Energy Bill [HL]

Lord Moynihan Excerpts

Wednesday 19th January 2011 Grand Committee

[Lord O'Neill of Clackmannan]

The attraction of this amendment is that it affords flexibility. A range of options will be available and, if an assessment is being done, it would be sensible to have a clear list. Let us face it, there may be a number of people who, having become interested in the Green Deal, will be able to purchase some of the items that are outwith the terms and purposes of the Green Deal but which might come cheaper if they get the whole job done at the one time. If a tradesman is visiting a house, it could involve just one visit and a person would have to pay only for another hour. Other pricing mechanisms might involve a second visit, with the first hour costing so much, et cetera.

It is important that we get an idea of the ideal deal as well as the Green Deal so that we can see all the requirements of the household and so that, when the assessment is done, the individuals, within the criteria of the Green Deal, are able to pick and mix. Within certain guidelines and appropriate standards, we should provide a range of options. This amendment may be unnecessary, but I would hate to think that this deal, as I have already characterised, is perhaps in reality more limited.

The Minister and I were not quite in dispute, but he noted his disagreement with me when I said that a number of properties will probably be too expensive to fall within the Green Deal. I identified the solid-wall rural household outwith the gas network, which would be very difficult to fund. The savings may not be sufficiently large to make the loan repayable over a 15-year period, but that should not mean that at least part of the work could not be done in the household under the Green Deal.

If people have enough money, they could take on a private financial arrangement with a bank, add to their mortgage or do whatever to carry out the other improvements. It would be helpful if the Minister could indicate whether he envisages the system being, in the first instance, capable of accommodating a whole list of possible options and being sufficiently flexible before the contract is signed to include some of the options, if not all, on the original list. The system should allow the individual, if they see fit, to have the other works done at their own expense and paid for by whatever means they can privately arrange, whether that be the credit card, the bank loan, adding to their mortgage or simply hard cash.

If we had that, we would get a clearer idea of the potential for flexibility. We do not want so much flexibility that people could be ripped off by cowboys, but qualified tradespeople, good assessors and a wide range of options would be a selling point for the Green Deal. That will not do everything, but it will help. It will perhaps free up resources for people so that they can do the things that they would like to do but otherwise might not consider to be a possibility.

[Lord Moynihan]

My Lords, as one who enjoyed spending Monday night in your Lordships’ House reading through every clause, including the details of the impact assessment, the Explanatory Notes and everything that goes with the Energy Bill, I may have overlooked something but I think that my noble friend’s point is, in effect, already answered. A request to list all the energy efficiency improvements that may or may not fall within the Green Deal would be fairly simple because it is already covered by the Bill. It was made clear by the Minister that under Clause 1(4) there would be an order made by the Secretary of State setting out the qualifying energy improvements. Anyone would be able to see those energy improvements. We would be at risk of repetition if we were now to add into this clause, and lift from the order, all those improvements that would qualify under the Green Deal.

[Lord Teverson]

My Lords, although I do not entirely agree with this amendment, or the way in which it is written, I think that it is important that the Green Deal plan is put within a broader context. In some ways, the Bill allows for that. In our last session in Grand Committee, we discussed the clauses that refer to the Green Deal plan and/or energy plan and I think that it is that broader energy plan that we could include in this.

As we will see in the next group of amendments, there will be occasions when there will be a much better deal available because more than one property is involved in the decision. This should also be pointed out in the Green Deal energy plan. I like what we are trying to achieve, because I believe that there is a broader issue.

There is another issue that has been left out. The biggest part of any energy plan is not the hardware or the physical changes that are made but how you use energy in your house. I would like to see an obligation in the code of practice—it is not appropriate for the primary legislation—that requires the assessor to ask whether it is possible to run a dishwasher or heating overnight off-peak rather than during the day. Your use of energy can be more effective in ways other than making physical changes to a building. I would like to see that included in recommendations in any energy plan.

This group of amendments includes Amendment 11, tabled by the noble Lord, Lord Whitty. Although I do not agree with all of the amendment, I agree with the end of the sentence, which says the improver should have,

“no bias towards any one green deal provider”.

That comes back to the issue of ensuring that the improver gets a fair choice and option and that there is no bias within the system.

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[Lord Teverson]

My Lords, this amendment brings two different subjects and two different strands to this debate: the role of local authorities and the ways in which we might incentivise the great British public to take advantage of the Green Deal. Ultimately, the measure of success of this scheme will be whether people sign up to see an assessor and say, “That’s a great deal for me. Go ahead”. I believe that they will and that they should.

