal, and to carry on acting inefficiently or inappropriately in perpetuity. We shall attempt to make sure that they do not. All the initiatives and drivers from our department try to force them into that position. However, there may be situations where we might have to take a view, for instance in the case of grade 1 listed properties. I think that the noble Lord, Lord Best, indicated that they may be a case in point.

Fuel: Electricity Supply Licences

Debate between Lord Marland and Baroness Smith of Basildon

Thursday 14th July 2011 Lords Chamber

[Baroness Smith of Basildon]

I am grateful to the noble Lord for his explanation. I can assure him that I do not agree with what he is doing, which is why I tabled the Motion today. I asked him another specific question about what options were being considered other than the two all or nothing questions that he has spoken about today. He has not answered that or my other questions. If he cannot answer today, I would be very grateful if he could write to me.

[Lord Marland]

My Lords, I can answer that straightaway. Let me make it clear that we considered every option. A whole magnitude of options are put forward in reviews and consultations with industry, so of course we considered other options. However, the option that was actually put to us, largely by industry, suggested that the contribution of FITs was going to be even more expensive than it is now, and I am afraid that that was an option that we were not going to embark upon.

In closing, I see no real sense in the feed-in tariff at the level that it was. We have made the right and brave decision. It is a decision to support the consumer, which is obviously a priority for the noble Lord, Lord Whitty. It saves consumers from a vast increase in bills on a form of electricity generation that is not really going to impact on the importance and size of the problem ahead of us.

Energy: Fuel Poverty

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 13th July 2011 Lords Chamber

[Baroness Smith of Basildon]

My Lords, fuel poverty has stepped up a gear with the latest announcement of 18 per cent price increases. The Government have to understand that more and more people who have never previously worried about their bills or thought of themselves as being in fuel poverty will do so when they get their winter bills next year. The disgrace of the energy companies is that those who have the least could end up paying the most, with higher prices for pre-paid meters and those who do not pay directly from their bank also having to pay more. I note that the Minister said he cannot instruct Professor Hills, but he could make suggestions. Can he suggest to Professor Hills that he examine this in his review to ensure that this perverse pricing is ended once and for all?

[Lord Marland]

I am afraid, as I said earlier, that I cannot agree with the noble Baroness; I normally do, but I cannot on this occasion. It is not for me to instruct Professor Hills; Professor Hills is coming up with an independent review. I am delighted if the noble Baroness herself wants to make suggestions to him. That is the point of the consultation that he is offering in September, and I am sure that he will greatly benefit from her views.

As for energy prices, these are very regrettable, and this is the price that we are currently paying for no investment in the infrastructure of the energy and electricity in this country. We have to invest £110 billion—

Noble Lords: No.

Environmental Permitting (England and Wales) (Amendment) Regulations 2011

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 12th July 2011 Grand Committee

[Lord Marland]

This is hopefully the last statutory instrument before we break—oh no, there is another one. I am always happy to hear the tales of Cornwall from the noble Lord, Lord Teverson, and all about English china clay. It is fantastic. The noble Baroness asked some very good questions, some of which she has given me notice of.

[Baroness Smith of Basildon]

All of them.

[Lord Marland]

The noble Baroness did not give me notice of the banana—I had to slip that in.

[Baroness Smith of Basildon]

I did not expect the noble Lord to mention bananas in today’s debate, so I think that I can be forgiven for that.

[Lord Marland]

The point of the banana was to illustrate that everything is radioactive. We need to consider that as we embark on anything to do with radioactivity.

There has been extensive shareholder consultation and engagement on this, as you would expect. Naturally, it is fundamental that public safety concerns on anything to do with nuclear radioactivity are given priority. I think the general public believe that, which is why reaction to events in Fukushima has been relatively benign. We are not being complacent but I think that the public understand that we put public safety first. The Health Protection Agency has been consulted and is happy with it. A lot of it is based on International Commission of Radiological Protection recommendations, which underpin the EU basic safety standards directive. Of course, any concerns that are raised in these discussions are taken most seriously and responded to. It is fundamental to our nuclear endeavour that we do so.

Finally, I am in regular touch with Mr Jamie Reid, as I am a regular visitor to Sellafield. I hope that the noble Baroness will join me there at some point. West Cumbria is a fantastic place and we will put in the Library a copy of the response to his very detailed and extensive questions and naturally will furnish the noble Baroness with a copy as well. I commend these regulations to the Committee.

Disclosure of State Pension Credit Information (Warm Home Discount) Regulations 2011

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 12th July 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, we have previously discussed the Warm Home Discount Regulations in Committee at some length and the regulations before us follow from that. When we discussed them before, the Minister was generous enough to acknowledge that the Labour Government were very clear when they brought in the voluntary arrangements that should they be successful, they would bring in legislation for compulsory support. Today’s regulations add to that compulsory support. What we did not envisage was that this would happen against the backdrop alluded to by my noble friend Lord Whitty: a drastic two-thirds cut in warm front grants. The Minister is very aware of our concerns and our opposition to those cuts. As welcome as these discounts are, my fear is that with the very substantial increases in bills for next year that have been announced, next winter’s bills will be so much larger that the impact of the discount, which will be extremely welcome to those who receive it, will be less than envisaged when the level was first set.

I have two questions for the Minister, and I have given him notice of them. One is to seek confirmation on a point which my noble friend Lord Whitty also made. It is about the use for which companies can contact recipients of grants. I want to be assured that when the Secretary of State discloses information to an electricity supplier it can not be used for the purposes of sale or promotion by that company. Sub-paragraphs (b) and (c) of Regulation 5(1) state that the reasons for giving the information are,

“enabling the supplier to so provide that rebate”,

which is entirely reasonable and welcome, and

“enabling the supplier to offer relevant assistance to that customer”,

which is also entirely reasonable and welcome. However, in Regulation 5(3), there is a very broad definition of relevant assistance including:

“energy efficiency measures, thermal efficiency measures and advice and assistance relating to energy and thermal efficiency … advice and assistance relating to the generation of electricity or heat produced by microgeneration or the production of heat produced by any plant which relies wholly or mainly on wood as a fuel”,

and the list continues. Energy companies can contact the recipient on such a broad base, and they may use that to try to promote sales growth. I am not sure that that is what is intended, so if the Minister could be clear that the broad definition is not a sales pitch for energy companies, it would be helpful.

On the previous regulations, we discussed the reconciliation mechanism that will be in place to make sure that the information shared is accurate. I am not clear whether there will be further regulations on that. I understood that second and third statutory instruments will be coming through. If they will not, will the Minister tell us how that will be funded? When we discussed this before, I think there was an issue about who would be responsible for funding the reconciliation mechanism. If he can give us an answer on that today, it will be very helpful. However, we broadly support the regulations with those two caveats on which we would like answers.

[Lord Marland]

I thank noble Lords, as always. The noble Lord, Lord Teverson, was first in to bat. Funnily enough, Teverson is not a natural terrorist name, I feel. You do not think that with that name—a Cornish name, no doubt—he is going to be immediately arrested at the airport for some data matching. The data-matching issue is very important. There is no great science. Indeed, we have trialled it. We have trialled 340,000 people on the pension credit and, luckily, we hit the jackpot with about 205,000. There is a gap, and it is very important that we follow up the people who we could not access through the matching, but we have made substantial inroads into the number.

The noble Lord, Lord Whitty, has great expertise in this area, particularly on the subject of fuel poverty. We all know that both Governments, particularly our Government, are determined to attack this dreadful feature of our society which is exponentially going off the dial in terms of numbers, despite the best intentions of the previous Government and, indeed, the much better intentions of this Government to try and sort it out. In truth, the House is unified in dealing with this dreadful problem. It is fundamental that we get to grips with it and I know that we will carry it out. As your Lordships will know, we have instructed Professor Hills to carry out a fuel poverty review. It is an independent review and we are looking forward to seeing what suggestions he comes up with.

--- Later in debate ---

[Baroness Smith of Basildon]

My understanding is that the Energy Bill, which has completed its stages in this House, is being delayed in the other place, which has not been having debates on the alternative vote or the House of Lords. In fact, if he is able to enlighten us on why there is no date set for the final stages of the Energy Bill in the other place, that would be gratefully received because many of us in this House, who fully supported so much of that Bill, are very disappointed that it does not seem to be going any further.

[Lord Marland]

Indeed, no more disappointed than I am. Of course, one has to take into consideration all the legislation going into the other House. We genuinely tried to persuade the other place to allow it to come in, but it is so log-jammed with legislation. I am not sure whether it is entirely true that the other place has not debated Lords reform, or indeed alternative voting. However, I take the noble Baroness’s point and no one is more disappointed than our department in not being able to get the Bill through.

The noble Baroness, Lady Smith, made a very good point, as always, about the parameters. Broadly speaking, this is not to be used as a method of mis-selling.

[Baroness Smith of Basildon]

Nor of any sales promotion.

[Lord Marland]

Yes, nor of any sales promotion, let alone mis-selling—a subject that we debated extensively on the Green Deal. We must be vigilant that that does not happen. Let me state this absolutely categorically; indeed, I will go through the notes because I do not want to have any doubt. This instrument sets very tight parameters around the use of information, limiting it to requiring electricity suppliers to give their customers an automatic rebate on their electricity bills—it is limited to that—and to being able to offer their customers advice and assistance in specified areas on energy and thermal efficiency. Any other reason, such as sales promotion, is not permitted and would be unlawful. I hope that that clarifies that issue in words of one syllable.

There is not going to be a further order on the subject of reconciliation. We accept that pensioners who will benefit may not be evenly distributed between the energy supply companies. As a result, we have put in place a reconciliation mechanism to allow the costs of the scheme to be distributed fairly between energy suppliers, based on their market share. Regulations to allow for this came into force on 1 July 2011. I hope, with that, I can commend these regulations to the Committee.

Storage of Carbon Dioxide (Access to Infrastructure) Regulations 2011

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 12th July 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, first, we welcome these regulations and the new clauses on this issue added in the other place to the Energy Bill. They all lead towards ensuring that we have the available infrastructure in place and that necessary powers will be available. The noble Lord knows that we fully support CCS, and indeed that we made a commitment in government to fully fund the first CCS project. The regulations pave the way to that. However, as the comments from other noble Lords have highlighted, they do not remove the uncertainties that remain. Perhaps, in the light of the regulations before us, the Minister will be able to offer some reassurance on when the investment for the schemes will be available, because we have had no information on that yet. The CCS levy has been scrapped, the Government's argument being that the burden on business was unfair. Instead, the taxpayer is now to be funding the scheme through the Treasury but we do not know when that is going to happen, so any clarification from the Minister would be welcome.

I want to ask two specific questions on the order. I understand what the Government are seeking to do here and I support that. I will talk through this and see if the Minister can follow, as I have not given him notification of this question. My understanding is that an applicant seeking access to or modification of a pipeline can seek the approval of the Secretary of State or another consenting authority—it need not be the Secretary of State—if negotiations fail to secure such access or modifications as are required. The legislation before us allows an appeal to be made if the consenting authority, which will mainly be the Secretary of State, thinks that there has been a reasonable time in which to reach that agreement. I hope that would only be in exceptional circumstances as it seems to me that, more often than not, the problems in reaching agreement will be not on technical issues but on the commercial aspects.

The evidence base for decisions determines the criteria on which the consenting authority will make decisions, and it does not include commercial considerations. What if the stumbling block to agreement is not technical in any way but commercial? What if it is about price? It seems very difficult for the Government or any consenting authorities to intervene, as stated in the order. As I read it, the Government would not have the power to intervene.

There may be an intention that there should be a regulator to ensure that the pricing mechanisms are fair but, unless I am misreading something in the order before us or its Explanatory Memorandum, I do not see that. Indeed, if we look at the evidence base for option 2, which is on page 10, the impact assessment says on these issues:

“If the consenting authority is required to determine the financial terms for access or modification for … pipelines and storage sites … they would be guided by principles similar to those already used in other sectors”.

That implies that there is a role for the consenting authority and the Secretary of State to intervene on financial or commercial matters. It would be helpful to have some clarification because I am not sure I really welcome a Secretary of State intervening in commercial decisions. There could be a potential difficulty or a minefield if they are required to do that without sufficient guidance about which criteria they should take into account and how that should be conducted.

My only other question is: in terms of the time allowed for negotiations before the applicant can make an appeal to the consenting authority, will there be any guidance on what is reasonable? It seems that different kinds of applications could take different amounts of time, as some will be more complex than others. If the negotiation is around price, that could make it even more complex as it could be that company A is trying to preserve a position that it may want to take in the future. While I certainly support the principle, I would like some further information on those points if possible.

[Lord Marland]

I am grateful to noble Lords. It is a very opportune moment because, as of this morning, I am in the middle of a two-week lock-in negotiation on the first demonstration project. This morning was spent banging heads together to try and make it work further, but I will explain a bit more about that in a moment.

On the specific points raised by my noble friend Lord Teverson and by the right reverend prelate the Bishop of Chester, whom we welcome as always, the first demonstration project will be using existing pipelines owned by National Grid and Shell. They have great expertise and technology and are very comfortable that they can work. In fact, they have exploratory machines working on them at the moment. One has to rely on great companies to come up with the technology, so the likelihood is that a number of the CCS projects will be able to use existing infrastructure. Of course, that will not always be the case and some new pipelines may have to be built to create junctions or things like that.

