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Green Deal

Volume 528: debated on Thursday 19 May 2011

The Energy Bill, which was introduced to the House of Lords on 8 December 2010, contains the primary legislation of the new green deal proposal. Secondary legislation will allow the Government to implement and administer the requirements of the primary legislation and we intend to lay the secondary legislation before Parliament in March 2012 so that it will be in place to underpin the delivery of the green deal for October 2012. The timetable is naturally subject to the time taken for parliamentary scrutiny.

I thank the Secretary of State for his comments. What opportunities will the green deal provide for smaller, innovative and high-tech companies, and how many jobs will be available in that sector as a result of the green deal?

The green deal will, I think, be a real game changer. It will provide a framework that will enable billions of pounds of investment in retrofitting our homes and businesses across the country. Everywhere we have homes—that obviously means every part of the country—there will be new business opportunities. It is important to develop the supply chains in the energy saving industries, such as for solid wall insulation, and innovative products, as well as to reduce our dependence on imported energy. We are determined to ensure that small businesses can participate in the benefits that the green deal will bring.

The Secretary of State will know that his Labour predecessors, of which I was one, developed a similar ambitious programme for domestic energy efficiency, but because of the complexity of financing such deals, we believed that pilot projects were necessary and set them up, involving 500 homes. What has he learned from those pilots?

I pay tribute to the work done under the previous Government. The fundamental principles of the green deal are cross-party and I welcome that because it provides comfort to investors that they know there will not be a sudden change in the framework. I welcome the Opposition’s input on this.

On finance, we have had many discussions and looked at the results of pilots, including the British Gas pilot. The business model that we are proposing is particularly interesting because the key thing is that if some of the bigger players can get the cost of a substantial number of green deals off their own balance sheets they will be able to securitise flows in the bond market, which will provide a regular flow of cheap finance for all the green deal providers.

Consumer confidence will be vital for the green deal. In developing secondary legislation, we will support this by ensuring consumer protection and redress mechanisms are in place. For example, our licensing arrangements will require providers to work to a green deal code, which will require they use only accredited assessors and installers.

I thank the Secretary of State for that answer. I recently met the National Federation of Roofing Contractors to discuss my Apprenticeships and Skills (Public Procurement Contracts) Bill and people raised concerns about potential loopholes in the green deal, ensuring the right measures are selected for installation, ensuring the quality of installations, and accountability for the work. Will the Secretary of State explain what he is doing to close the loopholes in order to ensure consumer confidence?

My officials are in contact with a wide range of interests and I am happy to meet, and to ensure that my officials meet, the people the hon. Lady has mentioned. We obviously want to ensure that there are no loopholes and we have done a lot. The licensing arrangement and the green deal code, as I have mentioned, will be important. The Consumer Credit Act 1974 will extend to the green deal, and the golden rule that forms part of the green deal ensures that the expected savings will always at least match the costs. The Energy Bill includes strong requirements to disclose the presence of a future charge to bill payers and the accreditation process will also allow guarantees for the work carried out, for example. We will establish an independent advice line that will also support customers seeking redress. The hon. Lady should remember that all that is in addition to the normal protections for consumers through, for example, the Consumer Protection from Unfair Trading Regulations 2008 and the Unfair Terms in Consumer Contracts Regulations 1999.

My right hon. Friend will be aware that a number of places in the country, including Cornwall, are particularly ambitious to forge ahead with the green deal. Other than the constraints on the capacity of assessors and fitters, will any other impediments be faced by those parts of the country that particularly want to embrace this great opportunity?

I am grateful for my hon. Friend’s question. We are working through literally every possible impediment, as we are in other areas of the economy in which my Department particularly wants to see a transition to a low-carbon economy, to understand best what the impediments might be and to remove them. I am absolutely confident that when it comes to the launch of the green deal in October 2012 there will be enormous opportunities for Cornwall. The only constraint is going to be making sure that there are enough people who are trained properly to accredit, assess and install the green deal. I am confident that the finance will be available and it is important that we make as much progress as we can.

Consumer confidence is vital to ensuring that the green deal is a success. We know that Ministers were discussing possible incentives at around the time of the Budget to encourage green deal take-up and the Chancellor alluded to that in his Budget speech, but no concrete announcements have yet been made. Will the Secretary of State give us any further details today about how home owners and tenants will be incentivised in order for the green deal to meet the Government’s ambitions?

Under the terms of the energy company obligation in the Energy Bill, there is capacity for the companies that are subject to the ECO to bring forward incentives. The Chancellor has, as the hon. Lady pointed out, rightly made a commitment to consider incentivisation. She will also be aware that we made announcements on the Energy Bill’s Second Reading to bring forward some quite important incentives for the private rental sector, particularly for F and G-rated properties. All those measures will get the scheme off to a flying start.

My hard-pressed constituents in Harlow will strongly welcome the green deal, but how will consumers be informed how to apply for it and how it will work?

I think we will have a lot of interest from consumers precisely because of the important golden rule that this will benefit consumers—that the energy savings as a result of the green deal will outstrip the assessed costs of the installation. I think there will be a lot of buzz around the green deal. A lot of potential suppliers, such as B&Q, are very interested. As people move house and go to B&Q and look at what they might do for their kitchen or bathroom, they might also, at that point, have the opportunity to sign up for a green deal. I think it will spread very quickly through word of mouth, and that is why it is so important to get consumer confidence.