Lord Davies of Oldham
Main Page: Lord Davies of Oldham (Labour - Life peer)Energy Bill [HL]
Lord Davies of Oldham Excerpts(13 years, 11 months ago)
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Lord Davies of Oldham
“( ) An assessment made and provided under this section must clearly detail those energy efficiency improvements that qualify under the green deal.
( ) In making an assessment, the assessor must include all energy efficiency improvement options that qualify under the green deal.
( ) Nothing in this section prevents green deal assessors from identifying energy efficiency improvements in their assessments that—
(a) sit outside the green deal; or(b) collectively exceed the total amount qualifiable under a green deal plan, where this is clearly identified on the assessment.”
Lord Davies of Oldham
My Lords, I apologise to the Committee for my late arrival. The Chair will have saved me by indicating that sittings in the Chamber take precedence and, unfortunately, Questions went on beyond the scheduled start of this Committee. I hope that government business managers will look at that difficulty, which has been the source of a little embarrassment to me today and, more than that, a disadvantage to the Committee.
The amendment is concerned with giving consumers choice. It would enable consumers to have the benefit of a more comprehensive range of options, so that those who are motivated or who can afford a range of energy efficiency options can think about installing measures that go above and beyond the Green Deal. Providing a range of such options helps consumers to think more intensively about which measures they would like to install, as some measures will be better suited than others, according to the circumstances of the building that is due to be treated.
We have heard in Committee arguments in favour of thinking beyond what may strictly be provided through the Green Deal. We all appreciate the importance and significance of the Green Deal. I am not in any way, shape of form doing anything other than commending the objectives of the Green Deal, but there are possibilities beyond it. We all have a major job in educating the public and our fellow citizens about how they can respond. We all know what a challenge that will be because, in all circumstances, despite the fact that the arrangements for payment are so skilfully done through energy bills, costs are involved and we all know people’s natural response to additional costs, particularly when, in the immediate future, household budgets are likely to be constrained.
We want to make sure that as much information as possible is available and that we emphasise the necessity of both hitting the targets and ensuring that individual citizens and consumers sign up to the proposals in the Bill. This amendment builds on the momentum in this House for a more comprehensive energy perspective. I hope, therefore, that the Committee and the Minister will look on it as a constructive proposal to assist in the general objectives of the Bill. I beg to move.
Lord Jenkin of Roding
I had hoped that the noble Lord would have given some indication of the range of improvements and benefits that might be available under the Green Deal. It seems to me that, if one were to list the entire range, including appliances and all the other things that now qualify under the Green Deal, that could in many cases be misleading to a householder, as it might be that only two or three of them could possibly be relevant to his or her house. I just wonder what the purpose is of listing the whole lot if inevitably the assessment will be that, within the price and given the nature of the building concerned, numbers 1, 2 and 3 are really the only ones that will be applicable. What is the purpose of listing, as the amendment suggests in the second subsection, all energy efficiency measures, if most of them might not apply to that house?
Lord Davies of Oldham
I am grateful to the Minister both for his response and for his good wishes to my noble friend Lady Smith, which I will convey to her; we anticipate that she will be back for the next session of the Committee. I will bear in mind his good wishes to me. He shares with me an interest in cricket and, as long as our cricket side is doing well internationally, I am sure that my heart will still continue to beat strongly. That ought to take us through this Committee in any case.
On the questions that have been raised in the debate, I am grateful to all noble Lords who have participated, particularly the noble Lord, Lord Oxburgh, for his supportive comments. I agree with the noble Lord, Lord Jenkin, that, if a household were to get the full list of potential measures as a result of this amendment, it might chill the blood somewhat. People would be overwhelmed by the prospect of the enormous amount of expenditure that could be involved if they followed a range of options. Of course, I wanted to emphasise—and perhaps I did not make it explicit enough in my breathless opening remarks—that we are talking about specific proposals in regard to the property, so that the customer would be looking only at a range that was relevant to what he might expend on the property.
I understand the noble Lord’s more general points, although I still subscribe to the opening statement that I made in support of this amendment. We need to engage in a major exercise in effective communication in order to make this scheme work. Ultimately, the householder will recognise that costs are involved and there will be some anxiety and scepticism. I emphasise that it should be made clear to the householder what is within the Green Deal and therefore within the framework of the scheme. If there are other proposals that might improve the property but are not within the scheme, that should be clear so that there would not be confusion.
