Lord Jenkin of Roding
Main Page: Lord Jenkin of Roding (Conservative - Life peer)Energy Bill [HL]
Lord Jenkin of Roding Excerpts
Lord Jenkin of Roding
I have some sympathy with the objectives of this amendment, but what strikes me as a problem is the structure of the Green Deal, which requires suppliers of energy to recover the debt that will have been advanced for the improvement of the house and transmit it to the providers. If one is talking about gas, electricity, and, I think, fuel oil, that would not be difficult, but in relation to LPG, a great deal of which, particularly in rural areas, is delivered to individual householders in individual canisters that have to be replaced from time to time, this fits rather uneasily into the main structure of the Green Deal. If this amendment is to be accepted, it will be incumbent on my noble friend on the Front Bench when she replies to explain how the debt would be recovered in relation to supplies of gas in canisters. It is not quite the same as gas and electricity supplied through the mains. It may well be that when she winds up the noble Baroness, Lady Gibson, will be able to explain what Calor Gas has in mind.
Baroness Northover
My Lords, I thank the noble Baroness for raising this issue and I also thank other noble Lords for contributing. The amendment moved by the noble Baroness, Lady Gibson, seeks to include in the Green Deal measures that save liquid petroleum gas. As she and my noble friend Lord Deben indicated, this goes to the deeper question of how we tackle properties that are not connected to the main gas supply and ensure that the Green Deal is as inclusive as possible. I can assure the noble Baroness that it is our intention that the Green Deal is flexible enough to allow appropriate measures to be installed in the maximum number of properties. I assure her that the provisions in the Bill are already wide enough to allow this. This may also reassure my noble friend Lord Teverson. We are even now working with stakeholders to ensure that this can include measures that save energy in buildings that are not on the main gas network. In these discussions, some of the issues that my noble friend Lord Jenkin has raised will no doubt have to be addressed. I hope that the noble Baroness found my explanation reassuring and that on that basis she will withdraw her amendment.
Lord Jenkin of Roding
Before my noble friend sits down, perhaps I may say that these issues will have to be addressed, but are we not entitled at this stage to know what might be in the Government’s mind as regards people buying cylinders of gas from ordinary retailers, as is often the case? If there are powers in the Bill that cover this, that is fine. I would be happy to accept that, but one needs to know how this is going to fit into the main structure of the Green Deal.
Baroness Northover
I am assured that there are indeed provisions in the Bill that will cover this. It may very well be that my noble friend Lord Marland would like to explain them in greater detail to my noble friend Lord Jenkin, to assure him that all is as it should be.
Lord Jenkin of Roding
Another issue that this group of amendments raises was discussed in Grand Committee. Much of the detail of this legislation will be found in regulations, and indeed we have been told that there are to be 19 different sets of regulations. I think we have accepted that that is an inevitable feature. My noble friend assured the Grand Committee, and indeed the House at Second Reading, that there would continue to be a great deal of consultation, and I take some comfort from that.
I have had a report of a meeting, held by the senior official in my noble friend’s department who is in charge of this activity, which was attended by 60 to 70 industry representatives. Apparently, she said that DECC is completely open-minded on the details and is listening to every point of view that is put forward—“listening” being the important word—and I welcome that. Furthermore, all the evidence will be published so that in due course we shall be able to see that other matters will be brought forward for continuing consultation. That is a reassuring point. Indeed, the issues raised by my noble friend Lord Deben and the noble Lord, Lord Whitty, are exactly what those sitting in the official Box will pick up on. They will recognise that when they come to draft the regulations, these things will have to be dealt with properly. From what I have heard from industry representatives, I am reassured about what the process actually is, and perhaps my noble friend will take some comfort from that.
Earl Cathcart
My Lords, I should like to speak to Amendment 6, tabled by the noble Lord, Lord Whitty, which deals with making,
“specific provision for the green deal to address situations of fuel poverty”.
With this in mind, will householders in fuel poverty be able to afford the cost of the assessor? I believe that this cost, which might be £80, £100 or £120—I do not know—could be a barrier to the take-up of the Green Deal. £100 may be the entire weekly income of some householders in poverty, so rather than spend £100 on the assessor, they will choose to buy food or whatever. I suggested in Committee that this cost could be rolled up into the Green Deal so that no one has any up-front costs. The Minister’s response then was:
“As for rolling up the costs of the assessor, we would not encourage that, but there may be a framework in which it could happen. We will need to look into that further”.—[Official Report, 19/1/11; col. GC69.]
