Energy: Fuel Poverty

Debate between Lord Marland and Earl Cathcart

Wednesday 13th July 2011 Lords Chamber

[Earl Cathcart]

To ask Her Majesty’s Government what progress has been made in carrying out their “full-scale review of fuel poverty and its implementation”, with special regard to energy companies adopting a rising block tariff system of charging.

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

My Lords, the Secretary of State announced on 14 March 2011 that Professor John Hills would undertake an independent review of fuel poverty. He has been asked to consider fuel poverty from first principles—what causes it, its effects and how best to measure it—with interim findings expected in the autumn and a final report in early 2012. The review is independent. Its conclusions will be evidence-based and have not been and will not be pre-judged or pre-agreed with the Government.

[Earl Cathcart]

My Lords, I thank my noble friend for that encouraging reply. It is good that Professor Hills will carry out that work. The problem is that energy companies recover their fixed costs from the first few hundred units they charge each customer, and the more energy used the lower the charge per unit. This seems topsy-turvy to me and does nothing to encourage us to use less energy. It is no wonder that there are millions of households in fuel poverty. With energy prices set to surge, surely the first few hundred units consumed should be relatively cheap and then the charging should get progressively more expensive per unit.

[Lord Marland]

I am very grateful to my noble friend. This is a subject that we have discussed on many occasions. Indeed, our officials have offered to meet him to discuss it, which I am delighted to say they will in September. I can also inform my noble friend that I have written to Professor Hills and suggested that he might like to talk to noble Lords and hear their views, bearing in mind that his is an independent review so I am not allowed to insist upon that. I am delighted that he has offered a date in August, which is probably not that convenient to noble Lords, so he has agreed to see your Lordships in September. I hope that the input from my noble friend will then be extremely invaluable.

Energy Bill [HL]

Debate between Lord Marland and Earl Cathcart

Wednesday 2nd March 2011 Lords Chamber

[Earl Cathcart]

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

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

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

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

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

[Lord Marland]

I thank noble Lords for their contributions. The noble Lord, Lord Whitty, has made a valuable point in asking whether the Bill should state “must” or “shall”—shall we or shan’t we?—so there are many imponderables. I am also grateful for the contributions made by my noble friends Lord Deben and Lord Jenkin of Roding, both of whom speak with great authority on these subjects.

The most important thing is that, as we take this Bill through its meandering course, we have the flexibility and the opportunity, as Ministers, to consult industry and all bodies that have an idea on this, and eventually to tighten the code of practice. At this point, however, it would not be appropriate for us unilaterally to change these words, which currently give the Government flexibility. I am heartened by and grateful for the words of the noble Lord, Lord Deben, that for the authority of Ministers it is imperative to have that flexibility. In the spirit in which we have conducted this Bill, I am happy to consider Amendment 3 in principle, as it is very important that the Secretary of State establishes a scheme through regulation. In considering the matter, it is rather important that we remove any doubts about the issue. That is why we are prepared to consider this amendment, but as the noble Lord, Lord Whitty, would suggest, we need flexibility in the other areas as we continue to go forward.

As to the cost of assessors, further consultation has taken place with industry. We strongly believe, as I said in Committee, that many of the suppliers will pay for the assessment, because it is to their benefit. Typically, I would imagine, if one went to B&Q, as one does when buying a home, one might be provided with a list of approved assessors and an assessor would then go in and make the assessment, which would be paid for by the provider. Our research with industry and with the potential providers suggests that that will, we hope, answer the important question of my noble friend Lord Cathcart.

In the spirit of what I have just said, I hope that my comments on these amendments find favour, and that the amendment will be withdrawn.

Energy Bill [HL]

Debate between Lord Marland and Earl Cathcart

Monday 31st January 2011 Grand Committee

[Earl Cathcart]

The noble Lord, Lord O’Neill, said that there were inconsistencies in my argument. What I was doing was reporting from the letter that my noble friend had sent to me, where there may have been inconsistencies. I said in my remarks that putting rising block tariffs in this Bill would be like putting the cart before the horse. I agree with the noble Lord, Lord Davies; I am not expecting to have an amendment to get rising block tariffs into the Bill. I am asking the Minister to assure us that this will be looked at, so that the Green Deal can take effect first, and then the whole issue will be considered after the Bill is done and dusted.

[Lord Marland]

My Lords, I am grateful to the noble Lord, Lord Davies, for summing up so well—he has done most of my job for me, which is extremely kind. The noble Earl, Lord Cathcart, drew this matter to my attention several months ago, as did the noble Lord, Lord Teverson. I am extremely sympathetic to it, but this debate has thrown up the different and slightly schizophrenic aspect of this tariff system. On the one hand we have the inequality of it, and on the other we have to take into consideration things like the fuel poor, inefficient houses, time tariffs, colder parts of the UK and so on.

There are two fundamental things that I can suggest to the Committee. The first, as I said earlier, is that we are going to carry out a full-scale review of fuel poverty and its implications. We will be announcing that review in the very near future, and it will look into the various aspects that noble Lords have brought up here. Secondly, I recognise that this is a complicated issue, not a simple matter which the Committee can debate now and then present a conclusion on. I can therefore suggest—and we have already started work on it—that officials within the department should look very closely at this in order to determine its operability without reference to the climate change committee, and between Committee and Report stage we will have the opportunity to explore it further with noble Lords who may wish, with officials, to see whether there is merit in this amendment. That is a genuine offer. I agree with the noble Lord, Lord Davies, that this is not a matter for this Bill as it is a complicated issue that needs considerable thought. Therefore, despite the merits of the amendment, I ask the noble Lord, Lord Teverson, to withdraw it.

