Lord Marland
Main Page: Lord Marland (Conservative - Life peer)Energy Bill [HL]
Lord Marland Excerpts(13 years, 5 months ago)
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Lord O'Neill of Clackmannan
Thank you. I was expecting some of the Government’s Back-Benchers in their varying forms to jump up and to defend this Bill in its present form. There are always criticisms made of Bills but, apart from Ministers who are paid to defend them, there are always people—
Lord O'Neill of Clackmannan
That is fine. Every man has his price. Some are well enough off to be able to do that. Many of the people we are concerned about in this Bill and who are looking to this legislation for assistance would be very happy to be in that position. A lot of them work for nothing on the basis that they are unemployed. That is why they live in fuel poverty.
As I say, the purpose of this amendment—coming from people who in the past have sought to pin down Governments to make sure that they will meet their requirements whether by international law or by British legislation—is to improve the Bill. We have had people on the Benches opposite cheering in the wings when the previous Government were taken to court because they had not met, in the eyes of some people, the requirements of the legislation of the 1990s and of 2008 to meet some of the fuel poverty targets. One would have thought that they would have been happy to make more explicit the commitment of the Government to these aims and objectives, because there is nothing which we are advocating here that is at variance with government policy.
Lord Dixon-Smith
My Lords, I feel tempted to rise for the fly that has been flicked over us, as you might say, even though I suspect that it is probably uncatchable. To explain my attitude to all this—particularly to the noble Baroness, Lady Smith of Basildon; she and I share a certain amount in our background—I should explain that I was once responsible for the total built estate in Essex. Part of that responsibility was structural maintenance, and the other part—even 30 years ago when I was doing it—was energy efficiency, not least of the problems being because we had many buildings erected under a very different regime in the 1950s that were extremely energy inefficient.
The point that I really want to make is this: in those days, energy efficiency was constantly measured and schemes for improving the energy efficiency of buildings flew in and out of our programme with monotonous regularity, because they were always dependent on showing an economic return. Interest rates in those days changed with monotonous regularity, and the consequence was that a scheme that might be eligible for consideration one month would go out six months or even three months later, because there was no longer an economic return. However else we look at the question of energy efficiency in housing, economic return will still be the driver on which individuals will make up their minds whether to participate in the scheme. Not least of the problems that the Government face in proposing a scheme of this nature, particularly at present when interest rates have been consistently low for a long period, is that it is almost impossible to judge what view people will take if interest rates go up to 5, 6 or 7 per cent. That would not be unforeseeable if the economy changes, particularly if inflation stays consistently high. That is one difficulty that the Government definitely have to face.
My problem with the amendments comes down to a slightly more difficult point. It is all very well for the Government to propose a scheme, but it depends on voluntary participation. People have to say that they wish to take part; there is no mechanism for compulsion, and rightly so. To ask the Government to predict what sort of savings in carbon emissions they expect as a result of the scheme is setting an impossible task. I do not see how it can be done. In any event, however significant the scheme may be in the context of the Climate Change Act and its 2050 target, it will play only a minor part. That target was specifically mentioned by the noble Baroness, Lady Smith, as a reason behind her amendment, but the critical issue in relation to it will be what happens to carbon dioxide.
If you remove carbon dioxide from electricity generation, you can turn a house totally into a zero-emissions house. The energy efficiency does not need to alter one iota if it is an all-electric house. At that point, you fall back on what I have already said—that the decision on whether to participate in an energy efficiency scheme is entirely and properly a responsibility of the householder. Therefore, I have a fundamental difference in approach.
I sometimes wonder when I see amendments like this how the proposers thought we would ever achieve the present state of development that we enjoy in this country, which is very sophisticated. The more sophisticated our society becomes, curiously, the more sophistication and complexity seems to be demanded in our legislation, which in fact makes legislation more difficult to implement. We have something here which depends on volunteers, and we already have a mechanism for annual reporting because the Government’s carbon performance has to be reported annually to the climate change committee. It seems to me therefore that the background to these amendments is superfluous. In order to keep legislation simple and understandable, I hope that the final decision will be that these amendments should not become part of the Bill.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, this is the first Bill that I have been involved with, so please be patient with me, if you would be so kind. It is good for this House that the Energy Bill is starting here, and I thank all noble Lords for their well thought out and helpful amendments. We may, of course, resist some of them, but they will be given respectful consideration and full discussion. I would also like to thank the opposition Benches for their constructive approach to this through the noble Baroness, Lady Smith of Basildon. I would particularly like to thank my officials, who have worked through the weekend and have had to respond to amendments tabled as recently as this morning. So they have put in a tremendous amount of hard work. I would also like to thank my unpaid friend Lady Northover, who joins me not as a rich person who can afford things—as the noble Lord, Lord O’Neill, thinks—but as someone who believes in public service.
Throughout our consideration of this Bill my door is always open, as is my limited mind, and should you wish at any time during this Committee to discuss any issues, I would be delighted to do so. So thank you in advance, all of you, for your support. I would also like to thank the noble Lords and the noble Baroness, Lady Smith of Basildon, for bringing forward these amendments which seek to provide clarity about the purposes of this part of the Bill, to ensure that those delivering the Green Deal have regard to those purposes, and to require annual reports on progress.
