Energy Bill [HL]

Lord Teverson Excerpts

Wednesday 26th January 2011 Grand Committee

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

My Lords, welcome back; it is very nice to see such a full contribution from noble Lords. I thank all noble Lords for their contributions as we move into day four. They have been incredibly valuable. I assure everybody that we are drawing up a list of comments and suggestions, which we take very seriously. We will look at them and if any noble Lords seek clarification, there will be some opportunity for that between Committee and Report. We will make sure that there is an opportunity for discussion. It would be quite nice if we could get through the Green Deal today; this will be our fourth day on it. It looks as though we are moving on quite nicely. It would also be very nice to get through the AV Bill today.

[Lord Teverson]

Can we take a vote on that, Lord Chairman?

[Lord Davies of Oldham]

I have noticed that the AV part of the Bill has long since been discussed. It is the other parts that are more difficult.

[Lord Marland]

I am obviously delaying our finishing the Green Deal Bill by adding some levity to the occasion. I will get on with it.

There are just a couple of points that need clarification after Monday’s debate. I will run through them so that they are on the record. As I said earlier, if people want clarification, let us have it now because I do not want to reopen a debate that we have already had. The definition of “private rented sector” in the Bill covers accommodation provided under an assured agricultural tenancy occupation, which was one of the points raised, or a protected occupancy for the purposes of the Rent (Agriculture) Act 1976. If they are let under an assured or regulated tenancy, this will not cover all cases. I have already agreed to consider whether the definition of “private rented sector” should be extended in the light of these amendments. That is for the subject of agriculture, which was discussed some amendments ago.

On payment holidays—another subject that my noble friend Lady Northover had to tussle with womanfully—Clause 30 enables us to allow the bill payer, who might be the landlord or the tenant, to suspend payments. However, suspension is likely to be available only in very limited circumstances. An example might be tenancy void periods. However, we do not expect tenants to be able to suspend payments, other than in the usual cases. The bill payer may also be able to enter into an arrangement with their energy supplier to reschedule their Green Deal payments.

Finally, on the purpose of the review of the private rented sector, our intention is that a key aim would be to safeguard against unnecessary and burdensome regulation. I hope this deals with the point of the noble Baroness, Lady Noakes. The Government are not set on regulation but on encouraging enterprise and activity. If we have to resort to regulation, it is, as the noble Lord, Lord Deben, said, probably a failure of government.

I hope that that clarifies the matter. We have debated this subject and I am grateful to my noble friend Lady Maddock for saying that we have discussed it already. We have given it a very good airing and I am sure we will have an opportunity to air it yet again. We are always open to discussion.

[Lord Teverson]

I thank my noble friend for that. I welcome his statement that the suspension of payments will occur in only a very restricted area, although I think that the Minister’s colleague may have taken the question the other way. However, in order for energy company providers to have faith in the scheme, they must know that they are going to be repaid. I understand that, but I like the fact that, in completely exceptional circumstances, there may be an alternative method. However, I welcome the fact that it will be a tight regime.

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Moved by

[Lord Teverson]

29: Before Clause 61, insert the following new Clause—
“Carbon neutral buildings and developments
(1) The Secretary of State shall make building regulations that require newly built domestic housing to be designed and constructed in such a way as to be carbon neutral.
(2) These regulations will apply either to individual dwellings or to new developments as a whole.
(3) These regulations shall come into force during 2016.
(4) Within one year of the passing of this Act, the Secretary of State shall, by order made by statutory instrument, prescribe the date on which building regulations will come into force that require commercial buildings or commercial developments as a whole to be carbon neutral.
(5) The definition of the term carbon neutral shall be determined by the Secretary of State following consultation with the construction industry, the Climate Change Committee, environmental groups, energy companies and other experts and interested parties.”

[Lord Teverson]

I was glad to note in that last exchange that the Minister had moved far more towards the Opposition than the Liberal Democrats, as happened earlier in Committee.

We now move on to Chapter 4, which is headed “Reducing Carbon Emissions and Home-Heating Costs”. It seems to me that we have moved on psychologically from the paramount area—as the Government have recognised—of trying to retrofit and bring up to a reasonable standard of energy efficiency the existing building stock. Having moved on through the Bill from that stage, we now have an opportunity to look to the future, and I hope that this amendment will be particularly useful and helpful to the Government.

