Monday, 17 January 2011.
Arrangement of Business
Energy Bill [HL]
1: Before Clause 1, insert the following new Clause—
“Purpose of Part 1
(1) The principal purpose of this Part is to deliver energy savings from the domestic building stock, which will make commensurate contributions to—
(a) the achievement of the target contained in section 1(1) of the Climate Change Act 2008 and the carbon budget set for each budgetary period under Part 1 of the Climate Change Act 2008; and(b) the elimination of fuel poverty by the target date required by section 2(2)(d) of the Warm Homes and Energy Conservation Act 2000.(2) In performing functions under this Part the relevant persons shall have regard to—
(a) the principal purpose set out in subsection (1); and(b) the recommendations made from time to time by the Committee on Climate Change, where these are adopted by the Secretary of State.(3) In this section “relevant persons” means—
(a) the Secretary of State;(b) any person or body required by this Part or empowered by the Secretary of State to carry out functions under this Part.”
My Lords, I shall speak also to Amendments 1A and 1C. The amendment may seem long but I can assure noble Lords that its purpose is very straightforward. I think that it is also helpful in setting the Bill into the context of government policy and existing government legislation. The Government have indicated very great ambition for the Green Deal, and I will come to that during the course of today’s debate and further debates. However, what is not clear from this legislation is how those ambitions will be met. The intention of this amendment is to ensure that all aspects of Part 1 of the Bill—that is, the Green Deal, the private rented sector and the other measures—are grounded in the purposes that the Secretary of State has indicated in both the impact assessment and in various speeches and press releases that we have seen from Ministers in the department. The intention of the subsequent four clauses, and the three that I am speaking to, is to define a purpose for Part 1—to place a duty on the Secretary of State, as we will hear from my noble friend, and on Welsh Ministers to produce a plan for improved energy efficiency, and also to create a means of reporting on progress towards achieving the aims set out in that plan.
I will say something briefly about each clause. The Secretary of State has described the Green Deal programme as,
“the most ambitious energy-saving plan ever put forward”.
If that is the case and it is to be achieved, we need to see that ambition grounded in a concrete set of objectives so that it is more than just an aspiration and really does become a reality. The Government have indicated that the purposes of the Green Deal and the related proposals that appear in Part 1 are: to improve the energy efficiency of existing building stock in the UK, including household and non-domestic properties, in order to reduce greenhouse gas emissions cost-effectively and fairly; and to contribute—I emphasise this—to our legally binding targets and improve the security of the UK energy supply. Under those legally binding targets, the UK is committed to achieving a 34 per cent reduction of CO2 emissions by 2020 relative to 1990, and at least an 80 per cent reduction by 2050. As the impact assessment—a weighty document—makes clear:
“There remains a considerable amount of cost effective abatement potential from energy efficiency measures in the domestic and business sectors which, if taken up, will mean that Carbon Budgets are met at a lower overall cost to society”.
The Government have indicated in their summary proposal for the Green Deal that they need to cut emissions in homes by 29 per cent by 2022 based on 2008 levels, which they say will deliver on the target of 34 per cent by 2020. That is obviously an inadequate ambition, and it is not properly defined in the Green Deal document how they will ensure that this really is delivered. Therefore it makes real sense for the ambition of the Green Deal to be linked to the scale required for carbon budgets and take into account the recommendations of the Committee on Climate Change for the future budgets.
As the Green Deal is a programme that lasts into the 2020s and through to 2030, the Government will want to ensure that they are delivering at the scale and pace required to meet the carbon reduction targets. We know that the Government’s objective is to make the Green Deal work, ensuring serious carbon reductions. As the Minister Greg Barker said:
“The new Green Deal initiative will help us achieve, or exceed, the binding targets for carbon reductions set during the previous administration”.—[Official Report, Commons, 6/7/10; col. 148W.]
He also said:
“We basically need to retrofit the entire housing stock”,
but he does not define what that retrofit would achieve. So there is a clear lack of detail. For the Government to state that they want to transform the whole housing stock and yet not indicate what this transformation will look like or what this means for carbon reduction energy saving is quite a significant omission.
The Government are not short on ambition for this legislation. Greg Barker stated that they want to retrofit 14 million homes by 2020. Chris Huhne described the Green Deal as:
“A once-and-for-all refit that will make every home in Britain ready for a low-carbon future”.
“No more half-measures going off at half-cock”.
Those are his words, not mine.
I have been through a number of ministerial speeches, comments and press releases—as the Minister knows, I look at the DECC website every day—but I cannot find anything about what energy carbon savings the Green Deal is anticipated to deliver even if the take-up is high, as the Government anticipate that it will be. So the Secretary of State has not stated what the carbon reductions from the housing sector need to be or what the standard of an individual home must be in order to contribute to the carbon reduction. So, defining the energy saving to be achieved to meet the reduction will provide more clarity on what will then need to be delivered in terms of improvement to properties.
Perhaps I may also address the fairness issue which the Government raised as an objective in the impact assessment. The principal purpose of these provisions should be in line with the statutory target date for elimination of fuel poverty as provided for by the provisions of the Warm Homes and Energy Conservation Act 2000. Aspects of the Green Deal programme—the energy company obligation in chapter 4—are partially aimed at assisting the most vulnerable. During the course of debates and deliberations on this Bill, the Government will need to decide whether the most vulnerable can be assisted early on in the new deal.
The intention of subsection (2) of the proposed new clause is to ensure that the Secretary of State and anybody he empowers to carry out anything under Part 1 of the Bill—the Green Deal providers, the energy companies, et cetera—will have to have regard to what will be delivered and provided towards the principal purposes outlined.
I turn to the new clause proposed in Amendment 1A, which deals with the Secretary of State’s duty to improve energy efficiency. By 2020 we should reduce carbon emissions from the housing stock by at least 42 per cent in line with the intended carbon budget proposed by the Committee on Climate Change. As I am sure we will repeat often during the course of this Committee, the Secretary of State has said that this Green Deal,
“is going to be a revolution … the most ambitious energy-saving plan ever put forward”.
Yet there is not really a plan. There is, however, an intention, and I think there are some good words around the ambition which are welcome. We will do our bit to work with the Government to ensure that we can realise that intention and that ambition. That intention and that ambition, however, is not a substitute for a clearly defined plan that is on paper, that is published and that outlines a policy measure to be introduced.
So, publishing a plan that defines that ambition could make real sense. It also gives to business and those seeking to introduce and deliver the Green Deal the certainty that they need to get themselves geared up and ready. I am sure that the Minister has seen the statement from a number of businesses and NGOs, from the Federation of Master Builders, the World Wide Fund for Nature, Marks & Spencer, B&Q and the UK Green Building Council, which all welcomed the Green Deal but emphasise the need for certainty and ambition. It is in seeking to provide that certainty that we put forward this amendment today.
The plan has to include a clearly stated level of energy savings to be achieved in each carbon budget period and the level of carbon budget reduction to be achieved. The complementary policies, such as the financial incentives and the means of ensuring that the cost of capital is kept low, will be key in this. How the Government expect it to be delivered and achieved will be outlined in the plan.
At present the Government have not outlined how they intend to report on the progress on what has been achieved as we move forward on the Green Deal. The plan can outline the frequency and measures that the Government will introduce to monitor progress towards achieving the plan and carbon reduction targets. This will outline the impact indicators that the Government will introduce.
