Energy Bill [HL]

Baroness Noakes Excerpts

Wednesday 26th January 2011 Grand Committee

[Baroness Maddock]

Members of the Committee will recognise that this is a similar amendment to one I moved on an earlier clause but this clause refers to tenants. However, the arguments that I used then apply to the position on this clause.

To refresh the memories of Members of the Committee but without going into huge detail, I am proposing that making regulations in this area should not be dependent on the outcome of the review in Clause 36. We had quite a discussion about how, particularly in the private rented sector and at the bottom of the market, we want to get this moving and do not want it to be held up by anything unnecessarily. That is all I need to say. I beg to move.

[Baroness Noakes]

I have put my name to Amendment 21B in this group and I will not repeat the speech that I made linked to a similar amendment moved by the noble Baroness, Lady Maddock. I wholly oppose the noble Baroness’s amendment, in particular because she assumes that regulation is the right way forward. We had a good discussion about that and I hope that the Minister will reaffirm that the Government do not see regulation as an inevitability but something that should be used as a last resort. My amendment has been tabled more to discuss how much debate we should have before we start introducing regulations. It asks for Parliament to approve the review that will be undertaken. That was by way of emphasising that regulation should not be undertaken lightly and should not be seen as a default position in this Bill.

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[Lord Marland]

The noble Baroness said that she had been put on the spot by a fellow Liberal Democrat Peer, which I do not think has happened too often, so I am very grateful that she should now have clarified these matters. It is very good for the Liberal Democrat Party that its members are now singing from the same hymn sheet. They were only not doing so temporarily—it was a momentary thing. I hope that, on that basis and the fact that we have debated this issue for quite some time, the noble Baronesses, Lady Noakes and Lady Maddock, will withdraw their amendments.

[Baroness Noakes]

My Lords, as I have not moved my amendment, I cannot possibly withdraw it. I believe that the Minister set out the issues that emerged from our debates on a previous Committee day that he intended to take forward in this chapter of the Bill. However, he omitted to say that we had tried to tease out how the structure of the provisions for the private rented sector fitted with the requirement for tenants to be involved in decisions on whether or not Green Deals could be used. As this chapter is predicated on finance being used by Green Deal or energy company obligations, we discussed whether obligations could be imposed on the landlord beyond that, given the powers that were potentially being enabled via regulations. The Minister did not mention that as a topic to be taken away, but I certainly had a feeling in Monday’s Committee that it was not well articulated and that there seemed to be gaps. If there were gaps, we might want to come back on Report with amendments to make it clear what the extent of those powers were.

[Lord Marland]

The noble Baroness is right: I think that that debate showed that there are gaps. That is why I prefaced my opening remarks by saying that we have to take away a number of issues—that is the whole point of Committee—and we shall be looking at whether we can improve those gaps, as we are committed to doing. From my point of view, it was an extremely useful and valuable debate, and I assure the Committee that we will be taking those issues away.

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Debate on whether Clause 61 should stand part of the Bill.

[Baroness Noakes]

My Lords, in tabling my opposition to Clause 61 standing part of the Bill, I am delighted to see that I am joined by not one or two but three noble Lords from the Official Opposition. For the convenience of the Committee, I shall also speak to Clauses 62 to 67 and Schedule 1 standing part of the Bill. Other noble Lords may wish to speak to those clauses later, but the points that I make on Clause 61 apply with equal force to the remainder of this chapter in this part of the Bill. As my noble friend Lord Jenkin has already noted, Chapter 4 deals with the energy company obligation, and I should state at the outset that I am not going to be talking about the energy company obligation itself. The issue that I raise with my stand part notifications is whether it is appropriate to legislate for something which has not yet been properly worked out by the Government.

I have mentioned in Committee the use of framework legislation, and I also raised it at Second Reading. The chapters of the Bill that we have already looked at—the Green Deal and the private rented sector provisions—are also very much lacking in detail. Indeed, to almost any of the many detailed questions put to my noble friend, he has tended to default to saying that this will all be dealt with in the later consultation on the regulations which will appear at some stage in the future. Perhaps I may remark that on that basis my noble friend has so far had a remarkably easy ride on this Bill.

