Energy Prices Bill

Debate between Lord Whitty and Lord Teverson

3rd reading
Tuesday 25th October 2022 Lords Chamber

[Lord Teverson (LD)]

My Lords, we on these Benches very much support the Bill, although it might have a few Henry VIII powers and go a little further than it needs to. However, it is clearly absolutely essential for households getting through the winter to come. I very much thank the Minister and the noble Baroness, Lady Bloomfield, for their work from the Government Benches, and all his other officials who have been involved. On our side, I also thank Sarah Pughe from our Whips’ Office. I also thank the Labour Front Bench, and particularly the noble Lord, Lord Lennie, for their co-operation and for the work we have done together. I make one least plea to the Minister, with which I am sure he will agree: it is very important that we manage to deliver the benefits that the Bill gives to those who are off-grid. I know that he and his officials will work hard to ensure that this is the case, although I understand that it will be difficult.

[Lord Whitty (Lab)]

My Lords, while I have no wish to dissent from this unanimity, I think that we are owed an indication from the Minister as to where this fits in with the overall energy policy. We had an Energy Bill before us which is now in limbo and which in part overlaps with the Bill. From the new Secretary of State for BEIS—and indeed from the Minister himself, with the assumption, we hope, that he is still here—we need an early statement on the totality of energy policy, on which this is dealing only with the immediate emergency—profound though it is—facing so many families and businesses. We need to know the totality of the position from the new Administration, so can we have some indication from the Minister as to when we are likely to see that?

Energy Bill [HL]

Debate between Lord Whitty and Lord Teverson

Monday 14th September 2015 Lords Chamber

[Lord Whitty (Lab)]

My Lords, my name is also on the amendment, but I must apologise to the Committee for not being here during its long discussions on the previous two amendments, which relate to the contribution that renewables, in particular wind power, make to the reduction of carbon emissions and the decarbonisation of electricity supply.

This clause or something like it is necessary in the Bill because of the consternation that the changes in support for and expectations of wind power, solar power and other renewables have caused within those industries. They are concerned not that, understandably, the Government wish to reduce the subsidy as those technologies become more competitive with conventional energy, but that they should change the pace at which and the terms on which they are doing it at such short notice, and with such drastic impacts on projects conceived and put to planning long before those changes were proposed. Some of that will have been covered in earlier debates, but the fact is that the renewables industry will lose confidence in this Government’s support for and wider commitment to the objectives established under the Climate Change Act, and those we hope will be established at EU and global level, if they are not prepared to continue such support.

If the Government have a better way of reporting to this House and to the country how well they are doing on their carbon reduction targets and their overall trajectory towards reduced carbon use, it would be helpful for the Committee to hear of it, but, in default of that and in reaction to what has been already announced, it is legitimate for us to put within this Bill an obligation on the Secretary of State to produce a report within six months of the passage of the Act. I hope the Minister can accept something like this amendment or indicate what alternative methods of report the Government are now proposing.

[Lord Teverson]

Although I agree in principle with what this amendment is trying to get at, I have a recollection—I cannot find it, so I may be wrong—that under the Energy Act 2013 the Secretary of State has to give an annual report to Parliament anyway. If that is the case, I just want an assurance from the Minister that that report would cover the sort of issues discussed in this debate. We could have endless reports, but the main thing is to have a key area of reporting where all these things come over at one time, and that Parliament can debate them.

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[Lord Whitty]

In the unavoidable absence of my noble friend Lord Foulkes, I will speak to Amendment 35A. As we have just discussed, electricity decarbonisation is a key component of our carbon reduction strategy. The amendment would provide a mechanism whereby decarbonisation by supplier is built in and becomes transparent, and is therefore enforceable supplier by supplier. It would require the Secretary of State to issue regulations to place on each electricity supplier—subject to definition in the regulations—a maximum level of carbon intensity in the electricity that it supplies within England and Wales. This decarbonisation obligation would be a proportion taken over the year of the carbon content of the electricity supply to its consumers over the course of that year.

The amendment of course does not specify exactly how the obligation would be expressed nor the level, nor whether there would be a single figure or whether that would be varied supplier by supplier depending on their pre-existing achievement of reductions in carbon intensity. That is a matter for consultation prior to the regulations being promulgated. The only specification in the amendment is that the Secretary of State needs to take the advice on this issue of the Committee on Climate Change—I am glad to see that the noble Lord, Lord Deben, has joined us at an appropriate point. Therefore, that would be the benchmark against which the Secretary of State calculates the requirement. It is noticeable that the amendment would apply only in England and Wales. There would be different arrangements in Scotland and Northern Ireland.

