Electricity and Gas (Energy Company Obligation) Order 2012
Debate between Lord Whitty and Lord Reay
Lord Reay
My Lords, the Green Deal seems to be a ferociously complicated and expensive bureaucratic edifice. It has the laudable objective of improving the energy efficiency of existing British homes and other buildings without requiring the taxpayer to fund it. If I understand the impact assessment correctly, the cost of the energy company obligation will be recouped by suppliers from customers’ bills generally, so that is a further cost to the consumer. As for the amount, I saw different references—a reference to a cost of £1.3 billion a year on page 187 of the impact assessment, but a reference to £540 million a year in the letter from the Minister that appears at the back of the report of the Secondary Legislation Scrutiny Committee. I do not know if the Minister might be able to comment on those figures.
The take-up of the scheme is of course unknowable. Much will depend, as the Government point out on page 131 of the impact assessment, on the trust that people learn to put into the scheme. Plenty of things could go wrong to affect or even destroy confidence and trust.
Two of the advantages of the scheme are said to be the saving of the CO2 emissions as a result of less electricity being used, and greater thermal comfort for householders through enabling them, for the same cost, to enjoy high temperatures in the homes. However, each of those objectives is achievable only at the expense of the other.
I will refer to some interesting paragraphs on page 89 on the subject of health. The impact assessment correctly points out that the scope for improving health by alleviating cold living conditions is considerable. However, it goes on to point to the growing concern that the removal of ventilation can increase the incidence of disease. It expects more attention to be focused on this subject in future.
Finally, I will ask the Minister a question on the subject of external cladding. We read recently that another government Minister had declared that he wished to promote this form of energy efficiency. Will my noble friend give an assurance that this will not be done to listed buildings? We do not want beautiful buildings and streets being vandalised into eyesores in the name of energy efficiency. Enough damage is already being done to the countryside by wind turbines, as the Minister well knows.
Lord Whitty
My Lords, I have a number of points; I will try to restrict them to five. The first two follow up on what my noble friend Lady Worthington referred to as “joining up the dots”. The first is very straightforward and relates to the previous item. I do not understand, even at this late stage, why the Government’s programmes for smart meters and the Green Deal are not allied at least in their means of delivery and timing. Householders will be faced with two different initiatives, one compulsory and one voluntary, at the same time. They could easily be combined. I will leave it at that.
My second and most important point concerns how the ECO mechanism and the Green Deal mechanism join up, in particular in relation to tackling fuel poverty. I think that the Minister was being a little economic with the truth earlier when he claimed that this represented an increase in the number of the fuel poor who would benefit from government policy. Figures produced by my former organisation, Consumer Focus, indicate that the total spend on fuel poverty will fall from £1.1 billion to £540 million in 2013. The latter amount will be accounted for largely by the proportion of the ECO that will be geared to addressing fuel poverty.
As the noble Lord, Lord Reay, said, all consumers will pay for the ECO. It is more or less a poll tax and therefore regressive on those who cannot afford to pay. The offset will be geared through measures such as the warm homes discount, and will include the gearing of some aspects of the Green Deal to the fuel poor. It is not clear that the fuel poor will benefit, in particular those who are tenants either of private or social landlords. Because of turnover and the nature of the tenants, it is unlikely that many will sign up to the Green Deal. Therefore, it would be much more efficient to deliver it via the landlord. Questions of inherited obligations would begin to disappear, and so forth.
It is not clear that in net terms the Green Deal can be delivered easily to individual households in tenanted property. It is not clear how obligations such as the forward payment could be delivered, and it is not clear how the relationship between the landlord and tenant could facilitate the take-up of the Green Deal—the payback from which will take a number of years. My central problem is that a significant element of those who are in fuel poverty will be unconvinced, if they are in their own property, of the need to take up the Green Deal. If they are in tenanted property, they will be unable on an individual basis to take up the most cost-effective ways of achieving Green Deal benefits.
Localism Bill
Debate between Lord Whitty and Lord Reay(13 years, 5 months ago)
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Lord Reay
My Lords, in moving my Amendment 170A, I should like to start by quoting what the Minister, Mr Greg Clark, said in another place at the Report stage of the Bill:
“There is also a case for looking at the fact that the costs of losing appeals can sometimes hang over local authorities. Sometimes the threat of losing an appeal dissuades a local authority from turning down an application that it might want to turn down. We should look at that”.—[Official Report, Commons, 17/5/11; col. 274.]