The plan for the first demonstrator is to force the carbon dioxide, which becomes more liquefied, into the Goldeneye oil well, located in the North Sea. It is a largely Shell-owned platform. The ownership of it has become a bit more complicated but Shell is operating that end of it. On how we know of its ability to keep the captured carbon in storage, the answer is—

--- Later in debate ---

[Baroness Smith of Basildon]

I am grateful to the noble Lord and thank him for being very candid about his own uncertainties on this statutory instrument. I do not think that it is unreasonable to say that he does not have an exact time limit in mind for when a Minister or consenting authority should intervene. “Reasonable time” is a matter of judgment. I apologise if I am missing the Minister’s comments, but I am still not clear about the financial side and when it would be appropriate for a Minister to intervene in a pricing or commercial decision. It seems to me that a significant part of the regulations concerns the ability to intervene if things are not going as we would like, and agreement cannot be reached. I would appreciate it if the Minister would give me more detail or write to me, as it is crucial to the statutory instrument.

[Lord Marland]

With due respect to the noble Baroness, I think that most decisions in which people have to intervene are commercial, so ultimately a commercial decision will have to be intervened on. I can say that it will be a commercial decision. I quite understand that there may be a case for putting a time limit on when the commercial decision is reviewed. Consideration may need to be given as to whether it is an independent authority and when the Secretary of State appoints the independent authority, but these challenges or disagreements always come about through failure to reach a commercial agreement. We are suggesting that the Secretary of State can intervene and bang heads together to make sure that the agreement is sorted out. I am not sure that one can say more than that.

[Baroness Smith of Basildon]

I know that the Minister is trying to be helpful, but there are four criteria in the regulations on which the consenting authority can make the decision if there is a dispute. None of those is commercial or financial, although it does say in the notes in option 2 that it is financial. I am happy for the Minister to take this away and come back to me. I am still not clear, if the regulations do not state that one of the criteria on which the Secretary of State or consenting authority can intervene is financial or commercial, where the authority to do so will come from, when rather than a technical issue it could be the basis on which the Secretary of State will need to bang heads together, to use the Minister’s words.

[Lord Marland]

I am very happy to carry on this conversation with the noble Baroness outside the Committee, but the point I am making is that whether this is technical or financial, it is all commercial. That is the reality. Everything is commercial when it comes to negotiating these things. The noble Baroness is in danger of taking things at face value without looking at the realpolitik. As I say, I do not think that we want to get into the nuts and bolts of the definition of commerciality. I am very happy to carry on this conversation with the noble Baroness through officials, as always.

[Baroness Smith of Basildon]

That would be helpful.

Renewable Heat Incentive (Amendment to the Energy Act 2008) Regulations 2011

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 12th July 2011 Grand Committee

[Lord Marland]

That is a debate for later. I think that the noble Duke roughly knew the direction of travel that I was coming from. However, we were interested to hear about his great estates and restaurant business. When I am up in that part of Scotland, I may pop in to sample the fare. The restaurant probably serves his beef. That would be excellent. We know that he is not involved in the peat business because he was very pleased that peat was excluded. I confirm that and thank him, as always, for his contribution.

I say to the noble Baroness, Lady Smith of Basildon, who described me as slinky, that it takes one to know one. As I have admired her slinky movements round the House, I am delighted to see that she is no longer impeded by having a foot in plaster and has her dancing shoes well and truly on. I thank her for giving me advance warning of some of her questions and for the great support on this subject. That is not surprising as the renewal heat incentive was kick-started by the previous Government and we are happy to take action on it.

The noble Baroness makes a very good point about the budget. She knows as well as I do that dealing with the Treasury is not always the easiest thing on earth. I am grateful to the noble Lord, Lord Teverson, for congratulating us on getting the money from the Treasury. We cannot push our luck too far with the Treasury, but I totally understand where the noble Baroness is coming from. Despite the fact that each year is a cut-off point, people who started after 1 July 2009 will now be able to apply for RHI—we are going back further. There is effectively a six-month period when we can backdate RHI into another financial year, provided that the relevant person has completed his accreditation. It may well have taken five or six months to process but we can backdate the funding to the date of accreditation which, of course, may go back to a previous year. I hope that that gives the noble Baroness hope that there is an element of flexibility, although not perhaps as much as she would like. Reluctantly, I occasionally have to say no to her—I know that she is not used to it—but that is as far as we can go. I wipe the sweat off my brow in relief at not having to go back and challenge the Treasury again on this difficult subject.

[Baroness Smith of Basildon]

I am sorry to interrupt but I seek clarification. My understanding is that it is the point at which all the information is submitted and accepted—if there were mistakes, it would have had to be resubmitted—that is the date of acceptance. Is the noble Lord now telling me that that is not the case and that the provision would be backdated to when a person first applied?

[Lord Marland]

No, I am merely saying that it can be backdated. Obviously, it may take time to process a person’s accreditation, and that accreditation may go into a subsequent year. If you complete your accreditation, and then it takes a while to process it, the backdating could go back to the year when the accreditation was first accepted.

I am, as always, happy to pick up comments later but I wish to move on to the subject of waste. We are slightly in the hands of Defra as regards its definition of “waste”. I am glad to say that Defra has recently extended the definition of “waste” to include a number of other types of waste. As was said earlier, the RHI supports some commercial waste. There are doubtless one or two that it does not but we have instructed Ofgem to look at this and to provide a pragmatic solution as regards other waste. Ofgem will be the arbiter of that. I hope that through this process we will embrace as much as possible because, after all, that is our intention. It is not our intention to exclude waste, it is our intention to make it available to as many as possible, and this is a clear way of doing that.

The noble Baroness mentioned Regulation 3(2). I confirm that it is not our intention to exclude chemical plants. The intention is to show that we will not support RHI for open-sided warehouses and similar locations, where it is like trying to heat fresh air. Again, we have instructed Ofgem to clarify this issue through the process. We hope that as we proceed, with further advice from the noble Baroness and her team, in the spirit of co-operation we will come up with a good proposal for the RHI. It is an excellent endeavour started by the previous Government, which we have happily brought into legislation. I therefore commend these regulations to the Committee.

Motion agreed.

Nuclear Reactors

Debate between Lord Marland and Baroness Smith of Basildon

Thursday 7th July 2011 Lords Chamber

[Baroness Smith of Basildon]

To ask Her Majesty’s Government what research they have undertaken into, and what assessment they have made of, the use of thorium in nuclear reactors.

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

My Lords, the Government are in the process of assessing the benefits of next-generation reactor technologies, including thorium, for the longer term, and the Secretary of State has asked the National Nuclear Laboratory to prepare a report. A previous NNL assessment of a number of claims made by proponents of thorium fuel concluded that while the theoretical science is reasonably sound, the risks and resources involved in achieving commercial deployment are significant.

[Baroness Smith of Basildon]

I am grateful to the noble Lord for his response. It is helpful, and I certainly welcome the fact that the Government are taking this more seriously. He will understand that despite greater acceptance of nuclear power there remain concerns about nuclear waste, both because of its potential military or terrorist use and because of the costs and difficulties of long-term storage—as he and I have discussed on many occasions—as it cannot be disposed of. Liquid fluoride thorium reactors generate no high-level waste material, and can reduce existing stockpiles of waste. Given that, while I welcome the Government’s assessment and the expected report, is there more that the Government can do to test the technology? Also, on a wider basis, have the Minister and his department given any thought to whether this is a technology for nuclear power that could be safely developed in all parts of the world?

[Lord Marland]

I am grateful for the noble Baroness’s question. The reality is that we have waste, so it will not improve the situation with regard to nuclear waste. This Government are very concentrated at the moment on recovering from 25 years of no nuclear activity with what we have. We have to concentrate on the reactors that are available, which we have had approval for, in order to get our next-generation nuclear power off the ground. We know fully that thorium reactors will take 10 to 15 years to develop. There is a high cost in that development and, at the moment, I would not put it as a priority unless the research report that comes out at the end of this summer advises us otherwise.

Warm Home Discount Regulations 2011

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 29th March 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, in his introduction the Minister said how he applauded the last Government. He commented in your Lordships’ House during our debates on the last legislation that he looked forward to being held aloft as he left the Chamber. He may not quite have achieved that on this occasion but he has had a pretty good stab at it and we welcome these regulations. Given that it comes from legislation passed in the Energy Act 2010 by the last Government, it will come as no surprise that we agree with the broad thrust of the order because it builds on that voluntary agreement which has been so successful in supporting those who are fuel poor. The Minister will be aware of the commitments made by Ed Miliband, then Secretary of State of State for Energy and Climate Change and now Leader of the Opposition, when he said he would bring forward legislation to make such support compulsory and to target resources at the most vulnerable consumers. The legislation was brought forward, along with other measures to deal with fuel poverty such as Warm Front and winter fuel payments, for two reasons—to deal with the issues of those that are fuel poor and the issues of those who live in unhealthy and cold conditions. We have heard from our previous debates on the Energy Bill the impact that can have on homes and families. There is an individual cost but also an environmental cost. So for those reasons I welcome the regulations. However, I did not imagine when the legislation was brought forward that the regulations would be with us today against a backdrop of winter fuel payments having been cut in the Budget and of Warm Front being drastically cut by two-thirds and phased out completely after two years. Although we will see the introduction of the Green Deal and the energy efficiency measures, which we welcome, we do not know yet if and when those measures will apply to the public rented sector. That makes the responsibility of getting this right today all the more important.

We agree with much that is in the order, and certainly with the principles behind it. The Minister spoke of four key elements, including support measures and who might be eligible for a rebate as part of the core group. We, too, favour that support being extended to a wider group. I understood that the wider group comprised those who were at risk of fuel poverty, but the Minister in his opening speech said that it was those who were fuel poor and those who were at risk of becoming fuel poor. That seems to be an admission that the core group will not pick up everybody who is fuel poor. I would be grateful if he would say something more about that. The voluntary agreement ends in the next few days. The legacy spend is an appropriate way forward. The proposed model of industry initiatives allows some of those non-financial benefits such as energy advice to continue.

There is considerable agreement in principle, but I will raise some questions that I hope the Minister can satisfy me on. They are not dissimilar to the questions raised by other noble Lords. I understand from the debate yesterday in the other place that there will be a further order concerned with data collection and protection issues that might arise from identification of the core group. This will concern sharing information with the DWP. One concern with the process of sharing information is whether it will fully identify everybody who will be eligible for support. What action will be taken to ensure that as many people as possible in that group are reached? Given that the information will be shared with energy companies, what restrictions will be placed on its use, and how will they be enforced or policed to ensure that they are abided by?

I am also interested—I know that we have a further order on this—in the reconciliation mechanism for energy suppliers in the core group. Further regulations have been published, but perhaps I have missed the Explanatory Notes to those regulations. I do not know whether they have been published yet. How will the reconciliation mechanism be funded, and what consultation has there been with energy companies prior to the order being published? The main concerns with the broader group arise out of the identification and funding of that group. The core group is specifically identified, but the broader group is not. That is appropriate, and I understand why the Government want to allow greater flexibility to suppliers to support a wider range of vulnerable households. I am aware that they understand that energy companies will need guidance on this. However, I am still not clear how the energy suppliers will identify those who need support. Will support be available to assist them? Will the Government enlist help from third-party organisations, and, if so, will they in turn have any support to help them work with energy supply companies to identify who is entitled to a rebate and support?

The Minister will be aware also of some of the concerns of those helped by organisations such as Macmillan Cancer Support. For those who are terminally ill, the additional cost of heating their homes is significant. It is a serious worry for people. Macmillan's research has identified that one in five people with cancer turns off the heating when they most need it because they are worried about, or cannot afford to pay, their bills. That causes concern both to the NHS and to your Lordships' House. Every health and social care professional is convinced that having an adequately heated home is crucial to a patient's recovery. Why was the decision taken to exclude people with terminal illnesses from the core group? I do not think that it is a matter of costs, because they are relatively small; perhaps there is another reason. It would be helpful to have further information on that.

Another area I would like to explore with the Minister is whether the Government have made any assessment of whether those who benefit under the current voluntary agreement could lose support under the new arrangements. It would be helpful if there was some kind of review of the scheme as it progresses to assess whether or not that is the case; and, if it is, what action can be taken to address the unintended consequence of losing support in moving to a statutory requirement.

I want to raise a couple of other issues, of which I have given the Minister notice, so it will be easier for him to address the points in Committee. On page 3, in the Interpretation, the Introduction there is a list of those who are eligible for a rebate. They are:

“a man and a woman who are married to each other … [or] not married to each other but are living together as husband and wife … two people of the same sex who are civil partners”,

and in the same household, or,

“two people of the same sex who are not civil partners of each other but are living together as if they were civil partners”.

These are couples who have a relationship. But what about other couples, siblings who may be living together, for example? Would they not be eligible for the same support as couples who have a civil partnership, or marriage, or are living as if they did? Two friends sharing a home in the same way as a married couple or civil partnership couple seem to be excluded under the interpretation. Any information or advice that the Minister can give me on that would be helpful.

