Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)Energy Bill [HL]
Baroness Smith of Basildon Excerpts(13 years, 5 months ago)
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“Purpose of Part 1
(1) The principal purpose of this Part is to deliver energy savings from the domestic building stock, which will make commensurate contributions to—
(a) the achievement of the target contained in section 1(1) of the Climate Change Act 2008 and the carbon budget set for each budgetary period under Part 1 of the Climate Change Act 2008; and(b) the elimination of fuel poverty by the target date required by section 2(2)(d) of the Warm Homes and Energy Conservation Act 2000.(2) In performing functions under this Part the relevant persons shall have regard to—
(a) the principal purpose set out in subsection (1); and(b) the recommendations made from time to time by the Committee on Climate Change, where these are adopted by the Secretary of State.(3) In this section “relevant persons” means—
(a) the Secretary of State;(b) any person or body required by this Part or empowered by the Secretary of State to carry out functions under this Part.”
Baroness Smith of Basildon
My Lords, I shall speak also to Amendments 1A and 1C. The amendment may seem long but I can assure noble Lords that its purpose is very straightforward. I think that it is also helpful in setting the Bill into the context of government policy and existing government legislation. The Government have indicated very great ambition for the Green Deal, and I will come to that during the course of today’s debate and further debates. However, what is not clear from this legislation is how those ambitions will be met. The intention of this amendment is to ensure that all aspects of Part 1 of the Bill—that is, the Green Deal, the private rented sector and the other measures—are grounded in the purposes that the Secretary of State has indicated in both the impact assessment and in various speeches and press releases that we have seen from Ministers in the department. The intention of the subsequent four clauses, and the three that I am speaking to, is to define a purpose for Part 1—to place a duty on the Secretary of State, as we will hear from my noble friend, and on Welsh Ministers to produce a plan for improved energy efficiency, and also to create a means of reporting on progress towards achieving the aims set out in that plan.
I will say something briefly about each clause. The Secretary of State has described the Green Deal programme as,
“the most ambitious energy-saving plan ever put forward”.
If that is the case and it is to be achieved, we need to see that ambition grounded in a concrete set of objectives so that it is more than just an aspiration and really does become a reality. The Government have indicated that the purposes of the Green Deal and the related proposals that appear in Part 1 are: to improve the energy efficiency of existing building stock in the UK, including household and non-domestic properties, in order to reduce greenhouse gas emissions cost-effectively and fairly; and to contribute—I emphasise this—to our legally binding targets and improve the security of the UK energy supply. Under those legally binding targets, the UK is committed to achieving a 34 per cent reduction of CO2 emissions by 2020 relative to 1990, and at least an 80 per cent reduction by 2050. As the impact assessment—a weighty document—makes clear:
“There remains a considerable amount of cost effective abatement potential from energy efficiency measures in the domestic and business sectors which, if taken up, will mean that Carbon Budgets are met at a lower overall cost to society”.
The Government have indicated in their summary proposal for the Green Deal that they need to cut emissions in homes by 29 per cent by 2022 based on 2008 levels, which they say will deliver on the target of 34 per cent by 2020. That is obviously an inadequate ambition, and it is not properly defined in the Green Deal document how they will ensure that this really is delivered. Therefore it makes real sense for the ambition of the Green Deal to be linked to the scale required for carbon budgets and take into account the recommendations of the Committee on Climate Change for the future budgets.
As the Green Deal is a programme that lasts into the 2020s and through to 2030, the Government will want to ensure that they are delivering at the scale and pace required to meet the carbon reduction targets. We know that the Government’s objective is to make the Green Deal work, ensuring serious carbon reductions. As the Minister Greg Barker said:
“The new Green Deal initiative will help us achieve, or exceed, the binding targets for carbon reductions set during the previous administration”.—[Official Report, Commons, 6/7/10; col. 148W.]
He also said:
“We basically need to retrofit the entire housing stock”,
but he does not define what that retrofit would achieve. So there is a clear lack of detail. For the Government to state that they want to transform the whole housing stock and yet not indicate what this transformation will look like or what this means for carbon reduction energy saving is quite a significant omission.
The Government are not short on ambition for this legislation. Greg Barker stated that they want to retrofit 14 million homes by 2020. Chris Huhne described the Green Deal as:
“A once-and-for-all refit that will make every home in Britain ready for a low-carbon future”.
He added:
“No more half-measures going off at half-cock”.
Those are his words, not mine.
I have been through a number of ministerial speeches, comments and press releases—as the Minister knows, I look at the DECC website every day—but I cannot find anything about what energy carbon savings the Green Deal is anticipated to deliver even if the take-up is high, as the Government anticipate that it will be. So the Secretary of State has not stated what the carbon reductions from the housing sector need to be or what the standard of an individual home must be in order to contribute to the carbon reduction. So, defining the energy saving to be achieved to meet the reduction will provide more clarity on what will then need to be delivered in terms of improvement to properties.