Amendment 1 seeks to put in statute the purposes of the Green Deal and to require relevant persons to have regard to these purposes in fulfilment of their functions. The Green Deal is indeed central to the carbon reduction target contained in the Climate Change Act and to the elimination of fuel poverty. I welcome the opportunity provided by this proposed amendment to provide clarity on the purposes of the policy.
There are, however, difficulties with this proposed clause as an operational clause, many of which my noble Friend Lord Dixon-Smith has alluded to. The Green Deal is about establishing a commercial framework in which businesses can take the lead in delivering a new type of finance package designed to address climate change and fuel poverty. However, most of the regulatory functions which will be performed by specific bodies under this Bill are for consumer protection. For example, those persons running accreditation schemes ought to be focused on setting and enforcing standards to protect customers, not having to have regard to a trade-off between high-level policy aims such as carbon reduction and operational issues such as enforcing standards. We should resist an overarching purpose because we do not want to open an opportunity to challenge inappropriate commercial practices on the basis that the end justifies the means if the overarching purpose is achieved.
Lord Davies of Oldham
If we won the argument substantially with the Government on the main proposals of the Bill, I have not the slightest doubt that the wisdom of Wales would be such that Welsh Ministers and the Welsh nation would recognise the values in the Bill which would be translated into meaningful structures for them. However, we have not yet consulted Welsh Ministers on the amendment.
Lord Marland
We greatly welcome the attendance of the noble Lord, Lord Davies of Oldham, who always brings great oratory to our debates, which we enjoy.
On Amendment 1B, the comments that I made on the previous group stand. The position in respect of Wales is particularly complicated, given, as the noble Lord, Lord Davies, said, the way in which the devolution settlement operates in this area. I would certainly want to consider further and consult as necessary before agreeing anything in this area. Therefore, I ask the noble Lord to withdraw the amendment.
Lord Davies of Oldham
The Minister’s response has not surprised me, and I beg leave to withdraw the amendment.
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.
Lord O'Neill of Clackmannan
I am grateful to the Minister for giving way. I do not wish to delay the proceedings, but I think he has come upon a point that illustrates the difficulty that some of us have. Consider people who have a solid wall property which is not within the gas network—that is, dependent upon probably oil-fired central heating—and requires, because it is solid wall, very expensive insulation, that will probably never be achieved because of the cost of the job to be done, the nature of the property and the length of time of the repayment. There are quite clearly certain properties which could almost deem themselves to be ineligible to participate in this scheme. Therefore, for us to talk of this great, exciting Green Deal, which is going, among other things, to transform the carbon excess in this country, is at this stage to build up the hopes of a number of people in rural communities outwith the gas grid who live in houses constructed in such a way that to insulate them effectively is going to be so expensive as to make them ineligible to be part of the scheme.
It is that kind of thing that, at the outset of our discussions, we should be clear about because there are some hopeless cases, for want of a better expression, which might never fall into this category. It is for that kind of thing that we want a clearer definition early on. So far, the Minister has not addressed that aspect, which is not beyond the wit and intelligence of the department to make clear at an early stage in our proceedings.
Lord Marland
This is a commercial market-driven project. In any commercial market-driven project there are going to be properties and buildings where, as the noble Lord rightly says, a cost may not be acceptable within the repayment fund or may not be within the golden rule. My sense, and that of the department, is that we set up the structure and see how it proceeds. I live in an oil-fired house in a rural community where we cannot get gas, as do many, as the noble Lord said. If it does not make commercial reality for market-driven forces to help with that, the department and Government should look at how that can best be achieved.
Until the commercial equation is worked out, however, and until I have seen the assessor and the accreditor, I cannot begin to see whether that is a viable proposition. It is incumbent upon the Government to regroup at a point, as the noble Lord rightly says, to see where it has not worked with these properties, what can be done to help, what type of people are not able to take full advantage of the scheme and then see where the Government can help. I look particularly here at the vulnerable, who are vital to this, particularly the vulnerable in rural communities where they cannot have the benefit of this if the numbers do not work out.
I hope that that deals with the noble Lord’s point. However, I think that he is absolutely right. The scheme needs to be road-tested to ensure that it works and we must keep a watchful eye on it. Getting these things precisely ordered is a very good thing for the Bill.
I regret to say that I have forgotten where I was but I have a feeling that I was somewhere like subsection (5) —or was it subsection (4)?
Lord Marland
That is very kind of the noble Baroness. Subsection (4)—no, I have already done this. Subsection (5) sets out some conditions that must be met before payments are collected under a Green Deal plan. For example, measures must be installed in accordance with requirements set out in Clause 7. Again, these conditions protect the parties entering into a Green Deal plan and are intended to ensure that payments are not collected until measures have been installed appropriately and the plan has been confirmed.
Subsections (5) and (6) provide that when all the requirements of subsections (3) to (5) have been met, payments under a Green Deal plan are to be made by the person who is liable to pay the energy bill for the property for the time being and should be made through energy bills for the property. This is the core of the Green Deal and the effect of an arrangement qualifying as a Green Deal plan.
