Lord Jenkin of Roding
Main Page: Lord Jenkin of Roding (Conservative - Life peer)Energy Bill [HL]
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Lord Jenkin of Roding
My Lords, it is perfectly clear that there is a great deal of detail to be worked out before the Bill becomes operative. Can my noble friend give the Committee an assurance that there will be the fullest consultation with outside interests? And, as has been sought by the Opposition, can he give some indication as to what the various statutory instruments are going to contain? There is an enormous amount of support behind the concept of this Bill. The representation I have had this morning makes the point that,
“there is clearly great deal of detail to be decided upon and it is important that this is done in such a way as to ensure the policy is fit for purpose”.
That is a sentiment that I wholly endorse. I, too, warmly support this Bill, not least because, as I said on Second Reading, it tackles the whole objective by approaching the consumer—the householder—in a totally different way from what happened in the past; they are not being asked to save the planet, they are being asked to save on their energy bills and perhaps have a more comfortable house. That will appeal to a large number of people. Of course, the details will have to be very carefully worked out. I hope that my noble friend can give me some assurance about consultation with the many interests that will have to help operate the whole scheme.
Lord Marland
My Lords, this part of the Bill introduces the Green Deal. The Green Deal is at the heart of this Energy Bill, representing a key part of the energy policy and our commitment to improving energy efficiency. In response to my noble and learned friend Lord Jenkin of Roding—
Lord Marland
My noble friend is learned, but not in the way that I meant. He does not want to be called learned today.
I cannot imagine a department that consults more than ours. We are locked in consultation on virtually every move we make and will continue to do so. We have had a lot of contributions from outside which we have taken on board in getting to this point.
The Green Deal is designed to address the longstanding problem of how to improve energy efficiency of existing building stock. While on paper improving efficiency of buildings makes sense to save money, protect our climate and improve the comfort of our homes, in practice too little has been done too slowly. There are some good reasons for this: people find it hard, or are reluctant, to take out large loans for property they might leave soon; they often do not trust salesmen and installers; and they are busy and simply do not know what to do.
Our solution, the Green Deal, is threefold. First, the Green Deal plan is a contract under which private companies provide finance up front for energy efficiency improvements and individuals then repay through their energy bills. Liability to repay attaches to the energy bill payer for the time being, so that only the person benefiting makes the repayments. The contract transfers to subsequent bill payers.
Secondly, there is the golden rule: the protecting principles which require that repayment costs should not exceed expected energy bill savings. Thirdly, there is the accreditation and redress system, which is the guarantee of quality which consumers need. It is a simple concept, but to make it both simple and secure for consumers, we need to put a robust framework in place. To ensure attractive external simplicity for the customer, we need to ensure that the internal mechanism comprehensively covers all those involved in the scheme—the assessors, installers, Green Deal providers and energy suppliers. This is a market mechanism funded by private capital.
In response to the noble Baroness, Lady Smith of Basildon, our responsibility is to create a robust framework backed up by redress and quality control. The Bill focuses on this enabling framework; we will certainly be consulting on the detail for secondary legislation, and I look forward to the input.
I will now speak to the detail of Clause 1. It provides for the Green Deal plans an arrangement made by an owner or occupier whereby a Green Deal provider makes energy efficiency improvements to that property. As the noble Lord, Lord O’Neill, said, it is important that we define what is an eligible property, but it is also important that we do not define it in a way that restricts properties. Therefore, the broad definition is as far and wide upon domestic and commercial properties as is possible. Of course there will be exceptions which we are starting to develop, such as something that may have been purchased under a compulsory purchase order. As the noble Lord rightly says, we need to define this over the next few weeks.
The clause defines the conditions that must be met in order for an arrangement to make energy efficiency improvements qualify as a Green Deal plan. By setting out these conditions as requirements of the plan, the clause defines the basis of the Green Deal. Subsection (3) sets out the two conditions that must be met. The first is that,
“the energy efficiency improvements are to be paid for wholly or partly in instalments”.
The second condition is that the requirements of subsection (4) are satisfied. These are that there must be “a relevant energy supplier” supplying or about to supply energy to the property. The energy efficiency improvements to be made must fall,
“within a description specified in an order made by the Secretary of State”.