I listened carefully to what the Minister said about the ability of the consumer to challenge the method if the method proved to be wrong. We are dealing with specialisms and technical skills. I do not know about other noble Lords but I am a dummy in the hands of quite a number of specialists who come to my home and seek to advise me on the improvements that I could effect at absolutely minimal cost and at huge benefit to me and probably the wider community if I listened to the spiel long enough. At times, such presentations are difficult to analyse effectively and to refute where they need to be refuted. This will not alter the fact that consumers will have a degree of scepticism.
I also want to emphasise that we are not suggesting at any stage that the assessor or the installer is doing the choosing. The responsibility, obligation and right rest with the property owner who is having the improvements. That is central to our amendment.
I am not quite sure whether the Minister responded to the contribution made by the noble Lord, Lord Oxburgh, as well as I would have hoped. I was feeling my way to that position and the noble Lord expressed it more precisely. My noble friend Lord O’Neill, who is not in his place, also contributed on this. We need to be clear. I understand the issues with regard to the code of practice but we also know the vagueness and generalities of the code of the practice. The noble Lord expressed anxieties about how this would impact on the consumer, as did my noble friend Lord Whitty in his contribution.
Nevertheless, the purpose of Committee stage is to identify areas of uncertainty, which the Minister will have recognised. I am sure that some of these questions will re-emerge in our debates. At the moment, I am happy to withdraw the amendment.
Earl Cathcart
My Lords, I was wrestling with an amendment—it was going to be a probing amendment—to the effect that a landlord of private rented property should not be liable for the Green Deal if the property becomes vacant. I realise that this amendment might better be put in Chapter 2, when we are discussing the private rented sector, but it did not seem to fit there and seems to fit much better in Clause 5, which deals with the terms of the plan and in particular the persons liable to make any payment under the Green Deal.
When a private rented property becomes vacant between lettings, does liability for the Green Deal loan repayment fall to the landlord, bearing in mind that energy bills are likely to be minimal between lettings? It seems obvious that if the property is vacant, it would fall to the landlord to carry on paying any energy bills for the duration of the vacancy, even though they are minimal, but does he become liable for the Green Deal? And if so, does the repayment of the loan instalments get adjusted downwards, bearing in mind the very small energy bills while vacant and the golden rule? Secondly, what happens if the landlord cuts off the energy supply and reconnects when a new tenant arrives? The energy bill would be zero but there would still be interest to pay. Would this fall on the landlord and what about the golden rule here? Could this act as a disincentive to landlords to take up the Green Deal, or do the Government think it will act as an incentive to landlords to reoccupy the property more quickly, bearing in mind that the landlord may have to carry out repairs, maintenance and redecorations between lettings?
There is a provision in Clause 15(3)(d) of this Bill to suspend Green Deal payments. Does this suspension provision apply when a property becomes vacant, and, if so, what would this do to the repayments? Would it increase the term of the agreement and increase total liability due to interest accrued during the suspension? I ask all this because it does not seem to be at all clear as to how this would work and what the figures would be like for the landlord in the event of his property becoming vacant. I would be grateful for clarification.
Lord Davies of Oldham
My Lords, the Minister will be relieved to hear that I do not have a great deal to add, as he has quite a bit to answer from his noble friend Lord Cathcart, who has identified issues which concern us all. Whether the answers come down in relation to the landlord or in any other respect, there are anxieties also about the tenant. We need a clear position with regard to that. We have our uncertainties and I am grateful to the noble Earl for having identified those.
The noble Lord, Lord Whitty, will accept what the noble Lord, Lord Jenkin, had to say about the fixed rate of interest. I once had a friend who took out a fixed-rate mortgage with a London authority just two years before the oil price rise in the 1970s. We can all recall inflation running at staggering figures at that time and interest rates going well into double figures. If you had a fixed-rate mortgage of 2 per cent, you reaped considerable advantages from that. With regard to a scheme that has any length of time attached to it, the question of fairness over a period of time has to be addressed.
My noble friend Lord Whitty raised the obvious question of what those costs will be and the interest which will bear upon the initial person living in the property. Consumer rights need to be safeguarded. We want clarity on that point too. Our amendment requires clarity on the changeover, to which the noble Earl, Lord Cathcart, also referred, with regard to whether the relationship between the improver and the person paying the Bill could change to the disadvantage of one or the other. How will the scheme work to guarantee that there is fairness over the considerable period of time involved in this exercise? That was the burden of the questions addressed earlier today.