In summary, therefore, Clause 1 sets out the conditions that must be met for an arrangement to qualify as a Green Deal plan and the effect of those conditions being met. It is therefore central to the operation of the Green Deal.
Amendment 38 would change the short title of the Bill from the Energy Act 2011 to the Energy Framework Act 2011. I appreciate the sentiment of this amendment, which highlights that the provisions for the Green Deal provide a framework to be codified by further legislation. This is the approach we want to take. The Green Deal provisions are about framing a new market and, as I said earlier, we wish to consult widely.
However, the Bill, while focused on the Green Deal, covers a number of other issues in the energy sector; therefore most of the provisions are not framework provisions. As the short title should describe the Bill as a whole, I do not believe this amendment is appropriate.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister, but I am not sure he has addressed the point I made first. On Amendment 38, I think that perhaps the noble Baroness, Lady Noakes, misunderstood me. It is not with any welcome that I say there are 52 pieces of secondary legislation; I think it is entirely inappropriate. I welcome the fact that the Minister says that he will consult on them. That is very different from having full scrutiny in this House. The point the noble Baroness and I both made at Second Reading is that it would be helpful in our deliberations if we had drafts of some of the secondary legislation as we discuss the Bill.
I accept that this is a framework Bill but I do not welcome the fact that it is. If we look at some of the points that will be covered by secondary legislation, it would be much better if we had that information today. The actual framework of regulations—the code of conduct, for example, and the kind of assessments—would be helpful prior to this stage. I would prefer to see much of this information in primary rather than secondary legislation.
The noble Lord, Lord O’Neill, referred to a lack of clarity. It would be helpful to have some of these comments prior to the Bill, and I apologise if I was not clear enough in my explanation. The objective of this Bill is to ensure that as many households as possible have as much work undertaken as possible in terms of energy efficiency to reduce carbon and reduce bills. The Bill is market-driven in some ways because, as I think the noble Lord, Lord Dixon-Smith, said, if there is an incentive for people to save money, there is an incentive to undertake the Green Deal; we would not want to exclude work that could be done and paid for in another way, including by the householder, because it is not in the Green Deal plan.
Clause 1 provides that an energy plan is an arrangement by the occupier owning the property for persons to make energy efficient improvements to the property, and goes on to say that it is an energy plan if it is paid for in instalments. Yet all the references in Clauses 2 and 3 to assessors, the framework regulations and the code of conduct apply to a Green Deal plan. We want to ensure that the assessor can undertake an energy plan so that he can assess how much work can be undertaken in that home to ensure energy efficiency, part of which may be part of the Green Deal. I do not think it has ever been the Minister’s intention to exclude all work other than the Green Deal. It should be an opportunity for the householder. I would welcome further discussion on this, because I do not think this is what the Minister intended.
Lord Hunt of Chesterton
Picking up on the point that the noble Baroness, Lady Finlay, made, she used the word “ventilation”. I keep looking through the Bill to see where the word “ventilation” is. I made this point on Second Reading. It is really important that when you are considering the energy of a house, you consider ventilation. You gain or lose a huge amount of heat in that way. Nobody could possibly have an energy system without that. Obviously, one aspect of ventilation is to do with energy; another aspect is to do with safety, comfort and so on. Some kinds of housing would require new ventilation, and that should be part of the cost. I also raised the point on Second Reading as to whether this could be included as part of the Green Deal funding. From a technical point of view, it seems that it would be very eccentric not to include that, so I hope that that is considered as part of the Bill. It may be that ventilation and safety should be considered in a more general clause.
Lord Marland
My Lords, I thought that I had an explanation of why there are so many amendments, but my noble friend Lady Noakes has put the cat among the pigeons by reversing what I thought was the case; but, as I said, we will get there in the end.
Clause 3 gives the Secretary of State powers to establish in regulations a scheme for authorising persons to act as Green Deal assessors, Green Deal providers and Green Deal installers, and provides for a code of conduct regulating these Green Deal participants. Subsequent Clauses 4, 5, 6, 7 and 8 deal with each step of this process in more detail and make provisions for customer redress. Correspondingly, Clause 28 enables the Secretary of State to delegate related regulatory functions to a public body.
Appropriate regulation of the Green Deal participants is vital if the customer is to be able to trust in the quality of the Green Deal itself. At the heart of this clause, therefore, is the ability to issue a code of practice with which Green Deal participants must comply.
I will now speak to Amendments 2B, 2C, 2E, 5A, 7B, 7BA, 7C, 8A and 8B, as they all relate to how we best protect Green Deal customers. I welcome the thrust of all these proposals, but I do not think they are ones that we should incorporate into this clause or elsewhere in the Bill at this time. Let me explain why. Amendments 2B, 2E, 5A and 8B seek to ensure that the scheme and code of practice hold customer protections. I would like to thank all noble Lords for highlighting through their amendments the importance of the framework regulation described in Clause 3. It is vital therefore that customers are able to recognise that the scheme benefits from quality assurance and is properly regulated. Without this degree of confidence the Green Deal simply does not work. More importantly, we must ensure that the consumer does not suffer from mis-selling in any way. This means that there must be accurate consumer information provided from suitably qualified and trained people. We cannot afford to make the same mistakes that have been made elsewhere, notably in Australia, where the Green Start scheme was axed due to quality-related problems.
