Energy Bill

Lord Teverson Excerpts

Wednesday 6th November 2013 Lords Chamber

There is another issue here that we have not discussed because it is in other parts of the Bill: the so-called massacre—which is what the European Commissioner calls the effect of high energy prices in Europe, compared with other parts of the world—of industry and jobs, which means more distress in many more families. I do not vigorously oppose these amendments; I just warn that neither they nor Clause 36 are any cure at all for the real problem, which we should have the honesty to face and address in a sensible and balanced way.

[Lord Teverson (LD)]

My Lords, I do not disagree at all with everything that my noble friend Lord Howell has just said, but it is worth noting that heating in most households in this country is by gas or, for people like me who are off the mains, by oil. None of the green taxes applies to either gas or oil.

[Lord Deben (Con)]

My Lords, I think that, when we are making these decisions, we ought to be particularly careful about the figures that we use. We must also understand why we are decarbonising at this rate. We are doing so because the economic advice from the best economists that we have is that it is the cheapest way to decarbonise. If we were to put it off, the cost would be considerably greater, so we should do it at this pace. We can disagree with this, but to do so would be to disagree with the best advice that we have been able to get. I must say, on behalf of the climate change committee, that, if I thought that there was a cheaper, more cost-effective way of doing it, I would do that. I am proposing this and have been pressing it because it is, by all the evidence, the best thing to do.

I think that we also ought to get the figures right. The average cost of decarbonisation for payers of the dual tariff—about 80% of users—is £60 per year at the moment. I am not suggesting that £60 is an unimportant matter, but when the average payment for fuel bills is £1,300, I think that we have to be careful about overemphasising the influence of the one thing upon the other. By 2020, the amount will be £100—and the figure will rise accordingly between now and then. I do not know what the average fuel bill will be in 2020, but the idea that £100 will be the major reason why the fuel bills will be high is not true.

We must take these figures seriously. This is one of the problems that we are facing. People are using figures that are clutched from the air. I have been watching Twitter and I find that people—sometimes, I am afraid, from my own party—are busy putting out tweets saying that if we had had a decarbonisation target after 2020 it would have increased our bills by £125 per year. This is totally untrue. The figure is £20, and the climate change committee has spent a great deal of time trying to get the best and most accurate figure possible. If the TaxPayers’ Alliance or others want to pick a figure out of the air, it is not for us to quote it. We are faced with a real issue here.

If, despite evidence mounting all the time—today we have been told of the highest increase in surface temperatures that we know of for a very long time—you still do not believe that climate change is immediate and dangerous and say that it is something that can be put, if I may use the phrase, on the back burner, then of course you can always say that this is not the moment to do this. However, I must say to my noble friend that in that case it will never be the moment to do it, because that is always true at any given moment. However, if you see that climate change is the most serious material threat to our society, as happily this Government do—and it is a common view across the House—the £60 being charged for the insurance against it seems a reasonable amount.

There is an argument, although it is not for the climate change committee to make it, that we might change where the money comes from. However, I do not think that there is an argument to say that we should not be spending the money. Therefore I think that we ought to be very careful when we are having these discussions that we do not talk in a way that distorts the argument, either by the size of the price that we claim or by forgetting that most people’s heating does not come from electricity—it comes from gas and other sources—and therefore they are not paying this. Neither ought we to forget that other countries are doing more than we are. Germany is doing more than we are and much of Europe is doing at least as much, as we can see by looking at the Danes. The rest of the world is moving in this direction in a very serious manner; whether it is today’s announcement from Mexico or the changes in China, we can see that this is happening all around the world. It is not that Britain is doing better than others or is out of step, but that we are doing what the world is doing, because the world recognises the threat. That means that we have to be very considerate about the condition and situation of vulnerable people.

I am not sure that these are the right amendments, but I have listened very carefully to what has been said about introducing this measure into the Bill in a more pronounced way. I think that the Government have probably got it about right, but I have listened with some care. However, it does not help the argument to use the poor as an argument against fighting climate change, because the people who will suffer most from climate change are the poor throughout the world—not just here but in Bangladesh, the Pacific, India and elsewhere. I find this argument about the poor really very upsetting.

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If we want to win this argument, let the people decide for themselves on the basis of the facts, not partisan political tabloid fiction. The provision of this kind of information will lead to a far more sensible, informed debate. It will reveal the truth behind green taxation. The noble Lord, Lord Marlesford, is to be congratulated. I am sorry that he is not here today to hear this debate which he will no doubt read. I strongly support this amendment and I hope many of my colleagues do as well.