Finally, it was helpful when the Minister spoke of the work of Professor Hill, which will be incredibly valuable to the work of the Government on energy efficiency and fuel poverty. I understand that there are discussions about him being asked to look at redefining fuel poverty. The only way we should take people out of fuel poverty is by addressing the core issues, not be redefining fuel poverty. Can the Minister can ask Professor Hill to look at this issue and come back to us on whether it can be done through this order or in some other way? I raised this during the Energy Bill as well. In terms of pre-payment meters, Save the Children has identified what it calls a poverty premium issue: those who earn the least, and have the greatest need, pay the most. If you are paying through a pre-payment meter you pay around 8 per cent to 10 per cent more in energy bills. Six per cent of households have pre-payment meters and 25 per cent of those households are fuel poor. That may not easily fit into the broader group, but it would be helpful if that could be looked at, as the broader group is being defined. One way out of fuel poverty is to stop charging those that have the greatest problem the most money for their fuel.

I assure the Minister that we welcome the proposals. I am not sure that they fully plug the gap that is needed to address the fuel poor, particularly the rise in energy prices. We are seeing the numbers of those who are fuel poor increasing. It will certainly help, however, and I entreat the Minister to keep the operation of this scheme open and under review, so that if we do find that there are gaps where we are not addressing the crucial issue, we can come back and ensure that this does fully undertake the role that the Government are seeking for it in these regulations.

[Lord Marland]

My Lords, I am grateful as always to the input from my noble friend and those on the opposition Benches. Again, I would like to thank opposition Members for giving me some indication of the angle that they were coming from in terms of questions. It is extremely helpful. These are detailed questions which I will seek to address now, but clearly, for some points, it may be useful if we put something in writing at a later stage for clarification; as always, I am happy to make officials available for further clarification.

I shall deal first with my noble friend Lady Maddock, who has unrivalled knowledge in this field through her work in the charities sector. She quite rightly asked about the overlap between the groups. I can assure her that we put in place arrangements to allow suppliers to continue to provide benefits to customers, receiving help under the current voluntary agreement through the legacy spending section. The amount of funding available, which I think is the figure that she would like to know in relation to the first scheme, is about £140 million. This would allow that continuation and assistance.

What percentage of those pensioners who receive the existing winter fuel allowance will be helped by the scheme? The noble Lord, Lord Jenkin of Roding, was alluding to this question as well. There are 12 million such pensioners, and in the first year we anticipate that 800,000 people would benefit, which is roughly 6.5 per cent—I say despite my failure at the old-fashioned maths O-level—and 1.3 million towards the end of the scheme, which is just over 10 per cent. I hope that is a satisfactory figure.

My education continues with the noble Lord, Lord Jenkin of Roding, talking to us in Latin. I am very grateful in this particular instance that he did do a translation—I did Latin O-level, but it needs some brushing up. I notice the noble Baroness opposite did not need to have it translated for her.

Energy: Shale Gas

Debate between Lord Marland and Baroness Smith of Basildon

Monday 28th March 2011 Lords Chamber

[Lord Marland]

My Lords, they are largely in the area around Blackpool. I understand that there will be some investigation in Southport and on that coastline. I am not a geologist but it presumably links in some form to Morecambe Bay. That is largely the area that is being investigated.

[Baroness Smith of Basildon]

I know the Minister is aware that there are concerns, as we have already heard, that there might be risks associated with obtaining shale gas. Why then have the Government not waited for the Select Committee in the other place to report fully on the inquiry that it is undertaking at present, or for the report from the US Environmental Protection Agency on the risk to humans and the environment? That information would have been very helpful to the Government before proceeding. To reassure people who have those concerns, what evidence does the Minister have that it is safe to proceed?

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 2nd March 2011 Lords Chamber

[Lord Marland]

My Lords, you have heard differing views on the future of carbon budgets, including those of the noble Baroness, Lady Smith of Basildon, the noble Lord, Lord Judd, and my noble friend Lady Maddock. My noble friend Lord Teverson, as usual, clearly told us his views; and we heard those of the noble Lords, Lord Dixon-Smith and Lord Reay, who would be opposed to carbon budgets. It has been an excellent debate and we have heard views from all sides—all of which are respected.

Throughout the passage of the Bill, this has been a subject on which I have taken those views on board. We should try to find a way through in a spirit of co-operation. The Localism Bill, which is about a spirit of partnership, is going through Parliament at the moment. We have imposed upon local authorities a 10 per cent carbon reduction target through the DCLG, and they will have to set their own examples.

During the passage of the Bill, we have given great consideration to these issues, and we have determined that the best way forward is co-operation. I hope that next week we will be able to sign a memorandum of understanding with the local government group, to build upon the Nottingham declaration. The memorandum will set out a timetable for progress on reducing carbon emissions that we hope all local authorities will buy into.

At this point, I offer my thanks to the right reverend Prelate the Bishop of Liverpool, who has set up a meeting with me and the chief executive of Liverpool City Council to discuss how we can get the Green Deal through to Liverpool and together reduce carbon emissions, and use Liverpool almost as a test case.

I have taken on board the valuable comments of noble Lords. I have taken on board the fact that it will not be acceptable to impose provisions on local authorities. Indeed, the Department for Energy and Climate Change cannot impose our will on local authorities, but we can impose a way forward and an understanding between us all that this has got to be right for the country, as the noble Lord, Lord Judd, said. It has to be right for future generations and it has to be right that we use less electricity and less energy than we are using now, to conserve the future.

I hope that given those comments and the impending memorandum of understanding—which I cannot reveal too much about now because, as you know, I am a very junior person—the noble Baroness, Lady Smith, will appreciate what we are doing. I hope that that finds favour with her and with the noble Baroness, Lady Maddock, and that they will not press their amendments.

[Baroness Smith of Basildon]

I am grateful to the noble Lord, because on two occasions today he has provided your Lordships’ House with information on the memorandum. He cannot make the announcement, but I think that he has stolen the thunder of whichever Minister will do so. The noble Lord’s response on the memorandum that he and his colleagues intend to bring forward addresses exactly the kind of issue we are looking at, whereby local communities and local authorities will have an opportunity to play their role in achieving carbon reductions across the country. I look forward to the further information, and I hope that there will be a statement to the House at a later date. I beg leave to withdraw the amendment.

--- Later in debate ---

[Baroness Smith of Basildon]

My Lords, I raised a similar amendment to this in Committee as a probing amendment to try to clarify financial liability for oil spills off the UK coast. Looking back, I am not sure that I am any clearer on the financial responsibility, but my amendments then got a fair amount of support in Committee. It was understood that there has to be an arrangement whereby, should there be an accidental spill by those seeking oil off our coast, the responsibility for cleaning it up does not fall on local authorities. We were seeking clarification. We did not get that then and it would be helpful if the Minister could provide it now. As the Minister may recall, I drew comparisons with the requirements on the nuclear industry, which has to provide all costs of clean-up after its operations, with that of the oil industry of accidental oil releases into the environment.

A couple of issues were raised in Committee which I think were entirely reasonable, and I have incorporated provision for funding into our new amendment. I hope that the Minister can take this away to look at it. We have included a definition of sufficient funds and taken out detailed provision about certification, because that could go into regulations. I will be grateful to hear the Minister's comments.

[Lord Marland]

This is a very complicated issue for someone who is not in the insurance world; but for someone who is, it is quite simple. It may be best in this instance if I commit in writing the exact layering of this requirement. Suffice it to say that the oil industry is a very mature industry. Substantial insurance requirements are placed on it. As I mentioned extensively in Committee, it has a mutual pool which offers additional protection to its balance sheets, and those that it makes in the open market. As someone with an insurance background, I would be happy to explain that in greater detail in writing to the noble Baroness. I hope that she finds that an adequate response to enable her to withdraw her amendment.

[Baroness Smith of Basildon]

I am grateful to the noble Lord. I think that he understands why I raised this issue. It is in large part due to public concern. He and I debated in this Chamber the Deepwater Horizon oil spill. It was in research for that debate that I discovered concern about not knowing what the full implications would be if there were an oil spill off our shores. I am grateful for his comments and his commitment to come back to me in writing.

It would also be helpful if he would come back to me on the issues that I raised about comparisons with the nuclear industry. I have never really understood why the nuclear industry is treated differently from the oil industry. He may be able in his response to assure me that it is not treated differently. The nuclear industry, particularly under this Government, now has to find all the costs of remediation and disposal of waste. As I understand it, that is not the same for the oil industry. Can the Minister tell me that he is entirely satisfied that, in any event, for any oil spill, the liability will not fall on local authorities, and that insurance is in place to deal with the matter? I look forward to receiving that information in his correspondence on the matter, which I can perhaps discuss with him further, and beg leave to withdraw my amendment.

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 2nd March 2011 Lords Chamber

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

My Lords, I thank all noble Lords who have spoken and want to tell everyone that I am on my best behaviour because my boss is watching, so I will not say anything too controversial or concede too much.

It is a great opportunity for me to thank all noble Lords for the time and effort that they put into Committee to identify issues and work together to make this a much more valuable Bill. That is the expertise of the House. We can contribute, and we have done magnificently. We have given the Bill a thorough road test with great cross-party agreement, and I pay my personal thanks to those on the Opposition Benches for all the work that they have done—through very difficult physical circumstances in the noble Baroness’s case. I am delighted to see her able to get to her feet. She can always have assistance from our side, particularly when going into the right Lobby.

We have sought where possible to accommodate suggestions, but some cannot be achieved within the timeframe available on Report. However, we will endeavour to do so by Third Reading, and then further changes will be made in the other place. Of course, some amendments would not provide the functionality that is required, and even though we have listened very hard to them, unsurprisingly we will not accept them. I hope noble Lords will take that into account when they make their contributions. We have listened and we have all ridden together to make this a constructive document, and again I thank everyone for their support. I do not believe that it is necessary to set statutory powers, as referred to in Amendments 102 and 121, but I agree that there should be an aim for our energy efficiency policies. We will come back with proposals on that for consideration in the other place, which I hope will satisfy the noble Baroness. We cannot achieve that now, but we will be looking to achieve it as we go forward.

I am grateful for the contribution from the noble Lord, Lord Whitty. I was pleased to see that he had a playful smile when he referred to fuel poverty, which is fundamental to what we are trying to achieve. Fuel poverty has increased exponentially and we must put the brakes on that. Much of what we are trying to do with the Green Deal addresses that. My noble friend Lord Dixon-Smith rightly points, as he often does, to the issue of whether we should have continuing annual reports, and so on. Clearly the Government are committed to openness and transparency, and we have an annual report on progress towards our energy efficiency goals. We will consider the operation and performance of our energy efficiency policies, not least the Green Deal and the ECO, which will prominently feature in our reports published under the department’s annual energy statements. Such documents will provide all the information required on the activity of the department, including the Green Deal and ECOs. I hope that that reassurance will allow the noble Baroness to withdraw her amendment.

[Baroness Smith of Basildon]

I thank the noble Lord for the way in which he has engaged with the Opposition during the Bill’s proceedings. He says that he will take things away and look at them again, which has been a theme throughout the Bill. All the amendments today are within that spirit of co-operation. I feel strongly about them, so I shall press the Minister for clarification. I think that what he is saying might satisfy our requirements, but we will test the will of the House unless I am clear about that.

There are two issues here. One is the annual report on ECOs and the Green Deal; the other is the purpose. Does the Minister intend to bring forward a purpose or aim clause which will specify what the Bill is to achieve in the context of government policy on emissions and other legislation? Will an annual report from the department include information about the Green Deal, such as how many homes have had Green Deal measures installed and what the emissions savings have been? If so, he has gone a long way to meet our concerns. If he is saying that those measures will be brought back either at Third Reading here or in the Commons, I will happily withdraw the amendment, but some clarification would be helpful.

[Lord Marland]

Forgive me; I thought that I was quite clear on the subject. The department’s annual energy statement will provide details of the progress of the Green Deal and ECOs, which will answer the noble Baroness’s question. Obviously, in providing information about the Green Deal, it will provide information on the amount of activity that we are able to create with it. We are committed to that.

As for the aims, I state clearly that we will look at them, refine them and come back with proposals in the other place, if we can in the timescale available for further debate. It should be very encouraging for the noble Baroness that that will carry on through the passage of the Bill.

[Baroness Smith of Basildon]

I think that the noble Lord realises the effort it takes me to get my feet, but I will continue to do so throughout the evening. I am very grateful for that explanation; on that basis I am happy to withdraw the amendment.

--- Later in debate ---

[Lord Marland]

My Lords, as always, there have been some valuable contributions for which I am extremely grateful. To deal first with the amendments tabled by the noble Baroness, Lady Smith of Basildon, it is clearly fundamental that there is transparency and independence, that the reputation of assessors is impeccable, and that we avoid the cowboy culture that could exist, and in certain parts of industry has existed, in the assessment work. That is fundamental to the confidence that consumers must have in the Green Deal. Therefore, we will set out in secondary legislation more detail of the standardised methodology, which will protect the consumer from the cowboy culture and any further abuse.

