Green Deal Framework (Disclosure, Acknowledgment, Redress etc.) (Amendment) Regulations 2012

Lord Whitty Excerpts

Tuesday 27th November 2012 Grand Committee

[Lord Moynihan]

My Lords, I shall briefly make a couple of comments and ask one question of the Minister. I am glad that there is continued all-party support, under her new leadership in this area, for the Green Deal and for the work of the Green Investment Bank, which I strongly echo. I hope that, as the Government have been reconsidering elements of the energy Bill, when we finally read it this week we will see a greater emphasis on energy efficiency measures. It is so important that we see energy efficiency embedded in energy policy, as much as we focus rightly on the need to ensure that we have the correct balance between nuclear, renewables and fossil fuels in a policy geared towards ensuring that we have security of supply at a competitive price.

I welcome the Minister’s clear explanation of the measure before the Committee today. In her opening comments, she made an interesting point: she said that during the consultation exercise undertaken on the three measures that we are considering, 80% were in favour. It would be helpful if we knew the genesis and gist of the 20% who were against the measures, so that we can take that into consideration before reaching a determination.

[Lord Whitty]

My Lords, I associate myself with my noble friend Lord Grantchester’s questions, which should throw some clarity on this issue, and with the underlying point made by the noble Lord, Lord Moynihan, about energy efficiency in general. Like other colleagues, I strongly support the concept of the Green Deal and wish to see it in operation as rapidly as possible. Now that we have a clear start date, the company is in place and the assessors are coming online, we stand a good chance of being able to start from that date.

The problem for the Government is that the start-up will be relatively slow. It is still not clear to the general public what the Green Deal is about. I think that I am right in saying that the Government are still setting their face against having a public information campaign on the Green Deal, which seems to negate all the good work that the department has done to get all its ducks in a row by this point. If we do not make a real effort—and it will be quite an expensive effort—to tell the public what is on offer, I fear that take-up will be even slower.

That leads me to my central point, which is broader than these regulations. I recognise that they involve some tidying up and corrections, as well as bringing some technologies into play, so I approve of their general direction. What is needed to surround them, though, is, first, a bigger commitment and information and, secondly, frankness about how quickly the Green Deal will not only have an effect on general energy saving and cost saving for householders but, more particularly, have an effect on and be available to the more vulnerable of those consumers.

The interplay between the ECO and the Green Deal is intended to replace CERT and CESP, and is also intended effectively to replace Warm Front. The total number of households covered by those provisions together, even after being run down over the past couple of years, is still close to 200,000. For those groups in fuel poverty, by the old definition at any rate—and I suspect that it will also be true under the new definition—I do not see how the Green Deal is going to replace a figure of that magnitude. When we are considering this, it would be useful to know the Government’s overall assessment of the impact of this on fuel-poor households, and of how far that and other measures will approximate what went before.

Having said that, I approve, broadly speaking, of the regulations and I approve of the Green Deal. However, we have to be clear that we are covering the hiatus period which, even if takes off faster than I am assuming, will cover the next 12 months at least. We also have to be clear on how it affects help to the fuel-poor who, at the moment, are still growing in number by any definition.

[Baroness Verma]

My Lords, I am grateful for the Committee’s comments and, of course, am glad that it has largely accepted the regulations. Noble Lords opposite are a little too pessimistic. On the one hand, they agree with what we are doing but on the other they are saying that we cannot deliver. I have said very clearly that, first of all, it is always helpful if Governments—be they coalitions or whatever—own up that there has been a mistake. At least I am standing here big enough to be able to do that. I am often disappointed when noble Lords opposite forget that many mistakes were made during their time in government. They have still failed to own up to that. That was just the cheap point that I wanted to get across following the cheap point that was thrown at me. I am always very glad that the noble Lord is optimistic in thinking that they are going to be in government next time. I wait to see that day.

Coming back to some of the questions that noble Lords have raised, I will first respond to the noble Lord on how fuel poverty is being tackled when eligibility is being tightened. The criteria for eco-affordable warmth are being better targeted; they are being targeted on low-income, vulnerable households that are in the greatest need of assistance, including—this time around—the elderly and disabled.

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[Baroness Verma]

My Lords, we will target eligibility criteria for ECO affordable warmth predominantly on private tenure, where concentration of fuel poverty is almost double that found elsewhere. I am sure that noble Lords will agree that we need to ensure that those who require it the most and are least able to afford it should be at the forefront of our schemes.