I reassure noble Lords that we will indeed be using powers established by this clause to protect customers. However, we will do so only where existing legal provisions or other mechanisms for securing consumer protection are not already in existence on this basis. I hope that on this basis, the noble Lord will feel able to withdraw the amendment.
Amendment 7BA seeks to have carbon monoxide alarms installed in properties as part of the Green Deal. The noble Baroness, Lady Finlay of Llandaff, discussed the risk of carbon monoxide poisoning on Second Reading, and I am extremely grateful to her for raising this important issue. The risks of carbon monoxide poisoning are potentially very grave, and I recognise the important role played by alarms in saving lives.
The Bill establishes the framework for installation but the detail of these conditions and the measures will be set out in secondary legislation following consultation with stakeholders. This will allow us time to consider in more detail whether the suggested approach would be the best and most cost-effective way of addressing carbon monoxide build-up. I am grateful for the additional comments of my noble friend Lady Noakes; they will help us decide how we can best help and consider this vital suggestion by the noble Baroness, Lady Finlay of Llandaff.
I fully take on board the comments of the noble Lord, Lord Hunt of Chesterton, about ventilation. We shall consider those during this process.
On Amendment 7C, Clause 3 gives the Secretary of State powers to establish in regulations a scheme for authorising persons to act as Green Deal assessors, Green Deal providers and Green Deal installers, and for a code of conduct regulating these Green Deal participants. It also allows for a body to be authorised so that its members are in turn authorised to act as Green Deal participants. We are committed to underpinning the Green Deal with high standards, but it is important not to be held to a requirement if, in time, a different approach becomes relevant or necessary. This approach is reflected throughout the Green Deal provisions of the Bill.
Finally, Amendment 8 seeks to require that any services provided or products sold by Green Deal participants, in addition to those paid for through Green Deal finance, should also be subject to the Green Deal regulatory framework. Amendments 2C and 7B similarly seek to extend the Green Deal framework specifically, the accreditation of Green Deal participants and any marketing requirements under the code of conduct to apply to energy plans—energy efficiency improvements offered by Green Deal participants without Green Deal finance.
The amendments raise an important issue—the need to safeguard against homeowners being sold measures by Green Deal providers that, unknown to them, do not benefit from the same regulations as Green Deal. However, it does not follow that the whole of the Green Deal framework could be applied appropriately to any other product or service.
I reassure noble Lords that we will be able to require, through the overall scheme and code, that customers are made fully aware of the difference between those measures being offered that fall under the Green Deal scheme with all its safeguards, and those that fall outside. We will not accept companies using Green Deal accreditation as cover for less appropriate goods and services. Furthermore, Clause 3(7) extends the scheme or code to energy-efficiency plans that are not Green Deal plans and provides a power to impose additional requirements on energy-efficiency providers.
The Earl of Lindsay
I do not believe that we are. I am grateful to the noble Lord for that clarification. We are in the same space. We both agree that flexibility can be a strength of the scheme by which certification to the required standard is sought. The important thing for the Government and for those who seek, as it were, to use the Green Deal, is that there is consistency with which all those who participate comply with the standard.
On the amendment of my noble friend Lord Teverson regarding suspension and expulsion, I make a brief comment about the broader point that an accreditation scheme run by UKAS should make sure that, long before the Minister has to step in in order to suspend or exclude, the system itself should make all those judgments within its own processes. The point of certification should be able to judge non-compliance. If it is major non-compliance, one needs to make a judgment between suspension and permanent withdrawal. The accreditation body should be capable of suspending or withdrawing a certification system if they are similarly not meeting the required standards that the scheme expects.
This group of amendments raises some very important issues. I am not persuaded that the way that the Bill is currently written needs to be changed in order to deliver the strengths that I believe that the Government are looking for. However, I am grateful. We have had an opportunity to debate some of the key attributes that the Green Deal will be underpinned by.
Lord Marland
I thank noble Lords for tabling these amendments which seek to ensure that the Green Deal participants are working to a specified standard using agreed methodologies. I welcome the various comments that have been made because it will help us set out our provisions in more detail. Amendments 2D, 2G and 5B all seek to ensure that the Green Deal assessment is carried out by qualified assessors. A specified methodology for completing this assessment is contained within the code of conduct. These are also covered in Clauses 3(4)(a) and 3(9).
I am glad to note that the noble Lord, Lord O’Neill, and my noble friend Lord Lindsay are not far apart. It is fundamental that standards are set, that they become the cornerstone of this whole assessment and that if we get that right we get the rest of it right. I am also grateful to my noble friend Lord Lindsay for pointing out the difference between accreditation and certification. This needs further discussion and investigation and we will undertake to look at that to make sure we get it right. It is fundamental and I agree with the noble Baroness, Lady Smith of Basildon, that getting these assessments and the quality is fundamental to the confidence of the customer and the whole scheme.