By setting out qualifying improvements, we can ensure that the customer benefits only from recognised and proven technologies.
Subsection (4) also states that the important conditions mentioned in subsections (4) and (5) must be met. These relate to the assessment of the property and the financial terms on which the Green Deal is offered, and a number of other terms that must be included or must not be included in the plan. This is to ensure that only measures that are appropriate for a property are recommended.
The Deputy Chairman of Committees (Lord Colwyn)
We are back now on the original Marshalled List. The manuscript amendment of the noble Lord, Lord Jenkin, is on a separate piece of paper and is included in this group.
Lord Jenkin of Roding
My Lords, I begin with an apology that I did not table this amendment until this morning. Last week we were fairly heavily involved on various energy matters and I am afraid I only got round to it over the weekend. Compared with the substantial points outlined by the noble Lord, Lord Grantchester, this is a very minor point and is solely about drafting.
I suggest an amendment to the first line of Clause 2(7) because it refers to the wrong paragraph in the subsection above. Clause 2(7) seeks to enlarge and define the matters that were included in subsection (6)(a). Therefore, for Clause 2(7) to refer to subsection (5)(b)(ii) is wrong because that only refers to the order. I mentioned subsection (6). I beg the Committee’s pardon—it is subsection (5), but it refers to matters in subsection (5)(a) and not subsection (5)(b). I wonder whether it is a misprint or whether there is some hidden matter of drafting which I have not appreciated.
Baroness Northover
This is not the first Bill that I have worked on, but my previous role in international development was not exactly legislation-heavy, so I can also claim inexperience. It is also outside the remit of all the other areas that I am working on. Therefore we will have to look to the noble Lord, Lord Davies, to guide us.
Clause 2 defines an energy efficiency improvement. This is one of the important criteria for determining the eligibility of works to be financed by a Green Deal plan. The clause is deliberately broad; it allows for a range of measures to be covered by the new framework, including certain energy generation measures as well as measures concerned with reducing energy consumption. It enables the Secretary of State to specify within this broad definition which types of measure will be eligible for Green Deal finance. This will provide the clarity and certainty that industry and consumers need. Green Deal installers will also be required under Clause 7 to adhere to any requirements in the installers’ code of practice regarding the standards of products installed.
I am grateful to the noble Lord, Lord Whitty—who is not in his place, but who has vast experience in this area—for tabling Amendment 2, which seeks to ensure that measures which reduce energy consumption are installed before those which generate energy.
Amendments 1D and 2A, tabled by the noble Baroness, Lady Smith, and the noble Lords, Lord Grantchester and Lord Davies, seek to ensure that renewable and low-carbon energy sources and energy generation are covered by the Green Deal.
Amendment 2AA is a technical drafting amendment tabled by the noble Lord with the sharp eyes, the noble Lord, Lord Jenkin, which is designed to correct a citation made to the wrong subsection.
On Amendments 1D and 2A, it is clearly important to get the right measures in the right buildings in the right order. For example, making improvements to the fabric of buildings to improve air tightness means that if renewable heat and energy technologies are installed at the same time, or further down the line, the energy is not wasted. We would therefore like to consult colleagues on the detail of the proposed amendments and report back at the next stage of the Bill. We need to be clear on what the implications are of these amendments for, among other things, the possible impact on consumer demand.
I should point out to noble Lords who referred to the renewable heating incentives that, in addition to this Bill, they are designed to incentivise people to generate energy. The noble Lord, Lord O’Neill, may be encouraged by that—it sounds as though he is. As he was speaking, the noble Lord, Lord Marland, was making welcoming noises about what he was saying. The schemes are designed to be complementary and I hope that in discussions we can take the ideas further forward.
We will also want to satisfy ourselves that Amendments 1D and 2A do not duplicate existing provisions, as I believe they may. I thank my noble friend Lord Jenkin for his incredibly sharp eyes and for correcting the reference in subsection (5) to subsection (7). His sharp eyes may note a spelling error in his second amendment on the manuscript list, but I am incredibly impressed by his thoroughness.