We have to make sure that in 25 years’ time we do not have to go through another Green Deal process with all the houses that we are currently building which will not be up to the standard that we require in the future. Instead, it would be much better to build these houses now to the right standards of energy efficiency and carbon emission levels. The Minister has perhaps recognised that in the area of energy and climate change there is a great deal of agreement among reasonable people and political parties. One area on which I certainly congratulated the previous Government was that they put a marker in the ground saying that by 2016 building regulations should effectively lead to carbon-neutral domestic dwellings. I do not think they said anything further regarding industrial buildings but that was what they said in respect of domestic dwellings. I tried to find out about it before the Committee, but my understanding is that Ministers in the present Government have endorsed that and have said that that will be the case.

We know that one important thing for industry and for people who have to build these Houses and ensure that regulations have been met is to have a degree of certainty in the market. We have heard how red tape and bureaucracy can be negative in legislation, but politicians and legislation should be able to give certainty to industry and the people who have to deliver policies, in a positive way. One of the best and most effective ways of doing that—the way in which we show true intent—is to put something in the Bill. Once we do that, that certainty of provision—the certainty that the Government mean that to happen—increases so that actions can take place, the target is met and the effect is achieved. In this case, it is not just for 2016 but for all the years ahead, when we are trying within this economy to reduce our carbon emissions and fuel poverty, so that they are history as well.

I tabled the amendment because it gives the Government an opportunity to confirm that target and to ensure that business, industry and the other various actors in producing these homes can make full plans for these measures so they can be delivered. The domestic sector is not the only sector. In fact, something that we truly welcome from the Government in terms of the Green Deal is that it includes a commercial aspect, which we have not discussed or debated much to date. The industrial sector is more difficult, so I have given the Government discretion to set a date, but it is important that the Secretary of State should set a date at some time.

Another area that I have emphasised or been careful about in my amendment is to avoid being overprescriptive. I hope that I have achieved that in two ways. It is not necessarily sensible for individual dwellings to be carbon neutral themselves, because the technology for renewables and low-carbon technologies are for groups of dwellings. They focus on ways in which a development as a whole can be carbon neutral in its broadest aspect, rather than an individual house, which is probably too big an ask, even for those who really want perfection in this area. There might be a renewable energy part of an overall housing development, which might be the travel plan that goes with it; there might be a district heating system or ground-sourced heat pumps put in across the whole estate that allow the larger unit to be carbon neutral, rather than the individual dwelling. That should be even truer of the commercial developments.

Another part of this amendment gives the discretion to the Secretary of State to define what carbon neutral means, because that definition is clearly something that we could debate for ever. At the end of the day, after proper consultation, it should be left to the Secretary of State to make that definition—one that is practical and will never be fudged.

The amendment introduces an aspiration for certainty by putting it into the Bill, which would ensure that we achieve it. I beg to move.

[Lord O'Neill of Clackmannan]

I support this amendment, which I realise is probing. One of the major reasons why we have an inadequate housing stock in the United Kingdom is that the incoming Government of 1951, charged with the ambition of building 300,000 houses, sought to achieve that by reducing housing standards. That was the way in which Harold Macmillan, as Housing Minister, achieved his obligation. It is as a result of that we have so many substandard houses in comparison with our European counterparts. In that fantastic period in the 1950s and early 1960s, when hundreds of thousands of houses were built every year, properties were more often than not built to standards which were less than desirable in terms of what could have been achieved. They were not bad but they could have been a lot better, and if they had been we probably would not have half of the problems we have today. It is useful, however, to give the Government an opportunity to make quite clear that they are signed up and prepared to take the appropriate steps to achieve the 2016 target.

The kind of pragmatic and flexible approach suggested by the noble Lord, Lord Teverson, in respect of different forms of heating and the combination of different forms of accommodation, is an appropriate way in. We do not want to be overprescriptive, but there are areas where we have to be prescriptive—not only prescriptive but prescriptive in a fairly tight, legalistic way. These regulations tend to be a mixture of the consultative processes which are implicit in secondary legislation. They can afford that degree of flexibility.

As in this decade we address the challenges of climate change and the environment, in some respects we are parallel to the post-war reconstruction challenges which were being addressed in the 1950s. I would like to think that this Conservative-led Government will not make the kind of mistakes made by the Churchill Administration, under the responsibility of Harold Macmillan as Housing Minister, in the early 1950s. I would like to think the Government could clearly and explicitly embrace the desirable environmental objectives set out by the previous Government and which appear to be supported by the Liberal part of this coalition.