We could have a workforce of 250,000 working to satisfy the Green Deal requirements but of course that depends on take-up, and we will inevitably find that if the take-up is not as great then there will not be that many. We believe that the maximum is about 250,000. If I heard the noble Lord, Lord Neill, correctly, he said we were thinking of excluding boilers and solid wall insulation, external and internal. That is not the case. Subject to the golden rule, these will be included. I think I heard the noble Lord correctly and it is worth clarifying this.
I agree that it is important that assessments are produced by those with suitable training and practical know-how and that is why Clause 3 of the Bill currently sets out provisions for a code of practice that all Green Deal participants will be required to sign up to as part of their participation. Furthermore, the Clause states that this code of practice may set out the qualifications and skills that these assessors must possess in order to practise.
I thank noble Lords for their suggested amendment to ensure that the code of conduct requires assessors to produce their assessment in line with standard methodology. The Bill currently sets out the intention for all assessors. Subsection (8) allows for the withdrawal of authorisation for particular participants and allows a membership body to withdraw authorisation from its members. Although Clause 3(5) may allow for regulating the membership body by legal advice, my legal advice is that it may not be sufficiently clear that we have powers to withdraw authorisation. I therefore agree that we should consider this amendment further.
Baroness Smith of Basildon
My Lords, I am grateful to the Minister. I welcome the approach that he has taken throughout this Committee. He is taking on board comments that have been made today, and I know that he will take them back and perhaps we will see some changes at Report. I just grinned when he talked about the code of conduct because—I do not know whether the noble Baroness, Lady Noakes, picked this up—he said that the code of conduct “must” set out the qualifications and skills. At the moment it does not; it only says it “may”. So I welcome his change of language to “must” set out the qualifications of skills, rather than “shall”, as my amendment suggested.
It has been a useful debate, and I always defer to those with greater knowledge on issues. I do not think that there is much difference between us. All of us agree that those undertaking the work, whether assessments or installation, have to have the appropriate skills and qualifications. It is entirely appropriate that although they are accredited in some way, that can be withdrawn. But the reason for raising the issue of standard assessments was not to propose a tick-box procedure—although there will undoubtedly be some kind of tick-box procedure—or uniformity of the work that will be required. However, the issue has been raised. The National Housing Federation raised concerns that the current assessment—I think it is the SAP—does not always work. I was trying to get to a consistency in standards of measurement.
Given that the Green Deal, in terms of what work can be undertaken in a home, has to be cost-effective and follow the golden rule, some kind of standardised assessment to understand what fulfils the golden rule in that way, if the savings have been made, and some sort of consistency, will be required. That is of interest to customers. So I am not suggesting that every house needs to have the same installation and the same work done. There will have to be intelligence taken on board by those installing. However, a lot of the measures will be very safe, and it would be a somewhat ludicrous position if two houses next door to each other were both given different ways of achieving it. It brings us back to the issue we had around the Green Deal plans and the energy plans because, under the Green Deal plans, it could be the same work but with different ways of achieving the same objectives; and the decision would be taken by the assessor, not by the householder. I think that is an issue of the householder having confidence that the assessor is given the correct information.
Lord Jenkin of Roding
I am most grateful to the noble Baroness for that explanation: I had entirely misunderstood the amendment’s intention. It refers to,
“ensuring that such payment is proportionate to the size and nature of the green deal assessor and provider”.
I thought that we were talking about individuals, but the noble Baroness has made it clear she is talking about companies, not the size of the man who is doing the assessing. I realised that there must have been a serious purpose behind the amendment, and she has now explained it.
I think that both these amendments are exceedingly difficult. One can always have sympathy with charities and other people who work for good, or not for profit—or whatever it might be—but at the same time, for the most part, professional services must be paid for. Unless somebody is doing work pro bono, which lawyers and others do from time to time, professional services must be paid for on a proper professional basis. That is what we are talking about. The idea that one should have reduced costs depending on the nature of the client is a difficult concept to import.
We are concerned to ensure that this will be as simple a process as possible. I said at Second Reading that I thought this had the ability to become a much more workable and simpler scheme for all parties to understand than has been the case under the CERT scheme, but I think this amendment would add a complication which I would not support. I am sorry to disappoint the noble Baroness, but I think professional services must be paid for properly.
Lord Marland
I thank the noble Baroness for raising this amendment. It is critical, particularly at this time, that we take into account the charitable sector, of which she has great knowledge. Indeed, so do I to a certain extent, from involvement with a number of charities. Obviously, I can only accept amendments such as these once they have been agreed with counsel and other Ministers, but we will consider how best to take on board this policy aim, which I think all of us would endorse and support in this sector.
Baroness Smith of Basildon
I thank the Minister for that. I understand the concerns of the noble Lord, Lord Jenkin of Roding. He mentioned the client. It is not the clients who would pay a reduced fee, but the provider of the services. I am grateful to the Minister for his acceptance, and I look forward to seeing what comes forward in due course.