[Lord Teverson]

Normally when we have bills, either from supermarkets or other places, we do not actually have a breakdown of those costs but in an industry that is regulated as much as energy has become, I think this is a really excellent idea. It is something that would become a myth-buster. My noble friend Lord Forsyth is right that there has been an embarrassment in terms of trying to shield some of these costs or sweep them under a carpet. That has backfired because they have been used as an excuse by energy companies to justify major increases when clearly they are not the major cause of the increases. One way of breaking that myth about the extent to which green taxes—or however they are described—have contributed to the rise of energy bills would be to have this level of transparency.

Which?, as noble Lords will know, is one of the major consumer campaign organisations and puts the green tax at 5% of total electricity bills. If you add in all the other government initiatives it comes to about 9% of the total. I think that is the most trustworthy of organisations because it is consumer-focused. I would also like to see on regulated industries’ bills how much UK corporation tax they pay in relation to their total turnover and profit. I am not saying the electricity industry is particularly bad in that way, but such a scheme would be particularly interesting in an industry which, through its bills, receives a fair degree of public subsidy towards the generation it undertakes.

In principle, I think that this amendment is excellent. I am not saying I would vote for it if it came to a Division but more transparency would break the myths and anti-green propaganda that we have seen, particularly over the last couple of years.

[Lord Forsyth of Drumlean]

Before the noble Lord sits down can he just explain—I am very puzzled—why he would not vote for an amendment that he believes is right?

[Lord Teverson]

That is because I feel there are some proposals that are even more important. If the noble Lord wanted to test me, I suppose it would be interesting to see what I would do. Perhaps he can put me on the spot. It would be interesting in terms of gas bills but of course the figure would actually be zero.

[Viscount Ridley]

My Lords, I support the amendment of the noble Lord, Lord Forsyth. There is no doubt that the policy of putting green subsidies on to consumer bills was designed to disguise and hide the costs and hope that we would not notice. We can disagree about whether the results are going to be pleasing or not, but we have noticed that the consumer has rumbled the ruse, so it is time, as the noble Lord, Lord Campbell-Savours, said, to be transparent and honest. It would help to resolve some of the disagreements we have heard again this afternoon about how much green levies are adding to bills.

There is an infographic on the Government website that says that £286 will be added in 2020. The Department of Energy and Climate Change says that the figure is £199. The Committee on Climate Change, as we have heard this afternoon, says it is only £100. A lot of these calculations leave out VAT, upgrades to the grid and system integration costs. They often make unreliable assumptions about wholesale gas prices and how they are going to change but above all these calculations leave out the indirect bill—the cost of green levies that is added to industrial and commercial users of electricity who then pass it on to individual consumers through the cost of goods and services. A pint of milk will be more expensive because of green levies paid by the dairy and the supermarket. If you look at the quantums involved, this roughly trebles the cost of green levies, two-thirds of which fall on commercial customers.

The way we have of doing things at the moment is underhand, regressive—as has been said—and unfair. Those who heat their homes with electricity are hit the hardest by these green levies. Contrary to what has been said today, 2.9 million people in this country heat their homes with electricity and those include many of the poorest people. Ideally we would remove these costs altogether and put them into taxation. Then the rich would pay more of them and the poor would pay less. If we cannot have that, then let us break it out honestly and transparently and see what there is. To those who say that it cannot be done and that it is too difficult, the noble Lord, Lord Marlesford, has shown me one of his own bills where it has been done very nicely. I think it is definitely possible and it should be done.

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[Lord Hunt of Kings Heath (Lab)]

My Lords, I support the noble Baroness. I speak as president of CO-Gas Safety. Like the noble Baroness, for many years I have been concerned about the lack of action in relation to carbon monoxide poisoning. As she said, the official figures disguise the true extent of the problem. Because the official figures have not really reflected the size of the problem, various agencies, particularly the Health and Safety Commission, have never really been prepared to take this issue seriously. The noble Baroness has found an ingenious way to bring this to your Lordships’ attention within the Energy Bill.

This afternoon, the Minister gave a very welcome announcement in relation to a government review. However, we would like to see this issue go further. All that my noble friend is doing is setting a framework within which the Government can take action following such a review. I think it particularly important that it gives the Government a regulation-making power. As the noble Baroness has said, not only are the figures just the tip of the iceberg but there is a real concern at the moment about the cost of servicing appliances. If people put that off, particularly because of concerns about the cost of living at the moment, the risk to many people will be greater. For that reason, I hope that the Government might be sympathetic. If not, perhaps the noble Baroness will decide to press this at some point. I hope that she does.