Perhaps I may also address the fairness issue which the Government raised as an objective in the impact assessment. The principal purpose of these provisions should be in line with the statutory target date for elimination of fuel poverty as provided for by the provisions of the Warm Homes and Energy Conservation Act 2000. Aspects of the Green Deal programme—the energy company obligation in chapter 4—are partially aimed at assisting the most vulnerable. During the course of debates and deliberations on this Bill, the Government will need to decide whether the most vulnerable can be assisted early on in the new deal.
The intention of subsection (2) of the proposed new clause is to ensure that the Secretary of State and anybody he empowers to carry out anything under Part 1 of the Bill—the Green Deal providers, the energy companies, et cetera—will have to have regard to what will be delivered and provided towards the principal purposes outlined.
I turn to the new clause proposed in Amendment 1A, which deals with the Secretary of State’s duty to improve energy efficiency. By 2020 we should reduce carbon emissions from the housing stock by at least 42 per cent in line with the intended carbon budget proposed by the Committee on Climate Change. As I am sure we will repeat often during the course of this Committee, the Secretary of State has said that this Green Deal,
“is going to be a revolution … the most ambitious energy-saving plan ever put forward”.
Yet there is not really a plan. There is, however, an intention, and I think there are some good words around the ambition which are welcome. We will do our bit to work with the Government to ensure that we can realise that intention and that ambition. That intention and that ambition, however, is not a substitute for a clearly defined plan that is on paper, that is published and that outlines a policy measure to be introduced.
So, publishing a plan that defines that ambition could make real sense. It also gives to business and those seeking to introduce and deliver the Green Deal the certainty that they need to get themselves geared up and ready. I am sure that the Minister has seen the statement from a number of businesses and NGOs, from the Federation of Master Builders, the World Wide Fund for Nature, Marks & Spencer, B&Q and the UK Green Building Council, which all welcomed the Green Deal but emphasise the need for certainty and ambition. It is in seeking to provide that certainty that we put forward this amendment today.
The plan has to include a clearly stated level of energy savings to be achieved in each carbon budget period and the level of carbon budget reduction to be achieved. The complementary policies, such as the financial incentives and the means of ensuring that the cost of capital is kept low, will be key in this. How the Government expect it to be delivered and achieved will be outlined in the plan.
At present the Government have not outlined how they intend to report on the progress on what has been achieved as we move forward on the Green Deal. The plan can outline the frequency and measures that the Government will introduce to monitor progress towards achieving the plan and carbon reduction targets. This will outline the impact indicators that the Government will introduce.
The plan will also have to take into account other plans because the UK energy system is UK-wide. Demand reduction in one part of the system will impact on another. The Government should ensure that the plan takes into account and has regard to what the Scottish Government intend to deliver in energy saving and what the Welsh Ministers intend to introduce as part of their contribution to meeting the carbon reduction targets under the Climate Change Act. There should also be included a means of review. The Green Deal policy will not just exist for a few years. It will be with us until 2030, over several Parliaments and several carbon budget periods. The recommendations of the Committee on Climate Change will change and develop over time. The Government need to have regard to that advice and any increase on the carbon budget targets that will impact on the level of energy saving that will need to be achieved under this programme.
I move on to Clause 4, on the annual report on progress. As it says on the tin, the provisions in this section in the new clause seek to integrate the reporting on progress under this plan with those reports already published under the provisions of the Sustainable Energy Act 2003. This will integrate reporting on the progress achieved on energy savings through the energy efficiency provisions in this Act with other sustainable energy reporting requirements. That does not preclude the Secretary of State from defining further reporting requirements in the plan that he is required to produce under Section 2.
I believe that the Government are serious in their intent for the Green Deal. However, this intent to achieve carbon reductions needs to be made clear. It needs to be an explicit and real commitment and not just a target or an aspiration. I hope the Minister feels able to support these amendments. I look forward to his support and comments.
Baroness Smith of Basildon
I am grateful to the Minister for his response. He says that this is his first Committee stage in this House. It is also my first Committee stage in this House, as well as my first Committee stage in opposition, so I hope that we both find it an enjoyable and rewarding experience. I also thank my noble friend Lord O’Neill for his comments. I think that he understood the point that I was trying to make. I apologise to the noble Lord, Lord Dixon-Smith, but as much as the two of us share an interest in Essex County Council, I am really not seeking in these new clauses to introduce any new targets. I am merely seeking to ensure that there is a way in which Ministers’ objectives for the Bill can be judged against the targets which have already been established, and a way in which this Bill and the Green Deal can be judged against those targets.
Ministers expressed enormous confidence in the Bill. Chris Huhne, the Secretary of State, said that it is a “revolution” and the,
“most ambitious energy-saving plan ever”.
It is a “game-changing” plan, says Greg Barker. There is huge ambition for the legislation, as is right. However, if Ministers really feel that the Bill can deliver the carbon reductions, I should hope that they would also want to measure that in some way. So I am seeking to use the existing legislation, not to create greater commitments.