The amendment would give a crucial mechanism to the Secretary of State for ensuring that the pace of decarbonisation in the electricity supply was maintained, transparent and understood supplier by supplier. It would be an important additional weapon in the Secretary of State’s armoury. The Minister has assured us that we are on track for 30% of renewables by 2020. We need to go much further than that to meet what will be the requirements for carbon reductions over the years beyond 2020. I beg to move.

[Lord Teverson]

My Lords, I was pleased to add my name to the amendment, although I do not pretend to be an expert on exactly how it would work. There was a great celebration in February this year when our Prime Minister, to whom I give full credit, made a declaration jointly with Nick Clegg, the then Deputy Prime Minister and Ed Miliband the then leader of the Official Opposition. They made pledges through the Green Alliance, one of which was to accelerate the transition to a competitive energy-efficient, low-carbon economy and to end the use of unabated coal for power generation.

That was a fantastic declaration at the beginning of a general election campaign when politics was running high and competition between political parties was starting to move into a more confrontational stage. Yet three party leaders came together and said that low carbon and taking out unabated coal would be key. I see the amendment as something that could move us towards that solution in a concrete way. That is why I support it so strongly.

The Energy Act 2013 started off being about decarbonisation. It made it clear that the Secretary of State had the ability to—and in parliamentary Bill language that presumed that the Secretary of State would—declare a decarbonisation target in 2016 when the Committee on Climate Change came forward with its recommendations for the fifth carbon budget. My question to the Minister on this key area in meeting Climate Change Act obligations is whether the Secretary of State intends next year to follow that through in the carbon budget that is recommended and the one that is subsequently agreed.

The other attractive thing about this amendment is that it tries to find a least-cost way through to decarbonisation. As previous debates have shown, in this House we are united in wanting to decarbonise our economy at least cost. We all know that that is important to consumers, for fuel poverty and to the competitiveness of our economy. This amendment finds a way to do that.

I welcome the amendment and I agree entirely with what the noble Lord, Lord Whitty, has put forward. I will be interested to learn from the Minister how the Government intend to take forward the pledge the Prime Minister made in February. Will the Government move next year to a decarbonisation target for 2030 and, as part of that, will they make sure that coal really does disappear from our system as soon as that is practically possible?

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[Lord Whitty]

My Lords, if I understand that right it is very disappointing. I can understand the objection, or at least the querying by the noble Lord, Lord Deben, as to whether we need a detailed mechanism for setting carbon intensity coefficients by supply, but he argued very persuasively, and has done before, for a decarbonisation target for 2030. That is why that was written into the 2013 Act and why there was an expectation and general indication from the Minister’s predecessors that there would be a target set in 2016, but only in the context of the carbon budget, which they are obliged by the Climate Change Act to come forward with. I did not accept that argument, but I understood it in terms of the timing. There was some considerable debate about that during what became the passage of the 2013 Act.

It is very disappointing, not only to us in this House but to the various industry operators, including the supply companies, that there seems to be an abandonment of that commitment in what the Minister has interpreted from the Conservative Party manifesto. As I well know, manifestos are pretty flexible things. I hope that he can consult with his colleagues as to whether it actually meant that, or whether there was some more room—

[Lord Teverson]

I am not quite sure how to ask the noble Lord, Lord Whitty, this, but having read the Conservative manifesto many times and having it on my iPad on iBooks, I have not seen this obligation not to have a target anywhere in it. Has he?

[Lord Whitty]

My Lords, I am not quite such a conscientious and diligent reader of the manifestos of various parties—even my own—as the noble Lord, Lord Teverson. The best thing we can ask the Minister to do is to go back and talk to his colleagues—whether it was in the manifesto or not—about whether they are definitely now not going ahead with what was allowed for in the 2013 Act. If that is the case, there are ramifications. I understand why the Minister is opposed to the mechanism proposed in the amendment. I would have thought that having set the 2030 target for decarbonisation would be a useful addition to the armoury, as the Committee on Climate Change and the noble Lord, Lord Deben, advocated. If the Minister feels that that would be too much interference in the market mechanisms, I understand that. It would still be up to the supply companies how they met that obligation and what kind of technologies and contracts they entered into. The market is still operating there. I understand and accept that the Minister is not prepared to go along with that.