[Lord Teverson]

Regrettably, my Lords, as has already been mentioned, my noble friend Lady Maddock is in Berlin on an EU Select Committee. It seems to be the place to be this afternoon. I know that she is very keen to support this amendment.

We hear of many tragedies that have happened because of this silent killer, often, but not exclusively, within rented accommodation. It is perhaps worth reminding those of us who are landlords in any way that we are already under an obligation to have our gas installations checked. I think it would make sense for a way to be found, without requiring more bureaucracy or a lot of extra work, to include carbon monoxide indicators through a clause of this sort.

I had a new wood-burner fitted in my house recently. Although carbon monoxide is often thought about in connection to traditional gas boilers, I was reminded by my installer that wood-burning stoves can be far more dangerous than gas boilers in this area. They took it upon themselves to install a carbon monoxide indicator and alarm in that room before they left. I thought that that was excellent; the industry was starting to get ahead of the problem. However, I hope that the Government will pursue this agenda in whatever way they feel is appropriate in order to ensure that more of the tragedies which have happened in the past do not happen in the future.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Stowell of Beeston) (Con)]

My Lords, as I said at Oral Questions this afternoon, I am very grateful to the noble Baroness, Lady Finlay of Llandaff, for raising this issue, both at Questions and by bringing forward this amendment this evening. She has given us a clear description of the effects of carbon monoxide poisoning and the terrible consequences that it can have on victims and their loved ones. As I think I indicated at Questions today, this is something that the Government take very seriously indeed.

I will start by reminding your Lordships, as some noble Lords who have contributed tonight have reflected already, that the most important element that we must ensure is in place is effective public awareness and education of the risks around carbon monoxide poisoning and of the fact that safety measures apply to people whether they live in homes that they own or homes that they rent.

As time is short, and noble Lords are keen to move onto other business, I will not go through the measures in detail, but they have been increased recently and are quite extensive in ensuring that the public are aware of the risks. As I mentioned at Questions today, there are now warnings on the sale of disposable barbecues, for instance, and Ofgem has placed a requirement on gas distribution network operators to ensure that they raise awareness. One of the important reasons why they are the right people to raise awareness, rather than the suppliers, is that the network providers are constant in the supply of gas to people’s homes as they are in charge of the pipes, while consumers are encouraged often to switch between suppliers in order to get the best deal that they can for their energy bills.

Of course regulation has its place. Following a comprehensive review of building regulations by the previous Government, new regulations were brought in in 2010 that require the installation of a carbon monoxide alarm when a new or replacement solid-fuel appliance is installed. I note what my noble friend Lord Teverson said about the installers of his wood-burner. The new regulations actually require the noble Lord to have a carbon monoxide detector.

[Lord Teverson]

My Lords, I thank the Minister for putting me right on that. I shall no longer praise my installer but say “quite right, too”.

[Baroness Stowell of Beeston]

Very good. All new gas appliances are subject to various standards laid down by the European Union. People in rented accommodation are covered by the requirement on landlords in the gas safety regulations to ensure that there is an annual gas safety check

As discussed at Questions today, we in Government feel that the real risk is to those people who live in rented accommodation where their landlords are not reputable or do not take care properly of the property that they rent out. We are putting in place a package of measures that we think will lead to greater safety for those who are in rented accommodation. As I said earlier today, I am pleased to announce that we have decided to extend the scope of the review announced a couple of weeks ago, so that it considers whether there is a need to require the installation of carbon monoxide alarms in privately rented housing. We are working on the matters to be covered in this review but I envisage that they will include questions as to whether the actions that I talked about earlier today are sufficient to raise and maintain awareness or whether other approaches, including regulation, might be needed.

When we think about regulation, we need to consider how any regulatory approach sits with building regulations, fire safety rules and housing standards regulations, because there are overlapping regulatory regimes. We will certainly want to look at the interaction with regulations on smoke alarms and perhaps include the scope for promoting combined carbon monoxide and smoke alarms.

Clearly, there are a lot of technical issues to consider, but once we have completed the review, if regulation is considered to be the right course of action, we must take all the necessary steps so that it is done in a proportionate and targeted way and interested parties, including housing groups and landlords, are properly consulted. The last thing that we would want would be ineffective regulation that did not result in the outcomes that we all want—reduction in deaths and in the effects of carbon monoxide poisoning—and that made the situation even worse by forcing up rents or discouraging good landlords from being in the market, thereby limiting choice to renters.