I understand the Minister’s comments about the Bill being commercial. However, I think that the Government have a responsibility as well. It is not good enough for the Government to want to introduce legislation, but then to take a step back and say that the market will provide. This is clearly a commercial matter. However, the Government are setting boundaries and guidance on consumer protection because the market on its own will not provide it unless there is government legislation and support to ensure that it happens. As for having regard to the Committee on Climate Change, although we are reluctant, we would want to ensure that the Government support and work with these organisations.
I am a bit disappointed by the Minister’s response. I had expected a warm welcome for the new clauses, in the spirit of co-operation which he mentioned. We will seek co-operation with him, and I will seek leave to withdraw the amendment for now, but I also ask him to take away the points I have made and to look at them and perhaps we can discuss them further before Report. I beg leave to withdraw the amendment.
Baroness Smith of Basildon
I thought it would be helpful to say something about our general approach to the Bill and the Green Deal and to speak to our Amendment 38 as well. The Government have great ambitions and hopes for the Bill, as well as soaring rhetoric. Chris Huhne describes it as a revolution. Indeed, on Second Reading, the noble Lord, Lord Marland, said that the Bill will take energy efficiency off the back burner—not that I am convinced it was on the back burner—and put it at the forefront of government policy. While I may take issue with some of the rhetoric that has been used by Ministers—I still feel slightly disappointed at the lack of ambition in terms of measuring the carbon reduction—these are very worthy objectives which we support. I thank the Minister for the engagement he has shown so far and will continue to show during our proceedings. We will seek to ensure that the Green Deal is fit for purpose and can achieve the objectives that we all wish for it.
I have two specific issues: one is on Amendment 38 and the other on Clause 1. I am not clear from Clause 1 about what is an energy plan and what is a Green Deal plan. The energy plan becomes a Green Deal plan only when there is an agreement that the costs can be paid for by the installers; that becomes clear in later clauses. However—and I have raised this with the Minister elsewhere—this could mean householders not being informed about potential cost savings and carbon savings that could be funded in another way. This contrasts not very favourably with Labour’s whole-house policy.
I am seeking to prevent a householder losing the opportunity to go beyond the Green Deal or not even realising that they could do so. They would only be informed of the measures that would be likely to attract Green Deal funding, yet there are other funding streams. Householders may choose to fund some measures themselves such as a feed-in tariff. There are also renewable heating incentives and some water company funds are available as well.
Unless it is clear that the assessor should undertake an energy plan, report that to the householder and then move from an energy plan to a Green Deal plan, we face two problems. We could lose public confidence because in effect the assessor would decide which measures in an energy plan could be undertaken in a Green Deal plan. That is a matter for the householder or tenant to decide—the person who is paying the bill—not an assessor. If the householder loses the right to decide which measures are Green Deal plans and which are energy plans, that would undermine public confidence.
We need to explain the difference and make that explicit in the legislation. Where an assessor goes in to a home and undertakes a major energy plan, I would like the householder, with the assessor and perhaps an installer, to decide which measures would be undertaken under the Green Deal. I hope the Minister will take that proposal away and look at it, because I am sure that what is proposed under the Bill is not the intention. If it is, it would be impossible to reach the targets set by the Secretary of State.
Amendment 38 is not a minor point. It would rename the Energy Bill the energy framework Bill. Noble Lords will be aware that originally the Bill was going to be the green energy and energy security Bill. That is why it is called the Energy Bill. Yet, in this Bill, my understanding is that—and correct me if I have the wrong number—something like 52 separate pieces of secondary legislation will have to come forward following this. The noble Baroness, Lady Noakes, raised this at Second Reading as well. I understand some of the reasons why but I find it unsatisfactory where so much legislation will be decided by secondary legislation that needs to be examined fully by this House.
At Second Reading the noble Lord said:
“I will clarify that this is a framework Bill on which there is a lot of work to be done”.—[Official Report, 22/12/10; col. 1151.]
I do not raise the issue out of frivolity. It is a matter of accuracy that the Bill could be renamed the energy framework Bill. I hope that the Minister will take on board the point and also the difference between an energy plan and Green Deal plan. I beg to move.
Lord Marland
This is a commercial market-driven project. In any commercial market-driven project there are going to be properties and buildings where, as the noble Lord rightly says, a cost may not be acceptable within the repayment fund or may not be within the golden rule. My sense, and that of the department, is that we set up the structure and see how it proceeds. I live in an oil-fired house in a rural community where we cannot get gas, as do many, as the noble Lord said. If it does not make commercial reality for market-driven forces to help with that, the department and Government should look at how that can best be achieved.
Until the commercial equation is worked out, however, and until I have seen the assessor and the accreditor, I cannot begin to see whether that is a viable proposition. It is incumbent upon the Government to regroup at a point, as the noble Lord rightly says, to see where it has not worked with these properties, what can be done to help, what type of people are not able to take full advantage of the scheme and then see where the Government can help. I look particularly here at the vulnerable, who are vital to this, particularly the vulnerable in rural communities where they cannot have the benefit of this if the numbers do not work out.