The plan will also have to take into account other plans because the UK energy system is UK-wide. Demand reduction in one part of the system will impact on another. The Government should ensure that the plan takes into account and has regard to what the Scottish Government intend to deliver in energy saving and what the Welsh Ministers intend to introduce as part of their contribution to meeting the carbon reduction targets under the Climate Change Act. There should also be included a means of review. The Green Deal policy will not just exist for a few years. It will be with us until 2030, over several Parliaments and several carbon budget periods. The recommendations of the Committee on Climate Change will change and develop over time. The Government need to have regard to that advice and any increase on the carbon budget targets that will impact on the level of energy saving that will need to be achieved under this programme.
I move on to Clause 4, on the annual report on progress. As it says on the tin, the provisions in this section in the new clause seek to integrate the reporting on progress under this plan with those reports already published under the provisions of the Sustainable Energy Act 2003. This will integrate reporting on the progress achieved on energy savings through the energy efficiency provisions in this Act with other sustainable energy reporting requirements. That does not preclude the Secretary of State from defining further reporting requirements in the plan that he is required to produce under Section 2.
I believe that the Government are serious in their intent for the Green Deal. However, this intent to achieve carbon reductions needs to be made clear. It needs to be an explicit and real commitment and not just a target or an aspiration. I hope the Minister feels able to support these amendments. I look forward to his support and comments.
Thank you. I was expecting some of the Government’s Back-Benchers in their varying forms to jump up and to defend this Bill in its present form. There are always criticisms made of Bills but, apart from Ministers who are paid to defend them, there are always people—
That is fine. Every man has his price. Some are well enough off to be able to do that. Many of the people we are concerned about in this Bill and who are looking to this legislation for assistance would be very happy to be in that position. A lot of them work for nothing on the basis that they are unemployed. That is why they live in fuel poverty.
As I say, the purpose of this amendment—coming from people who in the past have sought to pin down Governments to make sure that they will meet their requirements whether by international law or by British legislation—is to improve the Bill. We have had people on the Benches opposite cheering in the wings when the previous Government were taken to court because they had not met, in the eyes of some people, the requirements of the legislation of the 1990s and of 2008 to meet some of the fuel poverty targets. One would have thought that they would have been happy to make more explicit the commitment of the Government to these aims and objectives, because there is nothing which we are advocating here that is at variance with government policy.
It is certainly the case that it is desirable to make explicit at every opportunity the Government’s intentions to tackle both climate change and the contribution that is made to CO2 emissions by the inadequate housing construction that we have in the United Kingdom at present. This amendment, very briefly and very effectively, draws attention to the commitments that this Government have accepted from their predecessor and to the new objectives that are incorporated within the proposed legislation as a consequence of the proposed Green Deal. If we are to make progress then it is essential that we do not at any stage lose sight of the fact that we require a 34 per cent reduction in CO2 emissions by 2020 relative to 1990 and that we need to move on to even more substantial reductions using the 1990 base figure when we get to 2050.
Certainly these matters will be monitored by the Committee on Climate Change. They will be looked at by a variety of people and they will be the subject of annual reports to Parliament. It certainly does not do any harm for the annual reporting process to be incorporated in this legislation—which, of any, seems to be the most appropriate at the moment to reinforce that message. Certainly it does not do any harm for the duties of Secretaries of State to be repeated in legislation and to make clear that there is no possibility of backsliding—or, if there are to be issues relating to backsliding, that they can be the subject of parliamentary debate when the annual report is presented to Parliament.
Moreover it is important that we recognise that there are somewhat clear—and, in some ways, rather difficult—relationships between the Welsh Assembly and this place. That is particularly so when ambitions embraced by the Welsh Assembly are not necessarily matched by access to funds. However, it may well be that, as a consequence of the referendum which is to be held later this year, they will have access, or a greater degree of freedom, to spend the allocations from Whitehall. Certainly it does not do any harm to have the Welsh Executive on the same page as the Secretary of State, outlining their responsibilities, and ensuring that the Welsh Ministries are included in the annual report.
The three amendments in this group would enhance the Bill. They would enable those who perhaps suffer from insomnia and who read parliamentary legislation as an aid to sleeping at night to get through the first part of the Bill in which it would be made quite explicit what are the objectives and ambitions of this legislation. It is fair to say that this Bill is very ambitious and for that we give the Government credit. But it is one thing to have pre-election promises, immediate post-election legislation and Second Reading speeches, and another to realise those ambitions. That is where we have to hold them to account. It is therefore very useful for the Government to be held to account in the first clause of the Bill. That is why I am very happy to see this clause proposed and to support these amendments. They are more than just a reiteration of past policy and current ambition; they are a clear indication of what the Government have to do if they are to meet their responsibilities to the people of Britain and to those who live in inadequately insulated houses and if they are to meet their wider international responsibilities in the fight against unnecessary climate change.
I am very happy to support my noble friend in her attempt to amend the Bill. I would like to think that the amendment is so uncontroversial that those who have previously sought to make the Government’s intentions explicit, and who have sought to require Governments to be more accountable, are able sign up to it. I realise that we will not be voting for it at this stage. It may well be that at Third Reading such an opportunity will arise. But it is important that we get an indication from the Minister—paid or unpaid—that there is an intention to enter into the spirit of this legislation in a more meaningful way than the somewhat inadequate words of the first clause would suggest.
My Lords, I feel tempted to rise for the fly that has been flicked over us, as you might say, even though I suspect that it is probably uncatchable. To explain my attitude to all this—particularly to the noble Baroness, Lady Smith of Basildon; she and I share a certain amount in our background—I should explain that I was once responsible for the total built estate in Essex. Part of that responsibility was structural maintenance, and the other part—even 30 years ago when I was doing it—was energy efficiency, not least of the problems being because we had many buildings erected under a very different regime in the 1950s that were extremely energy inefficient.
The point that I really want to make is this: in those days, energy efficiency was constantly measured and schemes for improving the energy efficiency of buildings flew in and out of our programme with monotonous regularity, because they were always dependent on showing an economic return. Interest rates in those days changed with monotonous regularity, and the consequence was that a scheme that might be eligible for consideration one month would go out six months or even three months later, because there was no longer an economic return. However else we look at the question of energy efficiency in housing, economic return will still be the driver on which individuals will make up their minds whether to participate in the scheme. Not least of the problems that the Government face in proposing a scheme of this nature, particularly at present when interest rates have been consistently low for a long period, is that it is almost impossible to judge what view people will take if interest rates go up to 5, 6 or 7 per cent. That would not be unforeseeable if the economy changes, particularly if inflation stays consistently high. That is one difficulty that the Government definitely have to face.
My problem with the amendments comes down to a slightly more difficult point. It is all very well for the Government to propose a scheme, but it depends on voluntary participation. People have to say that they wish to take part; there is no mechanism for compulsion, and rightly so. To ask the Government to predict what sort of savings in carbon emissions they expect as a result of the scheme is setting an impossible task. I do not see how it can be done. In any event, however significant the scheme may be in the context of the Climate Change Act and its 2050 target, it will play only a minor part. That target was specifically mentioned by the noble Baroness, Lady Smith, as a reason behind her amendment, but the critical issue in relation to it will be what happens to carbon dioxide.
If you remove carbon dioxide from electricity generation, you can turn a house totally into a zero-emissions house. The energy efficiency does not need to alter one iota if it is an all-electric house. At that point, you fall back on what I have already said—that the decision on whether to participate in an energy efficiency scheme is entirely and properly a responsibility of the householder. Therefore, I have a fundamental difference in approach.