I wonder whether my noble friend has been able to look into it further and whether he can give me any comfort on the matter.
Lord Marland
My Lords, as the noble Lord, Lord Davies of Oldham, has telegraphed, this group of amendments respond to the excellent comments made by my noble friend Lady Noakes—such is the harmony that flows between the parties at the moment I was going to say his noble friend Lady Noakes—and my noble friend Lord Jenkin of Roding. The Delegated Powers Committee also prompted a number of these amendments. I hope they are self-explanatory and respond wholeheartedly to suggestions by my noble friend Lord Jenkin of Roding, to whom we are, as always, extremely grateful. I hope that the amendments satisfy his requirements and those of the Delegated Powers Committee. I beg to move.
Lord Jenkin of Roding
My Lords, I am indeed entirely satisfied with this group of amendments. This gives me an opportunity to say that the Government tabled no fewer than 145 amendments to the Bill. I assure the noble Lord that I did not have to count them. He was kind enough to send them to those of us who are active on the Bill numbered one to 145. It was a little difficult sometimes to match them up with the numbers of the amendments that finally appeared officially on the list.
Lord Jenkin of Roding
Of course. I am not blaming my noble friend for that in the least. On the contrary, I found it all extremely helpful, accompanied as they were with helpful notes to explain the amendments. He has met our case splendidly with this group.
Lord Jenkin of Roding
My noble friend’s meagre intelligence has led him to ask a series of very important questions. I put “meagre” in quotes; it would be quite wrong for him to stand by his own words.
I have a slight anxiety about this matter. As my noble friend rightly said, a number of parties are involved in producing the Green Deal for the customer. I had assumed that it was the role of the assessor to determine whether a proposal being put forward by a provider would achieve the objectives of the Green Deal. It seems to me—certainly a lot of people in the industry think that this will be the case—that a very wide range of bodies will wish to become providers under the Bill, not just banks, building societies or financial institutions. It has been suggested that major retailers might wish to become involved as well as local authorities, housing associations and a range of other bodies. I am not entirely clear how far the responsibility for ensuring that the plan is in the best interests of the consumer can necessarily rest with the provider.
My noble friend’s amendment emphasises the provider in this regard. The provider is entitled to rely on the advice of the assessor as the assessor will advise all parties on the validity of the proposals being put forward. Therefore, it would be very helpful if my noble friend could make this clear when he replies to the debate. I quite understand that these matters are being discussed with all the interests involved, but we must have some idea where the responsibility primarily lies. It is difficult to suggest that it lies with the provider, as my noble friend’s amendment does. The provider is entitled to rely on the advice of the assessor. As my noble friend rightly says, I hope that these matters can be decided in a competitive environment so that the consumer has a choice.
Lord Oxburgh
My Lords, I wish to pursue the point made by the two previous speakers. This is an extremely important area in which the fine detail will determine whether the scheme works. I draw attention to the implicit assumption in the Bill that there is such a thing as a unique assessment. Regardless of who makes the assessment—whether it is done by the person who ultimately provides or an independent assessor—these are matters on which there can be different views and with which a householder may be dissatisfied and may legitimately and reasonably want a second assessment.
Lord Jenkin of Roding
This group of amendments provides a welcome opportunity to talk about one particular participant in the whole process, and that is the many firms which supply the products. There is an enormous range of them and they are hugely important if the objectives of the Bill are to be achieved. All I want to say in a very few remarks is that I hope that the department really will listen to those people who have had the experience of supplying products to the various participants under the Green Deal’s predecessors. The impression of the trade association that represents the builders’ merchants is that there was actually a great deal of malpractice under the CERT programme, which it describes as operating as a closed shop and distorting the market with unfair subsidies. In my Second Reading speech, I warmly welcomed the new approach set out in the Green Deal and the energy companies’ obligation as it represents a considerable improvement on the previous system. I am delighted that it has been so widely welcomed around the House.
The participation of the supply chain is very important to this process. Suppliers have a great deal of experience and provide a wide range of products including loft and solid wall insulation, replacement windows and doors, heating, hot water systems and associated insulation, draft proofing and all the rest. It seems to me that those suppliers have a great deal of wisdom to convey to those who are trying to draw up the regulations and the code under Clause 7. This is an opportunity to stress the importance of the supply chain.
I believe that the department is listening to the trade association concerned and therefore I wish only to say firmly that it would do well to listen hard. Its representatives have experience and are deeply involved in the whole process, and they totally support both the concept and the practice of the Green Deal. Just as we do, they want it to be as successful as possible. I hope that my noble friend will be able to give me an assurance that this will indeed be something that the department will do.