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[Lord Marland]

My Lords, that was a magnificent debate. I am very interested to have had a history lesson. It is a slight shame that the noble Lord, Lord O’Neill, provoked political crossfire, because both sides are completely aligned on this. I am delighted to hear about events in 1951 but I am surprised that the noble Lord is of an age where he can remember them—he looks so young. I take his lesson on board. We are all lucky to be able to look in the rearview mirror and complain and criticise, but that is not what we are here to do today; we are moving forward.

I declare my own interest, having been involved in a building project that is going before the planners today—obviously I am not involved any more—for a small carbon-neutral eco-village. I have been working with the Prince of Wales and the Prince of Wales Trust on further housing development in this area, so I am in the vanguard of everyone in this Room and completely in support of them, with perhaps the very mild exception of my noble friend Lord Jenkin, who I know supports the spirit of this measure but is more worried about the timetable. I do not need to take messages back to the Government; I am completely in the vanguard and supportive of the attitude of the previous Government and the current Government to this subject.

In the end, though, we must remind ourselves why we are here: to talk about the Green Deal, not about new housing, which is what the amendment deals with. I am delighted to take this matter back to my honourable friend the Housing Minister, who is fully committed to enabling all new homes to be zero carbon from 2016, and non-domestic buildings from 2019. In July last year, my honourable friend made clear the Government’s ambitions for a low-carbon eco-friendly economy, with substantial and cost-effective reductions in carbon emissions forming an essential part of our effort. However, we are debating how we can improve the existing housing stock, not the new housing stock. On that basis, I invite my noble friend to withdraw his amendment.

[Lord Teverson]

My Lords, I have been seriously impressed by the debate. I actually enjoyed the history. I disagree slightly with the Minister: the 1950s are relevant because we are going to have to spend some £60 billion, or whatever it is, refurbishing the whole of the housing stock from that time, but otherwise I take his point. The historical perspective on this subject is a lesson for the future, which is exactly why I have tabled my amendment. A significant amount of the Bill is not about the Green Deal but about other things. The Green Deal, as I said in my opening remarks, is the most important, radical and needed aspect of the Bill and I congratulate the Government on it.

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[Lord Teverson]

My Lords, I am going to speak personally here: I welcome the passion of the noble Lord, Lord Judd, on this subject and on the previous amendment; he has brought us back to what it is all about—the fundamentals and challenges of climate change.

I am a member of a local authority. In the previous amendment I should have declared my interest as chairman of a regional development property company, although I am not involved in domestic dwellings.

I have a couple of questions. I agree that local authorities are fundamental to making the Green Deal work and helping to deliver our carbon targets nationally. I welcome particularly the various transition town organisations that have sprung up throughout the country, due sometimes to the frustration of the local authorities regarding their lack of performance in this area, and that are trying to move this whole agenda forward.

One of the things that I have learnt from my European experiences is that if institutions do not have the power to change things, you should abolish them rather than invent more of them, which is what tends to happen in Europe. It is a challenge that we have our own carbon budgets at a national level and, even at that level, the levers to make them happen are there and valid, but a number of those are beyond the reach of the UK Government. Car emissions have been mentioned; that is a European single market decision. The way that UK carbon budgets have been set up and brought together means, strangely enough, that in the whole of that carbon area, if we have huge improvements by industry covered by the EU ETS, they are not reflected in the performance of UK plc.

There are other areas, not the least of which is nothing to do with Governments—offshoring. One of the easiest ways for certain local authorities not to meet their carbon budgets would be to rely on the fact that major employers move or cease to exist. I am in favour of these proposals in principle, so I would like to understand what levers local authorities have in order to have a real effect on carbon emissions in their areas. There is a persuasive power, which is important, and a co-ordination power, but I would like to understand from the proposals how it is felt that what I see as a relatively powerless local government—in comparison with the golden days in the 20th century and early this century that we were talking about—fits in with that.

I have a personal plug to make as well about something that I feel is important. An issue for all carbon budgets is that we should look at carbon consumption within an area as well as carbon production. That way you get rid of offshore issues and that sort of thing. We cannot achieve this to that level of sophistication, and I am not asking for it in terms of a local area, but I would like to hear how local authorities can affect those carbon budgets to make this exercise necessary. This is important as local authorities are essential to delivering this package, but we should be careful before putting too many obligations on local authorities to ensure that they are able to deliver what we want them to.