I sometimes wonder when I see amendments like this how the proposers thought we would ever achieve the present state of development that we enjoy in this country, which is very sophisticated. The more sophisticated our society becomes, curiously, the more sophistication and complexity seems to be demanded in our legislation, which in fact makes legislation more difficult to implement. We have something here which depends on volunteers, and we already have a mechanism for annual reporting because the Government’s carbon performance has to be reported annually to the climate change committee. It seems to me therefore that the background to these amendments is superfluous. In order to keep legislation simple and understandable, I hope that the final decision will be that these amendments should not become part of the Bill.
My Lords, this is the first Bill that I have been involved with, so please be patient with me, if you would be so kind. It is good for this House that the Energy Bill is starting here, and I thank all noble Lords for their well thought out and helpful amendments. We may, of course, resist some of them, but they will be given respectful consideration and full discussion. I would also like to thank the opposition Benches for their constructive approach to this through the noble Baroness, Lady Smith of Basildon. I would particularly like to thank my officials, who have worked through the weekend and have had to respond to amendments tabled as recently as this morning. So they have put in a tremendous amount of hard work. I would also like to thank my unpaid friend Lady Northover, who joins me not as a rich person who can afford things—as the noble Lord, Lord O’Neill, thinks—but as someone who believes in public service.
Throughout our consideration of this Bill my door is always open, as is my limited mind, and should you wish at any time during this Committee to discuss any issues, I would be delighted to do so. So thank you in advance, all of you, for your support. I would also like to thank the noble Lords and the noble Baroness, Lady Smith of Basildon, for bringing forward these amendments which seek to provide clarity about the purposes of this part of the Bill, to ensure that those delivering the Green Deal have regard to those purposes, and to require annual reports on progress.
Amendment 1 seeks to put in statute the purposes of the Green Deal and to require relevant persons to have regard to these purposes in fulfilment of their functions. The Green Deal is indeed central to the carbon reduction target contained in the Climate Change Act and to the elimination of fuel poverty. I welcome the opportunity provided by this proposed amendment to provide clarity on the purposes of the policy.
There are, however, difficulties with this proposed clause as an operational clause, many of which my noble Friend Lord Dixon-Smith has alluded to. The Green Deal is about establishing a commercial framework in which businesses can take the lead in delivering a new type of finance package designed to address climate change and fuel poverty. However, most of the regulatory functions which will be performed by specific bodies under this Bill are for consumer protection. For example, those persons running accreditation schemes ought to be focused on setting and enforcing standards to protect customers, not having to have regard to a trade-off between high-level policy aims such as carbon reduction and operational issues such as enforcing standards. We should resist an overarching purpose because we do not want to open an opportunity to challenge inappropriate commercial practices on the basis that the end justifies the means if the overarching purpose is achieved.
We are also concerned that this amendment might cover all parties to the Green Deal—including installers, assessors and Green Deal providers—and, if so, places obligations most fitted to government onto commercial agents. For example, I do not consider it appropriate to ask an insulation installer to have regard to the recommendations of the Committee on Climate Change. Furthermore, Green Deal participants will quite legitimately hold commercial objectives that are not reflected in subsection (1) of the proposed new clause— ie, business motives but which indirectly contribute to public policy aims. By defining the purposes in this way, we risk creating unnecessary complications that could have unintended effects.
I hope the noble Baroness will therefore agree on this basis to withdraw her amendment, while taking comfort in the fact that we are in complete agreement on the relevance of the Bill to carbon targets and fuel poverty.
The key principles behind Amendments 1A, 1B and 1C are also ones where I support wholeheartedly the sentiment. There is no question but that we would want to explain how our energy efficiency policies will deliver our carbon saving and fuel poverty goals. However, the aims of these amendments are already provided for by existing legislation. Later this year we will publish a carbon plan to set out, department by department, the policies and deadlines that will ensure real action on climate change. Our energy efficiency policies, not least the Green Deal, will be a key element of this plan. Also, as required by Section 2(1) of the Warm Homes and Energy Conservation Act 2000, the Government have in place a strategy for delivering their fuel poverty targets.
The Government are obliged to report each year on progress towards our carbon and fuel poverty targets, and, as my noble friend Lord Dixon-Smith referenced, our progress against these objectives is scrutinised by independent bodies, namely the Committee on Climate Change and the Fuel Poverty Advisory Group. In the light of this, I believe that the aims of this amendment are already provided for through existing arrangements, and I am not keen to unnecessarily multiply statutory duties to create plans and report progress. I therefore invite the noble Baroness to withdraw her amendment.
I am grateful to the Minister for his response. He says that this is his first Committee stage in this House. It is also my first Committee stage in this House, as well as my first Committee stage in opposition, so I hope that we both find it an enjoyable and rewarding experience. I also thank my noble friend Lord O’Neill for his comments. I think that he understood the point that I was trying to make. I apologise to the noble Lord, Lord Dixon-Smith, but as much as the two of us share an interest in Essex County Council, I am really not seeking in these new clauses to introduce any new targets. I am merely seeking to ensure that there is a way in which Ministers’ objectives for the Bill can be judged against the targets which have already been established, and a way in which this Bill and the Green Deal can be judged against those targets.
Ministers expressed enormous confidence in the Bill. Chris Huhne, the Secretary of State, said that it is a “revolution” and the,
“most ambitious energy-saving plan ever”.
It is a “game-changing” plan, says Greg Barker. There is huge ambition for the legislation, as is right. However, if Ministers really feel that the Bill can deliver the carbon reductions, I should hope that they would also want to measure that in some way. So I am seeking to use the existing legislation, not to create greater commitments.
I understand the Minister’s comments about the Bill being commercial. However, I think that the Government have a responsibility as well. It is not good enough for the Government to want to introduce legislation, but then to take a step back and say that the market will provide. This is clearly a commercial matter. However, the Government are setting boundaries and guidance on consumer protection because the market on its own will not provide it unless there is government legislation and support to ensure that it happens. As for having regard to the Committee on Climate Change, although we are reluctant, we would want to ensure that the Government support and work with these organisations.
I am a bit disappointed by the Minister’s response. I had expected a warm welcome for the new clauses, in the spirit of co-operation which he mentioned. We will seek co-operation with him, and I will seek leave to withdraw the amendment for now, but I also ask him to take away the points I have made and to look at them and perhaps we can discuss them further before Report. I beg leave to withdraw the amendment.
Amendment 1 withdrawn.
Amendment 1A not moved.
1B: Before Clause 1, insert the following new Clause—
“Duty of Welsh Ministers to improve energy efficiency
(1) The Welsh Ministers must prepare and publish a plan for achieving the principal purpose set out in section (Purpose of Part 1) (1) in Wales.
(2) The plan referred to in subsection (1) must establish specific aims and describe the proposed means of achieving them together with methods for reporting on progress towards meeting them.
(3) In preparing the plan, the Welsh Ministers must take account of any plans produced under section (Duty of Secretary of State to improve energy efficiency) of this Act and section 60(2) of the Climate Change (Scotland) Act 2009.
(4) Where an aim is designated under this section, the Welsh Ministers must take all reasonable steps to achieve that aim.
(5) The plan prepared under subsection (1) must be published no later than one year after the day on which this section comes into force.
(6) The Welsh Ministers must review the plan prepared and published under this section within one year of each order setting a carbon budget under section 8(1) of the Climate Change Act 2008.
(7) Where the Welsh Ministers revise the plan, following a review under subsection (6), they must, as soon as is reasonably practicable, publish the revised plan.
(8) The Welsh Ministers must, as soon is reasonably practicable after publishing a plan under this section, lay it before the National Assembly for Wales.
(9) The Welsh Ministers must report annually to the Secretary of State on progress made in the reporting period towards achieving the annual targets established by the plan prepared and published under this section.”