Infrastructure Bill [HL]

Debate between Lord Whitty and Lord Teverson

Monday 10th November 2014 Lords Chamber

[Lord Whitty]

My Lords, I have also added my name to this amendment. This is for two reasons—partly, I was swept away by the rhetoric from the noble Lord, Lord Hodgson, in Committee; it is such an obvious strategic decision that I thought I must support it. The second reason is purely historic. Somewhere in the archives of the TUC, from about 1973, there is a paper with the initials “LW” on it. In that paper I argued that we should set up a fund to invest in upgrading into the new technologies of the manufacturing industry and acquire assets at home and abroad to meet the interests of the state and of the British economy out of the tax revenues which we anticipated would come from the North Sea. We had no idea how much revenue would be coming in from North Sea oil at that time but it would clearly be substantial. I do not think anybody thought at that point it would be as substantial as it turned out, altering the terms of trade of the UK, with the level of sterling rising to the detriment of the competitiveness of the British manufacturing sector which was, of course, already a bit deadbeat and uncompetitive.

If only they had listened to me then. I am afraid that I never got my paper to the noble Lord, Lord Jenkin, while he was still in office but the next Government took no notice of it nor, indeed, the one after that. It stayed through all that period of North Sea oil revenue the Government received—I would not use “squandered”. I disagree with a lot of the priorities of the Government of the 1980s as noble Lords know, but that revenue was not used for the long-term benefit of the British economy when at least a fraction of it should have been. I thought the noble Lord, Lord Hodgson, had an important point here. If this industry develops to the extent that many of its proponents are saying, although none of us knows that yet, there will be a serious tax revenue that is in a strict sense a windfall for future Governments and a windfall for the British economy. We should not make the same mistake and we should take a lesson from our Norwegian cousins by investing in a fund that can provide some degree of security and improvement of the British economic situation for future generations. I am very happy to support in principle the noble Lord’s amendment.

[Lord Teverson]

My Lords, I welcome this amendment and I was pleased to add my name to it both in Committee and now on Report. The important point to make is that my noble friend Lord Hodgson is absolutely right: if we do not put this on to the statute book as something that can happen, the temptation will pass and it will be as if it never happened. That is why I am keen that it should be done now.

I should say just as an observer, if you like, that it is very easy to expand government expenditure and very difficult to pull it back. It is easy to find uses for income if it is there, but perhaps those uses are not always the best for our long-term future. It is easy when there are financial and fiscal constraints of the kind the country is confronting at the moment, but that is not always the case. It is hoped that we will get over the current deficit at some point in the not too distant future. That is why it is important to prepare for a sovereign wealth fund so that we can build it up in an intergenerational way, as has been advocated already.

The other aspect is completely different and not at all the most important. In the last parliamentary Session this House set up a Select Committee to investigate the nature of soft power. I was not a member of the committee, but it seems to me that countries with sovereign wealth funds exercise considerably more soft power in global affairs. That is not surprising because money talks—not just within the family or in business, but across nations as well. Why does Norway enjoy its stature? It is in part because of its sovereign wealth fund. The same can be said for a number of Gulf states and for China. In terms of Britain’s status in the future, we would gain quite considerably if we were seen to be a country that is able to save, invest and exert influence financially beyond our borders in this way rather than one that just keeps its current account going through non-renewable resources that cannot be brought back. That is why I feel strongly that we should at least take the step of this enabling legislation and then let future Governments decide how it should be used.

Infrastructure Bill [HL]

Debate between Lord Whitty and Lord Teverson

Tuesday 14th October 2014 Grand Committee

[Lord Teverson]

My Lords, when I saw this amendment, I thought that it looked remarkably familiar. It took me back to the trauma of four years of the Energy Bill, and the White Papers before it. However, I am actually very pleased to see it because it was an important principle of an amendment that we tabled at the time. To explain this a little more from where I stand, this is one of the areas where white is black and black is white in coal terms. Making coal plants far better for the world in their nitrous and sulphur emissions, which we all want, means that they can escape the rundown that is caused by the European directives that mean that these coal stations have to go. The way in which the emission performance standards were written into the Energy Bill means, effectively, that they have a free life up to about 2044, or something like that—if you can keep them going—when we can change the emissions performance standards and they lose their grandfather rights. That is the issue.

I have not gone into this matter in the great detail that the noble Baroness, Lady Worthington, has, but I can see that there are ways by which being able to participate in the capacity mechanism gives enough financial stability for the energy companies to take on the investment that would enable them to comply with the large plant combustion directive and its successors and so continue to be high carbon emitters in this economy for many years to come. That has to be a bad thing. I will not go all the way through the arguments that we had in previous debates but, clearly, it is bad in terms of emissions. Coal is not good in that regard. I am not absolutely against coal being part of the capacity mechanism. I would prefer it if it was not, but I do not think that it is absolutely fundamental. What worries me is that, by investing to comply with European directives, we then have them for a long time into the future, which we would not otherwise. That is bad, but, at a time when an argument has emanated from the Treasury wishing gas to be particularly strong, it works against gas investment as well. That is investment that the Government has rightly said is important for medium-term fuel strategy and clearly is half the level of carbon emissions.