I invite noble Lords to meet my colleague the noble Lord, Lord Marland, and officials to discuss the proposed amendments in more detail. I hope that noble Lords will be satisfied with this approach and, on that basis, I move that this clause stand part of the Bill.
Lord Jenkin of Roding
I am not quite clear where we are. As the amendments have not been moved we cannot yet have the question on stand part.
Baroness Northover
I think the relevant ones were moved. I am accepting Amendment 2AA and ask that the others be withdrawn.
Lord Jenkin of Roding
I am sorry; we have not yet reached Amendment 2AA and I have not moved it.
Baroness Northover
I am asking that Amendment 1D be withdrawn and that Amendment 2AA, when we come to it, is accepted, and that the objection to the clause standing part is rejected and the clause accepted.
Lord Jenkin of Roding
Lord Teverson
I shall speak first to my Amendment 8C. I am trying to be helpful to the Government, as is the noble Baroness, Lady Smith. Where the Government talk about withdrawing authorisation from Green Deal providers, there has to be an authorising body as there is a mechanism within the Bill for those organisations to be authorised in the first place. So there should also be a means, in extremis—we hope it would never be used—whereby authorisation can be taken away from those authorisers as well.
I tread carefully here, but on the amendments of the noble Baroness, Lady Smith, it would be almost impossible to disagree with Amendment 2D which seeks,
“to ensure that assessors and providers have the qualifications and skills”,
to perform their functions under the Green Deal. I question Amendment 2G, however. In my mind, the jury is out on this. I have a concern about this whole scheme in terms of quality. I know that this is not what the noble Baroness means, but I am concerned that we have moved towards some kind of tick-box assessment; that if you meet certain criteria, then everything is fine. It is more important in many ways that a level of intelligence is attached to these processes, in a similar way to consumer protection in the financial services industry where there is an overall requirement for suppliers to act intelligently in the overall interests of the customer. While there is a place for standard assessments, they do not always meet that quality element. When we are talking about a programme that is to be as large as we hope it will be, the quality element is of great importance. I am not sure whether just assessment processes with a list of issues completely fulfil that. I am not necessarily talking against the amendment, but I am very anxious that there should be a qualitative demand in the Bill that providers think intelligently and provide plans that are specific to households and people; and that assessors are not working to a completely standardised format but in terms of whether a quality product will be provided within that market.
Lord Jenkin of Roding
My Lords, I have sympathy with what the noble Lord, Lord Teverson, has just said, particularly about Amendment 2G. When one thinks of the enormous range of the buildings that are going to be subject to the Green Deal process, it is with the utmost difficulty that one imagines how one could have a standard assessment measurement. What one looks for are sufficiently skilled and trained assessors who can look at a widely differing range of buildings and use their skill and judgment, in the time-honoured phrase, to come to a conclusion and make an assessment. We will come to this in Clause 4, where the requirements are very fully spelt out.
The idea of a standard assessment seems to me to inevitably result in a “tick-box” culture, which has been an unpleasant factor in so much of what one faces in modern life: people feel it is sufficient simply to tick the boxes. If we are going to have fully trained and qualified people—an objective I totally support—then we must rely on their skill and judgment to decide on the appropriate assessment for the hugely differing range of buildings with which they will be confronted. One would expect there to be assessors who specialise in particular kinds of buildings, because they will have the experience and expertise to deal with them. I am therefore unhappy with amendment 2G.
I have given training a good deal of attention over the past year or two. I believe that the present Government and BIS have produced a splendid blueprint of what they envisage the process of skills training to be. There is no question that the skills training system which operated under the preceding Government left much to be desired in achieving results. I declare an interest—as I have before—as the president of the National Skills Academy for Nuclear; I have also been involved with Cogent and a number of others. I have had dealings with Energy & Utility Skills, a highly effective body. It was the one—I raised this on the Floor of the House before the election—which tried to fit in to the national scheme for training people to install smart meters, and was firmly told that it could not have help with that. I am happy to say that Ministers in the present Government have addressed this problem fully. If we are to make a success of that—we may come to this later—there must be a proper system for training people to install these meters.