I confess that this is not my first time speaking for the Opposition in Committee; I am not enjoying it and I do not expect to enjoy it. Being in opposition is nothing like being in government, as we all recognise. However, over a period of time, I spoke on Welsh matters and therefore have a considerable respect for the devolution settlement and the importance of considering how we appreciate Welsh interests in our legislation. That is why I am moving this amendment.
My Lords, I thank the noble Lord for giving way. I am a little confused. Amendment 1B was grouped with the previous amendment moved by the noble Baroness. Are the opposition Benches not following the groupings that have been published for this afternoon? If so, could we have a sight of the groupings that they are working to?
I apologise to the noble Baroness; it was late notice, but we understood that in the latest official groupings Amendment 1B was to be degrouped. If it is not on the official groupings list, I present my apologies to her in pre-empting that position. It was our intention to keep the Welsh amendment separate because although he indicated aspects of principle on which he did not agree with our other amendments, he indicated that Committee stage is a time when we can consider issues in the round. Although he has indicated his reservations about the previous amendments, it is only appropriate for me to emphasise the importance of Amendment 1B and say that in our general consideration, we recognise the position of Wales.
The Scottish position is covered by similar provisions in the Climate Change Act 2008, so issues with regard to Scotland do not need to be considered specifically in this legislation. Issues with regard to Wales do need to be considered, however, particularly against a background where—as the Minister knows only too well, with the impending referendum on the powers of Wales—this is quite an important year for the devolution settlement. My noble friend Lord O’Neill identified the fact that there is a vast difference between the objectives and aspirations that the Welsh Assembly Government might have and their ability to translate these into achievements in terms of the resources which they have at their disposal and can command. That is an issue to be settled much later this year.
When the Minister is considering the issues which my noble friend has raised on the Green Deal, I suggest that he respects the position of Welsh Ministers and the role of the Welsh Assembly. I beg to move.
If we won the argument substantially with the Government on the main proposals of the Bill, I have not the slightest doubt that the wisdom of Wales would be such that Welsh Ministers and the Welsh nation would recognise the values in the Bill which would be translated into meaningful structures for them. However, we have not yet consulted Welsh Ministers on the amendment.
We greatly welcome the attendance of the noble Lord, Lord Davies of Oldham, who always brings great oratory to our debates, which we enjoy.
On Amendment 1B, the comments that I made on the previous group stand. The position in respect of Wales is particularly complicated, given, as the noble Lord, Lord Davies, said, the way in which the devolution settlement operates in this area. I would certainly want to consider further and consult as necessary before agreeing anything in this area. Therefore, I ask the noble Lord to withdraw the amendment.
Amendment 1B withdrawn.
Amendment 1C not moved.
Debate on whether Clause 1 should stand part of the Bill.
I thought it would be helpful to say something about our general approach to the Bill and the Green Deal and to speak to our Amendment 38 as well. The Government have great ambitions and hopes for the Bill, as well as soaring rhetoric. Chris Huhne describes it as a revolution. Indeed, on Second Reading, the noble Lord, Lord Marland, said that the Bill will take energy efficiency off the back burner—not that I am convinced it was on the back burner—and put it at the forefront of government policy. While I may take issue with some of the rhetoric that has been used by Ministers—I still feel slightly disappointed at the lack of ambition in terms of measuring the carbon reduction—these are very worthy objectives which we support. I thank the Minister for the engagement he has shown so far and will continue to show during our proceedings. We will seek to ensure that the Green Deal is fit for purpose and can achieve the objectives that we all wish for it.
I have two specific issues: one is on Amendment 38 and the other on Clause 1. I am not clear from Clause 1 about what is an energy plan and what is a Green Deal plan. The energy plan becomes a Green Deal plan only when there is an agreement that the costs can be paid for by the installers; that becomes clear in later clauses. However—and I have raised this with the Minister elsewhere—this could mean householders not being informed about potential cost savings and carbon savings that could be funded in another way. This contrasts not very favourably with Labour’s whole-house policy.
I am seeking to prevent a householder losing the opportunity to go beyond the Green Deal or not even realising that they could do so. They would only be informed of the measures that would be likely to attract Green Deal funding, yet there are other funding streams. Householders may choose to fund some measures themselves such as a feed-in tariff. There are also renewable heating incentives and some water company funds are available as well.
Unless it is clear that the assessor should undertake an energy plan, report that to the householder and then move from an energy plan to a Green Deal plan, we face two problems. We could lose public confidence because in effect the assessor would decide which measures in an energy plan could be undertaken in a Green Deal plan. That is a matter for the householder or tenant to decide—the person who is paying the bill—not an assessor. If the householder loses the right to decide which measures are Green Deal plans and which are energy plans, that would undermine public confidence.
We need to explain the difference and make that explicit in the legislation. Where an assessor goes in to a home and undertakes a major energy plan, I would like the householder, with the assessor and perhaps an installer, to decide which measures would be undertaken under the Green Deal. I hope the Minister will take that proposal away and look at it, because I am sure that what is proposed under the Bill is not the intention. If it is, it would be impossible to reach the targets set by the Secretary of State.
Amendment 38 is not a minor point. It would rename the Energy Bill the energy framework Bill. Noble Lords will be aware that originally the Bill was going to be the green energy and energy security Bill. That is why it is called the Energy Bill. Yet, in this Bill, my understanding is that—and correct me if I have the wrong number—something like 52 separate pieces of secondary legislation will have to come forward following this. The noble Baroness, Lady Noakes, raised this at Second Reading as well. I understand some of the reasons why but I find it unsatisfactory where so much legislation will be decided by secondary legislation that needs to be examined fully by this House.
At Second Reading the noble Lord said:
“I will clarify that this is a framework Bill on which there is a lot of work to be done”.—[Official Report, 22/12/10; col. 1151.]
I do not raise the issue out of frivolity. It is a matter of accuracy that the Bill could be renamed the energy framework Bill. I hope that the Minister will take on board the point and also the difference between an energy plan and Green Deal plan. I beg to move.
My Lords, I should not interrupt at this stage but perhaps it will help the Committee if I clarify one point. Because different groupings lists are circulating, and I have an older list, I should point out that the Question we are discussing now is whether Clause 1 should stand part of the Bill, and Amendment 38 is grouped with it.
I reiterate the point that was made by the noble Baroness just before she sat down. There are references to upcoming statutory instruments. They are mentioned in Clause 1 and two of them are of more than passing significance. It would be helpful if in this stand-part discussion the Minister could give us some indication of what is meant by an eligible property and some guidance relating to energy efficiency improvements. We are not asking him to give us chapter and verse but to give us a rough outline. These two things are obviously at the very heart of the Green Deal. It would be helpful if at this stage we could begin to get some kind of idea of what the Government have in mind in respect of upcoming statutory instruments.
We have had a passage of some three or four weeks. Admittedly there was the Christmas and new year break. Nevertheless, it is not beyond the wit and capability of the department and the officials. The Minister should have been asking for this to get some kind of rough outline of two of the central points of the Green Deal that appeared in Clause 1; that is to say the qualifying energy efficiency improvements and what is meant by eligible properties. If we could get some kind of clear indication on and definition of these points at this stage, it would assist us. It would perhaps diminish the need for us to continue to ask the Government for definitions and statutory instruments—albeit in a consultative form—at every stage and turn. We can make considerably more progress if we receive that than we are likely to make if we do not get it.