Without going through all the arguments again, this sort of amendment gives a double win for the Government on greater incentives for gas investment in the medium term and on meeting its carbon targets more certainly as time goes on. I hope that the Minister and her colleagues will find a way to realise those objectives, which are from both sides of the coalition, by looking at this very carefully.

[Lord Whitty]

My Lords, I support the amendment and my noble friend. The arguments she made during the Energy Bill have come to pass—I do not think that Bill lasted for four years, as the noble Lord, Lord Teverson, said, but it felt like it. The reality is that while in America the arrival of shale gas has driven out coal, to the benefit of carbon emissions—this links back to previous debates—it has also had the knock-on effect that the world price of coal has gone down. Therefore, the economics of coal in the rest of the world now look much more attractive. The economics of continuing to run coal-fired stations look dramatically more attractive.

A number of things were not clear during the debate on the Energy Bill and when it passed, including the exact way in which the capacity mechanism would work and who would be eligible. Some of that has become clearer with the regulations that have gone through. We now know which plants are being put in as a capacity mechanism; it includes some pretty old coal plants. Plants that companies such as EDF gave a clear indication, seven or eight years ago, would close about two or three years from now are now being rolled forward. The way to square that would have been for the performance standard to apply to old coal as it does to new coal plants, but it does not.

While the noble Lord, Lord Jenkin, is right that we encourage all plants to fit this abatement of sulphur et cetera, we have not applied the new emission standard in the Energy Act to all this old coal plant. As I understand it, the purport of the amendment is to ensure that they will be treated in the same way as new plants. That would change the economics of coal.

The other thing that has changed since the debate on the Energy Bill is that it was assumed at that time by some of the modellers that, as was originally intended, there would be a ratcheting up of the carbon price floor. That would also have altered the relative price of keeping on old coal, to the detriment of the coal industry. Of course, within a few weeks of the Energy Bill receiving Royal Assent, the Chancellor announced that we are no longer going to ratchet up the carbon price floor. Leaving aside the principled arguments about the use of a carbon price floor, the effect of that is that the economics do not look the same as they did when we were discussing that Bill. Clearly they were expressed as looking that way by the Government. As the noble Lord, Lord Teverson, said, it could mean that old coal plant could be running for decades as a result of the emissions performance standards not fully applying and the abolition of the carbon floor price ratcheting up.

The amendment is intended to ensure that that is not the case. As the noble Lord, Lord Teverson, has said, the immediate effect is to make our energy supply more dependent on old coal and less attractive to investment in new gas. Therefore, the higher the level of old coal that qualifies under the capacity mechanism, the less investment there will be in new, efficient gas generation.

In all terms, the economics have been made more difficult. The environmental cost of carbon emissions could be substantial. I therefore hope that the Government at least understand part of that argument and recognise that they have to do something along the lines my noble friend is arguing in support of these amendments.

Renewable Heat Incentive Scheme (Amendment) Regulations 2012

Debate between Lord Whitty and Lord Teverson

Monday 23rd July 2012 Grand Committee

[Lord Teverson]

My Lords, I welcome the foresight that these regulations bring. We certainly do not want a repeat of the solar PV issue, where we had a lot of changes at very short notice and a lot of confidence went out of the market. I note yet again that we remind ourselves that some 12% of heating needs to become renewable to meet our 2020 target, as the Minister said. Heating is a largely unrecognised but major part of our energy consumption, in households in particular, and has to be decarbonised by 2050. The irony of this is that, as the Explanatory Memorandum states, at the moment we have, if anything, underdemand for this initiative. Given those targets, it is quite important that we move it forward quickly.

I have some questions for the Minister. First, why does he think that the scheme has been relatively slow so far? I know that there is a learning curve and it is still relatively young. Can he give us some idea of the types of scheme that have been approved so that we can understand them a little more? Do the Government have plans to stimulate these schemes if demand remains low? Lastly, will he give us a view, even at this early stage, of what lessons have been learnt for rolling out this scheme for domestic RHI, to which we all look forward very much?