Lord Davies of Oldham
My Lords, on behalf of the Opposition I wish to state how much we support the broad thrust of these amendments. I accept entirely the point that the noble Lord, Lord Jenkin, emphasises: that a balance has got to be struck and that it has to be practicable in terms of encouraging people to provide these services. The noble Baroness, Lady Parminter, is absolutely right, however, that should there be a failure in the scheme and a level of malpractice and unfortunate efforts reflected in television programmes or other parts of the media which are able to dramatise failure, the confidence of the public will be lost, and that is bound to affect the speed with which we reach targets and the effectiveness of the work done across the country.
It is not necessary for me to reiterate the points that my noble friend Lord Whitty has made. We are glad to see him present in the Committee and bringing his important expertise to this area with regard to the consuming public. He is right to emphasise that there is no area more significant to any member of the public than when work is done in the home, particularly when, as he says, work is being done not by the people who actually provide the materials and the insulation but by sub-contractors. We all know the difficulties we face with regard to this—we have seen instances from time to time in other aspects—and it is important that we safeguard this position as far as possible.
I know the Minister will indicate that he also recognises the importance of the protection of the consumer, but he will also wish to restrict the amount of direction from the Committee and from the House with regard to the code of practice. I have no doubt that he is going to indicate that at the present time. He will accept that this is a critical area and therefore it behoves us to emphasise the significant points that we are making with regard to the code of practice. The balance which the noble Lord, Lord Jenkin, has emphasised must guarantee the adequate protection of the consumer.
Lord Marland
My Lords, I am very grateful to the noble Baroness, Lady Parminter, for raising this issue. I welcome the noble Lord, Lord Whitty, to this debate. I am glad that he was able to enjoy some winter sun while the rest of us were at the coalface here. As always, his contributions are welcome.
I have said many times that there is no doubt that consumer confidence is at the heart of the Green Deal. We have to get the regulation framework right so that, as the noble Lord, Lord Davies of Oldham, says, people feel confident about receiving people into their homes and that standards are maintained. I am grateful to the noble Lord, Lord Jenkin, for his practical approach to this matter, having welcomed people into his own home to help him with the Green Deal insulation.
I will speak to amendments 3, 4, 5, 6, 7 and 8 as they address customer protection for Green Deal customers. Amendments 4, 6 and 7 seek to ensure consumers are protected by adequate warranties and insurance. We envisage that anyone operating as a Green Deal assessor or installer will need to have appropriate professional indemnity cover but the Bill already provides sufficient powers. As to regulation, a subject raised by my noble friend Baroness Parminter, there are plenty of regulations in place for people selling insurance. I speak with some experience in that field. Clause 3(4)(c) makes provision for this to be a requirement within the code of practice, with which all Green Deal participants will have to comply. Clause 3(8) provides for appropriate sanctions and redress should the assessor or installer not meet the Green Deal standards.
Clause 5(5)(b) also provides for conditions to be set in secondary legislation requiring a guarantee covering improvements to be included in a Green Deal plan. Details regarding the provision of guarantees will become clearer following further consultation with relevant parties as secondary legislation is developed. This will address matters such as the specific nature of the guarantee, the necessary duration of cover and how the cost of providing the guarantee is met. It is therefore not appropriate to put more detailed requirements regarding guarantees and warranties in the Bill. I hope that noble Lords will be reassured that we intend to include the principle of these amendments in regulations and not move their amendments.
Amendments 3 and 5 deal with the detail on how standards will be enforced, specifically through what my official called “mystery shopping”, which is a new one on me—I hope my wife is not taught about mystery shopping—and through access to an Ombudsman. The regulatory framework needs to be developed in more detail but in essence, yes, it is highly likely to include commonplace means of ensuring standards, such as mystery shopping. However, it would not be appropriate to place this level of detail in the Bill. We will bring forward more details of our regulatory framework during the progress of the Bill.
We are committed to providing customers with a simple, seamless Green Deal service and are considering what is the best institutional framework to ensure that it is as simple as possible for a customer to get problems fixed or to seek redress. For example, it is not our intention that customers should have to contact different regulators for each circumstance. We will bring forward more details of our proposed framework during the progress of the Bill. With these reassurances, I hope noble Lords feel able to withdraw their amendments.
Finally, Amendment 8 seeks to broaden protections designed for Green Deal products to cover any non-Green Deal services or goods provided by Green Deal participants at the same time. The amendment raises an important issue: the need to safeguard against home owners being sold measures by Green Deal providers that, unknown to them, do not benefit from the same regulation as the Green Deal itself. We have, however, already discussed this point and I have commented that it should not follow that the whole of the Green Deal framework can be applied appropriately to any other product or service.
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.
Lord Marland
My Lords, it is marvellous to see such harmony in the room at the Government’s expense. Given the force of the arguments, particularly those from the Opposition Benches at which one quakes with fear—although one quakes with fear less at the arguments of noble Lords on our Benches, who are so erudite in these matters—we will obviously consider the amendment and reflect on the recommendations already made by the Delegated Powers and Regulatory Reform Committee on the code of practice.
Baroness Noakes
That was a slightly less fulsome reply than I had hoped for. I hoped my noble friend would agree readily that this was an appropriate amendment. However, we are where we are and if the Minister does not bring something back on Report, I will. I beg leave to withdraw the amendment.
