Energy Bill [HL]

Lord Teverson Excerpts

Wednesday 19th January 2011 Grand Committee

[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.

[Lord Whitty]

Prompted by the noble Lord, Lord Teverson, I rise to speak to the amendment in my name. Amendment 11 would require the assessor to inform the householder or landlord of the full range of possibilities and the flexibility within any recommendations. The assessment should be subject to clear, objective criteria. I know that some noble Lords dislike the reference to “standardised assessment”, but we need some objectivity and we need to give the householder some choice in how they take the assessor’s recommendations. We need to indicate some flexibility, even within the Green Deal, if we assume that there is a financial limit. This is before you consider the possibility of other arrangements to go beyond the provision of a new deal.

On the point made by the noble Lords, Lord Jenkin and Lord Moynihan, it is clear that there will have to be a detailed code of practice and it may be that some of these issues will be dealt with in that. However, those issues covered by the code of practice in Clause 3 do not include the listing or the objectivity in that listing of recommendations. While I accept that it may be more appropriate for this to go into the code of practice, the primary legislation has to make clear what the Secretary of State will have to bring forward when that code of practice eventually appears.

Finally, I underline the point that the noble Lord, Lord Teverson, made about the importance of there not being any bias towards any particular provider. This goes back to who is doing the assessing and what the qualifications for the assessing are, which we discussed at our last sitting. These things are quite ticklish. Obviously, we wish to encourage innovation in this area and we wish to encourage new entrants in the provision of energy-saving installations, ventilation equipment and so on, but these things get roguish at times. It is important to recognise that there is no point in going for the latest super-duper micro CHP system in an individual house if the roof is still not properly ventilated and the windows are not properly fitted. There is a hierarchy of things that you need to do, both in terms of cost and in terms of the most appropriate treatment of those premises. The code of practice and, in broad terms, the primary legislation need to make that clear. Otherwise, we will—I go back to the point that I made when I first spoke in Committee—get back to a situation where, in the very early days, there will be some bad publicity about what people have been lumbered with and the inappropriateness of the work that has been carried out. That would be very dangerous to the success, which we all want to see, of this Green Deal scheme.

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Moved by

[Lord Teverson]

12: After Clause 4, insert the following new Clause—
“Local housing authorities(1) Local housing authorities shall be empowered to arrange, with green deal providers, energy saving schemes that cover the whole or a part of housing estates, roads, districts or other local communities.
(2) Local housing authorities will negotiate on behalf of improvers to obtain savings that arise from economies of scale, which will be passed on to individual improvers.
(3) Local housing authorities will be empowered to award council tax rebates to participants in such communal schemes as incentives; and the rebates will be reclaimed from the Energy Company Obligation.”

[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.

[Baroness Maddock]

My Lords, in rising to speak about local authorities and to support my noble friend, I declare an interest as a vice-president of the Local Government Association. Like my noble friend, I am concerned about the role of local authorities. If we are going to succeed in all our efforts around climate change and reducing our energy consumption, we have to involve citizens and their local communities and councils. The purpose of the new clause proposed in Amendment 31, which is grouped with my noble friend’s amendment, is to do just that. It is not specifically about the Green Deal; it is about energy plans and local authorities. Although it would be placed later in the Bill, for the purposes of our debate it is about the role of local authorities.

I am particularly concerned about the role of local councils, as Clause 102 of the Bill repeals the Home Energy Conservation Act 1995, an Act that, as I said at Second Reading, I was successful in getting through when I was a Member of another place. I believe that that Act has successfully driven a lot of local authority action since 1995. It has had very good results. Involvement, for me, means the active empowerment of citizens and of their local authorities; it is not just about consultation.

Noble Lords may ask why this is so important. I think that it is because local authorities have been seen to have very good ideas. Indeed, it is probably what is driving the localism agenda, which is something that I and my colleagues have believed in for a long time and which now nearly everybody seems to believe in. It has become clear that not everything can be driven from the centre and that the centre is not the only place where there are good ideas. I believe that, unless we involve and empower people—my noble friend touched on this in talking about his amendment—we are not going to succeed. If people do not understand what they are doing and do not feel that they want to be involved, this whole thing will not work.

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[Lord Whitty]

I support the thrust of these amendments and I am grateful that we are discussing the role of the local authorities this early. Both as movers and shakers and as facilitators and providers of a framework or catalyst for movement, they will be extremely important.

In most parts of the country, opinion polls show that local authorities are relatively trusted. They are certainly trusted more than central government and energy supply companies. Whether the reasons for that are right or wrong, it is important that we mobilise that general good will. Local authorities have a role in a number of different respects and while it is true, as the noble Lord, Lord Dixon-Smith, has said, that the social housing stock has largely moved to housing associations, that is by no means totally the case. There will be many situations in which the local authority is still the landlord, although it may have a management company to run things, and it will have a responsibility for fairly substantial parts of the social housing stock and its maintenance and improvement.