[Lord Whitty]

My Lords, I have two quick points, one of which is fairly forlorn. The Minister referred to the ambition to raise the level of renewable heat to 12% from its current level of 2%. I commend and support that objective—it is right that we should give special provision for renewably sourced heat—but the overall objective is, of course, carbon saving. An awful lot of fossil-fuel-generated heat or dual-fuel heat is currently going to waste. It really ought to be part of the Government’s strategy, perhaps at a lower rate than the subsidy for renewable heat, to ensure that we maximise the use of the heat that is generated from fossil fuel, because the more widespread and efficient use of CHP and trigeneration will achieve larger carbon savings than the current targets for renewable-based heat. That is not to say that we should not do what the noble Lord is suggesting and which these regulations seek to implement, but there seems to be a lacuna—if you can have a lacuna in a suite of measures—in this respect.

With regard to the regulations before us, the Minister said that he has learnt from the FITs experience, and to some extent he has, but in these regulations and in what, at a quick read, is proposed in the consultation paper, I am not sure about giving much confidence or certainty to the market. Certainly, the Government are not avoiding sudden changes of policy. A week’s notice of the budget running out is likely to put off not only people who have gone some way through the process but those who are likely to apply the following year.

It has always seemed that annual budgets, no doubt imposed by the Treasury, are the department’s main problem. Under the solar energy part of FITs, in retrospect the take-up was too fast and the level of subsidy too high. However, as the noble Lord, Lord Teverson, said, the take-up of these RHI provisions has not been as great as the Government wanted. It would surely be better to manage the market according to a total amount rather than an annual budget, so that things would not be stopped half way through development because the budget has run out. Instead, the budget should be brought forward if it has been overspent or carried over into the following year if it has been underspent. That could be linked to the expected take-up.

The current mechanism has an annual budget that stops projects that might otherwise take off within the aggregate budget—for example, over the CSR period. There can also be overshoots, as happened with solar power. Once again the outcome was to cause uncertainty in the industry and to stop projects that were on line under existing rules and which had qualified under the regulations. This scheme is falling into the same category, although probably with less disastrous effect. If we are to maximise and smooth over the take-up of a new technology, we need to provide some degree of certainty over a minimum of two or three years rather than have a cut-off point with an annual budget.

In the medium term it would not cost the Treasury any more but it might make Treasury accountants a bit nervous. In terms of the objectives here, if we cannot have at least a three-year budget run in which we do not stop projects half way through their development, we will not achieve our objectives. I hope that the outcome of the consultation process produces something like that for the period starting in 2013. This does not do that and could put off a number of worthwhile projects.

Electricity and Gas (Internal Markets) Regulations 2011

Debate between Lord Whitty and Lord Teverson

Monday 17th October 2011 Grand Committee

[Lord Whitty]

My Lords, I broadly support the second package and the transposition of it. However, it leaves a few loose ends, and I want to raise three points, one of which relates very much to what my noble friend Lord Berkeley just mentioned: inclusion in the need to provide access for consumers and businesses those who are licensed for local networks.

I am in a dilemma here—no doubt, so are the Government—in that if you are locked into a local network and there is no alternative supplier, choice does not apply. On the other hand, if you open it up to choice, as the noble Lord explained in relation to ports, the economics of the local network change. There is a real problem here. I ask whether that would apply, for example, to a relatively small CHP system on an industrial estate where all the other units on the estate had agreed to sign up and the economics had been worked out on that basis; or indeed a residential district heating system—I am very much in favour of both such developments of localised and decentralised energy. Opening that up to competition or to the secondary user's choice of supplier makes the economics much more difficult. That is a dilemma. Two principles clash here: one of encouraging decentralised energy and the other of consumer choice. Simply including them under the same obligation as the big network suppliers does not resolve that. I am no closer than the regulations—or, probably, the department—to supplying a solution, but it is not supplied by the regulations.

My second point relates to the reference to consumer protection and Consumer Focus. I declare my past allegiance as former chair of Consumer Focus and—although this applies more to my third point—as currently undertaking some work for the Consumer Council for Northern Ireland. The requirement for Consumer Focus in part 2 to provide a consumer checklist is an extension to what is provided in the Consumers, Estate Agents and Redress Act 2007. It is a more prescriptive requirement on Consumer Focus—the National Consumer Council, in legal terms—than exists under that Act. Even in its current form, one could say that it is an incursion on its independence. The organisation already supplies significant guidance and information available to consumers. However, on balance, I do not object to the current setup.