As has been pointed out, it is customary with most framework Bills of this nature for advance drafts of related statutory instruments to be made available during the Committee stage of a Bill. This is important, because it allows the House to discover any issues in the way in which the Government intend to use the powers, which could be better dealt with in the Bill, or whether any safeguards are necessary. That is why it is quite normal for the Government to produce drafts of the related statutory instruments for the Committee—particularly in your Lordships’ House, where our obligations as a revising Chamber are more acutely felt than perhaps in the other place. We have not been offered that on any part of the Bill.

The Bill falls into that very small category of Bills which present a serious challenge to Parliament, and in particular to the role of your Lordships’ House as a revising Chamber. Our work is typically detailed and thorough, but it is virtually impossible to be detailed and thorough when dealing with long lists of enabling powers. The Bill is certainly not as bad as the Legislative and Regulatory Reform Act, which I am sure the noble Lord, Lord Davies of Oldham, will recall. It is not even as bad as the Public Bodies Bill, which is far from out of the woods in its passage through your Lordships’ House. However, the Bill is similar to both those pieces of legislation.

Let me read from the Sixth Report of 2010-11 of the Constitution Committee on the Public Bodies Bill. After rehearsing the history of the Legislative and Regulatory Reform Act, the report states at paragraph 13:

“The Public Bodies Bill … strikes at the very heart of our constitutional system, being a type of ‘framework’ or ‘enabling’ legislation that drains the lifeblood of legislative amendment and debate across a very broad range of public arrangements. In particular, it hits directly at the role of the House of Lords as a revising chamber”.

As I have said, this Bill is not nearly as bad as the Public Bodies Bill, but it is firmly in the same category.

I have singled out Chapter 4 of Part 1, rather than the chapters dealing with the Green Deal or the private rented sector, because Chapter 4 is so unclear and so lacking in detail on how the powers will be used, that it is simply not right to give the Executive the power to draft far-reaching regulations to impose the energy company obligation as they think fit, subject only to the affirmative procedure. That of course admits of no amendment and is a very unsatisfactory procedure for dealing with legislation which requires detailed, line-by-line scrutiny, in the way that we customarily approach things.

The impact assessment in respect of Chapter 4 has several pages of complete waffle. It is perhaps easier to go to the summary impact assessment, and I shall read from page 8. Under “Costs”, it states:

“There are no costs associated with the primary powers”—

the primary powers in Chapter 4 of Part 1—

“however, depending on the level of the ECO there is a potential for significant costs to suppliers in meeting the obligation which ultimately we expect to borne by consumers”.

Under “Benefits”, it is stated:

“There are not direct benefits from the primary powers, however they do enable future policy which has the potential to deliver benefits associated with energy and thermal efficiency measures”.

I note from the summary that there are likely to be significant costs. They are not costs that will be borne by the companies or taxpayers; they are costs which, as is fully anticipated in the impact assessment, will be passed on to customers. Therefore, there could be significant rises in energy bills, but neither customers nor the energy companies or Parliament will have any real influence over their size or incidence.

My contention is that this part of the Bill is simply not ready for passage as primary legislation. I do not challenge the fact that something may well be necessary in due course, but I believe that it would be correct for the Government to decide what to do, to consult on it and then to bring forward primary legislation to implement it, giving both Houses of Parliament—but in particular your Lordships’ House as a revising Chamber—the opportunity to do the job that it does so well. In that way, Parliament could give proper consideration to the practicality and fairness of how this area is to be tackled and its impact on companies and, importantly, on consumers. For these reasons, I do not think that these clauses should stand part of the Bill.