It is regrettably true that the early stages of the last Government’s decent homes programme did not have a very strong energy efficiency dimension. That improved as time went on, but an opportunity was missed; a substantial amount of expenditure went on upgrading social housing stock, but improved energy efficiency was not one of the prime objectives. Local authorities as landlords can take that on.

Of course, there are also landlords of estates that are no longer a single form of tenure. Some of the occupants may well be tenants, but some of them may be owner-occupiers and some may be leaseholders or on a sublease, while some properties may be run by housing associations within the same estate. We have a complex and largely beneficial mix of types of housing on some of our larger estates, but the local authority is still the landlord and therefore in a strong position to try to persuade those on all forms of tenure to take advantage of the Green Deal, which probably individually they might not.

It is wrong that some improvements on estates have applied only to one form of tenure, because the economies of scale, to which the noble Lord, Lord Teverson, referred in a wider dimension, apply whatever the form of tenure. The totality of the provision and use of energy in those estates means that economies of scale will be achieved if the majority of the residents participate. The local authority is by far the best body to ensure that that happens.

Where housing associations are the landlord, of course they also have to have a role, but that is a slightly different role from what the amendment envisages for local authorities. Housing associations are no different from any other landlord that could effectively take advantage of this scheme and negotiate better terms, because they deal with substantial properties. It may be, however, that the Bill also needs to refer to housing associations in this regard.

Of course, local authorities can go beyond their role as the landlord or as a body that has an indirect interest in the property to a role in which they can help to persuade landlords of private tenanted property—that will include a significant number of the fuel-poor, but not necessarily only them—and owner-occupiers to operate this scheme on a street-by-street, similar-property-to-similar-property basis, again achieving economies of scale.

That role of local authorities is important. Some will be more prone to take up this cause and will be better at it than others, but that is the essence of devolution. Indeed, I assume that the essence of localism is that you will have different patterns in different areas. It is important that the Bill recognises that.

As for subsection (3) in the amendment, it is true that the new ECO commitment will be largely focused on the fuel-poor, but local authorities will be able to negotiate—not only with the householder but also with the energy supply companies—different ways of incentivising the adoption of the Green Deal. As I said early on in our proceedings, we have to recognise that this is a voluntary thing. It is not something that the Government, the energy company or your landlord can impose on you; take-up is voluntary. That may require some incentives. As the noble Lord, Lord Teverson, said, it is already the case in a number of areas that, by dealing with the energy supplier—British Gas, mostly—local authorities have already provided an incentive, so presumably they already have the power to do so. Subsection (3) suggests that we need to legislate for the link with the new energy company obligation, but I believe that local authorities already have the power to do this. If, by agreement with the energy supply companies, they can reach an accommodation that delivers the Green Deal on a wider scale, they certainly should not be inhibited from so doing. Amendment 12 is important in that it recognises these proactive and direct roles of local authorities, so I hope that the Government, if not agreeing with every word of it, will accept the general thrust.

[Lord Teverson]

Just to clarify, the noble Lord is absolutely right. I have written this amendment so that the local authority would be the catalyst that makes things happen. Who the freeholder of the property or the land is is irrelevant to that—whether they are a private landlord, a public landlord or a registered social landlord, this would apply to them. This is not just about local authority estates. It is about any estate or group of houses geographically, not about tenure, exactly as the noble Lord has pointed out.

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[Baroness Northover]

As the noble Lord will have noted, obviously there are economies of scale when local authorities are dealing with this. Therefore, there is the incentive in that of being able to provide for local residents a better deal if they access these funds and we expect that they would see this as the route to go down. All these areas will, of course, be looked at carefully to try to ensure that the Green Deal is as effective as possible, which is what we all, in any party, even in these tight financial circumstances, wish to see.

[Lord Teverson]

My Lords, I thank my noble friend for that response. I am delighted to hear that local authorities have a number of those powers already. I omitted to declare that I am a member of a housing authority in terms of Cornwall Council, so I should declare an interest in that now, although I have absolutely no influence on what that council does, being a back-bench member of the opposition there. This important area is key to the success of this scheme. I am delighted that the Government recognise that and I am sure that we will have more conversations about this prior to Report stage. In the mean time, I beg leave to withdraw the amendment.

Amendment 12 withdrawn.

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[Baroness Northover]

Perhaps I may reassure the noble Lord that what is being sought here is a balance between bringing providers in and the very important aim of encouraging people to take up these schemes and for them not to think that their fingers are going to be burned if they pay off what they owe early. What underlines these provisions is the attempt to find a proportionate way to deal with that and to protect people through this legislation. However, as my noble friend Lord Marland has indicated, we will be discussing the subject of fees further.

[Lord Teverson]

Clearly, one of the points where someone might want to repay is when there is a transfer of the debt—for example, when the house is sold and the next person takes it on. Is the Government’s proposal for an exit fee or whatever to apply all the way through or does that particular circumstance make a difference?

[Baroness Northover]

I may need to come back to noble Lords on that but, as I understand it, if people choose to repay early the expectation is that they would pay a fee. However, I do not think that I have fully answered what the noble Lord has asked, so I will need to come back to him to clarify that.