As the Minister will be aware, under the Public Bodies Bill it is intended to move the role of Consumer Focus on energy either to a third-sector organisation, Citizens Advice or—another proposition currently in play—to Which?, which is, for these purposes, a private sector non-profit-making organisation. Is not the requirement for it to do the job in a certain way an even greater imposition on an independent organisation than it is on a quango? Is the Minister clear that such a requirement would survive a transfer of those functions to organisations that have not been in this game before and that have their own charitable and, in the case of Which?, slightly different structure of obligations and priorities?

Clearly, it is a bit of a problem to get the current powers of what was Energywatch and then Consumer Focus into a completely non-governmental organisation in the first place, but the more prescriptive that that becomes the more difficult it is to ensure that the provision in these regulations survives such a transfer.

My final point relates to Northern Ireland, to which the noble Lord, Lord Dixon-Smith, already referred. He seems to think that this lets Northern Ireland and the separate system of regulation off the hook. I am sure that in Northern Ireland he would be relatively happy for that to be the case, but my understanding is that there is concern about this over there because Northern Ireland organisations are not party to the ACER set-up. There can be only one regulator there, and the energy market there is very different to ours. The gas side is on an all-Ireland basis or is pretty much moving towards that. The Irish regulator would be there but not the Northern Ireland regulator. There are different structures of competition and supply. The regulations are not necessarily appropriate to a very different sort of market with a different sort of fuel supply. I should like the situation on Northern Ireland to be clarified—if not today, then at some point in the near future—because there seems to be a bit of a lacuna in the set-up.

[Lord Teverson]

My Lords, I should like to raise a couple of points—again, primarily on the consumer side, which I suppose is appropriate, given that it is a topical subject in government. I hope that the Official Opposition Front Bench do not take half an hour on the various provisions relating to competition and energy. However, that is entirely up to them.

The only issue that I wanted to raise was that a lot of this relates to competition and openness of markets. I want to understand where the Government are in terms of their recent announcements and the particular Ofgem proposal that 20 per cent of energy production be auctioned, which would at least start to open up the market.

The niche area that interested me is the one that the noble Lord, Lord Whitty, mentioned at some length—the energy consumer checklist. On page 19 of the annexe to the Explanatory Memorandum it is stated that the European legislation,

“Requires Member States to ensure consumers are provided with the Energy Consumer Checklist and that it is made publicly available”.

I understand how that started to work from reading the third column on that page. However, I draw the Minister’s attention to the fact that I tried to find out from a European Commission website and the DECC website what the energy consumer checklist was—particularly as the proposal is to have it printed on all bills. There nothing definitive whatever on the European Commission’s website. It was completely vague and the Commission had obviously decided that this was a good idea, had delegated and had then done not a lot else. On the DECC website there was a copy of a letter from the Directorate-General Energy and Transport to Kim Darroch, the UK’s permanent representative. Some 78 questions were listed on all the things that consumers ought to be able to ask about. My understanding from this—I am sure that the noble Lord, Lord Whitty, already knows the answers, but forgive me if I pursue the issue—is that the National Consumer Council boils those down and makes them work. I am interested in how we make that obligation relate in a useful way to consumers, so that they can actually make real decisions. That is obviously tied up with all the issues around the swapping of accounts and everything else that has been high on the agenda in recent times. However, I should like to understand how the energy consumer checklist will be effective.

Perhaps the Minister can give us an insight into how other European member states are approaching this. I am particularly interested in the auctioning activity and whether the Government feel that other EU member states are starting to move out of the ice age and into global warming in terms of making sure that some of this deregulation and more market competition in terms of unbundling, or whatever, actually happens as regards those other European markets where, historically, we have been well ahead of the rest of the pack.

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

Debate between Lord Whitty and Lord Teverson

Tuesday 12th July 2011 Grand Committee

[Lord Teverson]

I am not going until October—but let us move away from my domestic arrangements to those of the more vulnerable in society. Could the Minister clarify that, once the data-matching process has occurred, if there are “leftovers” the Government will ensure that everyone who is entitled receives their entitlement? How are we going to check that the matchings that have occurred are correct? A number of people may receive these discounts when they are not entitled to them. They will thank their lucky stars that the discounts have arrived and that will be that. The issue is not one of following up the data that have not matched but of ensuring that the matching that has taken place is effective, given that those who do not receive their entitlement are not likely to follow this up for the old reason that they did not know that they were eligible in the first place. However, I welcome this measure as a breakthrough for the more vulnerable in our society.

[Lord Whitty]

My Lords, I welcome this for the same reason as the noble Lord, Lord Teverson. This has been a long-running saga, but I hope that we will get the ability to match data in the nicest possible sense in order to ensure that the benefit goes to those for whom it is intended and to whom the provision of the warm homes discount applies.