My Lords, as the noble Baroness, Lady Smith, pointed out, I raised inter alia whether or not statutory instruments in draft would be available at Second Reading. Answer came there none from my Front Bench. In fact, my noble friend Lord Marland said—as if it was a badge of honour—that this is a framework Bill. The noble Baroness, Lady Smith, has translated that badge of honour into her Amendment 38 and, apparently, has also made it a good part of the Bill. I had not anticipated that we would be debating this point today. I have today tabled amendments—we will not see them on the list until tomorrow—that will tease out this point.
The Constitution Committee is clear that a framework Bill is on a par with a Henry VIII clause; that is to say, they are fundamentally unconstitutional. In particular—this is the point made by the noble Lord, Lord O’Neill—it sucks out the ability of this House, as a revising Chamber, to make any significant impact on the genuine content of what will be the result of the legislation. As a matter of principle—and the committee reiterated this as recently as the Public Bodies Bill—it does not believe that framework Bills are a good thing. I therefore oppose the amendment of the noble Baroness, Lady Smith, because putting “framework” in makes it sound as if it is okay. I believe that this House ought to hold out against excessive use of Henry VIII powers and the excessive use of framework legislation where there is no good reason for it and where the amount of information that will be made available to noble Lords during the passage of a Bill will not enable them to exercise their crucial function as a revising Chamber.
I will make these points again when I come to my amendments which are on the way to being tabled in respect of Chapter 4 of Part 1, which is the point that I specifically raised on Second Reading in regard to this very inchoate legislation. I had not intended to raise this point on the Green Deal, but I fully support what the noble Lord, Lord O’Neill, has said.
My Lords, it is perfectly clear that there is a great deal of detail to be worked out before the Bill becomes operative. Can my noble friend give the Committee an assurance that there will be the fullest consultation with outside interests? And, as has been sought by the Opposition, can he give some indication as to what the various statutory instruments are going to contain? There is an enormous amount of support behind the concept of this Bill. The representation I have had this morning makes the point that,
“there is clearly great deal of detail to be decided upon and it is important that this is done in such a way as to ensure the policy is fit for purpose”.
That is a sentiment that I wholly endorse. I, too, warmly support this Bill, not least because, as I said on Second Reading, it tackles the whole objective by approaching the consumer—the householder—in a totally different way from what happened in the past; they are not being asked to save the planet, they are being asked to save on their energy bills and perhaps have a more comfortable house. That will appeal to a large number of people. Of course, the details will have to be very carefully worked out. I hope that my noble friend can give me some assurance about consultation with the many interests that will have to help operate the whole scheme.
My Lords, this part of the Bill introduces the Green Deal. The Green Deal is at the heart of this Energy Bill, representing a key part of the energy policy and our commitment to improving energy efficiency. In response to my noble and learned friend Lord Jenkin of Roding—
My noble friend is learned, but not in the way that I meant. He does not want to be called learned today.
I cannot imagine a department that consults more than ours. We are locked in consultation on virtually every move we make and will continue to do so. We have had a lot of contributions from outside which we have taken on board in getting to this point.
The Green Deal is designed to address the longstanding problem of how to improve energy efficiency of existing building stock. While on paper improving efficiency of buildings makes sense to save money, protect our climate and improve the comfort of our homes, in practice too little has been done too slowly. There are some good reasons for this: people find it hard, or are reluctant, to take out large loans for property they might leave soon; they often do not trust salesmen and installers; and they are busy and simply do not know what to do.
Our solution, the Green Deal, is threefold. First, the Green Deal plan is a contract under which private companies provide finance up front for energy efficiency improvements and individuals then repay through their energy bills. Liability to repay attaches to the energy bill payer for the time being, so that only the person benefiting makes the repayments. The contract transfers to subsequent bill payers.
Secondly, there is the golden rule: the protecting principles which require that repayment costs should not exceed expected energy bill savings. Thirdly, there is the accreditation and redress system, which is the guarantee of quality which consumers need. It is a simple concept, but to make it both simple and secure for consumers, we need to put a robust framework in place. To ensure attractive external simplicity for the customer, we need to ensure that the internal mechanism comprehensively covers all those involved in the scheme—the assessors, installers, Green Deal providers and energy suppliers. This is a market mechanism funded by private capital.
In response to the noble Baroness, Lady Smith of Basildon, our responsibility is to create a robust framework backed up by redress and quality control. The Bill focuses on this enabling framework; we will certainly be consulting on the detail for secondary legislation, and I look forward to the input.
I will now speak to the detail of Clause 1. It provides for the Green Deal plans an arrangement made by an owner or occupier whereby a Green Deal provider makes energy efficiency improvements to that property. As the noble Lord, Lord O’Neill, said, it is important that we define what is an eligible property, but it is also important that we do not define it in a way that restricts properties. Therefore, the broad definition is as far and wide upon domestic and commercial properties as is possible. Of course there will be exceptions which we are starting to develop, such as something that may have been purchased under a compulsory purchase order. As the noble Lord rightly says, we need to define this over the next few weeks.
The clause defines the conditions that must be met in order for an arrangement to make energy efficiency improvements qualify as a Green Deal plan. By setting out these conditions as requirements of the plan, the clause defines the basis of the Green Deal. Subsection (3) sets out the two conditions that must be met. The first is that,
“the energy efficiency improvements are to be paid for wholly or partly in instalments”.
The second condition is that the requirements of subsection (4) are satisfied. These are that there must be “a relevant energy supplier” supplying or about to supply energy to the property. The energy efficiency improvements to be made must fall,
“within a description specified in an order made by the Secretary of State”.
By setting out qualifying improvements, we can ensure that the customer benefits only from recognised and proven technologies.
Subsection (4) also states that the important conditions mentioned in subsections (4) and (5) must be met. These relate to the assessment of the property and the financial terms on which the Green Deal is offered, and a number of other terms that must be included or must not be included in the plan. This is to ensure that only measures that are appropriate for a property are recommended.
I am grateful to the Minister for giving way. I do not wish to delay the proceedings, but I think he has come upon a point that illustrates the difficulty that some of us have. Consider people who have a solid wall property which is not within the gas network—that is, dependent upon probably oil-fired central heating—and requires, because it is solid wall, very expensive insulation, that will probably never be achieved because of the cost of the job to be done, the nature of the property and the length of time of the repayment. There are quite clearly certain properties which could almost deem themselves to be ineligible to participate in this scheme. Therefore, for us to talk of this great, exciting Green Deal, which is going, among other things, to transform the carbon excess in this country, is at this stage to build up the hopes of a number of people in rural communities outwith the gas grid who live in houses constructed in such a way that to insulate them effectively is going to be so expensive as to make them ineligible to be part of the scheme.
It is that kind of thing that, at the outset of our discussions, we should be clear about because there are some hopeless cases, for want of a better expression, which might never fall into this category. It is for that kind of thing that we want a clearer definition early on. So far, the Minister has not addressed that aspect, which is not beyond the wit and intelligence of the department to make clear at an early stage in our proceedings.
This is a commercial market-driven project. In any commercial market-driven project there are going to be properties and buildings where, as the noble Lord rightly says, a cost may not be acceptable within the repayment fund or may not be within the golden rule. My sense, and that of the department, is that we set up the structure and see how it proceeds. I live in an oil-fired house in a rural community where we cannot get gas, as do many, as the noble Lord said. If it does not make commercial reality for market-driven forces to help with that, the department and Government should look at how that can best be achieved.
Until the commercial equation is worked out, however, and until I have seen the assessor and the accreditor, I cannot begin to see whether that is a viable proposition. It is incumbent upon the Government to regroup at a point, as the noble Lord rightly says, to see where it has not worked with these properties, what can be done to help, what type of people are not able to take full advantage of the scheme and then see where the Government can help. I look particularly here at the vulnerable, who are vital to this, particularly the vulnerable in rural communities where they cannot have the benefit of this if the numbers do not work out.