I hope that that deals with the noble Lord’s point. However, I think that he is absolutely right. The scheme needs to be road-tested to ensure that it works and we must keep a watchful eye on it. Getting these things precisely ordered is a very good thing for the Bill.
I regret to say that I have forgotten where I was but I have a feeling that I was somewhere like subsection (5) —or was it subsection (4)?
Lord Marland
That is very kind of the noble Baroness. Subsection (4)—no, I have already done this. Subsection (5) sets out some conditions that must be met before payments are collected under a Green Deal plan. For example, measures must be installed in accordance with requirements set out in Clause 7. Again, these conditions protect the parties entering into a Green Deal plan and are intended to ensure that payments are not collected until measures have been installed appropriately and the plan has been confirmed.
Subsections (5) and (6) provide that when all the requirements of subsections (3) to (5) have been met, payments under a Green Deal plan are to be made by the person who is liable to pay the energy bill for the property for the time being and should be made through energy bills for the property. This is the core of the Green Deal and the effect of an arrangement qualifying as a Green Deal plan.
In summary, therefore, Clause 1 sets out the conditions that must be met for an arrangement to qualify as a Green Deal plan and the effect of those conditions being met. It is therefore central to the operation of the Green Deal.
Amendment 38 would change the short title of the Bill from the Energy Act 2011 to the Energy Framework Act 2011. I appreciate the sentiment of this amendment, which highlights that the provisions for the Green Deal provide a framework to be codified by further legislation. This is the approach we want to take. The Green Deal provisions are about framing a new market and, as I said earlier, we wish to consult widely.
However, the Bill, while focused on the Green Deal, covers a number of other issues in the energy sector; therefore most of the provisions are not framework provisions. As the short title should describe the Bill as a whole, I do not believe this amendment is appropriate.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister, but I am not sure he has addressed the point I made first. On Amendment 38, I think that perhaps the noble Baroness, Lady Noakes, misunderstood me. It is not with any welcome that I say there are 52 pieces of secondary legislation; I think it is entirely inappropriate. I welcome the fact that the Minister says that he will consult on them. That is very different from having full scrutiny in this House. The point the noble Baroness and I both made at Second Reading is that it would be helpful in our deliberations if we had drafts of some of the secondary legislation as we discuss the Bill.
I accept that this is a framework Bill but I do not welcome the fact that it is. If we look at some of the points that will be covered by secondary legislation, it would be much better if we had that information today. The actual framework of regulations—the code of conduct, for example, and the kind of assessments—would be helpful prior to this stage. I would prefer to see much of this information in primary rather than secondary legislation.
The noble Lord, Lord O’Neill, referred to a lack of clarity. It would be helpful to have some of these comments prior to the Bill, and I apologise if I was not clear enough in my explanation. The objective of this Bill is to ensure that as many households as possible have as much work undertaken as possible in terms of energy efficiency to reduce carbon and reduce bills. The Bill is market-driven in some ways because, as I think the noble Lord, Lord Dixon-Smith, said, if there is an incentive for people to save money, there is an incentive to undertake the Green Deal; we would not want to exclude work that could be done and paid for in another way, including by the householder, because it is not in the Green Deal plan.
Clause 1 provides that an energy plan is an arrangement by the occupier owning the property for persons to make energy efficient improvements to the property, and goes on to say that it is an energy plan if it is paid for in instalments. Yet all the references in Clauses 2 and 3 to assessors, the framework regulations and the code of conduct apply to a Green Deal plan. We want to ensure that the assessor can undertake an energy plan so that he can assess how much work can be undertaken in that home to ensure energy efficiency, part of which may be part of the Green Deal. I do not think it has ever been the Minister’s intention to exclude all work other than the Green Deal. It should be an opportunity for the householder. I would welcome further discussion on this, because I do not think this is what the Minister intended.
“( ) to ensure that assessors and providers have the qualifications and skills to perform their functions under the Green Deal;”
Baroness Smith of Basildon
In moving Amendment 2D, I shall speak also to Amendments 2G and 5B. It is probably difficult to speak to 8C until the noble Lord, Lord Teverson, has done so, but I may make a passing reference to it in support.
It is worth reiterating the extent and the expectation the Government have of the Green Deal because it sets these amendments in context and shows why we think they are so important. The Secretary of State has made it clear that he thinks that something like 26 million homes could be transformed by the Green Deal, which is a great ambition. It could create 250,000 new jobs and lever funding of £7 billion into the private sector. Quite rightly, the Secretary of State has also made it clear that there will be no cowboy operators under the Green Deal. This is extraordinarily important because, if we are looking at consumer confidence, it will be essential that consumers have confidence in the new deal and not just in the installers but in the assessors and providers through every stage of the arrangements.