I thank the noble Lord, Lord Berkeley, whose thoughts on energy efficiency are extremely well known. We are extremely sympathetic to them. Unless we educate people to use less electricity, we will end up using more, and the quickest way to reduce consumption is by using less energy. A lot of the work that we are doing on smart meters in homes will give people an everyday assessment of what electricity they use in their homes. At times, they will find it quite frightening, as I do with my children, whom I have referenced before, when I point to the excellent device we have that is also extremely frightening. The noble Lord, and the noble Baroness, Lady Maddock, rightly referred to the work that ACE has done, which we applaud and listen to in detail. It is fundamental that we develop a pattern of education so that energy use is reduced.

We can readily identify that with the levers that we have available. In October of this year, we will produce our fourth carbon budget report, which will provide evidence of the cost-effectiveness of economy-wide packages under consideration. That report will continue. The costs and benefits to society of particular technologies are assessed through extensive consultation within industry, so a lot of information is provided to us from industry groups. In addition, we provide publications on carbon budgets, energy market reform, feed-in tariffs, CERTs and green deals, so a huge amount of information is provided, which helps us readily to assess the extent to which carbon production and energy use are being reduced.

[Baroness Smith of Basildon]

I am grateful to the Minister, who has sought to be very co-operative and helpful in his comments. However, two things stand out for me. One is that he is right that there is a great deal of information out there for the consumer. In fact, there is so much that it is totally confusing for most people. The simple cost-benefit assessment that is referred to in the amendment tabled by the noble Lord, Lord Berkeley, would not only help the Government in developing policy but would be helpful to the consumer. Having information readily available is something that we all require.

The Minister welcomed both our amendments, but he did not pick up on one point. If he is able to assure me that he will come back on it later, it would be helpful. The issue relates to information being provided to the improver and the bill payer about the relationship between the assessor and the installer. That is necessary for transparency and openness. If that relationship is open, there can be no suggestion that there is anything underhand or against the interests of the consumer. If there is a doubt in the consumer’s mind, people will not have confidence in the Green Deal. I can see the noble Lord nodding at me, which is always a welcome sign, so I hope that he will look at these issues—he is now making extremely strange faces; I preferred the nod—and addresses these issues to take that point into account. Openness about that relationship is crucial.

On the basis of what he said, and on the basis that he will look again at the matter on which he nodded to me, I beg leave to withdraw the amendment.

--- Later in debate ---

[Lord Marland]

My Lords, Amendment 21 is in an extensive group of amendments that relate to the energy performance certificate. As I have said on a number of occasions, we are extensively reviewing the energy performance certificate to ensure that it is fit for purpose for the Green Deal and that there is no confusion between the certificate’s relationship with buying and selling a home and achieving energy performance under the Green Deal.

As currently drafted, the Bill would apply the energy performance of buildings regulations, with modifications, where a Green Deal plan is present. This would enable Green Deal information to be added to an EPC and kept up-to-date. In this way, we will be able to monitor the progress referred to earlier by other noble Lords and thereby measure the success of the Green Deal’s energy-saving benefits.

Amendments 58, 170, 172 and 174 make consequential amendments relating to parliamentary procedure, extent and commencement. I hope that noble Lords will recognise that these are effective and transparent ways of fulfilling our criteria for disclosure in the Green Deal. I beg to move.

[Baroness Smith of Basildon]

When we were discussing the number of government amendments earlier, the noble Lord, Lord Jenkin of Roding, made an appropriate comment about how we are all grateful to the Minister for tabling the amendments early. To have early sight of them was indeed helpful as, in the true spirit of the complications of energy legislation, it is sometimes difficult to trace them back and follow them through—that is more of a problem with the following group of amendments—although I am sure that all noble Lord have been able to do so.

The noble Lord has taken on board comments that we made throughout Committee stage about monitoring and having information and transparency. With this group of amendments the Minister has responded to issues raised by the Committee and I am grateful to him for doing so.

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 8th February 2011 Grand Committee

[Lord Marland]

My Lords, I am grateful for this amendment because it provoked my noble friend Lord Jenkin to use the full majesty of what used to be his office, and probably should be again, to demonstrate clearly the reasoning for this subsection staying in the Bill. I am grateful that we should have the support of no greater or more august figure than the chairman of the NIA itself, the noble Lord, Lord O'Neill of Clackmannan. Both noble Lords gave extremely good reasons for it.

I will explain briefly that the real reason for this change is to remove the power to subsequently modify an approved programme that has the potential to create uncertainty for operators and investors financing significant long-term investments. The key to this is giving long-term investment commitment to those who are investing in new nuclear. I have nothing to add to what the two noble Lords have so aptly said with their greater experience of the subject, and I invite the noble Baroness to withdraw her amendment.

[Baroness Smith of Basildon]

I beg leave to withdraw the amendment.

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Monday 31st January 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, this is a fairly brief and self-explanatory amendment, which gives us the opportunity to have an assessment of the obligations to ensure that they are,

“discharged transparently, cost-effectively and consistently”,

throughout the time period and to ensure that we have those areas covered so that we can make a full assessment of the effectiveness of the obligations. It is very straightforward and I hope that the Minister will be able to accept it. We have all learnt from past examples when the programmes in place may have been extremely valuable but we have also learnt lessons about how much more valuable they could have been if there had been such transparency in place. This is about getting the best approach. I beg to move.

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

My Lords, I welcome everyone back to the Committee and thank all noble Lords for their great contributions to date. May it continue. As I have said repeatedly, this is only one stage in the passage of our Bill, and there will be opportunities between now and Report for further advice to be given and listened to, further discussions to be had and further detail to be discussed.

Before I begin, I should say that in the debate on 26 January, I referred to a target of reducing carbon emissions by 10 per cent. I should clarify that this target refers to emissions from central government. I did not want any uncertainty there. We are keen for local authorities to play their part in reducing emissions. This will help the UK meet its legally binding carbon budgets, but local authorities are not formally covered by the 10 per cent central government target.

Amendment 30ZA would amend Clause 66 to provide further information-gathering powers. This is entirely consistent with the Government’s intention for greater transparency under future energy company obligations. The powers in Clause 66 allow us to gather such information as is necessary to help the Government to decide what provisions to make in future secondary legislation, powers which also enable the Government to review the operation and effect of policies that are under way. The matters that the noble Baroness seeks to cover are all, I believe, potentially germane to these issues, and are therefore covered in principle by the existing powers. Information could include, for example, exactly which measures the companies are delivering where, and how much those measures are costing the energy companies to acquire and install.

I hope that this has provided satisfactory reassurance and ask the noble Baroness to withdraw her amendment.

[Baroness Smith of Basildon]

My Lords, on the basis that the issues are covered, I would be happy to withdraw.

--- Later in debate ---

[Lord Marland]

My Lords, this is an excellent amendment and the Government are entirely in agreement with its broad principles. I am grateful to my noble friend Lord Moynihan for his comment as a practitioner in this field. I should preface any remarks that I make with a reminder that, in my former life, I spent most of my time trying to sell insurance to oil companies and to make myself even richer, so I was all in favour of them buying as much insurance as possible. However, in my current role, I see that a balance has to be struck and that I was wrong at the time—or only partly right. My shareholders thought that I was right.

The Government are in full agreement on this. We have seen the Select Committee’s recommendations and we are evaluating them at the moment. The noble Lord, Lord Moynihan, makes the point that we must not rush into this or have knee-jerk reactions. Of course, when the Government issue licences, a fundamental part of that is that the company awarded the licence becomes a member of the Offshore Pollution Liability Association; it has to purchase £250 million of cover and it then goes into a pool that offers greater cover. This pooling arrangement is fairly unique and it gives us a number of solid assurances. There are two imponderables that need evaluation. One is the quality of insurance cover. Obviously, if the insurance provider is not of A-graded quality, particularly with a longer-term liability situation, that would be a concern. That needs looking at rigorously. Then there is the matter of the quantum.

Two things are going on, as the noble Lord, Lord Moynihan, said. The first is the inquiry that is happening in the United States. We would not want to prejudge what is happening in that inquiry, which we want to evaluate. Also, we want to evaluate the Select Committee’s comments, which are valid. I hope that the noble Baroness will understand that the Government take this matter seriously. She has been persuasive in taking an important line. It is very much in the country’s interest that the subject of pollution should be managed very carefully indeed.

[Baroness Smith of Basildon]

I am grateful to the noble Lord for his expression of support and agreement with the intention of my amendment. I am not quite sure what he means by knee-jerk reaction and rushing into this. As new licences are being issued for drilling, probably as we speak, this is clearly an issue that needs to be addressed with some urgency, although I take on board entirely the points made by the noble Lord, Lord Moynihan. I understand from the Minister’s comments that the Government are looking at this matter and that we will return to it. With that information, I am happy to beg leave to withdraw the amendment.

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 26th January 2011 Grand Committee

[Lord Marland]

I will explain the Government’s thinking behind this to the noble Lord. This is a market-driven opportunity. The Government are not trying to be prescriptive. If two people were running a race, which one was winning easily by quite some margin, as the social rented sector is doing, you would train the runner who was not quick enough and encourage him to compete in the race. Here we have the social rented sector, which is by some margin ahead of the scale. It would be wrong to bring in legislation at this point that said, “Sorry, you’re not far enough ahead, despite beating the others. We intend to make sure that you get even further ahead”. The main aim of the Bill is to let the market drive the situation. At some point—the noble Lord is quite right—we will review the progress that the market has made and use any powers that are necessary.

The social rented sector should be congratulated. The noble Lord, Lord O’Neill of Clackmannan, said as much and I totally agree with him. That sector has led by example; we should encourage, not discourage, it. It is not my intention at this point to redraft part of the Bill to be prescriptive about this sector. I take on board that it is a critical area, which continues to make progress. Through this Bill, we will ensure that it does.

[Baroness Smith of Basildon]

I am grateful to the noble Lord for his explanation and to my noble friend Lord O’Neill. However, I struggle with his analogy of two runners. One is ahead, so we do not help that one. However, we do not have two runners here; we do not have two sectors in competition. To stretch his analogy, we have two teams. In the team that is doing well, there are some who are lagging a long way behind. A trainer would give support to them.

We should congratulate the social housing sector. With a lot of support from the previous Government, it has done extremely well in moving ahead on energy efficiency. However, that is not to say that every single home in the social rented sector is as energy efficient as possible. I recently spoke to a couple who have not had a new boiler for more than 20 years and whose electricity bill for heating last winter was £400. That is shocking. The point is that it is not the kind of house that someone lives in—whether it is privately rented, owner-occupied or socially rented—but the need to have energy-efficiency measures. Housing stock that is 10 points higher in the social rented sector or the private rented sector is quite good but the private rented sector starts from a very low base. Therefore, although it is better, it is not good enough.

Last week the Minister said that he wanted to skip out of the Committee, and he almost had the same effect on me when I heard him say that this was a very good idea. At one point I thought I heard him say that he would look at the issue, although he seems to have moved away from that. If he thinks that there is another way within the Bill—

[Lord Marland]

Perhaps I may clarify that for the noble Baroness. We intend to look at this matter as part of the review. The whole point is that we have to keep reviewing the whole procedure to see whether it operates properly. I hope that that gives her enough encouragement, particularly as we will be reviewing the progress that this sector, the private rented sector and the non-domestic and domestic sectors make with the Green Deal. If progress is not made, we will of course provide the necessary encouragement. The noble Baroness made a comment about teams and so on. This group is ahead of the curve. We must congratulate it and let it carry on about its business. It has taken the initiative and we do not want to frustrate that by being prescriptive. That is not how this Government will operate amid market-driven forces. The noble Baroness was absolutely right to bring to our attention how important it is that this sector makes progress, and the Government will carry out a review to make sure that it does.

[Baroness Smith of Basildon]

There are a number of points to pursue on that. The most important point that the Minister made was that he was going to carry out a review. I am not sure which review he is referring to but he said that there would be a review of the private rented sector, this sector and the owner-occupied sector. Therefore, on the basis of there being reviews to look into the matter, I am more than happy to withdraw the amendment.

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[Baroness Smith of Basildon]

Perhaps I may ask the Minister to clarify a couple of points. I am sad to say that I am disappointed with his response. The Green Deal is only one part of what is being put forward here with regard to local carbon budgets. The Bill is not just about the Green Deal; it is also about reducing emissions, about energy efficiency and the private rented sector. Therefore, I am disappointed that the Minister cannot look at this issue more carefully.

With regard to localism, he said that he cannot impose powers on local authorities. However, we are not seeking to impose; localism is also about giving local authorities the powers that they ask for, and in this case there is a very clear cross-party steer from local authorities unanimously seeking these powers.

The Minister also said that he did not feel the amendment was necessary because local authorities are going to buy into the Green Deal. He said—I wrote this down as he said it—that there are great financial benefits for local authorities to buy into the Green Deal. Can he tell me what those financial benefits are, because that may well help local authorities when they are seeking to do something about carbon budgets? I hope that the Minister can take this matter away and think about it. If he does, he will see that there is very strong non-party support for it in the Committee. I think that we would all be happy with any wording as long as there was a report to the Government. However, I urge him to think again and not dismiss this matter out of hand, particularly when his ministerial colleague, Greg Barker, has talked about his discussions with organisations such as Friends of the Earth and said how keen he is to pursue this issue.