Baroness Smith of Basildon
My Lords, I support the principle of what the noble Lord, Lord Teverson, is seeking to achieve. It is not dissimilar to the point I made earlier about whether there may be arrangements or relationships between an assessor and an installer whereby the assessor will always want to give business to a particular installer for the work to be done. It is difficult to ensure that there are not such arrangements and the wording of the amendment puts the issue back into the Minister’s court to see how best this can be achieved. It is an important objective to consider because, as has been said a few times during the course of the debate, protection of the consumer and consumer confidence are all important. If the consumer thinks that a certain assessor will always go for particular kinds of products or arrangements, it will not lead to confidence in the Green Deal. I hope the Minister will take on board the principle, understand the point that it is seeking to make and consider ways in which it can be addressed.
Lord Marland
My Lords, Amendment 9 would require the Secretary of State to ensure through regulation, audit and the code of practice that improvers are protected from anti-competitive activity by Green Deal providers. Clearly anti-competitive behaviour and collusion among Green Deal providers is undesirable and we want to ensure that the risk of this is minimised through the design of the scheme. However, this requirement on the Secretary of State would mean that the Secretary of State would be obliged to put in place legislation which already exists in other parts of the law. Green Deal providers should be covered by existing competition law, notably the Competition Act 1998, which prevents businesses from entering into anti-competitive agreements and abusing dominant market positions. I do not see any need to effectively replicate those arrangements in the Bill.
Furthermore, for domestic households only licensed creditors will be able to operate as Green Deal providers and the existing credit regulation contained in the Consumer Credit Act would apply. I hope that that is enough to satisfy the noble Lord and that he will withdraw the amendment.
Lord O'Neill of Clackmannan
The Minister has indicated that competition will be properly regulated and that consumers will be protected. However, the Green Deal will be offered by supermarkets and, in some parts of the country, a single supermarket chain can have a virtual monopoly of retail outlets. While it would certainly be capable of offering the Green Deal, we have to be careful because the nature of the relationship may be that a single company will link up with a supermarket, that the supermarket will leave everything to the company and that the company will then make it quite attractive for supplier A or supplier B to come in.
I am not sure whether the public are confident that the free play of market forces in such near monopolistic situations is sufficient protection. I have some sympathy with the proposition, not because I think that all supermarket chains are potential abusers but because we know that in a number of areas of sourcing—we have only to listen to the farming community about the sourcing of fresh food, fruit, vegetables and the like—these supermarkets act quite ruthlessly. We want stronger assurances than the bland approach taken by the Minister in his reply to the debate. I am not confident that something akin to the status quo operating in these circumstances is enough when people will be entering into substantial financial undertakings. Whether or not they do so on the basis that they will never pay because the bills will be reduced does not enter into it. If people did not have confidence in the company to which they are almost forced to go by circumstances beyond their control—they may happen to live in an area which is dominated by a particular supermarket chain which has a dubious record on the way that it sources its goods—we would be concerned about consumer confidence.
Baroness Smith of Basildon
Perhaps I may put a scenario to the Minister and ask for his comment so that I can see if I have misunderstood this. If an installer of double-glazing were to employ a team of assessors, and those assessors could do an assessment on a house, and one way of achieving carbon reduction was to have double-glazing in that home, in a sense there is nothing wrong in that, since it is one way of achieving the carbon reduction. However, it comes back to the point that it is the Green Deal plan by which they are achieving the carbon reduction. The householder has not got the choice of an energy plan from which to choose which Green Deal provisions they want to undertake. There could be a relationship where an installer employed an assessor who would always recommend that particular installer’s products. It would be a way of achieving the Green Deal, but it might not necessarily be the best way or the only way. Does the Minister envisage that as a problem, or is that how he sees it could work?
Lord Marland
I think that noble Lords are looking at this in a narrow sphere. I am not familiar with parts of the world where there is only one supermarket chain operating in that part of the world. I take the view of the noble Lord, Lord O’Neill. In my part of the world, there are four or five operating quite regularly. If you add to that B&Qs and the suppliers of all forms of household improvement, it multiplies. Therefore there is distinct competition. You have to add to that the energy companies, social enterprises, housing associations and all manner of retailers who can ensure that the market is competitive. I totally take on board what the noble Lord, Lord O’Neill of Clackmannan, has said, that it would be terrible if there was only one supplier in a part of the world. However, given the extent of suppliers that are available, I do not realistically think that market forces would apply.
Referring to the interesting point raised by the noble Baroness, Lady Smith, I am not entirely sure that I follow. If her point is that the double-glazing salesperson was promoting a product that was exclusively to their benefit, I am not sure that this would happen because market forces would dictate that anyone inviting someone into their home to give an assessment of the requirement and the cost of it would automatically put that out to tender. Even if these people were inappropriately selling the product, they themselves, before they are allowed to sell that product, have to be authorised under the scheme; and the scheme, as we have already debated, will have many a safeguard and recourse against unauthorised behaviour by an authorised provider or assessor.
It comes back to the central theme. We have to get these right, we have to ensure that the standards are properly maintained, and we have to ensure that competitiveness is allowed into the market.