I hope that that deals with the noble Lord’s point. However, I think that he is absolutely right. The scheme needs to be road-tested to ensure that it works and we must keep a watchful eye on it. Getting these things precisely ordered is a very good thing for the Bill.
I regret to say that I have forgotten where I was but I have a feeling that I was somewhere like subsection (5) —or was it subsection (4)?
That is very kind of the noble Baroness. Subsection (4)—no, I have already done this. Subsection (5) sets out some conditions that must be met before payments are collected under a Green Deal plan. For example, measures must be installed in accordance with requirements set out in Clause 7. Again, these conditions protect the parties entering into a Green Deal plan and are intended to ensure that payments are not collected until measures have been installed appropriately and the plan has been confirmed.
Subsections (5) and (6) provide that when all the requirements of subsections (3) to (5) have been met, payments under a Green Deal plan are to be made by the person who is liable to pay the energy bill for the property for the time being and should be made through energy bills for the property. This is the core of the Green Deal and the effect of an arrangement qualifying as a Green Deal plan.
In summary, therefore, Clause 1 sets out the conditions that must be met for an arrangement to qualify as a Green Deal plan and the effect of those conditions being met. It is therefore central to the operation of the Green Deal.
Amendment 38 would change the short title of the Bill from the Energy Act 2011 to the Energy Framework Act 2011. I appreciate the sentiment of this amendment, which highlights that the provisions for the Green Deal provide a framework to be codified by further legislation. This is the approach we want to take. The Green Deal provisions are about framing a new market and, as I said earlier, we wish to consult widely.
However, the Bill, while focused on the Green Deal, covers a number of other issues in the energy sector; therefore most of the provisions are not framework provisions. As the short title should describe the Bill as a whole, I do not believe this amendment is appropriate.
My Lords, I am grateful to the Minister, but I am not sure he has addressed the point I made first. On Amendment 38, I think that perhaps the noble Baroness, Lady Noakes, misunderstood me. It is not with any welcome that I say there are 52 pieces of secondary legislation; I think it is entirely inappropriate. I welcome the fact that the Minister says that he will consult on them. That is very different from having full scrutiny in this House. The point the noble Baroness and I both made at Second Reading is that it would be helpful in our deliberations if we had drafts of some of the secondary legislation as we discuss the Bill.
I accept that this is a framework Bill but I do not welcome the fact that it is. If we look at some of the points that will be covered by secondary legislation, it would be much better if we had that information today. The actual framework of regulations—the code of conduct, for example, and the kind of assessments—would be helpful prior to this stage. I would prefer to see much of this information in primary rather than secondary legislation.
The noble Lord, Lord O’Neill, referred to a lack of clarity. It would be helpful to have some of these comments prior to the Bill, and I apologise if I was not clear enough in my explanation. The objective of this Bill is to ensure that as many households as possible have as much work undertaken as possible in terms of energy efficiency to reduce carbon and reduce bills. The Bill is market-driven in some ways because, as I think the noble Lord, Lord Dixon-Smith, said, if there is an incentive for people to save money, there is an incentive to undertake the Green Deal; we would not want to exclude work that could be done and paid for in another way, including by the householder, because it is not in the Green Deal plan.
Clause 1 provides that an energy plan is an arrangement by the occupier owning the property for persons to make energy efficient improvements to the property, and goes on to say that it is an energy plan if it is paid for in instalments. Yet all the references in Clauses 2 and 3 to assessors, the framework regulations and the code of conduct apply to a Green Deal plan. We want to ensure that the assessor can undertake an energy plan so that he can assess how much work can be undertaken in that home to ensure energy efficiency, part of which may be part of the Green Deal. I do not think it has ever been the Minister’s intention to exclude all work other than the Green Deal. It should be an opportunity for the householder. I would welcome further discussion on this, because I do not think this is what the Minister intended.
Clause 1 agreed.
Clause 2 : Green deal plans: supplementary
1D: Clause 2, page 2, line 43, at end insert “, including renewables and low-carbon technologies,”
Other noble Lords have alluded to their experience of rising to speak in this Room for the first time. For myself, I am feeling extremely immature, and perhaps appropriately in this Room, I feel I have been put into a little basket and pushed out from the sides.
Our amendment has been tabled not because we oppose the objectives behind the Green Deal scheme, but to take the opportunity to ask the Government further questions about how it is intended to work in practice. In doing so, we hope to build on the constructive conversations we have already heard today on Clause 1.
Clause 2 sets out further introductory measures to the intended scheme. Key terms are defined. It is here that we learn that the improver of the property for the purposes of the scheme may be either the occupier or the owner. We support the principles behind this proposal. Both parties have the opportunity to develop an intimate knowledge of the property, with either party being potentially willing to take the initiative and improve the energy efficiency of the property. This can only be encouraged. What we should add, however, is that further consideration should be given to the consent to the other party being given to any improvements from the party who is not the improver in each case. This should be an informed decision with the full suite of options provided, including those that exceed the maximum finance or sit outside the Green Deal where this is clearly marked.
We also consider that the Bill needs to be clear about who is responsible for ongoing maintenance of any improvements that are installed. It is for this reason that we have tabled Amendments 16A and 16B, which we will have the opportunity to debate later in Committee.
In moving Amendment 1D I shall also speak to Amendments 2A, 2AA and Clause 2 stand part. My noble friend Lord Whitty, who is not in his place, will, I assume, speak to Amendment 2 which proposes that the Green Deal provider may offer measures only if they have taken all reasonable steps to install minimum measures for improving efficiency of electricity, gas or other sources of prescribed energy on the property.
Other key elements of Clause 2 are the types of measures that will be included as energy efficiency improvements to the property. It is here that we have tabled amendments to include a specific reference to renewables. This was a topic that I raised at Second Reading and one that I think should be included within the Bill. There are gains to be found from implementing some of the more expensive energy efficiency measures. Necessarily, the renewable heat incentive income could be a key element, leading to a reduction of the capital and running costs of any renewable heat installation, as less capacity will be required. I emphasise again that this would be a win-win situation.
We also consider that more needs to be done to co-ordinate the feed-in tariff with the energy efficiency measures in the Bill. At Second Reading I noted that,
“if the generating equipment provides excess electricity above the needs of the property, any excess capacity can be exported to the grid”.—[Official Report, 22/12/10; col. 1105.]
We would be able to reuse the energy by working out collectively the sentiment that our party wholeheartedly supports. It is important to note that, for the consumer, homeowners who are not connected to the grid stand to benefit the most from installing renewable heat technologies, since they would be protected from volatility in the price of fuel oil.
I would be greatly interested in seeing more details in the Bill about the Government’s intentions in respect of renewables, as it must be a key objective to reduce carbon omissions and the use of fossil fuels. It must make sense to specify renewables and low-carbon technologies, rather than expect their inclusion under the words,
“or any other source of energy”,
hence the specific inclusion. I beg to move.
My Lords, I begin with an apology that I did not table this amendment until this morning. Last week we were fairly heavily involved on various energy matters and I am afraid I only got round to it over the weekend. Compared with the substantial points outlined by the noble Lord, Lord Grantchester, this is a very minor point and is solely about drafting.