I do not really need to add my voice to this matter because, if my noble friend Lord Whitty and the noble Lord, Lord Jenkin, are worried about the word “fee”, I am too. I, too, had also identified that. So that is a question for the Minister to answer. Is he not lucky to be in the place that he is?
Lord Marland
I thank the noble Lords very much. Just before I respond to the amendments put forward by the noble Lord, Lord Whitty, among others, I want to clarify some comments on the previous amendments relating to Clause 4 about the Green Deal providers deciding how they would apply parts of the Green Deal, such as the assessment or the golden rule. I hope that I did not give the impression that firms could pick and choose. I hope I gave the impression that customers could pick and choose. Nevertheless, I want to be clear about that and that the prescribed methodologies for these steps, including expected savings, are very much part of the Bill.
I hope that I highlighted the beneficial flexibility, which experts and customer insight will have to present information in a useable format, as well as communicating accurately in line with the regulation. I want to emphasise another important protection. It covers all credit arrangements. Let me put on record that for consumers the Green Deal will need to meet the requirements of the Consumer Credit Act with only limited exceptions. For example, all communication on the terms of the plan would need to meet responsible lending rules.
I turn to the excellent amendments in the name of the noble Lord, Lord Whitty. Clause 5 sets out requirements for what terms must and must not be present in a Green Deal plan. In doing so, it builds on Clause 4 by further specifying the basis on which a Green Deal can be offered. Clause 5 ensures that, through the terms of the plan, key consumer protections are in place about the financing as well as the advice, the measures and the installation. Subsections (2) and (3) ensure that no charge over any person’s property may be taken away by way of security. Early repayment cannot be required of the bill payer, except in conditions to be set out in regulations, and a bill payer’s liability for maintaining Green Deal repayments cannot be extended beyond the period for which they are the bill payer for a property. This ensures that the Green Deal does not become a personal loan and remains a charge on the energy bill.
The noble Earl, Lord Cathcart, wishes us to expand on this point, particularly on when the property becomes vacant. As regards the person then liable for the bill at the end of a tenancy, that obligation would usually revert to the owner. Clause 2(10) also makes provision for where there is no energy bill because supply and connection charges have been suspended. We will provide in regulation that the person who would otherwise be the bill payer, usually the owner, is liable for the charge. I hope that that answers the question posed by the noble Earl.
I have just been passed a note saying, “Be fast if you can” and I am trying my best. I thought that I was being quite fast. Amendment 13A proposes a further element to the terms of the plan to provide for confirmation of the ownership and maintenance of the Green Deal improvements.
Lord Whitty
It would probably be helpful to us to have that legal advice—or the gist of it—in writing, otherwise we may return to this.
The issue in Clause 13, equity between the original occupier signing up for the Green Deal and a subsequent occupier, is still important. I agree that aspects can be covered by secondary legislation or the code of conduct, but it is obviously key that any potential payment needs to be spelt out—this is where it links to Amendment 16 with relation, for example, to an exit fee. If you sign up for an agreement, and there is an exit fee included, you are going in with your eyes open—or you should be if everything is transparent and spelt out. However, the agreement is not with the person who may subsequently pay the exit fee; other things being equal, on acquiring the property, a subsequent owner will have calculated that it is better to pay off the debt early. If there is a fee attached that is not included in the deal, it is important that contingency is covered. Transparency, caveat emptor and a search on acquiring the property or taking up the tenancy or lease must all be taken into consideration, but if a subsequent owner is to be liable for such fees down the line this must be spelt out.
To some extent, I accept the view that Amendment 15 is not appropriate in that it would prescribe a fixed rate of interest. On the other hand, it is difficult to calculate, even within the range of outcomes we discussed on the earlier amendment, whether the golden rule works unless you have some understanding of the interest implied in the total package. Some will be marginal, and a fixed rate will give you at least the minimum rate of return and benefit, whereas with a variable rate it will be difficult to assess whether the golden rule has been met. We will have to assume certain things about energy use. As the noble Lord, Lord Jenkin, said, some people will use more energy because it is cheaper, for obvious reasons. However, on the basis of equal use and equal interest rates, you can make a reasonable stab at a calculation on the golden rule. If both of those are variable, it is more difficult to say how it applies.