We need to keep a careful eye—this is a key stage in the whole Green Deal process—on how the training of the assessors will be handled. If my noble friend can give us some more information, that would be very helpful. Yes, we are going to have a code, and we will come to that later under another amendment. But I think this will be a key part of the whole process.
I have referred before to the fact that I had my house installed under the old CERT scheme, and it was an unhappy experience: one simply ran into the sand. At first I went through the Energy Saving Trust, and that became completely futile, so I started again with my own supplier. In the end that produced a solution, although an expensive one, as I had to pay for all the scaffolding, which was very tiresome. But I was satisfied in the end that the expert who came from British Gas to decide what my house needed was highly qualified and that the installer was able to do a good job. Those are the key things which will generate confidence in whether the Green Deal scheme will take off as we hope it will. This is an important requirement, which hinges on skills and training, and not on standard assessments.
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 Parminter
I am grateful to the noble Lord for raising that point. At Second Reading, I raised the point about the need for a single body, a single entity or ombudsman, to take on these additional responsibilities. The Minister said he would go away and think about the creation of such a single body or ombudsman. I am looking forward to hearing what he might say, particularly on that point.
Moving on to insurance, it is important, given the new nature of this service for many consumers, that at the point of sale there is an insurance product available for people to give them the confidence that, throughout the lifetime of the installation, there is security for them. Clearly consumers can opt out—the amendments states that people can opt in—but I think it is important that when they enter into these contracts there is an insurance product they can have confidence in. This is a new area. There is no insurance product for this at the moment; certainly in the early days they will not be able to go to one of the insurance comparison websites and find products. They will need assurance that there is a product specific to this area to give them the confidence to move forward and take up the Green Deal as we would wish them to do. I beg to move.
Lord Jenkin of Roding
My Lords, we are considering, among other things, what is to go into the code of practice. We are not at this stage legislating that these are going to be duties placed by the Bill immediately on the various participants, but it is what the code of practice needs to cover. This raises the point that has already been mentioned; I will mention it very shortly again. There will have to be a balance. If you are going to attract providers to initiate the process by setting up a scheme which involves assessors, installers, the energy companies and so on, there must not be too many obstacles or disincentives placed in their way. Equally, there needs to be fairness for the consumer whose house is going to be made more energy efficient. Throughout this process we must make it clear that we have that balance right.
I have read some of the briefs, one or two of which are reflected in the amendments that have been tabled by my noble friends. I rang one and said if you get all these amendments accepted, you will kill the scheme stone dead. There will be so many obstacles and barriers that the objective of the scheme to get the largest possible number of homes and small business offices properly treated and properly energy efficient will in fact not happen. The response was, “We still think that these are necessary to protect the consumer”. A balance has to be struck.
The one thing that I am attracted to is a proper system for making complaints and having them dealt with. That seems something that the code of practice could very well deal with quite effectively. Nothing is worse than if something goes wrong and you do not know where or how to try to get it put right or you waste hours on the telephone trying to find people who will deal with your complaint. That could be a very important element in ensuring the confidence of the people whose premises are due to be made more efficient. If one adds all the other things together, one is creating barriers. We must be very careful not to raise too many barriers otherwise the scheme simply will not achieve its objectives.
Lord Whitty
I support the bulk of these amendments. They may eventually appear in a somewhat different form but they are important for the success of the scheme. I apologise that I was not here at the beginning of the discussion of the consumer protection amendments and that I was in somewhat sunnier climes on Second Reading. This is the first time that I have intervened in this debate and I hope that colleagues will not mind me reiterating my general position.
I am strongly in favour of the Green Deal approach for its effect on carbon cuts, fuel poverty and the bills of consumers of all kinds. However, it is a complicated thing to put together. There are several things that would kill it stone dead, as the noble Lord, Lord Jenkin, said, one of which is that the industry is not mobilised because it is disincentivised. However, an equally possible reason for the thing falling stone dead would be if consumers do not have confidence that the work that they are being asked by choice to undertake in their own homes is done in an effective way and that, were there to be any flaws in it, they would have suitable protection and redress.