I suggest an amendment to the first line of Clause 2(7) because it refers to the wrong paragraph in the subsection above. Clause 2(7) seeks to enlarge and define the matters that were included in subsection (6)(a). Therefore, for Clause 2(7) to refer to subsection (5)(b)(ii) is wrong because that only refers to the order. I mentioned subsection (6). I beg the Committee’s pardon—it is subsection (5), but it refers to matters in subsection (5)(a) and not subsection (5)(b). I wonder whether it is a misprint or whether there is some hidden matter of drafting which I have not appreciated.
My Lords, I wonder if I could support this amendment but also refer back to the Minister’s remarks about the Bill. I have just begun to realise that the Bill is about the Green Deal for certain properties. You have to have an eligible property, and the noble Lord explained very clearly that this is a commercial operation that will not apply to quite a number of properties. That is a very important point. The preamble states that the Bill will:
“Make provision for the arrangement and financing of energy efficiency improvements to be made to properties”.
In fact, the improvements will be made only to certain properties.
You may have a house which, as I mentioned on Second Reading, is subject to flooding. As the noble Lord, Lord O’Neill, said, there are going to be houses and properties that are not very appropriate. I think it is very important to say that this is a selective Bill; indeed it is an experimental Bill. Of course, “experiment” is not a word used very often in legislation. We used to use it on Cambridge City Council—because that was Cambridge—and it worked quite well.
We are approaching a new and complex situation and we are going to define this for certain properties with certain types of energy. It is clearly not going to be a Magna Carta, a democratic right, where everybody in the UK can have a Green Deal. I think that that should be made very clear, or clearer. For example, when we come to renewables and low-carbon technologies, as I think the Minister said, certain ones will be approved and certain ones will not be approved, and that is also part of the spirit of the Bill.
As I understand it, the point about this experiment is that some of these investments will not be undertaken by people unless there is a long term. As I understand it, the philosophy of the Bill is that you will approve certain kinds of insulation and energy systems, but you must obviously improve them in such a way that an investment can be made with the energy companies; and there will be cases where this is not true. However, you cannot have is an experiment to approve something for a certain period and then say, “I am going to disapprove that”, because obviously investments must be made. Therefore the timeframe in which you make your approval should be reflected in the Bill, otherwise people will not know what they are doing. That is my view on how we are proceeding, and I think it might be helpful if we made it clear that that is the nature of this Bill.
I support this amendment. It is important that the possibility of renewable energy making a contribution is recognised. It is essential that we try as best we can to make this legislation as explicit as possible. Certainly, when one talks of renewables, one is talking not just of combustion but of other methods such as ground source and air source heat pumps which, I have to say, can only make a bit of a difference. Although they take the chill out of the house, they do not really warm it in the way that we would want, because there has to be other insulation and it tends to be background heating. Nevertheless, they are important, and if we could reduce dependence on oil-fired heating, it would be very useful.
My sister-in-law lives in an oil-fired house in a village just outside Edinburgh, and the oil delivery vehicle had considerable difficulty getting to her house this winter. Indeed, the amount of diesel or petroleum that was used by the company to deliver the oil must have added quite considerably to the CO2 emissions of that type of heating. We tend to forget the bigger picture. When we have a debate at this early stage in the Bill considering the Green Deal, there may well be other forms of reducing CO2 emissions which do not spring immediately to mind and may not be included in what will probably be a too neat and tidy box-ticking form of assessment of carbon reduction techniques.
It is important that we make it explicit that renewable technologies across the board should be open to consideration and that the specific circumstances of the properties as yet to be defined are taken into account as well. It certainly might be important, if you have hard-to-insulate houses, that you could get additional forms of heating that might enable what is traditionally a rather expensive form of heating, namely electric central heating, to kick in at some of these rural properties.
Equally, at this stage, in the absence of a definition of eligible properties, we ought to take account of the fact that a number of renewable technologies work when you have not one house but half a dozen of them working together and sharing. These are commonplace in Scandinavia where the climate is more extreme than ours, but the houses tend to be better built and to have more efficient heating systems.
We have to look at this in the absence of a proper definition of “eligible property”. We might need to look at what could be a co-operative venture; that would lend itself to social housing projects but it may well also lend itself to certain village contexts as well. It would therefore be useful to underline the prospects and the possibilities for renewables.
I do not imagine that we can accurately factor in the feed-in tariff at this stage because it is an inexact science. There is every likelihood that feed-in tariffs will go down in value as time moves on. They are a selling point for renewable technologies and we might not want to be too dependent on their contribution to at least an element in the Green Deal. Maybe I am running away with myself here; maybe renewable technologies could have a contribution to make through the feed-in tariff and making the whole package that much more cost effective.
Again, in the absence of adequate definitions, the more explicit we can be in the initial stages of this legislation, the better it will be for our understanding of the potential that we could achieve through the Green Deal, either for individual properties or for a group of them. This group in particular is often the forgotten minority when we are dealing with not just fuel poverty but expensive-to-heat houses; because of their employment circumstances, people have to live outwith the gas grid and are condemned to paying outrageously high fuel bills, which takes up a disproportionate amount of their income. The amendment would help us to concentrate our minds on some of the opportunities, as well as the challenges, that properties of this nature would provide.
This is not the first Bill that I have worked on, but my previous role in international development was not exactly legislation-heavy, so I can also claim inexperience. It is also outside the remit of all the other areas that I am working on. Therefore we will have to look to the noble Lord, Lord Davies, to guide us.
Clause 2 defines an energy efficiency improvement. This is one of the important criteria for determining the eligibility of works to be financed by a Green Deal plan. The clause is deliberately broad; it allows for a range of measures to be covered by the new framework, including certain energy generation measures as well as measures concerned with reducing energy consumption. It enables the Secretary of State to specify within this broad definition which types of measure will be eligible for Green Deal finance. This will provide the clarity and certainty that industry and consumers need. Green Deal installers will also be required under Clause 7 to adhere to any requirements in the installers’ code of practice regarding the standards of products installed.
I am grateful to the noble Lord, Lord Whitty—who is not in his place, but who has vast experience in this area—for tabling Amendment 2, which seeks to ensure that measures which reduce energy consumption are installed before those which generate energy.
Amendments 1D and 2A, tabled by the noble Baroness, Lady Smith, and the noble Lords, Lord Grantchester and Lord Davies, seek to ensure that renewable and low-carbon energy sources and energy generation are covered by the Green Deal.
Amendment 2AA is a technical drafting amendment tabled by the noble Lord with the sharp eyes, the noble Lord, Lord Jenkin, which is designed to correct a citation made to the wrong subsection.
On Amendments 1D and 2A, it is clearly important to get the right measures in the right buildings in the right order. For example, making improvements to the fabric of buildings to improve air tightness means that if renewable heat and energy technologies are installed at the same time, or further down the line, the energy is not wasted. We would therefore like to consult colleagues on the detail of the proposed amendments and report back at the next stage of the Bill. We need to be clear on what the implications are of these amendments for, among other things, the possible impact on consumer demand.
I should point out to noble Lords who referred to the renewable heating incentives that, in addition to this Bill, they are designed to incentivise people to generate energy. The noble Lord, Lord O’Neill, may be encouraged by that—it sounds as though he is. As he was speaking, the noble Lord, Lord Marland, was making welcoming noises about what he was saying. The schemes are designed to be complementary and I hope that in discussions we can take the ideas further forward.
We will also want to satisfy ourselves that Amendments 1D and 2A do not duplicate existing provisions, as I believe they may. I thank my noble friend Lord Jenkin for his incredibly sharp eyes and for correcting the reference in subsection (5) to subsection (7). His sharp eyes may note a spelling error in his second amendment on the manuscript list, but I am incredibly impressed by his thoroughness.