I realise that we have to have flexibility, and therefore Amendment 15 in its absolutist sense is probably not appropriate. The previous amendment, with the clarification on compensation and Consumer Credit Act provisions, is needed. We need to protect consumers from the possibility that the whole structure of repayment is either to their detriment or unclear when they sign up.
Although I will withdraw the amendment at this stage—
Lord Davies of Oldham
My noble friend will have recognised from the contributions of Members of the Committee the anxiety about the concept of the fee. I wonder whether he will withdraw his amendment before we have made a great deal of progress, as I heard from the Minister’s reply, on how that issue is to be resolved. We have expressed anxieties on it.
I apologise to the Minister if, in the disturbance caused by the Divisions, I lost track of his replies. He may have covered the matter. I know that my noble friend was exercised about this, but so were other Members of the Committee and we all gave voice to it. We certainly have anxieties, and I wonder whether, before withdrawing the amendment, my noble friend will press the Minister on the matter.
Lord Whitty
I will press the Minister for communication with Members of the Committee who have taken an interest in the matter, on both the legal point and on any fee that applies.
Lord Davies of Oldham
“(A1) Before any improvements are installed under section 7, or a plan is confirmed under sections 8 to 10, the improver must consult—
(a) the bill payer, where the improver is the owner of a property; or(b) the owner of a property, where the improver is the bill payer, about the assessment undertaken and options outlined in the assessment, and receive the consent of that person to the intended improvements.(A2) At the time of consulting a person about the assessment and intended improvements under subsection (A1), the improver must provide the person with a copy of the assessment undertaken.
(A3) Where a person is consulted about intended improvements under this section, they must not unreasonably withhold their consent to those improvements.
(A4) The framework regulations shall make provision for an appropriate period for a person to consider and consent to intended improvements under this section.”
Lord Davies of Oldham
My Lords, the amendment seeks to clarify some important aspects of the clause and identifies just what the Opposition’s anxieties are. I hope that the Minister will be able to reassure us on this. It is quite clear that necessary consultation will take place between the improver and any potential bill payer. It is important that we appreciate the obvious fact that whoever is saddled with the additional costs that are reflected in energy bills knows exactly what is going on in relation to the property.
The issue does not arise with regard to the householder for obvious reasons, but we are also concerned with kinds of property entirely different from properties inhabited by the owner-occupier or a single tenant. We are concerned with the situation where there are improvements going on across a number of flats, for example, where the improver is the landlord but the individual tenants are going to be the bill payers. We want to make sure that, in any such exercise, everybody is fully informed and knows what is going on.
We also recognise, and I hope that we have included this satisfactorily in the amendment, the enormous danger of the awkward one person putting a veto on desirable improvements right across the range of the property. That would lead to a situation in which proposals were vitiated simply because one had no framework at all to deal with the minority—not that I am against minorities, nor do I think that at any time the individual’s rights should be overridden. However, we have to take the interests of the generality into account in circumstances where someone, for all sorts of reasons that we do not dare to presage, might be awkward.
Of course, there is the obvious fact that, with regard to bill payments, some may consider that they might be in for the shorter term because they might be a little older than other people in other properties and that any costs at this stage—anything at all that puts up a fuel bill—is disadvantageous to them, while at the same time they might not think that there is much in the way of long-term benefits for them because they may not think that their own term is very long. Such difficulties must be overcome.
This is a probing amendment. It merely asks the Minister to identify both the process of consultation and how he thinks the difficulties that may occur from time to time should be addressed. I beg to move.
Lord Marland
My Lords, this clause enables the framework regulations to require that the energy bill payer consents to the adding of the Green Deal charge to their bills. This is important in cases where the Green Deal plan is set up by someone such as a landlord who does not pay the bills for the property. This clause will enable the framework regulations to prevent, for example, landlords from imposing charges on to tenants’ bills without first obtaining their express written consent. The clause also enables the framework regulations to provide for redress in cases where it transpires that the necessary permissions or consents to the improvements have not been obtained—for example, that the improvements have been made without consulting the freeholder.
I am grateful to the noble Lord, Lord Davies of Oldham, and other noble Lords for Amendments 16A and 16B. As I have outlined, there is adequate provision within this clause for the framework regulations to set out more detail on the issue of consent where the improver and bill payer are different people. It is important that such detail is contained within the framework regulations, as the detailed arrangements may be subject to change as the Green Deal develops. These regulations will be subject to the affirmative procedure.