My query arises from a wider concern about the Government’s strategy in relation to fuel poverty. There is no relationship between the warm homes discount and any improvement in the energy efficiency of the home itself. The Government have cut significantly the former direct payment through Warm Front and related schemes and are relying on a variation of the eco-mechanism to redirect money back into energy efficiency. This is distinct from the previous approach of a social tariff—which may have been flawed in many ways—in that there is no mechanism for ensuring that the bills next year, for those people who will benefit from the discount this year, will be any lower, because there has been no nudge in the direction of improving the energy efficiency of their homes.

However, the Minister encouraged me in his closing remarks when he referred to the possibility of using the data to identify those who may be targeted for advice on improving energy efficiency. As long as only a discount is provided, the problem of fuel poverty will continue, and the Government will have to continue to override the tariffs structure by providing discounts, rebates and special tariffs, with all the complexities and requirements to identify individuals that that implies. However, if the policy were linked to one of improving energy efficiency, perhaps through the same supply companies, that would be a more constructive way to go forward.

The question is: beyond the giving of advice, would it be possible to gear some of this discount—on the discretion of the recipient—to improvements through the Green Deal or other provisions fronted by the supply company, rather than providing a straight discount? If that is possible, could it be made apparent to the recipient that this is not just a cash saving this year, but a step towards reducing energy consumption and therefore towards reduced bills in future years? That would be a more coherent approach and would not require any greater disclosure of data or data matching than these regulations require.

Energy Bill [HL]

Debate between Lord Whitty and Lord Teverson

Wednesday 19th January 2011 Grand Committee

[Lord Teverson]

My Lords, although I do not entirely agree with this amendment, or the way in which it is written, I think that it is important that the Green Deal plan is put within a broader context. In some ways, the Bill allows for that. In our last session in Grand Committee, we discussed the clauses that refer to the Green Deal plan and/or energy plan and I think that it is that broader energy plan that we could include in this.

As we will see in the next group of amendments, there will be occasions when there will be a much better deal available because more than one property is involved in the decision. This should also be pointed out in the Green Deal energy plan. I like what we are trying to achieve, because I believe that there is a broader issue.

There is another issue that has been left out. The biggest part of any energy plan is not the hardware or the physical changes that are made but how you use energy in your house. I would like to see an obligation in the code of practice—it is not appropriate for the primary legislation—that requires the assessor to ask whether it is possible to run a dishwasher or heating overnight off-peak rather than during the day. Your use of energy can be more effective in ways other than making physical changes to a building. I would like to see that included in recommendations in any energy plan.

This group of amendments includes Amendment 11, tabled by the noble Lord, Lord Whitty. Although I do not agree with all of the amendment, I agree with the end of the sentence, which says the improver should have,

“no bias towards any one green deal provider”.

That comes back to the issue of ensuring that the improver gets a fair choice and option and that there is no bias within the system.

[Lord Whitty]

Prompted by the noble Lord, Lord Teverson, I rise to speak to the amendment in my name. Amendment 11 would require the assessor to inform the householder or landlord of the full range of possibilities and the flexibility within any recommendations. The assessment should be subject to clear, objective criteria. I know that some noble Lords dislike the reference to “standardised assessment”, but we need some objectivity and we need to give the householder some choice in how they take the assessor’s recommendations. We need to indicate some flexibility, even within the Green Deal, if we assume that there is a financial limit. This is before you consider the possibility of other arrangements to go beyond the provision of a new deal.

On the point made by the noble Lords, Lord Jenkin and Lord Moynihan, it is clear that there will have to be a detailed code of practice and it may be that some of these issues will be dealt with in that. However, those issues covered by the code of practice in Clause 3 do not include the listing or the objectivity in that listing of recommendations. While I accept that it may be more appropriate for this to go into the code of practice, the primary legislation has to make clear what the Secretary of State will have to bring forward when that code of practice eventually appears.

Finally, I underline the point that the noble Lord, Lord Teverson, made about the importance of there not being any bias towards any particular provider. This goes back to who is doing the assessing and what the qualifications for the assessing are, which we discussed at our last sitting. These things are quite ticklish. Obviously, we wish to encourage innovation in this area and we wish to encourage new entrants in the provision of energy-saving installations, ventilation equipment and so on, but these things get roguish at times. It is important to recognise that there is no point in going for the latest super-duper micro CHP system in an individual house if the roof is still not properly ventilated and the windows are not properly fitted. There is a hierarchy of things that you need to do, both in terms of cost and in terms of the most appropriate treatment of those premises. The code of practice and, in broad terms, the primary legislation need to make that clear. Otherwise, we will—I go back to the point that I made when I first spoke in Committee—get back to a situation where, in the very early days, there will be some bad publicity about what people have been lumbered with and the inappropriateness of the work that has been carried out. That would be very dangerous to the success, which we all want to see, of this Green Deal scheme.