Energy Bill [HL]

Debate between Lord Marland and Earl Cathcart

Wednesday 19th January 2011 Grand Committee

[Earl Cathcart]

My Lords, this is the first time that I have spoken in Committee, so I should declare that I am a landlord in the private rented sector. The assessors will obviously need paying, but who pays for that? Is it the household or is the cost added to the Green Deal and then paid off over time?

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

My Lords, I welcome the noble Lord, Lord Davies of Oldham, who seems to be indispensable to the Labour Party at the moment—two Questions and then running in here and doing this. I congratulate him on the energy and commitment that he shows to this great House. I just warn him of the words of the noble Lord, Lord Winston, who said that statistically, out of the Members of your Lordships’ House, 140 would die from a heart attack. All of us clutched our chests at that time. Seriously, I welcome him and thank him for leading from the opposition Benches. I send the noble Baroness, Lady Smith of Basildon, our good wishes as she sees her medical experts. I hope that we will welcome her back next week. I also thank all those noble Lords who are here, as usual, making their very good and committed contributions. I say just for reference that the noble Lord, Lord O’Neill, and I rarely disagree on things, as he always makes very valuable remarks for us to listen to. I do not want us to be under any illusion on that front. Some valuable points have been raised and I shall try to pick them up as we go through.

Clause 4 is central to the Green Deal. It sets out key conditions that must be met before a Green Deal plan can be taken out on the property. In so doing, it defines the circumstances in which the Green Deal can be offered to the customer, which is fundamental. Subsections (2) and (3) require that an accredited Green Deal assessor has assessed the property in accordance with standards. To comment on the remark made by the noble Lord, Lord Oxburgh, if an assessor has failed, he has clearly failed the assessor regulation; all the usual consumer protections are in place and the householder would be entitled to use another assessor, as people would be able to in anything. To pick up on what the noble Lord, Lord Whitty, said, standards are completely fundamental, as we have said on several occasions. I worry—as he does, rightly—about the bad publicity that might ensue if we do not do this properly. That is why the noble Lord’s valuable comments are correct.

In many cases, we envisage the Green Deal provider employing or contracting the assessor. The assessor would identify the potential for energy savings using the standardised methodology. This assessment will be used by the provider as the basis of an offer of Green Deal finance. Subsections (4) and (5) require that an accredited Green Deal provider—the body seeking to contract for the work—should give the customer an estimate of the savings on the energy bills that are likely to result from the proposed energy efficiency improvements and over what period these are likely to accrue. The Green Deal provider is required to base these estimates on a standardised methodology to be set out in regulations, thereby ensuring consistency and rigour in the process.

--- Later in debate ---

[Earl Cathcart]

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

[Lord Marland]

Noble Lords have made good points about how we should evaluate this. I am sure that many young women will feel well advised by my noble friend Lord Jenkin of Roding about how they should dress in a cold climate; we should encourage them not to wear skimpy clothing in these snowy conditions.

The central point is a good one and we must look closely at it, but we are talking about companies that are used to dealing with the consumer. It is not as if they are going to pass a standard accreditation not having been used to dealing with the consumer. We would not want to prescribe to a Green Deal provider such as British Gas or Centrica how it should interrelate with the customer, because there are all sorts of customer protections available. The Consumer Credit Act quite clearly lays down the relationship between the consumer and the provider. Whereas we must ensure at all turns that this is not taken advantage of, and that there is a creditable method, it is up to the providers to come up with the method so that, in turn, the consumer has recourse against them, to challenge them if that method is wrong. The noble Lord, Lord Oxburgh, has much greater experience than I have in these matters, but I have experience in the insurance industry—I think that he mentioned life insurance. I could point to many life insurance predictions made by actuaries that are utterly wrong, so we have to be very careful about being overly prescriptive in this area.

It is hard to think too far out—I speak as a consumer myself—because most of us at the time are thinking about today: what we can save today, what we can do to benefit our housing today and what the effects are. A lot of us sit and think that prices may well go up; we live in a world where prices have traditionally gone up as, traditionally, have taxes, as most people think. That is not an excuse, but it is the mental approach that I personally would take to this Green Deal. I take on board the general points that everyone has made. It is vital that we protect the customer. This is fundamental to the Green Deal and the approach that we are taking. All of us in this Room feel exactly the same and, as we take this Bill through its various stages, the standard words that go underneath the Bill will be “consumer”, “assessment”, “accreditation”, “customer” and “must be protected”.

--- Later in debate ---

[Lord Marland]

I am grateful to my noble friend Lord Moynihan for assisting me in this regard. Absolutely—we have to allow the framework to take its course and we have to be open to consultation and views to find the best method of dealing with this.

[Earl Cathcart]

My Lords, I am not sure that my noble friend answered my questions quite as fully as I might have hoped. I asked whether the suspension provisions in Clause 15 might apply to the landlord of a vacant property. It seems that repayments of the Green Deal are fixed at the outset—or am I wrong? Is there flexibility? What happens if one tenant does not use much energy and the next one does? Does the Green Deal repayment change under any circumstances? What if a tenant defaults on paying his energy bills, does the landlord become liable?

I am not asking the Minister to answer everything now—I do not want to regurgitate my previous remarks—but would he consider writing to me once he has considered the issue?

[Lord Marland]

I am grateful to my noble friend for asking me to explain again. A lot of this will be picked up in the group of amendments that relate to the rental sector. When we reach that point we will be able to clarify the situation.