In addition, it is not our intention to force the Green Deal on to any party. It must be allowed to work on a voluntary basis, even where the improver and the bill payer are different people. We are proposing powers under the private rented sector chapter that would ensure that a landlord does not unreasonably withhold consent to a tenant’s request for a Green Deal. However, these powers would be used only if the sector as a whole does not take advantage of the Green Deal and improve properties voluntarily.
I turn now to Amendment 16B. The Bill contains powers to provide for redress in cases where an improver incorrectly confirms that he has obtained all necessary consents to the improvements. We do not consider that it is necessary, as this amendment seeks to do, to provide for redress in respect of matters agreed to by the improver, as the improver will himself confirm consent by signing up to the Green Deal. I hope that this gives the noble Lord reassurance, enabling him to withdraw his probing amendment.
Lord Davies of Oldham
My Lords, I am partially satisfied. I am pleased to note that the noble Lord says that the regulations will be subject to the affirmative procedure, so we recognise that the Government appreciate the importance of this. However, surely the matter of the principle of consultation and the certainty that attends on it is of such importance that it ought really to be on the face of the Bill. I understand that the details ought to be in regulations and I accept entirely his point about changes over time. We all appreciate the obvious fact that you cannot have excessive detail in primary legislation. However, I am not pressing him on the detail at this point; I am pressing him on the principle underpinning the operation of the clause and I am not certain that the clause is clear enough. I hear what the Minister says. As I said, it is a reassurance that the regulations are going to be before Parliament, but we have some anxieties and so might return to this at a later stage. I beg leave to withdraw the amendment.
Lord Davies of Oldham
Lord Davies of Oldham
I note that the noble Lord, Lord Jenkin, also looked on this clause and also saw that there was an issue with regard to the appropriate penalty. I appreciate that he is looking at it slightly differently from us, as we distinguish between the individual and the body corporate. We are concerned that we need an order of magnitude with regard to the nature of the offence. Here we are, involved in an exercise when we all know that we want, as far as possible, to see provisions go through on the basis of consent and mutual amity. We also know that things can go wrong. When they do so, we need to have some feeling of the order of magnitude which is attended on the wrongdoing, consistent with the overall objectives of the scheme. I look forward to the contribution that the noble Lord, Lord Jenkin, will make to his amendment. I beg to move.
Lord Jenkin of Roding
I was inspired to table my amendment by the proposal of the Delegated Powers Committee. In paragraph 11 of its report, it drew attention to the absence of a limit in the Bill and of the penalty that could be imposed. It took the view that as the affirmative procedure would be required, it would not regard the derogation of the power as inappropriate. However, it suggested that there should be a maximum penalty.
Looking at this provision, and applying my little skill and dubious judgment, I suggested a figure of £500. My amendment was tabled before that of the Official Opposition, and I am intrigued to see that they tabled the same figure for corporate bodies but a much lower figure for individuals. I would like to know what the Minister has in mind as an appropriate level of penalty. Mine is an entirely probing amendment.
Lord Marland
I thank noble Lords for their suggested amendments to Clause 14 to limit the level of financial penalty on individuals and companies for failure to comply with the disclosure and acknowledgement provisions. This clause provides the powers of the Secretary of State to make regulations to ensure that sellers and licensors comply with their disclosure and acknowledgement obligations. The clause allows for the following specific provisions to be made: sanctions for non-compliance, including civil penalties; requiring the Green Deal provider to cancel the liability of a bill payer to pay Green Deal plan instalments; requiring the Green Deal provider to refund any payments already made; and requiring those at fault to pay compensation to the Green Deal providers.
I understand noble Lords’ desire to protect individuals and businesses from excessive penalties. However, the disclosure and acknowledgment requirements are vital to the effective operation of the Green Deal and indeed to protect the customer, so we need robust and transparent sanctions to ensure that they are all complied with. We will work with relevant industry stakeholders to develop options as to how these provisions will apply in practice to minimise instances of non-compliance. I wish to emphasise that we will consult before setting out these arrangements in regulations.
Our aim will be to use existing and well established systems of sanctions and redress where possible. Further consideration is necessary to determine what level of civil penalty would provide sufficient deterrence to ensure compliance, but I trust noble Lords understand that it would be premature to make a decision on an upper limit at this stage. In conclusion, I assure noble Lords that we will seek to ensure that penalties are proportionate. I hope that this assurance will enable the noble Lord to withdraw the amendment.