--- Later in debate ---

[Lord Whitty]

I support the thrust of these amendments and I am grateful that we are discussing the role of the local authorities this early. Both as movers and shakers and as facilitators and providers of a framework or catalyst for movement, they will be extremely important.

In most parts of the country, opinion polls show that local authorities are relatively trusted. They are certainly trusted more than central government and energy supply companies. Whether the reasons for that are right or wrong, it is important that we mobilise that general good will. Local authorities have a role in a number of different respects and while it is true, as the noble Lord, Lord Dixon-Smith, has said, that the social housing stock has largely moved to housing associations, that is by no means totally the case. There will be many situations in which the local authority is still the landlord, although it may have a management company to run things, and it will have a responsibility for fairly substantial parts of the social housing stock and its maintenance and improvement.

It is regrettably true that the early stages of the last Government’s decent homes programme did not have a very strong energy efficiency dimension. That improved as time went on, but an opportunity was missed; a substantial amount of expenditure went on upgrading social housing stock, but improved energy efficiency was not one of the prime objectives. Local authorities as landlords can take that on.

Of course, there are also landlords of estates that are no longer a single form of tenure. Some of the occupants may well be tenants, but some of them may be owner-occupiers and some may be leaseholders or on a sublease, while some properties may be run by housing associations within the same estate. We have a complex and largely beneficial mix of types of housing on some of our larger estates, but the local authority is still the landlord and therefore in a strong position to try to persuade those on all forms of tenure to take advantage of the Green Deal, which probably individually they might not.

It is wrong that some improvements on estates have applied only to one form of tenure, because the economies of scale, to which the noble Lord, Lord Teverson, referred in a wider dimension, apply whatever the form of tenure. The totality of the provision and use of energy in those estates means that economies of scale will be achieved if the majority of the residents participate. The local authority is by far the best body to ensure that that happens.

Where housing associations are the landlord, of course they also have to have a role, but that is a slightly different role from what the amendment envisages for local authorities. Housing associations are no different from any other landlord that could effectively take advantage of this scheme and negotiate better terms, because they deal with substantial properties. It may be, however, that the Bill also needs to refer to housing associations in this regard.

Of course, local authorities can go beyond their role as the landlord or as a body that has an indirect interest in the property to a role in which they can help to persuade landlords of private tenanted property—that will include a significant number of the fuel-poor, but not necessarily only them—and owner-occupiers to operate this scheme on a street-by-street, similar-property-to-similar-property basis, again achieving economies of scale.

That role of local authorities is important. Some will be more prone to take up this cause and will be better at it than others, but that is the essence of devolution. Indeed, I assume that the essence of localism is that you will have different patterns in different areas. It is important that the Bill recognises that.

As for subsection (3) in the amendment, it is true that the new ECO commitment will be largely focused on the fuel-poor, but local authorities will be able to negotiate—not only with the householder but also with the energy supply companies—different ways of incentivising the adoption of the Green Deal. As I said early on in our proceedings, we have to recognise that this is a voluntary thing. It is not something that the Government, the energy company or your landlord can impose on you; take-up is voluntary. That may require some incentives. As the noble Lord, Lord Teverson, said, it is already the case in a number of areas that, by dealing with the energy supplier—British Gas, mostly—local authorities have already provided an incentive, so presumably they already have the power to do so. Subsection (3) suggests that we need to legislate for the link with the new energy company obligation, but I believe that local authorities already have the power to do this. If, by agreement with the energy supply companies, they can reach an accommodation that delivers the Green Deal on a wider scale, they certainly should not be inhibited from so doing. Amendment 12 is important in that it recognises these proactive and direct roles of local authorities, so I hope that the Government, if not agreeing with every word of it, will accept the general thrust.

[Lord Teverson]

Just to clarify, the noble Lord is absolutely right. I have written this amendment so that the local authority would be the catalyst that makes things happen. Who the freeholder of the property or the land is is irrelevant to that—whether they are a private landlord, a public landlord or a registered social landlord, this would apply to them. This is not just about local authority estates. It is about any estate or group of houses geographically, not about tenure, exactly as the noble Lord has pointed out.