Having said that, I understand that a number of major local authorities are promoting this—I know that Bristol, a Liberal Democrat/Labour authority, is one—so I am sure that the answers are there.

[Baroness Smith of Basildon]

The noble Lord asked if the promoters could tell him what local authorities could do. I admit I am rather surprised that, as a local councillor himself, he asked the question, because he knows about Bristol. I know that the Minister is anxious to reply, I hope positively. Perhaps I may draw the attention of the noble Lord, Lord Teverson, to the local carbon framework pilots. I can give him the information, although it is easily available, on the work already undertaken by local authorities. Bournemouth, for example, has encouraged microgeneration in the domestic sector and production of energy from waste. There has been retrofitting for homes in Bristol. These pilots undertook a number of programmes to see what levers local authorities have and what practical measures they can take. It is because the outcome of those pilots was successful that not just I but all noble Lords would feel confident in putting these proposals before the Committee.

[Lord Teverson]

I thank the noble Baroness for that. My comment would then be that that shows how important local authorities are in this area. A number of them are probably significant as a proportion of total carbon within their regions.

[Lord Marland]

This has been yet another challenging and interesting debate. I notice that the noble Lord, Lord O’Neill, has gone for fear of being lynched by the officials behind me. Or perhaps he has gone to speak on the first amendment still being considered on the parliamentary voting systems Bill. We will miss him, of course. I thought that at one point he was probably in the wrong Chamber, but all his views are valuable.

I agree with the noble Lord, Lord Teverson, that the noble Lord, Lord Judd, made a passionate speech—as you would expect from someone who feels very passionately about this matter. I personally thank him for his kind comments. It is a great shame that the noble Lord, Lord Giddens, is not here. He has challenged me to a game of tennis, and my fear is that he is practising in order to try to beat me. That may be his excuse for not being here, but he made a very good speech at Second Reading.

The noble Lord, Lord Deben, comes to this issue with great experience of local authorities, and I am grateful for the amendment of the noble Baroness, Lady Smith of Basildon, on this subject. I should be interested to see the report to which the right reverend Prelate the Bishop of Liverpool referred. As he rightly said, the north-west is energy rich. We should be tapping into that, and I am delighted to hear that Liverpool is making strides within the local authority. Every person in this room—not everyone perhaps, but most of us—is looking to drive carbon reduction in every way. We are committed to it. We feel strongly and passionately about it. We want to see it happen, and we want to see it happen urgently. That is the strand of this debate.

Regarding the Green Deal, which is really what we are here to debate, our initial research revolved mainly around how local authorities could buy into this programme. It does two things. First, research shows that local authorities are among the most trusted when it comes to people’s homes. They have become good exponents of the Green Deal. By working closely with some of the building merchants and others, local authorities will be able to sell the Green Deal, because they will be trusted, and can advise on it. A definite incentive will be introduced for local authorities. If at some point the local authorities are not seen to be buying into the Green Deal—which I think is highly unlikely, because there will be great financial benefits for local authorities in this—we must bring in some form of regulation, where possible, within the remit of the Department of Energy and Climate Change, given that we are not the department that is responsible for local authorities. We must encourage a greater take-up. Our initial findings—I think that the right reverend Prelate said as much—are that there is a big take-up from local authorities, they are enthusiastic about the Green Deal and they want to participate vigorously.

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[Lord Davies of Oldham]

No, my Lords, I have asked whether the noble Baroness intends to move the adjournment of this Committee. It is 7.45 pm. I have quite a lot to say on this Committee. In fact, I could probably go on for three and a half hours and I assure the Committee that I certainly will unless the Government recognise that rules are rules. To complain about what is going on in the Chamber, which is well within the rules, and to break the rules in Committee is quite unacceptable.

[Lord Teverson]

I am not going to talk about the other Chamber, but with this Committee on the Energy Bill, if there is some time left, we take the amendment and finish after that amendment. I am amazed at that intervention. It is quite unnecessary. I find it absolutely astounding. I presume that we will do as we have always done, which is to finish debating the amendment then adjourn. I shall join with the noble Lord in doing that, if that is the case.

[Lord Marland]

We started at 3.45 pm and we have been here for four hours. That is how long I was instructed that we were here for. We are running over by a minute. I do not think that that is unreasonable; no one is trying to frustrate the Committee. I did not intend to stop the noble Baroness, Lady Maddock, making her excellent speech. I naturally thought that we would finish the amendment.