[Baroness Smith of Basildon]

My Lords, I want to make a very similar point relating to Clause 61 but also to Chapter 4 as a whole. We raised with the Minister previously the question of the amount of legislation that will need to be resolved through secondary legislation. There are 52 separate items in this Bill that would be dealt with through secondary legislation. I have had difficulty in understanding in detail what the ECO proposals really mean and how they will operate. It is a serious matter when it is difficult for noble Lords to assess the impact of the operation and the amount of money that will be involved for consumers as well as providers, because so little information can be provided in the legislation. It is all to be done by secondary legislation.

It might have helped the issue to be resolved if there had been a purpose clause at the beginning of this chapter, not dissimilar to the one that I proposed at the beginning of the Bill. Such a clause could set out what this chapter is seeking to do and the purpose of the energy company obligations. Without it, it is very difficult to assess the proposals put forward in the different clauses. Therefore, I have some specific questions for the Minister, although he may not be able to answer them, because the answers have not yet been compiled.

The noble Lord will recall that, possibly at Second Reading but certainly in the meetings that he has been generous enough to have with noble Lords prior to and throughout the passage of the Bill, I have raised with him the concern that the noble Baroness, Lady Noakes, has also spoken about—the need to have drafts of statutory instruments before us when we are considering these matters. Seeing the detail of where the Government intend to go would help to inform our discussions; otherwise, they are held in something of a vacuum. I certainly find it difficult to discuss the detail of the clauses.

Perhaps I may raise some specific questions to which the Minister may be able to respond. One question with which I struggle is whether the ECO is effectively and appropriately linked with the Green Deal. Without that link, I am not sure that the ECO can deliver, which is why I mentioned the purpose clause at the beginning. Like the noble Baroness, Lady Noakes, at times I find the impact assessment difficult to read, and it is probably best not to try reading it during a late-night sitting of this House. The impact assessment states:

“The domestic sector has the potential to play a big role in meeting the UK’s carbon budgets by delivering cost-effective emission reductions. Under Green Deal there is a range of policies aimed at helping households install cost effective energy efficiency measures. However there are a range of market failures (positive externalities) and barriers (e.g. consumer inertia) that are likely to continue to restrict households from undertaking cost-effective abatement measures”.

It goes on to set out the difficulties, saying that,

“it is necessary to gain the powers to intervene to ensure that energy and thermal efficiency programmes are focussed on delivering measures in vulnerable and hard to treat houses”.

Because the purpose of the obligation and how it underpins the Green Deal are not defined, the provisions in the Bill for the energy companies do not state how these measures are intended to be delivered or how those most vulnerable households will be assisted. There is a lack of clarity about how this will work, and I am sure that the Government could do more to assist the Committee in bringing forward some information regarding it.

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[Baroness Noakes]

The Minister referred to an excellent summary that had been placed in the Library. Judging by the looks of incomprehension around me and my own lack of knowledge, this may not be widely available to the Committee. It certainly does not appear to be in the documents that are available to the Committee at the back. I am not sure that it will answer the questions raised by these amendments but I just note that there does not appear to be a wide knowledge of it.

[Lord Marland]

I fear that the noble Baroness may be in a small minority on this. I have just sent someone to the Library to get the document. It is there and I see my noble friend Lord Teverson has it. When we launched this Bill the document was attached. I do not want to get into semantics but I am happy for the noble Baroness to be provided with a copy now so that she can read it. I agree that my department produces an awful lot of information, which shows its willingness to be transparent. Perhaps the document could be passed to the noble Baroness; I am sorry that it is a photocopy. I have just sent someone to the Library to check that it is there. The noble Baroness seems confused. I hope the document is satisfactory.

[Baroness Noakes]

I have now seen the document and it gives virtually no information.

[Lord Marland]

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

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

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

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[Baroness Noakes]

My Lords, this has been a very interesting debate and I thank all noble Lords from all parts of the Committee who have taken part in the debate. Like the noble Lord, Lord O’Neill, I thought the three paragraphs in the document on the energy company obligation clearly did not go any way towards giving the Committee the kind of information that we would customarily expect to see in something like draft statutory instruments. I did note that when the Minister responded, the one thing he did not do was undertake to give the Committee or the House any further information when the Bill returns to the Chamber. I regret that, and I suspect that it may mean that we will return to this issue.