Something that surprised me when I first read this Bill—I was going to say that with pride, but its sounds as though my noble friend Lord Moynihan has read it in much greater detail than I managed—was that local authorities do not seem to be covered until we get to the need to make sure that landlords behave themselves and participate. They seem to have disappeared from the concept of the Bill. I know that that is not the case, because the Government are heavily into localism, which I strongly applaud.

However, in the Bill and in the massive task nationally to deliver energy savings across the nation, we need allies. Natural allies in this are local authorities—the ones with a track record. They have previously been involved in this area and have shown their keenness. More importantly, they know the lie of the land and more about communities, housing estates and roads than do central government or the Secretary of State, and they know more than individual utilities, deliverers or providers within the scheme. That is why it is important to involve them.

Another theme that needs to come out with which local authorities could be very helpful—I refer to housing authorities in particular—is the achievement of even greater gains and possibilities as regards energy efficiency and saving, and help as regards fuel poverty. That can be done not only by looking at individual properties and flats or individual business units, but by looking at the opportunities that exist to act together. I do not propose that we substitute individual households participating in the scheme—I am sure that that will always constitute the major part—but I suggest that we bring together communities, streets, housing estates and those in flats of multiple occupation to form a single deal. That will bring better value to individual households and will enable us to complete this task more effectively.

This is a probing amendment. I would not for one minute expect it to appear in the Bill because it is not written in the correct language and probably would not work. However, I shall be interested to hear the Minister’s comments on, first, how local authorities can be involved and, secondly, on how we can ensure the rollout of a number of schemes that would be more effectively done on a community basis. As things stand, we will have a scattergun effect, where individual households make their decision about whether to participate. It will be like looking at the Milky Way, or the stars at night, where they appear all over the place with some areas of concentration. I think that it will be extremely effective to have individual street or housing estate action.

[Lord Moynihan]

My noble friend is speaking with characteristic eloquence and expertise on this subject, but I wonder why he has not included housing associations in the amendment.

[Lord Teverson]

That is a very good question. It is because, as a result of a lack of forethought, I did not think to include them. They would be an excellent addition to the list. Housing associations and social landlords would be the right types of organisations to be involved in such a scheme.

Finally, I turn to incentivisation. In talking about how we involve households in these schemes, I should mention that a couple of the more successful schemes that arose under the CERT programme involved a rebate through participation, particularly to do with council tax. I know that British Gas has successfully operated a couple of these schemes. Households will know that the Green Deal will mean that their energy bills will come down and that they can invest in their house in the long term without there being an immediate cost.

Nothing attracts people better than a bargain and something off the price when they sign up on the deal. I would like the Minister to use his imagination to think what we might do to ignite excitement about the Green Deal. Much as I support local government, I have to admit that there are few better incentives than knowing that you are going to have to pay less council tax. This has a track record as an incentive and I think that, if that sort of scheme could be included in some way, it would work well.

I realise that there is a problem about this and that I have solved it in a very imperfect fashion. The Green Deal is clearly self-financing through private finance rather than through other ways. To achieve the participation with local authorities and maybe the council tax rebate, which needs to be found from somewhere, I have taken the easy route and suggested the energy company obligation, which I am sure the energy companies will not thank me for. That is roughly how the CERT system works at the moment and it could potentially be a way through this as well, although I realise that that itself would effectively add to household energy bills.

Those are the areas about which I would be very keen to hear from the Minister. I very much look forward to this Bill finally passing and to the start of this scheme. It would be good to involve local authorities more and it would be good to have a community aspect to this. I believe that using incentives, however much we might look down our noses at them, are a way in which to ignite this plan, make it work and make it successful. I beg to move.

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[Lord Marland]

I totally agree with my noble friend Lord Jenkin. There is always an argument for keeping everything as low as possible. However, we are not at the stage of the Bill where we should be able to predict or prescribe how additional fees are charged. I think I have spoken to that; I hope that my noble friend feels that I have. We have a lot of discussion, dialogue and consultation to have with the financial institutions who may well be providing that finance.

[Lord Moynihan]

To assist the Minister on this, can he clarify to the Committee that the Government intend for there to be the flexibility that my noble friend is looking for?

[Lord Marland]

I am grateful to my noble friend Lord Moynihan for assisting me in this regard. Absolutely—we have to allow the framework to take its course and we have to be open to consultation and views to find the best method of dealing with this.