[Lord Marland]

The first point is that these amendments come under the section relating to the Green Deal, apart from the amendment in the name of the noble Lord, Lord Deben, which comes along later. The substantive issue here is the Green Deal, but the other substantive issue is that it is not for us to impose on local authorities what they should and should not do. As I said earlier, it is for us to produce a product that they are incentivised to put into homes and which they encourage other people to put into homes. This is what we are doing with the Green Deal. There are other elements relating to the energy sector, and of course we will encourage local authorities to set themselves achievable carbon reduction targets. However, it is for local authorities to buy into that; at this point, it is not for government to be prescriptive. I know that it is a tradition of the Labour Government to decide what everyone must do, and when and where they must do it. However, that is not the tradition of this Government. We are saying, “Here we are. Here’s an opportunity. Get on and do it”.

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[Lord Marland]

I am not denying any of this. In an ideal world, that is what we would do, but it is up to the Department for Communities and Local Government, not our department, to ensure that there is a common theme running through this. Of course, we are working very closely with them to ensure standardisation. It is absolutely in our department’s interest, and the Government’s, that local authorities come up with a standardised plan. Of course, we are working within Government to try to achieve that, but it is not for us in this debate to be prescriptive of local government on what it should and should not do. It is for us to carry back the views of noble Lords to other departments, which is what I intend to do, and to make these valuable suggestions. That is the point that I am trying to make.

Do not get me wrong. I repeat what I have said: we are absolutely committed to driving down carbon emissions. It is a very important target for this Government. We have to get the 10 per cent reduction through government—it is a government diktat. That has to be achieved through the local authority and, if the local authority department does not drive it through, local authorities will be exposed in the tables that will be produced about reducing carbon emissions. So there is a mechanism. If local authorities have any sense, of course, they will try to standardise among themselves, but it is not for me today to make commitments. It is for me to take back these suggestions and report them back to the various departments.

I apologise for momentarily suggesting that this was to do with the Green Deal. Of course it is not; it is to do with the Bill as a whole. The noble Baroness was quite right to point that out, and I take back the comments.

[Baroness Smith of Basildon]

I would not want the noble Lord to think that we have any doubts about his commitment to reducing carbon and ensuring that this Bill is a success, but I do not think that he has understood the point that the noble Lord, Lord Deben, and I made about this not being a pressure or a duty on local authorities other than one that they seek for themselves.

The Minister said that there were great financial benefits for local authorities to bind the Green Deal. This will be significant in this debate and further debates, although we are not talking about the Green Deal at the moment. I appreciate that he may not have the information available, but it would help us to see whether there are other ways to achieve this objective for local government.

[Lord Marland]

I can answer that immediately. If local government is working with two or three suppliers, it may enter into a binding commission-sharing arrangement or something like that. So there could be financial benefits in supply or in being one of the registered assessors or accreditors, when there may be charges on behalf of building merchants, and so on. That is where there are potential financial benefits.

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[Lord Marland]

That is a matter of opinion. That is the opinion of the noble Baroness, but I find the document quite informative, as I know many others do. We will disagree on that.

The reality is that we must, in tabling the Green Deal, look at all the ancillary events that come alongside it. We are trying to improve and work towards reducing fuel poverty. That is why we are embarking on, effectively, a review of CERT to make it better. CERT was a very good initiative and endeavour but it did not hit the targets to the extent that was needed. It had several misadventures, including too many light bulbs appearing on people’s doorsteps. Therefore, the ECO will be a development on that theme.

We consider the views of this House very carefully. If we did not, we would not be starting this Bill here, as we have done. We would not be entering into very long debates on every aspect of it before it gets to the House of Commons. We would not be taking away the comments of everyone in this Room to think about in between sessions and when we get to the next stage. I think that is a genuine commitment by this Government to listen, to improve and to get things fit for purpose. I hope this satisfies those people who have raised these points.

[Baroness Smith of Basildon]

I am grateful to the noble Lord. He has gone some way to answering some of my questions, but not all the way, I regret. I welcome his point about linking the Green Deal and the ECO. If that could be enshrined in what comes before us, it would be helpful and, in the light of our later amendments, it might cover some of those points. His confirmation about roughly the amount of money involved is helpful. However, a number of questions remain. I will read again the document to which he referred and see if it answers them.

I am sorry if the noble Lord feels tetchy about my questions, but the Lords’ scrutiny is important. If I may raise one note of contention, I was most concerned that it would have wider implications when he seemed to threaten the use of more SIs if the Opposition seek to properly scrutinise legislation. The way to have shorter debates, if that is what he is looking for, is to have more detail; that is why I ask the questions. However, his comment gives me cause for concern, and, when we get the Hansard I will re-read what he has said about having more SIs if the Opposition insist on scrutiny.

[Lord Marland]

I am not concerned about scrutiny. Of course that is what SIs are for—to add on and improve legislation that is already in place. I merely said: do we think that the debate going on in the main Chamber at the moment is reasonable? Do we think things are being properly scrutinised and debated in the right way? Certain parts of the House of Lords do, large parts of it do not, and that is where the matter stands. I have no problem, of course, with proper scrutiny on these things and putting things towards the House. However, in the time available in this Parliament, we will probably not have the opportunity to get many more Energy Bills through that will be able to change various things. Therefore the opportunities available to us are through statutory instruments, and those are what we intend to use.

[Baroness Smith of Basildon]

I am not clear which Bill the noble Lord was talking about. The Bill that I am talking about is the Energy Bill before us today. However, in both cases the Opposition are fulfilling their legitimate and proper role in effective scrutiny.

I have a couple more questions. I know that the noble Lord has tried to answer the question, but I will re-read the Green Deal document as it addresses the issues that I have on the ECO. I am merely seeking clarity. I am genuinely not able to work out from the impact assessment, the legislation and the Explanatory Notes exactly how the ECO is going to work. That was the first of my questions. I am disappointed that I did not get answers to all of them, but I am sure that we can return to them. Perhaps the Minister could work with his officials and, before we get to Report stage, if there is more information available on the operation of the ECO, it would be very helpful to have that.

While it would be nice to have the actual statutory instruments before us then, I appreciate the Minister’s position. I have been a Minister. I have taken through legislation with statutory instruments. I have taken through a number of statutory instruments. However, if we were to have some of the information detail prior to that, it would assist this Committee and your Lordships’ House in being able to make a proper judgment. It is impossible to do so on what we have before us. I do not think that there is a person in this Committee who does not want the ECO to do exactly what the Minister wants it to do—address the issues of the fuel poor and the hardest-to-treat properties.

It would be very helpful to have clarification on two particular points. One is the cost to the consumer. That comes back to the idea of the consumer levy. I appreciate that CERT and CESP both included the consumer levy, but there was also Warm Front at that time, which was substantially greater than it is now. Perhaps the Minister can come back to us on that one.

The Minister also said that the energy companies would pay for large amounts of the ECO through their profits. Has he consulted the energy companies on that and what has there response been? If they intend to absorb the cost of the ECO through their profits, that would interest the Committee and the House, unless the energy companies intend to pass on the additional cost as well to their customers.

The final point is the one I made a moment ago about the report from GEMA, the Gas and Electricity Markets Authority. The Government are still consulting on what to do. That is why I understood it was in the Public Bodies Bill and that it could be moved from Schedule 7 to other schedules. But in this Bill it does seem that a more specific point is being made—I hope the Minister is listening and not just using his mobile phone—and I wonder if it is possible to give us more information on that, though I may be wasting my breath in raising the questions. I am not sure if the Minister is taking note.

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Monday 24th January 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, I welcome the comments of the noble Lord, Lord Jenkin of Roding, because I think they sum up some of the challenges of the legislation and why it is so welcome that we seek to make improvements in the private rented sector and indeed other sectors—the private sector and the social housing sectors—through the energy market.

It is right that we examine this in detail because the issue around the balance between the quality and quantity of housing is a fine one to walk, and we want to ensure that at all times the Government reach the correct balance. In proposing amendments and discussing and debating the clauses of the Bill, we want to ensure that the Government can fulfil the objectives they have set themselves. We entirely agree with the Government when they said that they wanted to be the greenest Government ever. When the Minister referred to that in the Chamber in our first energy debate, which seems an awfully long time ago, and I challenged him on it he said, “Like it or not”. I let him know that we do like it and that we will support the Government in these aims and wider where they seek to be as green as possible. The issue of having greener properties and more energy- efficient properties goes beyond just the idea of being energy-efficient. It goes into health, the economy and much wider. As we debate these clauses about the private rented sector I give the Minister our assurance that every time we raise an issue we do so only to improve the Bill and work with him to achieve his stated objectives.

[Lord Marland]

My Lords, it is wonderful to hear so much green co-operation bouncing backwards and forwards. We appreciate the very generous words from the opposition Benches, and of course from my noble friend Lord Jenkin of Roding, who has told us that we have a very significant task to perform in this Bill. He has told us that there are many challenges ahead, which we will have to address. The noble Baroness, Lady Smith, and my noble friend Lord Jenkin both talk about a balance that needs to be had, and they are quite right. If I may, I will deal with his specific point about ECOs later, when it comes up in the list of amendments, but I am very grateful for the encouragement.

I will speak to Clause 35, so that we are clear where that is going. Clause 35 lays the foundations for the provisions in the private rented sector by clearly defining what we mean by domestic and non-domestic private rented property in England and Wales for the purposes of this Bill. The domestic private rented sector is defined by the two most common types of tenancy agreements in the sector: assured and regulated tenancies. We have intentionally excluded social landlords from these requirements. The sector has previously been required to invest in the energy-efficiency performance of its homes. As a result, it has made some of the biggest energy-efficiency gains in recent years.

The definition of a non-domestic private rented property is one which is let under a tenancy and is not a dwelling. A dwelling is already defined under the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007, so it is logical to use this existing definition for the purpose of this chapter. I hope that that satisfies noble Lords.

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[Baroness Smith of Basildon]

While the Minister seeks inspiration on that point, perhaps I may put to him that my comments and my amendment seek to probe whether there should be additional items in the review, but he did not address that, either.

[Lord Marland]

Could you repeat that?

[Baroness Smith of Basildon]

The purpose of my Amendment 20KA is to probe whether additional items should be in the review other than those in paragraphs (a) to (d) of subsection (5). I do not think that the Minister addressed that, but I apologise if I have missed it.

[Lord Marland]

I will deal first with the point made by my noble friend Lady Noakes. There is a limit to how much one can inform. Clearly, there is a greater emphasis on the private rented sector to inform. If we find that the sector is not informing people, we will bring that to attention under the review. I hope that that deals with the point.

I am not sure of the direction of the question of the noble Baroness, Lady Smith. Perhaps I could also deal with that at a later point.

[Lord Marland]

I think that I understand the question, so it may be the second question that I do not understand. If we are talking about awareness, it is incumbent on the private rented sector to make people aware. It is also incumbent on the Government to make people aware of the range of assistance available under the Green Deal. If there has been no—or not enough—positive action, the review will endeavour to make the necessary adjustments to make sure that that action is provided to communicate the information that is required. This set of opportunities should be widely known about. This is a very new initiative that, as I understand it, virtually everyone in property knows is about to happen. If we feel that the information is not being passed on, obviously we should take action.

[Baroness Smith of Basildon]

I hate to confuse the Minister and I apologise if my earlier comment was not clear, but all that I seek is confirmation that the review will be able to consider items other than those listed in paragraphs (a) to (d) of subsection (5). Are those the only items that the review will look at? Is the review limited to those items, or can other issues be taken into consideration?

[Lord Marland]

I am getting a lot of notes, but the short answer is that the review can consider other issues. I hope that that answers the question.

[Baroness Smith of Basildon]

I am most grateful. I beg leave to withdraw the amendment.

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[Baroness Smith of Basildon]

The point made by the noble Lord, Lord Deben, relates to issues raised by amendments that we discussed in the previous Committee meeting about consent being given or withheld reasonably or unreasonably. The issue was whether a landlord or tenant was behaving unreasonably or reasonably. It might help the Minister to reflect on the amendments that we put forward the other day.

I seek clarification on a couple of points. The Minister referred to the lists that are held by local authorities, but those are held very much on an ad hoc basis. It would be preferable, as far as concerns the responsibilities placed on local authorities by the legislation, if such matters were made more formal and uniform, so that local authorities know what is expected of them and so that landlords, too, will know what information they are expected to provide to local authorities. The Minister also said that Clause 37 provides that the worst performing properties will be the first to be improved. I would be grateful if he could clarify or explain that, as I do not understand where I will find that in the legislation or how it can be guaranteed.

My response earlier to the comments of the noble Earl, Lord Cathcart, was perhaps badly worded. I was not at any stage trying to suggest that there are not landlords who at this moment are taking good energy efficiency measures in the homes that they rent out. I am sure that all noble Lords who have declared an interest as landlords will rush home to ensure that energy efficiency measures are put in place immediately. I was trying to argue from the landlord's point of view. There are no guarantees for landlords that these regulations will ever come into effect because of their conditionality on the review. There is no guarantee of any substantial change, whereas we need substantial change across an enormous number of properties, given that the Residential Landlords Association estimates that 40 per cent of properties were built prior to 1919 and some of those will be the hardest properties to treat. Many landlords will be waiting to see what will happen. Good landlords will rush to undertake the work, and some have done so already. However, because there is no guarantee for landlords that there will be regulations, it will be very difficult for them—many are working on a budget for the properties that they own—to guarantee that they will be able to do the work, because they are not sure whether the regulations will come into play.

