Michael Meacher
Main Page: Michael Meacher (Labour - Oldham West and Royton)
Chris Huhne
I absolutely sympathise with the hon. Lady’s question—I spent a number of years on the board of the Consumers Association, and I am a firm believer in the need for good consumer protection. There are several layers of protection, and the first line of defence for the consumer is competition. The inability of householders to get an assessment and an alternative quote—such competition keeps suppliers lean and mean—is perhaps what went wrong with the Warm Front scheme.
In addition, we will have all of the usual protections. I mentioned the Consumer Credit Act 2006 in respect of finance, but there is also the accreditation scheme for assessors, so we will know that assessors are properly trained to assess what people need in their homes to meet that golden rule. We will have properly qualified installers, so avoiding the problems that occurred, for example, in Australia, where untrained people crawled through people’s lofts, banging nails into wires and setting fire to homes. The whole Australian energy efficiency industry was given a bad name for many years because of that, but we are avoiding those problems. The hon. Lady will see in Committee that we have delivered a lot on consumer protection.
Mr Michael Meacher (Oldham West and Royton) (Lab)
The Secretary of State has concentrated on the benefits of the Bill, which of course depend on whether there is high take-up, which in turn depends on the interest rates on loans under the green deal. Will he give us some idea of what he intends the interest rate to be? Most expect that it will be of the order of 8% to 10% over a 25-year period, which will rule out very large numbers of people, particularly the poorest.
Chris Huhne
The right hon. Gentleman is right to say that the interest rate is important. However, it is up to competing businesses to arrange that finance. I also very much hope and trust that finance houses will make pools available for the small businesses of which my hon. Friend the Member for St Ives (Andrew George) spoke, so that providers other than the B&Qs and the Scottish and Southerns—the big providers—can get involved. The key point is that the securitisation market is opening up for such businesses, and the finance available is at a reasonable level, which I believe will ensure that we have take-off. However, the right hon. Gentleman is right that that is a market decision.
Mr Michael Meacher (Oldham West and Royton) (Lab)
We have listened to a distinctly Panglossian rosy glow of a statement from the Secretary of State. I think that we can all support the green deal’s ostensible objectives, but there are profound problems with the mechanisms and financing necessary to deliver on the rhetoric. The Bill’s biggest flaw is the failure to address adequately the central issue in energy policy, which is to establish a target for the most efficient way of meeting the nation’s energy requirement over the next 20 years or so, and then to put in place secure and effective mechanisms to ensure that those targets are met. I think that the Bill is the wrong way around: it makes assumptions about the level of energy supply in future decades, and then proposes mechanisms, albeit—as I shall show—rather uncertain and dubious ones, to green that supply.
The Government’s draft overarching national policy statement blandly states, as a sort of unchallengeable datum, that a doubling, or even tripling, of generation will be required by 2050. That clearly puts the cart before the horse, however. If, instead of planning for X terawatts of extra power over the next two to three decades, it was practicable to reduce the figure by, say, 40%—I think that is practicable—it would make much more sense to set that reduced level of energy production as the central target, and then to implement measures to ensure that it is met in as green and cost-effective a way as possible. That is all the more the case given that energy saving is more cost effective, which is a mantra that spokesmen, including the Minister, of all three main parties have repeatedly asserted.
Why, then, are the Government still refusing to undertake a proper cost-benefit assessment of energy demand? Obviously one can see that the big six operators and power generators will be anxious about anything that might impact on their future profits, but I think that the Government, who are far too committed to accommodating the private sector, need to put the national interest first.
Then there is the question of whether the measures in the Bill will deliver what the Government purport to be aiming at. The fundamental issue, on which the whole green deal hinges, is what the interest rates will be. When that was put by me and other hon. Members to the Secretary of State, he gave a studiously vague answer—a discourse, but not an answer. However, without a low interest rate, households will be paying a full, unsubsidised rate for measures such as cavity-wall or loft insulation, which were previously available at no cost or little cost under successive supplier obligations. Without a low interest rate, households will be worse off than they are now. I do not wish to be over-critical, because this should be a reasonably non-partisan debate, but it is irresponsible for Ministers to present such a major Bill to the House and yet remain silent on the intended rate of interest, when the success or otherwise of the entire Bill—certainly the green deal part of it—hinges on that point.
WWF has done a lot of research on the issue and reports that the cost of borrowing for the green deal is likely to be around 8% to 10% over the 25-year debt. Do Ministers agree? If that is the likely interest rate, the effect of the Bill is likely to be fairly minimal without much greater financial support being offered. Market research by the so-called Great British Refurb campaign found last September that even if the interest rate were no more than 6%, only 7% of households—one in 14—would be likely to take up the green deal offer. That is all the more significant when, as we all agree, we recall that the people who need help most in energy saving are those in fuel-poor and vulnerable households, who unfortunately live in the most poorly insulated and energy-wasteful houses.