My noble friend Lord Moynihan asked about the 20% of respondents who did not agree with including the in-use factor. They wanted it to be a changeable rather than a fixed factor, but they did not disagree with the principle.

The noble Lord, Lord Grantchester, asked whether the software was ready. The software tool to be used in people’s homes is fundamentally an issue for the companies providing the Green Deal, but it is important that it be properly tested and approved to ensure that it generates the correct results. I understand that several tools are undergoing a process of technical validation and we expect to see them on the market in the very near future.

The noble Lord, Lord Whitty asked about the impact on fuel-poor households and how expenditure compares with that in previous schemes. Our figures suggest that total fuel poverty spending was £760 million in 2009-10 and will be £828 million in 2014-15, which represents a 9% increase in spending over the period. It will be a more effective way of assisting low-income, vulnerable households than existing schemes because energy suppliers will be incentivised to deliver a package of measures to help households to heat their homes more affordably, rather than just delivering single measures to individual dwellings.

The noble Lord, Lord Grantchester, asked if we were planning to lay regulations amending the Consumer Credit Act. Using the power in Section 30 of the Energy Act 2011, amendments to the framework regulations will be laid to the framework in December. We have laid a revised draft Green Deal code of practice today and recently we published Green Deal provider guidance. If the noble Lord has not had sight of that, I am sure that he will be able to access it.

I have additional information for the noble Lord, Lord Grantchester, on the Consumer Credit Act. It will be for the purpose of dealing with situations where there is more than one debtor under a Green Deal plan, which I think he was quite concerned about. If one bill payer moves on, but the Green Deal has arrears, there will be a format for us to ensure that we can respond.

The noble Lord, Lord Grantchester, also asked how the ECO subsidy would interact with the Green Deal because of the golden rule. There will be occasions when it will not be possible under the golden rule to cover the full cost of installations of more expensive measures. Therefore, the ECO subsidy will work with Green Deal finance for these measures and will take it into account when calculating the Green Deal finance package for the household.

The noble Lord, Lord Grantchester, asked several more questions and I hope that I will be able to answer most of them. If I do not, I will ensure that the noble Lord is written to. He asked how the Green Investment Bank would underwrite the Green Deal and how that would work. I may suggest to him that this is a negotiation process between the Green Deal Finance Company and the Green Investment Bank. It is an agreed priority for the Green Investment Bank, but these are commercially confidential negotiations, and they are ongoing. I cannot comment further on them.

The noble Lord, Lord Whitty, said that no one really knows about the Green Deal. We have been working closely with local authorities and consumer groups but until we are able to offer the Green Deal, which will go out in January, we do not want to raise the expectations of people and then tell them to wait. We have worked closely to ensure that all the processes we need to ensure that the Green Deal is kick-started in a very progressive, productive way in January are in place. That work has been going on for several months.

I urge the noble Lord, Lord Whitty, to be less pessimistic about the response that we are going to get to the Green Deal. I assure him that many of us, particularly Ministers, have been to a number of events to raise the profile of the Green Deal. In October, it was kick-started when people could sign up to become suppliers, assessors and providers, but the programme will not start until January 2013. The noble Lord needs to sit and wait, and to watch this space. However, I urge him to be optimistic that people will benefit hugely from the Green Deal and that we are working very well and very closely.

[Lord Whitty]

My Lords, I am prepared to agree with the noble Baroness that everything is being put in place, and you could not expect and would not want a huge take-up right at the beginning. My point was that, because all the other schemes will have finished by 28 January, there will be a hiatus between that and Green Deal reaching its forward drive path, if everything goes well—I certainly wish it well. Therefore, in 2013 we will see a dip in the number of households treated, particularly in relation to fuel poverty. It may well be that by 2014, if all goes well, the situation will have improved. However, for the next year and a half, the Green Deal uptake, and in particular the uptake by the fuel-poor, who are heavily concentrated in the private rented sector, which is the most difficult to address and where there are most reservations among both landlords and tenants, will not be that fast. I am not complaining about that; I am just saying that there will be a big problem over the next 18 months in the achievement of energy efficiency and fuel poverty targets.

[Baroness Verma]

Perhaps I may reassure the noble Lord that we have looked at those factors. People on the current schemes will remain on them and will be protected until the Green Deal takes over. Unless I am corrected by officials, the noble Lord can feel reassured that there will not be the hiatus that he assumes. If I do not receive inspiration immediately, I will write to the noble Lord—but I see that inspiration is on its way. The Warm Front will continue until March 2013.