My final point is that I asked a question on Amendment 20YA, but I think that the Minister was unable to respond at the time.

[Lord Marland]

The noble Baroness raises several questions. It is not for this Committee to prescribe to local authorities what they should be doing. I hope that this Bill is one that local authorities can buy in to. That is a subject for the DCLG. We are committed to focusing on the worst performing properties because we are committed to energy efficiency, and if we can attack the lower-performing properties, we will do it. Clearly, we have a governor in place—the EPC, which we are reviewing at the moment—which will establish the level that properties must come up to. We will focus on the worst performers. We can use only the tools that are available in a market-driven product. It would be totally wrong for us sitting here to prescribe regulations at this point for those in the sector who are being recalcitrant or not performing. That is the point of the review, which will take place as we have discussed. We will then consider what regulations, if any, are needed to push this thing forward.

On Amendment 20YA, which the noble Baroness spoke to, and on her question who makes the judgment about the property’s energy performance, the judgment will come from the EPC, which defines performance. That is there in black and white on every home.

[Baroness Smith of Basildon]

I think that the Minister has misunderstood the point in my amendment, which refers not to energy performance but to the impact on the price of the property. Indeed, the Explanatory Notes refer to the possibility of an exemption,

“if the property is likely to be worth less as a result of the improvements being installed”.

Who will make that judgment? That is not a matter for the EPC, which deals with energy efficiency.

[Lord Marland]

With all due respect, I think that I answered that. I said that it is very unlikely that there will be negative value, but the market makes the judgment if something has gone down in value. If you put a property on the market or to rent, the market determines whether its value has gone down. That is how every price is achieved. I hope that that answers the noble Baroness—she is looking a little bit negative. I cannot imagine that we can set up a system that prescribes that a property is worth this or that amount; the market determines that.

Energy Bill [HL]

Debate between Lord Marland and Baroness Smith of Basildon

Monday 17th January 2011 Grand Committee

[Lord Marland]

This is a commercial market-driven project. In any commercial market-driven project there are going to be properties and buildings where, as the noble Lord rightly says, a cost may not be acceptable within the repayment fund or may not be within the golden rule. My sense, and that of the department, is that we set up the structure and see how it proceeds. I live in an oil-fired house in a rural community where we cannot get gas, as do many, as the noble Lord said. If it does not make commercial reality for market-driven forces to help with that, the department and Government should look at how that can best be achieved.

Until the commercial equation is worked out, however, and until I have seen the assessor and the accreditor, I cannot begin to see whether that is a viable proposition. It is incumbent upon the Government to regroup at a point, as the noble Lord rightly says, to see where it has not worked with these properties, what can be done to help, what type of people are not able to take full advantage of the scheme and then see where the Government can help. I look particularly here at the vulnerable, who are vital to this, particularly the vulnerable in rural communities where they cannot have the benefit of this if the numbers do not work out.

I hope that that deals with the noble Lord’s point. However, I think that he is absolutely right. The scheme needs to be road-tested to ensure that it works and we must keep a watchful eye on it. Getting these things precisely ordered is a very good thing for the Bill.

I regret to say that I have forgotten where I was but I have a feeling that I was somewhere like subsection (5) —or was it subsection (4)?

[Baroness Smith of Basildon]

Subsection (4).

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[Lord Marland]

That is very kind of the noble Baroness. Subsection (4)—no, I have already done this. Subsection (5) sets out some conditions that must be met before payments are collected under a Green Deal plan. For example, measures must be installed in accordance with requirements set out in Clause 7. Again, these conditions protect the parties entering into a Green Deal plan and are intended to ensure that payments are not collected until measures have been installed appropriately and the plan has been confirmed.

Subsections (5) and (6) provide that when all the requirements of subsections (3) to (5) have been met, payments under a Green Deal plan are to be made by the person who is liable to pay the energy bill for the property for the time being and should be made through energy bills for the property. This is the core of the Green Deal and the effect of an arrangement qualifying as a Green Deal plan.

In summary, therefore, Clause 1 sets out the conditions that must be met for an arrangement to qualify as a Green Deal plan and the effect of those conditions being met. It is therefore central to the operation of the Green Deal.

Amendment 38 would change the short title of the Bill from the Energy Act 2011 to the Energy Framework Act 2011. I appreciate the sentiment of this amendment, which highlights that the provisions for the Green Deal provide a framework to be codified by further legislation. This is the approach we want to take. The Green Deal provisions are about framing a new market and, as I said earlier, we wish to consult widely.

However, the Bill, while focused on the Green Deal, covers a number of other issues in the energy sector; therefore most of the provisions are not framework provisions. As the short title should describe the Bill as a whole, I do not believe this amendment is appropriate.

[Baroness Smith of Basildon]

My Lords, I am grateful to the Minister, but I am not sure he has addressed the point I made first. On Amendment 38, I think that perhaps the noble Baroness, Lady Noakes, misunderstood me. It is not with any welcome that I say there are 52 pieces of secondary legislation; I think it is entirely inappropriate. I welcome the fact that the Minister says that he will consult on them. That is very different from having full scrutiny in this House. The point the noble Baroness and I both made at Second Reading is that it would be helpful in our deliberations if we had drafts of some of the secondary legislation as we discuss the Bill.

I accept that this is a framework Bill but I do not welcome the fact that it is. If we look at some of the points that will be covered by secondary legislation, it would be much better if we had that information today. The actual framework of regulations—the code of conduct, for example, and the kind of assessments—would be helpful prior to this stage. I would prefer to see much of this information in primary rather than secondary legislation.

The noble Lord, Lord O’Neill, referred to a lack of clarity. It would be helpful to have some of these comments prior to the Bill, and I apologise if I was not clear enough in my explanation. The objective of this Bill is to ensure that as many households as possible have as much work undertaken as possible in terms of energy efficiency to reduce carbon and reduce bills. The Bill is market-driven in some ways because, as I think the noble Lord, Lord Dixon-Smith, said, if there is an incentive for people to save money, there is an incentive to undertake the Green Deal; we would not want to exclude work that could be done and paid for in another way, including by the householder, because it is not in the Green Deal plan.

Clause 1 provides that an energy plan is an arrangement by the occupier owning the property for persons to make energy efficient improvements to the property, and goes on to say that it is an energy plan if it is paid for in instalments. Yet all the references in Clauses 2 and 3 to assessors, the framework regulations and the code of conduct apply to a Green Deal plan. We want to ensure that the assessor can undertake an energy plan so that he can assess how much work can be undertaken in that home to ensure energy efficiency, part of which may be part of the Green Deal. I do not think it has ever been the Minister’s intention to exclude all work other than the Green Deal. It should be an opportunity for the householder. I would welcome further discussion on this, because I do not think this is what the Minister intended.

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[Lord Marland]

I thank noble Lords for tabling these amendments which seek to ensure that the Green Deal participants are working to a specified standard using agreed methodologies. I welcome the various comments that have been made because it will help us set out our provisions in more detail. Amendments 2D, 2G and 5B all seek to ensure that the Green Deal assessment is carried out by qualified assessors. A specified methodology for completing this assessment is contained within the code of conduct. These are also covered in Clauses 3(4)(a) and 3(9).

I am glad to note that the noble Lord, Lord O’Neill, and my noble friend Lord Lindsay are not far apart. It is fundamental that standards are set, that they become the cornerstone of this whole assessment and that if we get that right we get the rest of it right. I am also grateful to my noble friend Lord Lindsay for pointing out the difference between accreditation and certification. This needs further discussion and investigation and we will undertake to look at that to make sure we get it right. It is fundamental and I agree with the noble Baroness, Lady Smith of Basildon, that getting these assessments and the quality is fundamental to the confidence of the customer and the whole scheme.

We could have a workforce of 250,000 working to satisfy the Green Deal requirements but of course that depends on take-up, and we will inevitably find that if the take-up is not as great then there will not be that many. We believe that the maximum is about 250,000. If I heard the noble Lord, Lord Neill, correctly, he said we were thinking of excluding boilers and solid wall insulation, external and internal. That is not the case. Subject to the golden rule, these will be included. I think I heard the noble Lord correctly and it is worth clarifying this.

I agree that it is important that assessments are produced by those with suitable training and practical know-how and that is why Clause 3 of the Bill currently sets out provisions for a code of practice that all Green Deal participants will be required to sign up to as part of their participation. Furthermore, the Clause states that this code of practice may set out the qualifications and skills that these assessors must possess in order to practise.

I thank noble Lords for their suggested amendment to ensure that the code of conduct requires assessors to produce their assessment in line with standard methodology. The Bill currently sets out the intention for all assessors. Subsection (8) allows for the withdrawal of authorisation for particular participants and allows a membership body to withdraw authorisation from its members. Although Clause 3(5) may allow for regulating the membership body by legal advice, my legal advice is that it may not be sufficiently clear that we have powers to withdraw authorisation. I therefore agree that we should consider this amendment further.

[Baroness Smith of Basildon]

My Lords, I am grateful to the Minister. I welcome the approach that he has taken throughout this Committee. He is taking on board comments that have been made today, and I know that he will take them back and perhaps we will see some changes at Report. I just grinned when he talked about the code of conduct because—I do not know whether the noble Baroness, Lady Noakes, picked this up—he said that the code of conduct “must” set out the qualifications and skills. At the moment it does not; it only says it “may”. So I welcome his change of language to “must” set out the qualifications of skills, rather than “shall”, as my amendment suggested.

It has been a useful debate, and I always defer to those with greater knowledge on issues. I do not think that there is much difference between us. All of us agree that those undertaking the work, whether assessments or installation, have to have the appropriate skills and qualifications. It is entirely appropriate that although they are accredited in some way, that can be withdrawn. But the reason for raising the issue of standard assessments was not to propose a tick-box procedure—although there will undoubtedly be some kind of tick-box procedure—or uniformity of the work that will be required. However, the issue has been raised. The National Housing Federation raised concerns that the current assessment—I think it is the SAP—does not always work. I was trying to get to a consistency in standards of measurement.

Given that the Green Deal, in terms of what work can be undertaken in a home, has to be cost-effective and follow the golden rule, some kind of standardised assessment to understand what fulfils the golden rule in that way, if the savings have been made, and some sort of consistency, will be required. That is of interest to customers. So I am not suggesting that every house needs to have the same installation and the same work done. There will have to be intelligence taken on board by those installing. However, a lot of the measures will be very safe, and it would be a somewhat ludicrous position if two houses next door to each other were both given different ways of achieving it. It brings us back to the issue we had around the Green Deal plans and the energy plans because, under the Green Deal plans, it could be the same work but with different ways of achieving the same objectives; and the decision would be taken by the assessor, not by the householder. I think that is an issue of the householder having confidence that the assessor is given the correct information.

--- Later in debate ---

[Lord Marland]

I thank the noble Baroness for raising this amendment. It is critical, particularly at this time, that we take into account the charitable sector, of which she has great knowledge. Indeed, so do I to a certain extent, from involvement with a number of charities. Obviously, I can only accept amendments such as these once they have been agreed with counsel and other Ministers, but we will consider how best to take on board this policy aim, which I think all of us would endorse and support in this sector.

[Baroness Smith of Basildon]

I thank the Minister for that. I understand the concerns of the noble Lord, Lord Jenkin of Roding. He mentioned the client. It is not the clients who would pay a reduced fee, but the provider of the services. I am grateful to the Minister for his acceptance, and I look forward to seeing what comes forward in due course.

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[Baroness Smith of Basildon]

My Lords, I support the principle of what the noble Lord, Lord Teverson, is seeking to achieve. It is not dissimilar to the point I made earlier about whether there may be arrangements or relationships between an assessor and an installer whereby the assessor will always want to give business to a particular installer for the work to be done. It is difficult to ensure that there are not such arrangements and the wording of the amendment puts the issue back into the Minister’s court to see how best this can be achieved. It is an important objective to consider because, as has been said a few times during the course of the debate, protection of the consumer and consumer confidence are all important. If the consumer thinks that a certain assessor will always go for particular kinds of products or arrangements, it will not lead to confidence in the Green Deal. I hope the Minister will take on board the principle, understand the point that it is seeking to make and consider ways in which it can be addressed.

[Lord Marland]

My Lords, Amendment 9 would require the Secretary of State to ensure through regulation, audit and the code of practice that improvers are protected from anti-competitive activity by Green Deal providers. Clearly anti-competitive behaviour and collusion among Green Deal providers is undesirable and we want to ensure that the risk of this is minimised through the design of the scheme. However, this requirement on the Secretary of State would mean that the Secretary of State would be obliged to put in place legislation which already exists in other parts of the law. Green Deal providers should be covered by existing competition law, notably the Competition Act 1998, which prevents businesses from entering into anti-competitive agreements and abusing dominant market positions. I do not see any need to effectively replicate those arrangements in the Bill.

Furthermore, for domestic households only licensed creditors will be able to operate as Green Deal providers and the existing credit regulation contained in the Consumer Credit Act would apply. I hope that that is enough to satisfy the noble Lord and that he will withdraw the amendment.

