Energy Bill

Lord Jenkin of Roding Excerpts

Wednesday 6th November 2013 Lords Chamber

[Lord Deben]

I can see the Whip looking at me with some care so I will be very quick. First, we have a moral duty because much of the climate change that is happening at the moment has actually been caused by us because we were the first in the Industrial Revolution. Secondly, if we want other, much less well-off people to follow, we have to set an example. Thirdly, 11% of the emissions in the world are made by organisations that are headquartered or sold on the London Stock Exchange, so we must realise how big our reach is.

Fourthly, because we have led the world—although we do not now—other countries are now doing significantly more than we are. The President of South Korea is here on a visit today. She comes from a country that has a programme of very considerable remit which will end up with it being carbon-neutral by 2050. China is moving from a carbon-intensity target towards a carbon-reduction target for the mid-2020s. It has already been shown that by leading the world, the world is changing. But if we stand aside and say, “After you, Claude”, nothing will actually happen. That is why we have to do it. We do it for the poor. To use the poor as an argument against doing things on climate change seems close—although I am not saying this about my noble friend—to reprehensible.

[Lord Jenkin of Roding (Con)]

My Lords, I shall be extremely brief because I sense the House would like to come to a conclusion on the amendments.

I listened to the noble Lord, Lord Whitty, with some astonishment. It was as though we had not even had a debate about fuel poverty in Grand Committee. I reread that debate and his first words were that he thanked the Minister for having brought fuel poverty into the Bill. You would not have guessed that from what he said this afternoon.

I have much more sympathy with the points made by the noble Lord, Lord O’Neill, but he, too, had his words of congratulation in Grand Committee. He said:

“The amendment goes some way to mitigate concerns that have arisen about that. It sticks in my craw to say this but the Government must be praised for obtaining support for the measure from Derek Licorice, the chair of the Fuel Poverty Advisory Group, and Jenny Saunders of the NEA”.—[Official Report, 11/7/13; col. GC 135.]

One must recognise Clause 136 is a considerable step forward. In Committee, I said that it was very worthwhile. Of course, the meat of this is going to be in subordinate regulations. We shall obviously want to watch that very carefully indeed. I totally understand the argument that my noble friend on the Front Bench advanced for not putting all the detail into the Bill, but wanting it in the regulations.

The impression I was given by the noble Lord, Lord Whitty, was that the Government were not doing anything for the fuel poor. In fact, he has had a copy of the letter that was sent to all of us from my noble friend on the Front Bench setting out the details of fuel poverty spending. The total resources spent in 2010-11 at 2012 prices—these are common prices all the way through—on fuel poverty spending was £821 million. The current year has gone up, at constant prices, to £841 million and the next year the estimate is £845 million. That does not take account of the fuel allowance, which is paid under the social security arrangements. These are arrangements under the carbon emissions target, under the energy company obligation, the warm homes discount and so on, which are specifically aimed at the poor. So I rather resent that.

I have one question for my noble friend. John Hills’s report made the hugely important point—indeed, it has been referred to earlier in the debate—that it is our uninsulated homes, particularly for poor people, which are the biggest single cause of cold homes and fuel poverty. He quite rightly says—and this has been widely welcomed—that we must change the definition to take account of that. What I hope to hear from my noble friend is what is now happening to our main programme, the Green Deal, which is supposed to be the main instrument for increasing the amount of insulation of homes. One has heard gloomy tales that so far very few people have been able to take advantage of that. What is happening on that? We must know. To my mind that is the most important thing we can do to reduce fuel poverty.

[The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con)]

My Lords, I start by thanking all noble Lords for a very full and informed debate. I thank my noble friend Lord Jenkin for reminding the House of the warm welcome from the opposite Benches for us taking forward this measure. It is really important that we all agree that something must be done. What has been done in the past has not been enough. We need to be working far more constructively together to get solutions, particularly for those who are most vulnerable and least able to respond. I also thank my noble friend Lord Deben. He is absolutely right: any measures that we take here will have an impact somewhere else in the world. It is really important that we are mindful that this Bill is in part there to help decarbonisation. The bigger picture is to play our role in helping other countries, which can look at how we are putting those measures in place.

I also thank the noble Lords, Lord Whitty and Lord O’Neill, for their amendments, because they enable me to clarify a little further points that I made in Committee so that they feel reassured that this Government really take seriously the issue of fuel poverty. We take the issue no less seriously than the previous Government did, but the measures that were put in place were not working well enough. We need to make sure, therefore, that what we are doing gives better results.

Noble Lords have rightly highlighted the seriousness of fuel poverty; it is because of this that we are committed to tackling this. This is why we made the amendments in Committee which will set a new target and put in place a new strategy for tackling the serious issues around fuel poverty. This framework will allow us to maintain a concern for fuel poverty beyond the current date of 2016. That concern needs to be set out in legislation. However, the right balance must be struck between what is set out in primary legislation, what is subsequently laid out in secondary legislation and what is included in the strategy, to maintain an appropriate use of parliamentary time and level of government accountability.

I turn to Amendments 104C, 104D, 104E, 104F and 104G, which would put a specific target for fuel poverty in the Bill, and limit the changes that can be made to the target as well as proposing a review of that target every two years. We proposed setting the target through secondary legislation as we felt that this struck the right balance between the certainty of legislative targets and the need for flexibility in the future. The flexibility will, for instance, be important to reflect changes in the way energy efficiency is measured over time. The setting of the target, and any changes to it, will be subject to full parliamentary debate and the importance of that debate is why we have proposed that these are subject to affirmative resolution by both Houses.