Lord Davies of Oldham
I do not wish to pre-empt the noble Lord, Lord Jenkin, but my amendment, too, was a probing one and I am satisfied with that reply. I beg to withdraw.
Lord Davies of Oldham
The Deputy Chairman of Committees (Baroness Gould of Potternewton)
I should announce that there is an error in the wording on the Marshalled List. It should say “Page 13, line 29, leave out paragraph (b)”.
Lord Davies of Oldham
I am grateful for the clarification on the terms of this amendment. The purpose of the amendment is to draw attention to the additional ways in which the Government are intending to disconnect someone’s power. We need to be clear about this. We all know the controversies of the past in relation to disconnection, and we also know that the major energy companies are careful about disconnection issues, particularly with regard to winter disconnections and vulnerable households. However, of course that refers to the big providers; and it is merely a code of practice and therefore not in legislation. We are concerned that here is a cause for potential disconnection and we want to know the circumstances in which disconnection would take place.
We are not quite clear whether we are creating with this legislation something that detracts from the existing protection that so many consumers have, and that would render vulnerable those who are not at the present time, because of the nature of the scheme. We think that this issue is of such importance and that we ought to get this right in primary legislation. All noble Lords will of course fully appreciate the problems for a household if disconnection occurs at any stage. It is of sufficient import for the Minister to give us greater assurances than we have in the Bill on the issue of disconnection. I beg to move.
Lord Marland
My Lords, Clause 16 permits the Secretary of State to modify gas and electricity supply licences to make provisions as to the steps that can be taken by energy suppliers when the customer defaults in making Green Deal payments. We intend that the existing procedures employed by energy suppliers in the event of a non-payment by a customer will also be used to collect Green Deal charges. The clause also enables provision to be made in licences regarding disconnection of a customer who has defaulted on the Green Deal charge. However, we expect that disconnection will, as is currently the case, be very rarely used by energy suppliers and only in the last resort when all other means of collecting payments have been exhausted. Furthermore, licences prohibit energy suppliers from disconnecting households in the winter months where they know, or have reason to believe, the customer is, for example, a pensioner or lives with other pensioners or those under 18. In addition, the larger energy suppliers have developed their own safety net procedure, which is a commitment to never knowingly disconnect a vulnerable consumer at any time of the year.
Clause 16 also allows provision to be made in licences enabling suppliers to require a deposit as security for Green Deal payments in specific circumstances. We intend to exercise this power to ensure that, if a customer is required to provide a deposit in respect of energy supply charges, that deposit can also be used as security for Green Deal payments. We do not intend to allow suppliers to request a deposit solely because a customer has a Green Deal finance arrangement. As is currently the case in the domestic market, a security deposit should only be requested from a domestic customer in specific circumstances. For example, when a customer has a poor credit history and a secure method of payment, like fitting a prepayment meter, is not feasible.
All these provisions are necessary to ensure that the Green Deal charge part of the energy bill can be treated equally with the energy component by suppliers when the customer defaults on payment. This will in turn help to secure low interest rates on Green Deal finance, as debt recovery rates on the Green Deal charge should closely match the high historical recovery rates observed for an energy bill. I therefore invite the noble Lord to withdraw his amendment.
Lord Davies of Oldham
My Lords, I am largely satisfied with that reply. Can the Minister clarify one issue? When he talks about the special deposit, is that specific and unique to this legislation or is he building upon a power that exists elsewhere and applies to deposits where there have been problems with failure of sustaining payments? If this is novel, he has not relaxed my anxieties about this power. If he is saying that in order to protect the Green Deal we are merely buttressing the provision which exists in other circumstances, I have no quibble, but I would like reassurance on that.
Lord Marland
I am grateful to the noble Lord for pressing me on this. There is a practice in place in the non-domestic sector and we are building on that here in the Green Deal. I hope that satisfies the noble Lord; if he wants us to specify how that works, I would be happy to do so during the course of proceedings.
Lord Davies of Oldham
I am grateful to the noble Lord; I would like a note from him on this point, because we have real anxieties.
Lord Marland
Is the noble Lord looking for clarification on the domestic or the nondomestic sector?