We are talking about 14 million householders and landlords and 250,000 potential workers in this area. There are bound to be things that go wrong and people understand that. However, they also need to be assured that the general quality of the people that they are asking into their homes and, ultimately, they or their successors are paying for, do a proper job and that there is some protection if they do not. The confidence of the householder and the landlord is essential in this area, otherwise there will not be a sufficient take-up of the scheme.
We have talked a little about certification and accreditation. This group of amendments addresses checking on quality in a reasonably random way. There is the issue of warranty and of having standardised —or at least the offer of standardised—insurance. If we are undertaking building work in our homes, we would expect all of those to exist. If we ignore the need for that, we consumers deserve to be ripped off by cowboy builders or whatever—as many are.
There is an added complication because the people that the householder will be dealing with—the people who, effectively, they will be repaying for this work through their lower energy bills—will not in general be the same as the people who are doing the work, nor the same as the people that will be in their homes, nor the same as they would expect the quality of work from. We do not quite yet know what the range of new Green Deal providers will be. However, there will be finance companies, maybe retailers, banks, energy service companies and energy supply companies. Relatively few of these will be the same as the people making the installation. They will in one sense be subcontractors and, hopefully, the subcontractors will be accredited and certified in some form. There will be standards which they will all meet or which the majority will meet most of the time. However, the householder will need to be assured that there is that standard; that there is the protection of an effective warranty and insurance system; and that there is an appeals and redress process built into the totality of the system.
Lord Jenkin of Roding
My Lords, going back a very great many years, I remember when I was a law student at Cambridge. One read the reports of the Court of Appeal. Much the easiest judgments to read were those that said, “I agree with my learned friend”, and had nothing to add. My noble friend’s amendment is better than mine and I simply endorse and support it.
Lord Davies of Oldham
My Lords, the Minister is faced with a significant challenge to his position. If the noble Baroness, Lady Noakes, presents her detailed analysis of the Merits Committee and the strength of its arguments from the coalition side, it will not be at all a surprise for the opposition side. Quick learners as we are, we are quite happy on this occasion to be secondary to the issue and supportive of the amendment. The noble Baroness has indicated that the judgments of the Merits Committee in this House are always ones that we take very seriously indeed. We are grateful for the immense amount of work that goes on, the plethora of such legislation and the clarity that is always present in its reports. As the noble Baroness has said, it has given very clear guidance on this occasion on what should obtain with regard to this legislation. Therefore, the Opposition are delighted to offer their puny strength to the forces that are arranged alongside the noble Lord in the coalition, preaching the lessons of good will and good judgment.
Lord O'Neill of Clackmannan
I followed the noble Baroness in the Second Reading debate and was somewhat surprised to agree with her on a number of issues. I have one question for her. As a consequence of this amendment—were it to be accepted—we would have not 52 but 53 statutory instruments flowing from the Bill. Paradoxically, one of the great critics of the ill defined character of this legislation will also add to it. Frankly, on this occasion, it is justified and I am happy to support the noble Baroness. As a general rule, however, I do not think that either of us—or many of us in this Committee—want to see any more orders being left to the rather inadequate, consultative and therefore scrutinising, approach that both Houses have. I hope that it will be a negative resolution in both Houses.
Lord Jenkin of Roding
Is the noble Lord imagining that these will all be separate orders? Is it not open to the Government to link a whole lot of these together in a single set of regulations or a single order?
Lord O'Neill of Clackmannan
The noble Lord is putting ideas in the Whips’ and party managers’ heads. We would like to see each of these being given proper weight and being discussed and debated as appropriate. If it takes 53 one-and-a-half hour sessions, so be it. That is the price that we have to pay for the proper scrutiny of legislation that could have been better drafted in the first instance.
The Deputy Chairman of Committees (Baroness Pitkeathley)
Before I call the next amendment, I must apologise to the noble Lord, Lord Jenkin of Roding, for omitting to call his manuscript Amendment 8D. It has already been debated but I should check with him that he was content not to move it.
Lord Teverson
I agree with my noble friend entirely. The quality of the assessor is most important, but that has to be supplemented by the duty of providing good information or a good plan as well. On that basis I beg to move.
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.