We know from Professor Hills’s independent review that the way in which we understand the problem, as well as the best ways of tackling it, can change over time. Primary legislation is not the appropriate vehicle, given the importance of a nuanced, flexible approach to tackling fuel poverty.

I agree with noble Lords that we must be ambitious if we are to be successful in tackling fuel poverty, and the strategy must be a comprehensive one. However, it is neither sensible nor appropriate to put this level of detail into primary legislation. We will bring forward proposals on both the fuel poverty target as well as the strategy in due course, both for public consultation and, subsequently, for a full debate by both Houses.

In the mean time we will continue to deliver policies to tackle one of the main causes of fuel poverty, which, as noble Lords have already mentioned, is living in cold, draughty homes. The energy company obligation is set to deliver permanent energy savings in 230,000 households by the end of the year, including for the hardest-to-treat homes. We anticipate the ECO affordable warmth and carbon saving communities obligations should generate investment in home thermal efficiency improvements equivalent to around £540 million per year. As a result of the ECO, we should see more than 60,000 boilers—which were mentioned by the noble Lord, Lord O’Neill—being installed in fuel-poor homes, as 60,000 have been installed since the policy was launched in January.

--- Later in debate ---

[Lord Berkeley of Knighton (CB)]

My Lords, I would like to follow up on that point and also agree with the noble Lord, Lord Forsyth. I feel I represent people in mid-Wales—another area which is profoundly threatened with pylons and wind farms. When I get my council tax bill, the police, the fire services and everything else is listed in just the way the noble Lord, Lord Forsyth, is suggesting. I do not really see any problem in bringing greater transparency which we would all like to see and which might help us to understand how these bills are put together.

[Lord Jenkin of Roding]

Some years ago I moved amendments to an energy Bill to the effect that the bills should actually show the breakdown of the costs on the supplier that is then charged on the bill. I was therefore quite pleased when I found that my electricity bills—I draw my supplies from British Gas—in fact do that. They do not show the details of what it paid up but have the total cost of government, environmental and social schemes. It is 11%. I can understand the desirability of providing people with an opportunity to break that down and find out how that figure is made up.

When we debated this in Committee, the right reverend Prelate the Bishop of Chester made this case very strongly. As it was in Committee there was quite an exchange between him and my noble friend on the Front Bench, at the end of which my noble friend said very firmly:

“My Lords, as I said earlier, I am taking the amendment away and shall reflect on what the right reverend Prelate the Bishop of Chester has raised. Like noble Lords, I am very keen that information is available, simple and understandable, but I am also keen to ensure that I can deliver what I am able to. Part of that is by taking this away and giving it further consideration”.—[Official Report, 9/7/13; col. GC 80.]

That she did, and subsequently sent a letter to those of us on the Committee. I will not read the whole passage, but it is headed “Information on consumer bills” and states:

“I undertook to reflect on”—

the right reverend Prelate the Bishop of Chester’s—

“suggestion that companies should be obliged to include information on consumers’ bills about Government environmental levies and programmes”—

thereafter pointing out that the bills are pretty crowded documents. My bill not only tells me what I have incurred during the quarter in question but what my estimated total consumption will be and how that compares with the estimated total consumption of the previous year. All those things are quite interesting, but one feels, how far does one go?

My noble friend continued:

“I agree that we must be transparent about the impact of Government environmental levies and programmes on consumer bills and that is why the Government has committed to publishing this information annually, through the Price and Bill impacts Report. In addition Ofgem produces fact sheets that provide a breakdown of costs which make up a typical energy bill”.

How many consumers are aware of those documents? Even if they were aware, how would they get hold of them? I understand the difficulty in seeking to break down that 11%. If someone is really interested in that, no doubt they can pursue it by looking it up on the internet, where I am sure that the figures are available. I hope that my noble friend can give us some reassurance about the information. As my noble friend Lord Ridley said, the public have rumbled that already; they now know that that is what is happening; hence the suggestion from the Prime Minister that some of it should be placed on taxation and not on the bills. That will no doubt be considered.

My noble friends Lord Forsyth and Lord Marlesford have a point here. I am not entirely sure that the letter from my noble friend Lady Verma has dealt with that. Can we not be told how people can best get hold of that information if they want to? Why is it not possible for every energy supplier to do what British Gas does on my bills and what Southern Electric does on a sample bill which it has given to me, which shows the cost of government, environmental and social schemes to be 11%. That does not seem an unreasonable thing to ask for, and I shall listen to what my noble friend says with considerable interest.

[Lord Kerr of Kinlochard (CB)]

My Lords, it is probably quite unnecessary to add to the avalanche of support for the amendment of the noble Lord, Lord Forsyth, which I am sure that the Minister will accept. Just in case she is still in any doubt, I will add my support for the amendment, which is absolutely right. Of course, this is the anti-hypocrisy amendment. It is much needed today, when we have spent a lot of time discussing fuel poverty. One very good way to deal with fuel poverty would be to keep prices down and finance environmental and social objectives through general taxation. That would be socially wise and would assist in dealing with the problem of fuel poverty.

I should say that my interests recorded in the register include the fact that I am the director of a power company. I am delighted not to hear boos and hisses—although I think that there was a silent one. There is hypocrisy in the current criticism of the power companies, given that this year sees the introduction of the Energy Companies Obligation and the Green Deal. The energy companies are obliged to spend huge sums of money on insulating domestic property. Then they are criticised for putting prices up.