My only quarrel with that statement is that it is not so much the threat of losing an appeal as the costs of fighting one, whatever the result, that can dissuade a local authority from turning down a planning application that it should turn down and/or might otherwise want to turn down. This is more true today than ever now that local authorities are having to make severe budget cuts.
Following my having taken up that point at Second Reading, my noble friend the Minister kindly wrote to me on the 20th of last month and ended her letter by saying that she hoped to be able to update me shortly with news on,
“how we propose to do that”;
that is, deal with the concerns about appeal costs. I am hoping that she may be able to tell us today what that is.
I have singled out onshore wind farm applications because it is particularly scandalous that it is the subsidies that wind farm developers are promised that place them in a position to outbid local authorities and local action groups. Without those subsidies, the planning applications would never be made in the first place. Just to remind noble Lords, the subsidy takes the form of a promise to take on to the grid for 20 years all the electricity that the wind farm can produce at a price which is currently over twice the market rate. If for some reason the grid cannot accept the electricity, as we have seen happen recently and I am sure we will again, it will still pay for it at the subsidised rate. It is of course the consumer, including the consumer who is being pushed into fuel poverty, who is then charged on his electricity bills with these costs, and who thus pays for the subsidy.
This of course creates the very antithesis of a level playing field. The result is that this is an area where final planning decisions are emphatically not taken by local authorities or local communities. Localism does not rule. It is routine for developers to waste no time in appealing once the local authority has rejected, if it has had the courage to reject, their planning application. In the first place, the developers hope to intimidate the local authority with the threat of a protracted and expensive public inquiry into granting their planning applications. If, nevertheless, the local authority stands up to them, they hope to defeat the local authority at the public inquiry. As developers are invariably able to afford better legal and administrative representation than the local authority, and certainly than the local action groups, they are favourites to win.
The Government are complicit in this unjust process because they maintain the subsidies. The Government also apply immense pressure on the Planning Inspectorate through statements in every conceivable piece of legislation and guidance to help deliver, through its decisions at public inquiries, the Government’s renewable energy targets. In many cases the inspector does give priority to local concerns or to landscape considerations, but it still seems to be the case that in a majority of cases he will give priority to government policy. So by means of the subsidies to renewable energy electricity generators and the pressure on the Planning Inspectorate to deliver the Government’s renewable energy targets, the Government are doing everything in their power to thwart local opponents of onshore wind farm schemes. Yet they still claim to want to devolve decision-making powers in planning matters to local communities. How do they justify that blatant contradiction? I am afraid that it invites the charge of hypocrisy.
Yet it is still the case that the Government have signalled their recognition that the ability of developers to intimidate local planning authorities into granting planning permission because of the costs of going to appeal represents a problem, which is why I hope that my noble friend will say today what the Government propose to do about it. My amendment might result in developers thinking twice about taking local planning authority refusals to appeal. In doing so, it might give some encouragement to local authorities to stick to their guns with the result that more final decisions might be in accordance with the wishes of local communities. Perhaps naively I thought that that was meant to be the main purpose of the Bill. I beg to move.
Lord Whitty
My Lords, I trust that the Government will give no credence to this intervention by the noble Lord, Lord Reay. Government policy for encouraging the development of alternative energy—which is essential to our future—includes onshore wind farms. If he wishes to pursue his opposition to that policy, he should pursue it under energy Bills and the various regulations that are brought before this House under the energy Bills. He may well have done so. However, this is not the appropriate point to do it.
His amendment would do the opposite of what he is suggesting. It would discriminate against developers of wind farms as compared with any other developer, as well as cutting across what has been a cross-party consensual position in terms of encouraging alternative energy, including wind farms. In reality, the number of wind farms that have been rejected on planning grounds is at least equivalent to those that have gone forward and the number on which a decision has been challenged.
I do not want to use the same intemperate language as the noble Lord, Lord Reay, but, in practice, on wind farm applications, the nimbys have generally won. In this, at least, let us recognise that there is an overriding national consideration that this Government, the last Government and all parties in this House have accepted. This is not the point at which to further discriminate against wind farm developers.