The Minister made a similar point about consumer confidence in his comments and I hope therefore that he can take these amendments on board. They seek to ensure that the assessors, providers and installers of the Green Deal have the qualifications, skills and aptitudes to perform their functions appropriately and fully under the new deal. We also look at the standard to which they work on assessments.
One reason why I am so concerned about skills is that those who work in the industry and are involved in training have expressed their concerns to me and to other noble Lords. There is a campaign known as Cut Your Carbon, a partnership between the Construction Industry Training Board, that deals with construction skills, the Sector Skills Councils, the Federation of Master Builders and the National Specialist Contractors Council. They have all sought to raise awareness of the kind of skills that will be required to fulfil the Green Deal and the ambition of 26 million homes that could be transformed.
Cutting carbon emissions is going to mean a change in the construction industry and in the industry that will have to undertake the Green Deal. They have to change the skills that many in their workforce have. They have to upskill and reskill. Currently there is a gap between what the clients would demand under a Green Deal—and, indeed, any other energy programme—and the understanding of the role and ability for small and medium-sized enterprises to deliver the low-carbon solutions that we will need to find in order to fulfil the Green Deal.
Lord Marland
I thank noble Lords for tabling these amendments which seek to ensure that the Green Deal participants are working to a specified standard using agreed methodologies. I welcome the various comments that have been made because it will help us set out our provisions in more detail. Amendments 2D, 2G and 5B all seek to ensure that the Green Deal assessment is carried out by qualified assessors. A specified methodology for completing this assessment is contained within the code of conduct. These are also covered in Clauses 3(4)(a) and 3(9).
I am glad to note that the noble Lord, Lord O’Neill, and my noble friend Lord Lindsay are not far apart. It is fundamental that standards are set, that they become the cornerstone of this whole assessment and that if we get that right we get the rest of it right. I am also grateful to my noble friend Lord Lindsay for pointing out the difference between accreditation and certification. This needs further discussion and investigation and we will undertake to look at that to make sure we get it right. It is fundamental and I agree with the noble Baroness, Lady Smith of Basildon, that getting these assessments and the quality is fundamental to the confidence of the customer and the whole scheme.
We could have a workforce of 250,000 working to satisfy the Green Deal requirements but of course that depends on take-up, and we will inevitably find that if the take-up is not as great then there will not be that many. We believe that the maximum is about 250,000. If I heard the noble Lord, Lord Neill, correctly, he said we were thinking of excluding boilers and solid wall insulation, external and internal. That is not the case. Subject to the golden rule, these will be included. I think I heard the noble Lord correctly and it is worth clarifying this.
I agree that it is important that assessments are produced by those with suitable training and practical know-how and that is why Clause 3 of the Bill currently sets out provisions for a code of practice that all Green Deal participants will be required to sign up to as part of their participation. Furthermore, the Clause states that this code of practice may set out the qualifications and skills that these assessors must possess in order to practise.
I thank noble Lords for their suggested amendment to ensure that the code of conduct requires assessors to produce their assessment in line with standard methodology. The Bill currently sets out the intention for all assessors. Subsection (8) allows for the withdrawal of authorisation for particular participants and allows a membership body to withdraw authorisation from its members. Although Clause 3(5) may allow for regulating the membership body by legal advice, my legal advice is that it may not be sufficiently clear that we have powers to withdraw authorisation. I therefore agree that we should consider this amendment further.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister. I welcome the approach that he has taken throughout this Committee. He is taking on board comments that have been made today, and I know that he will take them back and perhaps we will see some changes at Report. I just grinned when he talked about the code of conduct because—I do not know whether the noble Baroness, Lady Noakes, picked this up—he said that the code of conduct “must” set out the qualifications and skills. At the moment it does not; it only says it “may”. So I welcome his change of language to “must” set out the qualifications of skills, rather than “shall”, as my amendment suggested.
It has been a useful debate, and I always defer to those with greater knowledge on issues. I do not think that there is much difference between us. All of us agree that those undertaking the work, whether assessments or installation, have to have the appropriate skills and qualifications. It is entirely appropriate that although they are accredited in some way, that can be withdrawn. But the reason for raising the issue of standard assessments was not to propose a tick-box procedure—although there will undoubtedly be some kind of tick-box procedure—or uniformity of the work that will be required. However, the issue has been raised. The National Housing Federation raised concerns that the current assessment—I think it is the SAP—does not always work. I was trying to get to a consistency in standards of measurement.
Given that the Green Deal, in terms of what work can be undertaken in a home, has to be cost-effective and follow the golden rule, some kind of standardised assessment to understand what fulfils the golden rule in that way, if the savings have been made, and some sort of consistency, will be required. That is of interest to customers. So I am not suggesting that every house needs to have the same installation and the same work done. There will have to be intelligence taken on board by those installing. However, a lot of the measures will be very safe, and it would be a somewhat ludicrous position if two houses next door to each other were both given different ways of achieving it. It brings us back to the issue we had around the Green Deal plans and the energy plans because, under the Green Deal plans, it could be the same work but with different ways of achieving the same objectives; and the decision would be taken by the assessor, not by the householder. I think that is an issue of the householder having confidence that the assessor is given the correct information.