--- Later in debate ---

[Baroness Smith of Basildon]

Perhaps I may put a scenario to the Minister and ask for his comment so that I can see if I have misunderstood this. If an installer of double-glazing were to employ a team of assessors, and those assessors could do an assessment on a house, and one way of achieving carbon reduction was to have double-glazing in that home, in a sense there is nothing wrong in that, since it is one way of achieving the carbon reduction. However, it comes back to the point that it is the Green Deal plan by which they are achieving the carbon reduction. The householder has not got the choice of an energy plan from which to choose which Green Deal provisions they want to undertake. There could be a relationship where an installer employed an assessor who would always recommend that particular installer’s products. It would be a way of achieving the Green Deal, but it might not necessarily be the best way or the only way. Does the Minister envisage that as a problem, or is that how he sees it could work?

[Lord Marland]

I think that noble Lords are looking at this in a narrow sphere. I am not familiar with parts of the world where there is only one supermarket chain operating in that part of the world. I take the view of the noble Lord, Lord O’Neill. In my part of the world, there are four or five operating quite regularly. If you add to that B&Qs and the suppliers of all forms of household improvement, it multiplies. Therefore there is distinct competition. You have to add to that the energy companies, social enterprises, housing associations and all manner of retailers who can ensure that the market is competitive. I totally take on board what the noble Lord, Lord O’Neill of Clackmannan, has said, that it would be terrible if there was only one supplier in a part of the world. However, given the extent of suppliers that are available, I do not realistically think that market forces would apply.

Referring to the interesting point raised by the noble Baroness, Lady Smith, I am not entirely sure that I follow. If her point is that the double-glazing salesperson was promoting a product that was exclusively to their benefit, I am not sure that this would happen because market forces would dictate that anyone inviting someone into their home to give an assessment of the requirement and the cost of it would automatically put that out to tender. Even if these people were inappropriately selling the product, they themselves, before they are allowed to sell that product, have to be authorised under the scheme; and the scheme, as we have already debated, will have many a safeguard and recourse against unauthorised behaviour by an authorised provider or assessor.

It comes back to the central theme. We have to get these right, we have to ensure that the standards are properly maintained, and we have to ensure that competitiveness is allowed into the market.

[Lord Marland]

My Lords, there is nothing to prevent an assessor working for an organisation, but the reality is that they have to be independent of that organisation in terms of their assessment. There has to be a Chinese wall. To answer my noble friend Lord Teverson’s excellent question, assessors can come from all walks of life. They could be quantity surveyors, representatives of B&Q or representatives of a supermarket, but they have to retain an independence and fulfil the standards that are required of them under the Green Deal regulatory mechanisms that we have been debating today.

I would also point out that a lot of the products that we are talking about here are not new to the market. It is not as if we are suddenly coming into the market with a wonderful new product. Double-glazing has been sold consistently through the country for a long time. Loft lagging has been consistently sold, and there are consumer protections in place under the Act which provide for proper regulation.

There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on, however, and that is the role of commissions. My noble friend has raised a very important point where we need to work out the impact and how these assessors are remunerated.

[Baroness Smith of Basildon]

I have listened carefully to the Minister. I think that he is trying to reassure noble Lords on this important commission point, but I am not reassured. Clause 3(4)(a) to (g), on the code of practice, would seem to allow an installer to employ an assessor, and to allow that assessor—within this code of practice, this framework arrangement and the Green Deal—to recommend energy efficient measures that fall within the remit of one installer that is employing that assessor. I do not understand how an assessor can be employed by an installer and be independent. I am grateful that the Minister will look at this again. However, depending on what he comes back with, we may wish to return to this at a later date.

Revised Draft National Policy Statement for Nuclear Power Generation, volumes I and II (EN-6)

Debate between Lord Marland and Baroness Smith of Basildon

Thursday 13th January 2011 Grand Committee

[Lord Marland]

My Lords, I thank noble Lords for an excellent debate, which, as always, has been very informative. I thought that we might simply be here complaining until the ghost of the noble Lord, Lord O’Neill of Clackmannan, came in and told us what a great moment it was for us, supported so excellently by the noble Lord, Lord Liddle. However, let us get this matter into context. We have just given the green light to eight new nuclear sites when nothing has happened for 20 years, and people are standing here asking me questions about timetables, process, pathways and so on. I repeat: we have just given the go-ahead for eight new nuclear sites, and we should be leaping to our feet and jumping for joy. Everywhere I go, I find that people in this House and throughout the country have changed their view and now think that new nuclear is what it is all about. That even applies to the noble Lord, Lord Teverson—I rejoice in what he has to say—and his excellent colleague the Secretary of State, for whom I have the privilege of working. So let us go forward with gladness in our hearts rather than talking timetables and process and picking around at the edges. This is a fantastic opportunity for all those in the nuclear industry.

[Baroness Smith of Basildon]

I just want to assure the Minister that I shall leap out of this Room with him with great joy if he is able to answer my questions. We are simply seeking assurances on the timetable—I am sure he understands that—and we want to share the great joy that he is experiencing.

[Lord Marland]

I think that that was the Scottish side of the noble Baroness coming out there. Let us be gladdened in our hearts. Have the Government been reluctant? No, we have been at it for nine months and we have eight new nuclear sites, so let us rejoice in that. None of us is sitting here making party-political points about it. We are not saying “You haven’t done this” and “You haven’t done that”, and I am not accusing the Labour Party of anything. I have regularly complimented the Labour Party for changing public opinion so that we are able to be where we are now.

This document gives a very clear pathway to future investors that the Government want nuclear and there is an opportunity—come and get it. I was very interested in the comments of the noble Lord, Lord Berkeley, particularly as we are in the Moses Room, when he started talking about flood and drought almost in the same sentence. Of course, he comes at this issue with great expertise of transport, which will be fundamental to infrastructure planning of all these sites. Clearly, the secondary impact of low carbon is very important, and will be very much part of the regulatory justification process.

A number of noble Lords have raised the subject of flooding. We can do no more than assess the flood situation and we have made assessments to 2100, which, as everyone has told me so far today, is a very long way off. I am sure that with the prayers of the right reverend Prelate the Bishop of Chester, we will be around to see it, although there is a fighting chance that in my case that I will not, if I keep having these stressful debates.

Of course, we were totally right to observe the socioeconomic aspects, which the noble Lord, Lord Teverson, who has converted to nuclear, has rightly identified. The noble Lord, Lord Jenkin of Roding, kindly warned me that he was going to talk to us about Dungeness. He is right that it could offer great opportunity for that part of the world; I have seen that site—it is an amazing place. But we have to remember about Dungeness that it is not quite as simple as consulting Natural England and hearing from the Environment Agency. We have used consultants in coming to this conclusion, but the reality is that this was designated a special area of conservation after the first power station was established by the European Commission. That means that it is more than just a simple process. But, as the noble Lord will know, we are still in consultation and we welcome until 24 January any further recommendations that Members in the other place make and that the noble Lord himself wishes to make—when he has been able to get through to the right number, which must be very frustrating indeed.

The noble Lord, Lord Davies of Stamford, talks about subsidy. I made it clear that there was no subsidy. The nuclear power industry has been an industry for a very long period of time and there is a lot of expertise throughout the world. One chairman of its representative bodies is in this Room. We do not generally as a Government need to subsidise mature businesses that have huge expertise and know exactly what they are doing. We have to allow them to have the planning framework, the waste disposal issues and all the technical regulation that government has to allow them the freedom to make it a profitable venture. This Government understand as well as anyone—and the noble Lord himself was in the world of finance—that no venture will go ahead unless it is financially viable.

I shall deal with aspects of reprocessing in a few minutes, but I shall first deal with the noble Lord’s point about whether 2018 will be operational. Let us not kid ourselves. It is a huge task to get something going by 2018. One reason why we are removing the IPC is so that the Secretary of State will have direct control of the decision-making and speed it up. As the general public would rightly expect, the Minister will determine whether that site is ready. We are working flat out to ensure that we can get something by 2018, but will there be a judicial review in the mean time? It is probably likely. What will be the reaction to the judicial review? We do not know—we do not have hour-glasses in front of us—but we are determined with every best endeavour to ensure that the first one goes by 2018.

--- Later in debate ---

[Lord Marland]

I am no expert on these matters as I have only been here for five minutes. I would expect noble Lords to be able to answer that. I have been passed a note, which is very helpful. I wish that noble Lords would not ask questions to which they know the answer. The answer is: if there are no substantive or material changes, there is no reason to reconsult or repeat scrutiny. However, my overriding point—

[Baroness Smith of Basildon]

I apologise for interrupting the noble Lord. That is the wording in the Localism Bill on the ratification process. However, is that the position now, as well as what it will be under the Localism Bill, if passed?

Revised Draft Overarching National Policy Statement for Energy (EN-1)

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 11th January 2011 Grand Committee

[Lord Marland]

As I said, the noble Lord has great knowledge in this area and we take on board what he has to say. I am perfectly happy to discuss this with him later to see how we can improve. It is a complicated area, as the noble Lord knows.

I will deal with the issue, raised by the right reverend Prelate the Bishop of Chester, of nuclear subsidy. The Government do not intend to provide a subsidy for nuclear because it is a very mature market. Subsidies should be for new technologies, which we can pump-prime to generate electricity. Of course we should maximise our resources in oil and gas, but we should also husband them because they do not last forever, as the noble Lord, Lord Deben, said. That requirement is satisfied. We have just granted licences in the Shetlands to allow new oil drilling to happen.

I thank the noble Lord, Lord Oxburgh, for answering half my questions and the noble Lord, Lord Deben, for his sage-like remarks and for laying out the landscape for us. He rightly says, in the true Conservative way, that we will look at the costs. We cannot waste taxpayers’ money and must be careful. We must also remove any impediments to this substantial development.

I will be as brief as I can in answering the noble Baroness, Lady Smith, whom I thank for her co-operation. She asked about the Localism Bill and what is material in the Secretary of State putting a matter to the vote. I am not the arbiter of what is material and neither is she. We all know in our heart of hearts what is material and what we would expect. We will bring the usual pressures to bear through the other place or here to make sure that anything material gets debated because of the cross-relationship.

I mentioned earlier our reason for abolishing the IPC. The noble Baroness asked me to talk about the green investment bank, which is complicated. We have committed money to it. It is being set up primarily to commit to new technologies. We are investing taxpayers’ money and other banking institutions’ money in it. Therefore, there will be a rigorous test of whether it is a profitable enterprise. It is not a giveaway bank; it is an investment bank. However, it is an investment opportunity that will be available to people with new technologies to help them develop, provided they have a profitable end to them. We are not in the business of unprofitable enterprises.

The need case that was referred to is set out clearly in the 2050 Pathways Analysis, which is a very substantive document. If the noble Baroness would like to discuss issues on that after the event, I am very happy to do so. She also mentioned Renewables UK, the “dash for gas” and all those sorts of things. We need to have a broad portfolio in order to achieve our 2050 pathway, which is an enormous task. There is no point in saying, “I don’t like that, and I don’t like that”. We have to like it all because we need it, and we owe it to the next generations among us here to provide it. We cannot say, in our own isolated world, that we think this and we think that. We owe it to the next generations to deliver their requirements in a low-carbon, secure-energy framework. That is why I commend these NPSs to the Committee.

[Baroness Smith of Basildon]

I thank the noble Lord for the time and care that he has taken to address many of the questions asked of him today. Perhaps I can press him on one point that I do not think he was able to answer. He said, in response to the comments of the noble Lord, Lord Crickhowell, that he would look at it again and take it back and discuss it with colleagues. If he were to do that and if changes were made to the national policy statement as a result, would that have to go through another round of consultation and another revised document, or could it be inserted as a result of the consultation and before it was put to a vote in the House of Commons?

[Lord Marland]

This matter goes to the House of Commons for a vote, where they can vote. It will happen in the spring. They are perfectly entitled to have amendments put in there for consultation. It may or may not be feasible that the comments of the noble Lord, Lord Crickhowell, will be something that the Government want to achieve. I am happy to explore them with him, as one would with any development of a policy, but whether that would come in this policy, in an attachment to the energy policy or in future national policy statements is another matter. We are trying to achieve what we have set out here in this policy.

Energy: Electricity

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 11th January 2011 Lords Chamber

[Lord Marland]

With all due respect, the noble Lord is slightly wrong in his sweeping judgment that there is no wind activity from wind farms. There is of course wind; we live in a windy country. Wind farms are seen to be an appropriate way for this country to generate electricity. However, his broader point is very well made: in order to achieve by 2050 probably twice the amount of electricity that we need now, we have to get on with obtaining it from a portfolio of ventures. That means new nuclear, wind farms, renewables such as anaerobic digesters and biomass, et cetera. We have to have a portfolio of ventures and this Government have set about achieving that.

[Baroness Smith of Basildon]

My Lords, with the announcement today of yet another energy company increasing its charges, I know that the Minister understands how worried people are about paying their bills, particularly as we have seen a spate of very cold weather. The noble Lord will be aware that his own department has forecast that the shift towards greener energy and a greener economy will increase the cost of electricity by 33 per cent and the cost of gas by 18 per cent. We welcome and support the move to greener energy, but what action will the Government take to ensure that the energy companies do not continue to make excessive profits while the costs fall on the consumers?