Lord Davies of Oldham
This is a power that stretches across the board, so I want reassurance in both instances. The noble Lord has been entirely reasonable, as he always is, but we are anxious that this is originating in primary legislation a concept which is merely practice elsewhere thus far. If it is built on precedent in other Acts to which energy companies or other providers respond, of course I am entirely reassured by his response. I just want a note to clarify that point. As the noble Lord has indicated that he will reassure the Committee on that point, I beg leave to withdraw the amendment.
Lord Davies of Oldham
My Lords, the Committee is grateful to the noble Baroness for her amendment. She will see that we agree with her in terms of intent; but we think there are advantages in the annual report having some more specific dimensions to it. We agree with her entirely that the more general reports that are referred to will not monitor the success or otherwise of this significant scheme. As she rightly says, it does not raise the issue of commercial information; it is a question of the householder, the dweller and the landlord making their contribution in an important way to our carbon targets. We think the country will benefit from a close monitoring of this scheme.
That is why we think there are advantages in ensuring that local authorities keep a check on progress and that they ensure that as much progress as possible is being made in their areas. This is going to be a scheme, after all, to which the energies of the nation will have to respond. Therefore, all agencies that are capable of promoting this scheme should be brought on board. That is why we think the local authorities have a role to play and that small-and medium-size enterprises and local community groups can play their part. I respect the point that there may be issues involving commercial confidentiality, but we are talking about small units here and not major companies. We therefore think it is appropriate that we ask them to make their contribution. Certainly local community groups are going to be the cheerleaders of some of this work. I can think of those who will set a fine example by the community premises they hold, where they will be first into the field. We should not underestimate the extent to which progress can be made almost by word of mouth and by encouragement and example. That is why we want local communities involved.
We also think that it important that we should monitor this issue geographically across the nation. It would be very sad if it proved to be the more prosperous areas which were able to engage in the Green Deal because they had less anxiety about the additional costs. So we need to know the balance of the scheme, and whether we need to address the failure of take-up, given that the whole nation needs to contribute to this. That emphasises the obvious fact that we would need some analysis of the response by different sections of community in terms of socioeconomic groups. This scheme is not going to be successful if only those who can take the risk with extra cost are going to play their part; we need everyone to be involved in it. Therefore an annual report identifying progress in some detail would be an enormous advantage to what we all appreciate—as opposed to all our other activities aimed at carbon reduction—is the activity to which we are all committed, is among the most imaginative and requires engagement by so many people. That is why we hope the noble Baroness responding on behalf of the Government will give a fair wind to the concept of an annual report on this scheme.
Baroness Maddock
An amendment of mine is in this group. I support what has been said about the importance of looking at how successful things are and looking year-on-year at figures. Mine is a more general measure. Indeed, I had placed it much further on in the Bill, but it was obviously seem to be convenient to debate it at this time; I do not mind that. Mine is about the assessment of the costs and benefits of energy saving, as opposed to those of energy generation.
Energy saving is universally acknowledged on all political sides to be the cheapest and cleanest way to achieve our energy policy objectives. That view is behind the Green Deal. As I understand it, an assessment of the costs and benefits of investment in energy generation capacity compared to the costs and benefits of demand-reduction policies has never been carried out. As noble Lords have said, I have been involved in the area for a number of years and have worked closely with the Association for the Conservation of Energy. I therefore know that it has pursued the issue but has never received a satisfactory answer. Over the years, as I have looked at, sat through and taken part in all sorts of legislation—a lot of it reforming legislation—I have learnt that reviewing and taking note of what has happened before moving on to the next piece of legislation is something that Governments seem to be bad at, particularly in the area of energy efficiency.
That is important when you have a lot of sceptics around and people argue about what is the best way to do things. The European Climate Foundation reports that emissions from buildings can be reduced by 95 per cent. It breaks it up into a 40 per cent as a result of reduced demand and 45 per cent as a result of the electrification of heating. Its predictions of energy efficiency mean that overall electricity demand increases only by about 40 per cent with full electrification of heating and, largely, of transport. That is in stark contrast to DECC figures, which predict a doubling, and possibly a tripling, of UK electricity demand. It is therefore important, when debating an Energy Bill, to consider that.
I hope that I can get a positive response from the Minister that he will take the issue seriously. I am not saying that the amendment has to be in the Bill in this form, but it is an important issue—particularly now that we are moving ahead with the scheme.