Lord Teverson
How do the Government see the status of assessors? Does the Minister see them as being like independent financial advisers in the financial world? Can they be employed by B&Q or Everest? Can they actually be employees of those organisations, and can that be made quite transparent? Do they have to be self-employed? That is what I am trying to get to the depth of here. It is not in any way a criticism. It is actually trying to understand how this works in practice. I come back to the financial services industry or even—dare I say to the noble Lord?—the insurance industry. There is a whole history of mis-selling despite strong regulation, perhaps because people got commissions—I would be interested in comments in terms of whether commissions are permissible under this system. There are clearly advantages to the upfront sales force or the people who recommend because there is a temptation, under certain circumstances—which may not be illegal but might be dubious or not in the interests of the customer—not to recommend the best solution necessarily, or a particular solution. Most people will not want to get more than one assessor. They will want to get an assessor who they see as independent of mind, maybe through a proper assessment process or not—coming back to the previous debate. I am interested in how the Minister sees the status of assessors. Can they be a full-time employer, employee or an organisation that tends to specialise in certain solutions? I am just interested in how the Government see that working out in terms of a code of practice or maybe in the way that this scheme has to operate, because I believe that it is fundamentally important.
Lord Marland
My Lords, there is nothing to prevent an assessor working for an organisation, but the reality is that they have to be independent of that organisation in terms of their assessment. There has to be a Chinese wall. To answer my noble friend Lord Teverson’s excellent question, assessors can come from all walks of life. They could be quantity surveyors, representatives of B&Q or representatives of a supermarket, but they have to retain an independence and fulfil the standards that are required of them under the Green Deal regulatory mechanisms that we have been debating today.
I would also point out that a lot of the products that we are talking about here are not new to the market. It is not as if we are suddenly coming into the market with a wonderful new product. Double-glazing has been sold consistently through the country for a long time. Loft lagging has been consistently sold, and there are consumer protections in place under the Act which provide for proper regulation.
There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on, however, and that is the role of commissions. My noble friend has raised a very important point where we need to work out the impact and how these assessors are remunerated.
Baroness Smith of Basildon
I have listened carefully to the Minister. I think that he is trying to reassure noble Lords on this important commission point, but I am not reassured. Clause 3(4)(a) to (g), on the code of practice, would seem to allow an installer to employ an assessor, and to allow that assessor—within this code of practice, this framework arrangement and the Green Deal—to recommend energy efficient measures that fall within the remit of one installer that is employing that assessor. I do not understand how an assessor can be employed by an installer and be independent. I am grateful that the Minister will look at this again. However, depending on what he comes back with, we may wish to return to this at a later date.
Lord Marland
My Lords, this is an interesting amendment. The question raised by my noble friend Lord Teverson of what is the best deal remains unanswered, because a best deal to some people is quality; to others it is price; and, arguably, the best deal to most is a combination of quality and price.
Amendment 10 seeks to introduce a new clause addressing consumer protection mechanisms. While we accept the thrust of the amendment and what it is trying to achieve, I believe that the issue is already addressed in Clauses 3 and 4. Clause 4 is central to the Green Deal and defines the terms on which it can be offered to customers. I urge noble Lords to look at it again. Subsections (2) and (3) require that an accredited Green Deal assessor has assessed the property in accordance with the standards that we set out in the framework regulations and has recommended energy efficiency improvements on this basis. The assessor would identify the potential for energy savings using the standardised methodology as set down. The outcome of the assessment would be provided to the improver and would be used by the provider as the basis of an offer for Green Deal finance.
Subsections (4) and (5) require that an accredited Green Deal provider, the body seeking to contract the work, should give the customer an estimate of the savings on energy bills that are likely to result from the proposed energy efficiency improvements and over what time period these are likely to accrue. The Green Deal provider is required to base his estimates on a standardised methodology to be set out in regulations, thereby ensuring consistency and rigour in the process.
In addition, Clause 3 sets out requirements for the code of conduct which will make provisions as to the qualification and training of Green Deal participants. This will ensure that Green Deal participants operate to competent standards. We will look to see what, if any, further requirement should be placed on Green Deal providers to ensure robust consumer protection. We will set out these conditions in the code of conduct.
Lastly, I believe that we have the flexibility to make requirements in secondary legislation to enable us to move swiftly to close any loopholes that may become apparent once the scheme is operational. Paradoxically, agreeing this amendment for primary legislation could lessen our ability to protect customers. I believe that the Bill already contains the necessary provisions to achieve what is intended by the amendment and I would ask the noble Lord to withdraw it.
Lord Teverson
I thank the Minister for going through that explanation. He is right to say that there is a list of provisions within the Bill that point in the direction of the right quality of decision-making and of ensuring that all the procedures are right. However, I am not sure that there is a duty to get the right deal for the consumer at the end of the day. However, I note the Minister’s intention that that should be the case, as I am sure we would all want. Perhaps I can ask him to look at it again.
I should also like briefly to reply to my noble friend Lord Jenkin of Roding. My amendment makes it quite clear that subsection (1) is concerned with overall energy solutions and that subsection (4) is concerned just with an estimate, which I do not think would be very difficult to make. I know the Minister has exactly the same objectives here and I hope he will look at it again. I beg leave to withdraw the amendment.