Baroness Finlay of Llandaff
My Lords, at the previous stage of this Bill, I tabled an amendment about carbon monoxide alarms. I have not retabled it now because I have had reassurances from the Minister. These amendments are about compliance with appropriate standards, so I rise simply to seek an assurance that the standards will cover both primary products and secondary products, which must be appropriate carbon monoxide alarms to accompany the installation of appliances which may produce carbon monoxide. Sadly, we have a steady string of notifications of carbon monoxide poisoning. Charlotte Church was recently poisoned but she survived because luckily she lives in a large house and her grandfather had told her to get a carbon monoxide alarm because of her symptoms. No one is immune, from the most famous names to those one has never heard of.
A further reason that the concept of a Green Deal oversight body is appealing is that, while many victims of carbon monoxide poisoning survive, unfortunately many will do so only with neurological and other damage. They need to be listened to and their claims to be heeded. I therefore seek a reassurance from the Minister that the issue of carbon monoxide alarms has not been forgotten or sidetracked, and that it will be considered as part of the appropriate standards to be set out in a code of practice as a result of this Bill.
Lord Jenkin of Roding
Lord Jenkin of Roding
One of the features of this whole Green Deal, which has run right through the discussions, is that it will be the suppliers of gas, electricity and, no doubt, other products, who have to collect the payments from the improver, through their energy bills, in order to repay the loan that will have been made by the provider to enable the improvements to be made. This is an important new role for the gas and electricity supply companies. They have unanimously—I have spoken to a number of the companies—welcomed the whole process in this Bill. They recognise that this will bring a range of energy efficiency measures to homes and businesses.
However, they have a very serious concern about an aspect of this process of cash control. My noble friends on the Front Bench will remember that I have raised this at every stage of the Bill, including at Second Reading. They do not want to become liable for the Green Deal debt. If there is a default on the payment, it is difficult to understand why the gas and electricity companies should be the ones that bear that. Perhaps I may spell this out because that is what this amendment is all about. Clause 15 as currently drafted provides power for the Minister to modify gas and electricity licences, and industry codes and agreements maintained pursuant to a licence, for the purpose of requiring and enabling licence holders,
“to take, or not to take, specified action in relation to Green Deal payments”.
That is very wide indeed. The power can be exercised by the Minister subject only to routine public consultation. It really is quite a peremptory power.
Lord Marland
I am grateful to the noble Lord, Lord Davies, for helpfully answering this question for me because it is absolutely fundamental that if we withdraw the liability from one party, we have to establish where it is going to fall. No one knows more about the industry than my noble friend Lord Jenkin of Roding. He is very close to it indeed and, as he said, this is a complex accounting issue on companies’ balance sheets. These implications need to be looked at carefully and that needs to be done in consultation with businesses. I refer to what the noble Lord, Lord Davies, said earlier: if we withdraw from one, we have to work out who is going to pick up the bill at the end.
I make a strong commitment to my noble friend Lord Jenkin of Roding—he knows that when I make these commitments, I mean them—that we will be liaising with the energy suppliers and the finance providers over the next few months as we put together the important financing of the Green Deal which, as we all know, we have not as yet structured. It will, however, be an important structure and through that we will develop a policy and provide absolute clarity on this issue for, we hope, all parties. It is fundamental that all parties go into this Green Deal approach unified and clear of their position and, indeed, that the customer is clear of his recourse in that position. That is a commitment that the Government will make to this process and I hope that the noble Lord will be satisfied to withdraw his amendment.
Lord Jenkin of Roding
My Lords, in reply to the noble Lord, Lord Davies of Oldham, I say that if the supply companies are not going to be made liable then it will of course be the providers. They put up the money and if there is a default then, like any lender, they have to bear its cost. The risk of default could mean a marginal increase in the rate of interest that they would have to charge in order to cover that risk. They do not face the same problem as the supply companies, which have the problem of having the whole thing landed on their balance sheets. As I have said, that could amount to billions of pounds.
I am extremely grateful to my noble friend for his promise to consider this. He has of course been as good as his word on so many of the other undertakings that he has given. While he will be discussing this with the industry and with the providers, I simply find it difficult to believe that it could be right in the present circumstances to leave the whole of the debt outstanding, in the case of a default, on the balance sheet of the supply companies. I want to make my own views on that clear. Having said that, my noble friend has made a fair offer and I beg leave to withdraw the amendment.