Lord Teverson
I thank the noble Baroness for giving way. I would like to make an illustration there, which may come on to something later on. She mentions that two houses together should not have different solutions. The big challenge is that both those houses, and probably the rest of the street, are assessed as a whole, and a better solution of the 20 houses has made them the one or two. That is why I have a slight concern about too systematised an approach. I think the noble Lord, Lord O’Neill, made a magnificent case for a degree of that approach; but I think that that point illustrates that, if it is too tram-lined, then we can get into too much trouble, and I understand she is not saying that.
Baroness Smith of Basildon
I am not suggesting that it should work on tram-lines, but there will need to be a consistency that is understood. The other point is that there should be some kind of guidance and standard of assessment. The noble Lord, Lord Jenkin of Roding, said in his comments that assessors will have particular expertise in methods of insulation or whatever. There is a concern that assessors may be linked to a particular company and may want to promote the products of that company and a particular method of energy efficiency. That is something that I think all of us want to avoid. The assessor should be free to look at any way in which you can promote energy efficiency or maximise energy efficiency in the home. I hope the noble Lord can take these points away. There needs to be some consistency in the standard that is required. If we can reach that through the level of skills, qualifications or training, then that would be appropriate. We will always want to ensure that the consumer comes first, and the consumer can be assured in all cases that they are getting correct and accurate information. I beg leave to withdraw the amendment.
“( ) for the payment of a reduced fee for charities and social enterprises;”
Baroness Smith of Basildon
My Lords, I draw on my experience as a Minister with responsibility for the third sector and for social enterprise in the previous Government. I will make a very brief comment which will not take much debate, and I hope the noble Lord will be able to accept this and take it away and undertake to look at it. While accepting that this would be commercial, we would not want to exclude those charities, non-profit organisations and social enterprises that have a particular interest in helping those who are vulnerable—perhaps people with learning difficulties or people who are fuel poor. If the level of fee that is charged to those organisations that do not seek to make a profit will be different from the fee charged to a commercial organisation, there will be a different impact on each of those organisations. All that I am seeking to explore through this amendment is whether the Minister will consider—and how we define legislation can vary in open discussion—whether a reduced fee can be charged for those organisations that have charitable objectives.
Lord Jenkin of Roding
Is the noble Baroness going to say anything about the second amendment in this group, Amendment 7A? I do not understand it.
Baroness Smith of Basildon
The second amendment would also look at the size of the organisation—the kind of provider. It comes back to the same point: payment may not be proportionate, if there is the same level of fee for both the smaller charity, say, and the large company. The amendment endorses the idea of whether we consider a lower fee, a lower payment, for those kinds of non-profit or charitable organisations or organisations with charitable objectives.
Lord Jenkin of Roding
I am most grateful to the noble Baroness for that explanation: I had entirely misunderstood the amendment’s intention. It refers to,
“ensuring that such payment is proportionate to the size and nature of the green deal assessor and provider”.
I thought that we were talking about individuals, but the noble Baroness has made it clear she is talking about companies, not the size of the man who is doing the assessing. I realised that there must have been a serious purpose behind the amendment, and she has now explained it.
I think that both these amendments are exceedingly difficult. One can always have sympathy with charities and other people who work for good, or not for profit—or whatever it might be—but at the same time, for the most part, professional services must be paid for. Unless somebody is doing work pro bono, which lawyers and others do from time to time, professional services must be paid for on a proper professional basis. That is what we are talking about. The idea that one should have reduced costs depending on the nature of the client is a difficult concept to import.
We are concerned to ensure that this will be as simple a process as possible. I said at Second Reading that I thought this had the ability to become a much more workable and simpler scheme for all parties to understand than has been the case under the CERT scheme, but I think this amendment would add a complication which I would not support. I am sorry to disappoint the noble Baroness, but I think professional services must be paid for properly.
Lord Marland
I thank the noble Baroness for raising this amendment. It is critical, particularly at this time, that we take into account the charitable sector, of which she has great knowledge. Indeed, so do I to a certain extent, from involvement with a number of charities. Obviously, I can only accept amendments such as these once they have been agreed with counsel and other Ministers, but we will consider how best to take on board this policy aim, which I think all of us would endorse and support in this sector.
Baroness Smith of Basildon
I thank the Minister for that. I understand the concerns of the noble Lord, Lord Jenkin of Roding. He mentioned the client. It is not the clients who would pay a reduced fee, but the provider of the services. I am grateful to the Minister for his acceptance, and I look forward to seeing what comes forward in due course.