I got the impression that the Minister was linking the time taken in the Chamber on amendments with the time taken on this Committee. I am conscious that we have not achieved the target that the Minister wished to achieve today; nevertheless, I do not think that any of our debates has in any sense been of an unnecessarily excessive length. I believe that we have raised genuine points.

The Minister suggested that the energy company obligation might be met from profits. I remind him that his department’s impact assessment says that,

“there is a potential for significant costs to suppliers in meeting the obligation which ultimately we”—

that is, his department—

“expect to be borne by consumers”.

That is why there are important issues that need to be teased out. What is this obligation? Which people will it affect? How much is it going to cost, and how is it going to flow through the system into consumer prices? There is a real problem that it may not alleviate fuel poverty if it just goes round the houses and comes back in the form of bills. We need all those details.

My main reason for tabling my opposition to the clause concerns parliamentary scrutiny; it is not to challenge any part of the energy company obligation. The Minister said that we have to recognise what the Government have to do. Governance is about trying to get things done, and there is a framework Bill in order to allow the Executive to do what it wants. I am sorry, but the reason why we have legislation is to ensure that there are proper checks and balances against the Executive doing exactly what they want. That is why we have Parliament and, in particular, it is why we have your Lordships’ House, which acts as a revising Chamber. It is not about stopping the Government doing what they want; it is about making sure that there are the right checks and balances in the process. This is what I feel most strongly about in connection with this part of the Bill. We are letting the Executive do what they want but with insufficient scrutiny by either House.

I hope that the Minister will reflect on this debate as we move through this Committee stage and before we reach Report. It is important that your Lordships’ House has further and better particulars as an aid to understanding how Chapter 4 of Part 1 of the Bill will be used, and as an aid to your Lordships’ House in determining whether it is content with the formulation of the powers in the Bill or whether other safeguards are needed in the Bill. That is the role of your Lordships’ House and I hope that the Minister will facilitate the House in carrying out its role.

Clause 61 agreed.

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[Baroness Noakes]

The noble Lord, Lord Davies, might have forgotten that on Wednesdays the Grand Committee normally sits until 7.45 pm, not 7.30, so we are not 15 minutes but only a couple of minutes over. That is the Wednesday convention. However, I support the noble Lord, Lord Davies of Oldham, having spent many days in Grand Committee, often with him. It is customary in Grand Committee not to overrun by more than a couple of minutes and it would have been helpful not to have begun consideration of this amendment. The custom is not like that in the main Chamber, where if you start an amendment before 10 pm you finish it, but as near as possible to that time. That was the custom when I was in Opposition and the noble Lord, Lord Davies, often had to call time on behalf of the Government. I thought it was fair to say that.

[Baroness Northover]

As the inexperienced Whip on this Bill, I think I need to apologise if we have overshot. Given that we started consideration of the amendment before the finishing time, and given that it is incredibly unpredictable as to how long any amendment will take, and given that we discussed various clauses, including the one that this amendment slots into, it seemed to me—although I was clearly in error—that we could look at it quickly. That is clearly not the case, and I therefore apologise for trespassing on noble Lords’ time.

Perhaps I may respond as rapidly as I can to my noble friend. We fully support the underlying ideas in this amendment. It is essential that, when designing new energy policies, we take into account the costs and benefits of the full range of technologies available. The noble Baroness flagged up some important areas. However, I should point out that including specific measures and organisations in the Bill in this way leads potentially to the kind of problems that the noble Lord, Lord Jenkin, was flagging up earlier, by potentially, if things become redundant, having the problem of needing to consolidate Bills because things have moved on and changed. Although we very much support the ideas behind the amendment, including bringing in new technologies, we encourage the noble Baroness to withdraw the amendment at this stage.