[Lord Marland]

The noble Baroness raises a very apposite question. As she says, E.ON has today raised its energy prices, which is absolutely regrettable in the current circumstances. We are very concerned about the margin that electricity companies are making in the current environment. As I said earlier, ensuring competitiveness is the role of Ofgem but let us make no mistake: we have to invest £110 billion in the next 10 years to upgrade our very redundant network. Therefore, I am afraid that electricity prices are going to go up because we have done nothing for a very long period.

Justification Decision (Generation of Electricity by the EPR Nuclear Reactor) Regulations 2010

Debate between Lord Marland and Baroness Smith of Basildon

Wednesday 17th November 2010 Lords Chamber

[Lord Marland]

It is all very well the noble Lord asking questions, but he should know the answer to them.

One question is why we should designate interim stores. Operators must provide for interim stores during the life of a station and it is essential to ensure that the money is set aside. I was asked whether the funds were secure. Yes, there is protection in the funded decommissioning programme and in the Act itself. Funds must be remote from the operation of the Government. Neither party, including the Treasury, can get its hands on it. That was the concern.

The two reactors are hybrids and based on the foundation of reactors already in use. Obviously, they are not the same, because the people who make them are continually trying to improve on them and technology is moving forward on that. The noble Lord asked whether other reactors would require approval. Of course they would—as, indeed, would a Mox plant, as it does not fit within this legislation.

I thank the noble Baroness, Lady Smith, very much for her co-operation in this particular SI. She let me know in advance about some of the matters of concern affecting her Benches, and I am grateful for that level of co-operation. We are trying to build a consensus and get the ball rolling as quickly as we can, and it is very welcome that on all sides of the House we seem to have a common theme. I thank her very much for that.

The noble Baroness asked whether we have considered whether there should have been an inquiry. Over three years we have had the three consultation processes that her own Government instigated, which I think is pretty exhaustive in the current circumstances. She asked whether we were on track; we are, and we have published the timetable on the DECC website. If she has time available, we would be happy to show her how to get on to it. We can keep her posted through that means.

[Baroness Smith of Basildon]

I reassure the Minister that I look at the website every single day.

[Lord Marland]

That is very gratifying, because I do not. Perhaps she would not mind telling me about the changes that are going on at the moment.

[Lord Marland]

I am extremely grateful to the noble Lord, Lord Myners, whom I much enjoy bumping into on the street every now and then. I hope that his dog is fine, and all the rest of it. I admire his honesty for saying such honest things about me, so it is a mutual appreciation society here. On the last question, noble Lords say that they are concerned, rightly, that there may be a legal challenge. We obviously feel that our case is extremely robust, or we would not be here now trying to get these regulations through.

[Baroness Smith of Basildon]

The question I was asking about judicial review or possible legal action was not on whether the case were robust. I have read all the documents and I am sure the Minister is convinced that his case and the work undertaken have been robust. The point was specifically whether legal actions would significantly delay the process beyond 2017. He may want to check on that. If there were legal actions, would that delay the process?

[Lord Marland]

Clearly they would delay the process. A legal challenge is what it says, and would delay the process, but there is no sign of it at the moment so we hope that it will not happen. As the noble Lord, Lord O’Neill, said, not everyone agrees with nuclear as being the future and we know who some of those people are. Through a consultation process over three years, with three types of consultation at least, you try and get to a hard edge on it.

I turn to the human rights issue that the noble Baroness raises. We believe that all human rights issues are compatible with legislation. On her point about no subsidy, I will repeat what my right honourable friend the Secretary of State has said—that no subsidy means,

“that there will be no levy, direct payment or market support for electricity supplied or capacity provided by a private sector new nuclear operator, unless similar support is also made available more widely to other types of generation”.—[Official Report, Commons, 18/10/10; col. 45WS.]

That clearly gives opportunity for a watering-down, because if similar support is made available more widely to other types of generation then obviously we will consider it from a nuclear standpoint. I hope that answers her concern in that area.

--- Later in debate ---

[Baroness Smith of Basildon]

I apologise for intervening again on the noble Lord; he has been generous in giving way yet again. He goes a long way to answering the point. The point I was asking was particularly on the waste disposal area and on the funded decommissioning programme, because no other process of energy generation allows for waste in that way. I was particularly referring to the order and the FDP. It seemed to me that it was tightening up the issues around any subsidy available and all costs would fall on the operator. Has this been discussed with the industry and what is its reaction?

[Lord Marland]

If I understand the noble Baroness correctly, the cost for provision for waste falls on the operator, who has to—as I have answered the noble Lord, Lord Teverson—provide funds at all stages of the decommissioning. That includes storage and the final decommissioning. They are fully aware of it. Clearly, we have not got to where we are now without consultation with all the operators. They understand the rules of engagement—I am not going to say they are happy with them, as I cannot immediately tell you that—and these rules are the way we are intending to proceed.

I hope the noble Baroness feels that I have answered the majority of her questions, if not all of them. As always, it is good to have a lot of questions as this is an important step change that we are making for the future of the nuclear industry.

Energy: Climate Change

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 2nd November 2010 Lords Chamber

[Lord Marland]

My Lords, I thank my noble friend the Duke of Montrose, but I have answered a lot of questions. However, if any are unanswered that I can answer, as I pointed out earlier, I will answer them. However, I do not see the point when we are about to have a considerable lock-in on the energy Bill and various debates, which will provide answers to these questions. However, if noble Lords feel that their questions have not been adequately answered in this exhaustive debate, I shall be happy to write to them.

[Baroness Smith of Basildon]

I apologise for delaying the House. A number of questions were asked and not all were answered. I appreciate that some questions will have to wait for the Bill, but there were others that related to measures that will come into force before the Bill takes effect. It would be helpful if he could look at those—I am happy to remind the Minister if he is unclear as to which they are—and provide answers that could go in the Library.

[Lord Marland]

As I said earlier, I am happy to answer questions that noble Lords feel have not been answered and that are within my remit. The noble Baroness asked several questions that were not within my department’s remit: for example, about Consumer Focus. I answered her questions on smart meters, but I am very happy to respond further if she or any noble Lord wishes to write to me.

Home Energy Efficiency Scheme (England) (Amendment) Regulations 2010

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 26th October 2010 Lords Chamber

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

My Lords, in answering these comprehensive questions I shall lump them together.

First, I welcome the noble Baroness, Lady Morris, who has changed her name since I had tea with her this afternoon—for the record, I thought she was called Baroness Smith—who made an excellent first speech as the shadow DECC Minister. It was a factual speech which represented the situation fairly, adequately and comprehensively and I thank her for that. I also thank her for the pre-advice she gave me on some of the questions I need to answer. I am not sure that I have all of them but I shall do my best. I thank the noble Lord, Lord Beecham, and my noble friend and colleague Lord Teverson, who is always so excellent on these matters. He is missed when he goes to Japan but we know that he is doing valuable work out there on behalf of this subject.

I shall go through the questions as asked by the noble Baroness and pick up on them. What percentage of the 2010-11 budget has been allocated to date? As at the week ending 16 October, £310 million has been allocated; of this about £180 million has been spent. As at 16 October approximately 81,000 customers had made applications that are currently being actioned. This number takes account of customers who have dropped out of the process. We expect these applications and other costs to lead to further expenditure of about £130 million.

When does the Minister consider that the 2010-11 funding will have been fully allocated? The Warm Front budget for 2010-11 remains unchanged at £345 million—I underline the fact that it remains unchanged—and the measures will continue to be delivered throughout the year. The scheme remains open to new applicants this year while the resources are available to meet the commitments—that is what we have promised—and, at the current rate of applications, we expect the funding to be fully utilised by mid-December. I should point out that, despite the comments made by the noble Lord, Lord Beecham, and the spending review, the commitment has remained. There has been no going back on it and it has been honoured. Applicants contacting Warm Front after the funding has been fully allocated will be advised to reapply once the scheme reopens.

What demand is anticipated for the years 2011-12 and 2012-13 and are we planning any changes to the criteria for those years? We expect the demand to be lower in 2011-12 and 2012-13 because of changes to the scheme. Based on the available budget, we expect, as a maximum, to be able to help 60,000 households in year one and 54,000 in year two of the spending period. We will work to improve the cost-effectiveness of the Warm Front scheme by ensuring that it will be better targeted to help the most vulnerable. We will be consulting to make sure that the eligibility criteria reflect this.

Another question concerned monitoring. The scheme is monitored on a weekly basis to review the flow of applications and expenditure commitments. This is underpinned through the contractual reporting arrangements and will continue throughout the lifetime of the scheme. An equality impact assessment will be undertaken in advance of temporary closure to new applicants and we will also conduct an equality impact assessment on any proposed changes to the eligibility criteria.

Warm Front will continue until the Green Deal is launched. The Green Deal is a key element of our policy to improve household energy efficiency. It will help to protect people against price rises through greater energy saving, with special support for the most vulnerable. The new energy company obligations, starting in late 2012, will run in parallel with the Green Deal programme. It is intended to focus particularly on households that cannot achieve financial savings without additional support, including the poorest and most vulnerable and those in hard-to-treat homes. This includes offering a wide range of measures to improve energy performance, such as heating systems. As announced on 20 October, as part of our spending review, the renewable heat incentive will go ahead in 2011. We expect to be in a position to announce details of the scheme at the year end and to be open for business in 2011.

I hope that that deals with most of the noble Baroness’s questions. If she has more, I am always delighted to hear them. I hope that what I have said also picks up the comments of the noble Lord, Lord Beecham. I shall now respond to his comment about Eaga, about which he is obviously very knowledgeable.

Eaga has been contracted by the Government to deliver Warm Front since 2005. The contract provides for fees to be paid to Eaga, based on its delivery. We intend that the scheme should provide for the vulnerable; that was Eaga’s main task when it was set up. Given the statistics, the Government think that the scheme has not fully targeted the vulnerable. Fuel poverty has increased from 4 million to 4.6 million, which indicates that one of the things that the scheme was introduced to do has not been achieved to the desired end. However, that does not mean to say that Warm Front is wrong; we have been lucky to have it as an experiment. When something is not working completely, it is the job of government to recognise that and adjust it. That is why we have learnt from the mistakes made and developed two new policies. The social price support will generate £250 million of support, rising to £310 million by 2014-15, while the Green Deal will continue to offer practical support to households and will focus on the vulnerable.

Before the new schemes are introduced, we are consulting on how Warm Front should best operate and who are the most needy and vulnerable. We will then target those people for the delivery of these measures, which we hope to do by November. I hope that that explanation satisfactorily answers the questions that have been asked.

[Baroness Smith of Basildon]

My Lords, I thank the Minister for the care that he has taken in addressing the questions that have been raised today. I thank also the noble Lords, Lord Beecham and Lord Teverson. Tempted as I am to get the latter’s name wrong, I promise not to do so.

Climate Change: IPCC Leadership

Debate between Lord Marland and Baroness Smith of Basildon

Monday 25th October 2010 Lords Chamber

[Lord Marland]

I have known Christopher Booker for a long time, but I am afraid that I do not agree with a lot of things he has to say. Doubtless, the noble Lord agrees with every word—it is probably a biblical thing.

[Baroness Smith of Basildon]

My Lords, while clearly lessons are to be learnt from any errors in the assessment report, that does not alter the fact that there is overwhelming scientific evidence of significant man-made climate change and action must be taken. Does the Minister agree with the professor of physics and oceanography, Stefan Rahmstorf, that one of the great strengths of the IPCC is that it tends to be conservative and cautious and does not overstate any climate change risk? Indeed, it has since been proved by the July 2001 study that projections in temperature and sea level have risen higher than the top of the range predicted by the IPCC.

[Lord Marland]

I thank the noble Baroness for pointing that out. Again, the role that the Labour Government played in sorting out the problems that the IPCC had got into is to be commended. I totally endorse what the noble Baroness said.

Energy: Renewables Directive

Debate between Lord Marland and Baroness Smith of Basildon

Tuesday 19th October 2010 Lords Chamber

[Lord Marland]

My noble friend’s expertise is well known and we welcome his commitment to anaerobic digestion, which is fundamental to our reaching our renewables targets by 2020. We anticipate that 3 to 7 per cent will come from anaerobic digestion, with the noble Lord’s strong support and the use of sewage to get there, and we welcome his comments.

[Baroness Smith of Basildon]

My Lords, yesterday’s announcement by the Secretary of State on energy policy was a great disappointment to those of us who support and want to invest in renewable energy. Not only is the Severn barrage not backed, as we have heard, but there were only passing references to carbon capture and storage and to wind power and there was no reference to government commitment, support or funding. We would have appreciated and welcomed a Statement to this House also. I appreciate that there is another day before the final CSR announcement, but will the Minister confirm whether his department has won the battle with the Treasury and that the green investment bank will be only for low-carbon projects and not for general infrastructure? Given the Prime Minister’s comment that this is the greenest Government ever, will the Minister confirm that there will be no reduction in the amounts confirmed by the last Labour Government?

[Lord Marland]

I welcome the noble Baroness to her new role, although I am not sure that I welcome the question, and I look forward to working constructively with her. As I have said many times in this House, the delivery of energy supply goes across many Governments and has a long period of development. Decisions that we make now will have fundamental relevance to Governments in five, 10 and 15 years. As for spending, I am sure that the noble Baroness will understand that I will not commit anything until after tomorrow, when I will be able to bring joyous news, I hope, on the subject.