Lord Teverson
My Lords, the amendment concerns a matter of principle. When reading through the detail of the Bill I had some difficulty in understanding exactly what protections there are for consumers in this system given that there are a number of different actors in the providers of services. We have the finance companies, I presume; the assessors; the experts who go out with or without their tick boxes; and the people who draw up the green plan or the broader energy plan. I am concerned about consumer confidence, about which the noble Lord, Lord Whitty, talked so well. There is a need for the legislation to contain a duty to ensure that there is no collusion—or even laziness in a negative way—which prevents consumers getting the best deal.
I do not believe the Competition Commission would be interested in this level of transaction, nor, I suspect, would it come under local authority trading standards. I will be interested to hear from the Minister how the Government see this area and what legislation they will bring forward to make sure that the various actors on the supply side provide the best deal for the improver; that there is not in the supply chain a person making sure that a particular building supplier always gets the right business or an assessor who makes sure that the person who draws up the energy plan is not always the same person.
Having said that, I understand that this is a complicated area. Clearly relationships will build up. It may be good that particular organisations and individuals work well with others within the supply chain but I am concerned that the consumer’s interest is protected. Hence the amendment seeks the Secretary of State to have a duty to ensure that there is no collusion, either by design or through laziness, that delivers a less than optimal solution for the consumer. That is what the amendment is about. I am sure that any public Bill writer would be appalled by the state of the language and what it says, but I have tried to put it in plain language so that the Minister can come back and say to us how he feels this area should be approached within the context of a green energy plan. I beg to move.
Baroness Smith of Basildon
My Lords, I support the principle of what the noble Lord, Lord Teverson, is seeking to achieve. It is not dissimilar to the point I made earlier about whether there may be arrangements or relationships between an assessor and an installer whereby the assessor will always want to give business to a particular installer for the work to be done. It is difficult to ensure that there are not such arrangements and the wording of the amendment puts the issue back into the Minister’s court to see how best this can be achieved. It is an important objective to consider because, as has been said a few times during the course of the debate, protection of the consumer and consumer confidence are all important. If the consumer thinks that a certain assessor will always go for particular kinds of products or arrangements, it will not lead to confidence in the Green Deal. I hope the Minister will take on board the principle, understand the point that it is seeking to make and consider ways in which it can be addressed.
Lord Marland
My Lords, Amendment 9 would require the Secretary of State to ensure through regulation, audit and the code of practice that improvers are protected from anti-competitive activity by Green Deal providers. Clearly anti-competitive behaviour and collusion among Green Deal providers is undesirable and we want to ensure that the risk of this is minimised through the design of the scheme. However, this requirement on the Secretary of State would mean that the Secretary of State would be obliged to put in place legislation which already exists in other parts of the law. Green Deal providers should be covered by existing competition law, notably the Competition Act 1998, which prevents businesses from entering into anti-competitive agreements and abusing dominant market positions. I do not see any need to effectively replicate those arrangements in the Bill.
Furthermore, for domestic households only licensed creditors will be able to operate as Green Deal providers and the existing credit regulation contained in the Consumer Credit Act would apply. I hope that that is enough to satisfy the noble Lord and that he will withdraw the amendment.
Baroness Smith of Basildon
Perhaps I may put a scenario to the Minister and ask for his comment so that I can see if I have misunderstood this. If an installer of double-glazing were to employ a team of assessors, and those assessors could do an assessment on a house, and one way of achieving carbon reduction was to have double-glazing in that home, in a sense there is nothing wrong in that, since it is one way of achieving the carbon reduction. However, it comes back to the point that it is the Green Deal plan by which they are achieving the carbon reduction. The householder has not got the choice of an energy plan from which to choose which Green Deal provisions they want to undertake. There could be a relationship where an installer employed an assessor who would always recommend that particular installer’s products. It would be a way of achieving the Green Deal, but it might not necessarily be the best way or the only way. Does the Minister envisage that as a problem, or is that how he sees it could work?
Lord Marland
I think that noble Lords are looking at this in a narrow sphere. I am not familiar with parts of the world where there is only one supermarket chain operating in that part of the world. I take the view of the noble Lord, Lord O’Neill. In my part of the world, there are four or five operating quite regularly. If you add to that B&Qs and the suppliers of all forms of household improvement, it multiplies. Therefore there is distinct competition. You have to add to that the energy companies, social enterprises, housing associations and all manner of retailers who can ensure that the market is competitive. I totally take on board what the noble Lord, Lord O’Neill of Clackmannan, has said, that it would be terrible if there was only one supplier in a part of the world. However, given the extent of suppliers that are available, I do not realistically think that market forces would apply.
Referring to the interesting point raised by the noble Baroness, Lady Smith, I am not entirely sure that I follow. If her point is that the double-glazing salesperson was promoting a product that was exclusively to their benefit, I am not sure that this would happen because market forces would dictate that anyone inviting someone into their home to give an assessment of the requirement and the cost of it would automatically put that out to tender. Even if these people were inappropriately selling the product, they themselves, before they are allowed to sell that product, have to be authorised under the scheme; and the scheme, as we have already debated, will have many a safeguard and recourse against unauthorised behaviour by an authorised provider or assessor.