Given the Government’s savage cuts to the Warm Front programme over the next two years and its discontinuance in 2013, it is perfectly clear that they are not going to lift a finger to help with repayment charges for fuel-poor households, so I ask this question. Realistically, within the parameters of the Bill, is there any reason why energy suppliers should not be required to meet green deal repayments on behalf of fuel-poor households? After all, as we know, such companies regularly report vast profits arising from adventitious rises in fuel prices. However, such a requirement would help them, because they would be able to spread the capital costs over the full length of the green deal finance arrangements and thereby be able to install far more packages in a much shorter time than under the carbon emissions reduction target.
Mark Tami (Alyn and Deeside) (Lab)
Does my right hon. Friend agree that our experience of how the big companies have treated the fuel poor—with pre-payment meters, for example—does not really set a good example or give any hope for how they would look to the future?
Mr Meacher
The point about pre-payment meters is important, because, again, it is the poorest households—the most fuel-poor and vulnerable households—that are so often forced to use pre-payment meters. Their experience under the Bill would be questionable if it were left to private companies to decide how to deal with the issue. Again, that is an area where the Government need to step in and offer support.
A minimum energy efficiency standard is clearly needed in the private rented sector—a point that several hon. Members have made. There is little or no incentive for landlords to do very much to improve their properties, because it is their tenants who pay the fuel bills, not them. What is needed, therefore, is an energy efficiency baseline to prevent properties with an energy performance certificate rating of F or G, or whatever the Government choose, from being re-let or marketed for rent after a reasonable period—say, five years—in which the necessary energy-efficiency measures can be installed.
Lastly—and briefly—it is regrettable that the Home Energy Conservation Act 1995, or HECA, which was a Lib Dem private Member’s Bill, is being repealed rather than extended and toughened, because it delivered more savings in domestic fuel than the entire first phase of the energy efficiency commitment.
Gregory Barker
I will address some of the right hon. Gentleman’s thoughtful comments in my wind-up, but let me put it on record that we are not repealing HECA. Rather, it will form an important part of our strategy to ensure coherent and joined-up implementation of the green deal right across the country at the local authority and community levels.
Mr Meacher
I am very pleased to hear that, and I will take that point away and look at it again. Obviously if the Minister says that, I accept that it is the case, and I am also grateful for it, because HECA is an important Act. It never had great support because it was a private Member’s Bill. Local authorities did not have statutory requirements but had to act voluntarily, so the legislation was not as effective as it could be. However, if the Government are to take it over, supporting and strengthening it, that is excellent.
Gregory Barker
The right hon. Gentleman makes exactly the right point, and although the Secretary of State did not mention it in his opening remarks, that is a new advance—which we are making today, on Second Reading—in strengthening the Bill.
Mr Meacher
I am very pleased to hear that. Clearly there is thinking going on in Government about how the Bill can be improved, which is what we all want. This is a good Bill, but there is a risk that it will not achieve its objectives, so it needs improvements.
Many people have said this, but there are still too many unanswered questions about so many aspects of the Bill, which I do not think is acceptable for a Bill on Second Reading. The Secretary of State was generous in being cross-questioned by Members from all parts of the House, but the increment of information that he was able to provide was not really satisfactory. Given that there is no cap on interest rates, how can the golden rule—that the expected financial savings will be greater than the cost—be guaranteed? Clearly it cannot. What consumer assurances are there that the green deal advisers will not be in cahoots with the green deal installers? Where is the major information campaign? I do not like saying this, but the “Tell Sid” campaign for privatisation in the 1980s was very effective. Where is the information campaign—which only the Government can provide—to support the green deal, rather than leaving it to big business, which will put its own spin on it? In the worst scenario, there is always a risk of repeating the kind of mis-selling scandal that we saw in the City in the 1990s.
I want to be positive about the Bill. Members in all parts of the House acknowledge that this country badly needs a programme for green energy, albeit one that is cost-effective, with implementation measures that will ensure the objective—not hope for it on a wing and a prayer—and comprehensively address the energy saving requirements of fuel-poor and vulnerable households, particularly in the private rented sector. The Bill needs a great deal more work in Committee. I hope that the Government Whip will not reject all the helpful and constructive amendments that are suggested, as so often happens. I am glad that the Government appear to be still thinking about the matter. If we make some significant changes, this could be—I stress: could be—a good Bill.