It comes back to the central theme. We have to get these right, we have to ensure that the standards are properly maintained, and we have to ensure that competitiveness is allowed into the market.
Lord Marland
My Lords, there is nothing to prevent an assessor working for an organisation, but the reality is that they have to be independent of that organisation in terms of their assessment. There has to be a Chinese wall. To answer my noble friend Lord Teverson’s excellent question, assessors can come from all walks of life. They could be quantity surveyors, representatives of B&Q or representatives of a supermarket, but they have to retain an independence and fulfil the standards that are required of them under the Green Deal regulatory mechanisms that we have been debating today.
I would also point out that a lot of the products that we are talking about here are not new to the market. It is not as if we are suddenly coming into the market with a wonderful new product. Double-glazing has been sold consistently through the country for a long time. Loft lagging has been consistently sold, and there are consumer protections in place under the Act which provide for proper regulation.
There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on, however, and that is the role of commissions. My noble friend has raised a very important point where we need to work out the impact and how these assessors are remunerated.
Baroness Smith of Basildon
I have listened carefully to the Minister. I think that he is trying to reassure noble Lords on this important commission point, but I am not reassured. Clause 3(4)(a) to (g), on the code of practice, would seem to allow an installer to employ an assessor, and to allow that assessor—within this code of practice, this framework arrangement and the Green Deal—to recommend energy efficient measures that fall within the remit of one installer that is employing that assessor. I do not understand how an assessor can be employed by an installer and be independent. I am grateful that the Minister will look at this again. However, depending on what he comes back with, we may wish to return to this at a later date.
Lord Teverson
My Lords, I thank the Minister for going through this and perhaps spending more time on it than he would wish. However, I think it is a core part of making this system work and putting it above question. Public money is not involved but we are talking about consumers’ own money under a government scheme. That is why it is particularly important. I was going to offer to look up the various bits of competition legislation that he mentioned but I suspect that I will not get round to that before Report.
I thank the Minister for looking into this area. It would be useful for the department to explore this and to have a clear view on how it will work to avoid what I would call mis-selling within the market place. I beg leave to withdraw the amendment.
Lord Jenkin of Roding
There is both good and bad in this suggested new clause. The point about the first three subsections seems to me to be inherent in the nature of the scheme. However, I do not know whether this is the right way to make clear that the scheme is intended to give the consumer, the householder, the best deal available. I am sure that there will be many circumstances where the assessor will have to weigh up the situation and say, “Are we asking too much?”, which means that it could not be paid back within a reasonable time; and, “Are we asking too little?”, which means that the householder could have paid rather more. This may need to be written into the Bill in some form. With the use of the words,
“the best overall energy solution”,
you are opening up the possibility that someone will sue if they can be persuaded that they could have got a better one. Somehow one has got to try and avoid that. That is the good part.
Subsection (4) is totally impractical and undesirable. As I said at Second Reading, one of the great advantages of the Green Deal over the CERT programme is that this is not written directly around carbon savings but is intended to provide the householder—the consumer—with incentives for lower bills and warmer houses. To require that in every individual case someone has to sit down and estimate what the carbon savings are likely to be seems to me to be unrealistic. I apologise to my noble friend for using what may seem to be fairly strong words, but everyone has recognised that one of the advantages of this is that people may choose to have warmer homes and pay back rather more because they will not get as much savings as they might have had had the whole thing gone into saving energy costs. How is anybody going to conceivably estimate that at the outset?
We have a classic case here where the carbon savings, which certainly lie at the heart of this in order to achieve our carbon targets, are the consequence and not the primary objective. As I said at Second Reading, people will respond much more easily and readily to an offer of lower bills or a warmer home than they will to someone coming along and telling them that they have to cut their carbon footprint. Subsection (4) is very difficult and I would find it hard to support if it were to find its way into the Bill.
Baroness Smith of Basildon
My Lords, I feel that in some ways we have already had this debate during the course of the Bill. We are perhaps all looking at different ways of addressing the same kinds of issues and problems that arise. Whether or not this is the best way forward I do not know. It comes down to the fact that, in any property where an assessor looks at what could be done to achieve energy efficiency, there will possibly be several options of what can be achieved under the Green Deal, and different assessors may give different options.
The concern is: who makes the decision and what options in the energy plan can be achieved under the Green Deal? Would it be the installer, the provider, the assessor or the householder? I am not clear where the decision-making process for the best energy solution lies. I make the same point as the noble Lord, Lord Jenkin, and ask whether the best possible solution would be challengeable? Who would make the decision about the best possible solution? This brings me to the point about how decisions are made and what energy plans and efficiency improvements can be taken into account under the Green Deal. It would be helpful if we had clarity on who makes the decision on that.
I like the idea of the householder having input into that decision and of having an energy plan as well as a Green Deal plan. I would welcome the Minister’s comments on how this would work in practice.