I invite noble Lords to meet my colleague the noble Lord, Lord Marland, and officials to discuss the proposed amendments in more detail. I hope that noble Lords will be satisfied with this approach and, on that basis, I move that this clause stand part of the Bill.
I thank the noble Baroness for her words. I have a sense that she is going to take away Amendments 1D and 2A and think about them. I wonder whether it matters that they may or may not duplicate provisions but I shall leave that with her. We can now move on to the amendment of the noble Lord, Lord Jenkin. I beg leave to withdraw Amendment 1D.
Amendment 1D withdrawn.
Amendments 2 and 2A not moved.
2AA: Clause 2, page 3, line 25, leave out “(5)(b)(ii) and insert “(5)(a)(ii)”
Amendment 2AA agreed.
Clause 2, as amended, agreed
Clause 3 : Framework regulations
2B: Clause 3, page 3, line 39, leave out “may” and insert “shall”
My Lords, the purport behind the amendments is to clarify what will be included in the framework regulations. The Minister has used the open term “may” and we are concerned that he should be more deterministic in regard to the regulations. He should include the word “shall” in crucial places in the legislation in order that we are clear about the determination of the Minister and the legislation as to what the regulations will cover.
We want to be clear from the legislation what will appear rather than what will be at the Secretary of State’s discretion. The greater degree of certainty that we are able to establish within this legislation, the clearer the nation will be. This is important for everyone who is a participant in this ambitious agenda for ensuring the reduction of carbon content and for hitting the important targets. The more that is clearly determined in the legislation, the clearer the nation will be about our obligations.
We propose inserting “shall”, and I hope the Minister will take these amendments as an opportunity to give a clear definition of what he expects to be in the legislation. I am sure he appreciates that accepting our amendments would be the clearest way of communicating that fact to our fellow countrymen.
Amendments 5A and 8B seek to establish whether we are limited to the lists referred to in the legislation and I ask the Minister to clarify the position.
It would not become me to pre-empt the amendments which are to be spoken to by other noble Lords but we all recognise from the Second Reading speech of the noble Baroness, Lady Finlay, the importance of her amendment, which we support in principle. The amendment of the noble Lord, Lord Teverson, also brings forward a principle that we largely support. I beg to move.
It is a great pleasure to speak during the course of a Bill to which I have been looking forward for some time. I am glad that the Energy Bill is a priority in the Government’s legislation.
My amendments are minor but have an important effect. They reflect in many ways the debate that took place on the previous group of amendments. On page 4, Clause 3(7) refers to energy plans. We believe that it would be useful if we included energy plans as well as Green Deal plans within the same sections of the Bill. It would add greater clarity and ensure a more holistic approach to the way in which the Green Deal operates. A number of my other amendments circle around that broader theme.
In response to the noble Lord, Lord Davies, I should say that I cannot think of a better principle than that the Government should be clear. I like firm language as opposed to language which is not clear about its intent, and I welcome the amendments that will achieve that.
My Lords, as I made clear at Second Reading, my amendment concerns carbon monoxide alarms. I am grateful that it has been accepted. Like other noble Lords, I apologise that it appeared in its final form only this morning.
Noble Lords who have read the Sunday Times will be aware that this problem has not gone away and that further tragedies have been reported. Two sisters, Miriam and Patricia, went to a hen party in Cork and stayed in a hotel. Six other guests in the hotel were taken ill and were seen by doctors and one couple was sent to the university hospital in Cork. This was on the Sunday morning. At two o’clock on the Sunday afternoon, one of the sisters was found dead and the other one had not recovered enough to be able to attend her sister’s funeral two days ago. Also, this week Cardiff Crown Court, in my home city, is hearing a case where a man died because his landlord had not had carbon monoxide checks done on gas appliances.
We are in the peak season for carbon monoxide poisoning—November to March—and the more that we decrease ventilation, the higher the risk associated with it. Since Second Reading I have done a little more digging to try to further persuade Ministers of the importance of this issue. A survey for the Hotspot report found that although 35 per cent of people surveyed said that they had bought a carbon monoxide alarm, only 8 per cent had installed the alarm and 15 per cent had never tested it. Of those, only 17 per cent of the alarms purchased were the less effective black spot detectors.
The issue of carbon monoxide poisoning is under-reported. France has compulsory testing at post mortems and our recorded death rates are probably artificially low. There is certainly a very poor awareness among general practitioners and hospital doctors about carbon monoxide poisoning and even when people present with symptoms they are not being diagnosed.
Gas appliances, solid fuel and so on are all culpable. I shall not go through the figures but if we do not take the opportunity to address this issue and we decrease ventilation in draughty homes, it will inevitably increase the number of cases of carbon monoxide poisoning.
The amendment is worded to move away from being restricted to hard-wired alarms because I have discovered that the cost of a sealed battery alarm is £15 to £30 rather than the £50 cost of a hard-wired alarm, and it can be fitted by anyone. The battery does not require changing and should last six to seven years, at which point the alarm needs to be replaced, so it would be an even more cost-effective intervention. It would help occupiers to be alerted to any build-up of carbon monoxide and one can say with certainty that it would decrease the number of deaths.
In line with my amendment, I strongly support Amendments 5A and 7B because they make stronger the wording of subsection (4) and ensure that it shall include a list of items. If the Government were minded to accept my amendment it would make a massive change to the number of cases of carbon monoxide poisoning, which is hugely under-reported and under-recognised and continues to take lives every week.
My Lords, I support the noble Baroness’s amendment. If the issue had not been raised by someone else I would have probably raised it myself during the passage of the Bill. I have been a campaigner with the COGAS charity on this issue for a number of years and, as the noble Baroness said, the situation has not gotten any better. We particularly have problems with GPs in general practice not recognising the symptoms. I recognise that when one is seeking to make an amendment of this kind to a Bill, the Minister might not like it. However, we should make an effort to ensure that it is included somewhere in order to improve the way we deal with it.
When I was a Member of Parliament a constituent’s child died not from an appliance, because of a leaky chimney. There are all sorts of reasons why these cases happen. Anyone who has come into contact with people who have suffered and lost loved ones knows how important this issue is. It is not only that people die from this; sometimes they do not die but are left in wheelchairs for the rest of their lives. I hope the Minister will give us some comfort and do something to improve the situation which the noble Baroness has clearly set out.
I support the previous two contributions. We have seen a diminution in deaths due to smoke inhalation as a result of smoke detectors. Part of the reason for the decrease is that the fire services have been proactive and going round homes handing them out. Frankly, £15 to £30 is not a lot, but it is quite a lot for the kind of households that might have defective boilers and the like. I know from my own experience that when people from British Gas, which we use for boiler maintenance, come to our home they always ask about this. We can afford to pay the £15 to £30, but it still seems to be excessively priced.
If this legislation were to bring in a recognition of the importance of the issue then it would mean a massive increase in sales and therefore a reduction in price. We are told a lot about smart meters and about these gadgets which tell you how much you are spending when you use certain electrical appliances. People often use these not because they want to reduce their consumption but because they are interested in finding out how much they are spending. The electricity companies give them away for nothing. The gas companies should be a little more generous and more proactive. As I say, they are proactive when it comes to maintenance, but this usually involves condemning a boiler and saying that they would like to install another one. In the interim they will offer the person an alarm so that they do not poison themselves, or wrap the boiler in a yellow and black band and say that it should not be used. Invariably they do that on Christmas Eve when they know you are not going to be able to get another one until probably the summer.
This is an opportunity. It is not about the Green Deal as such but it is about energy safety and domestic safety and it could be that this is an opportunity that the Government would be well advised to look at.
In terms of people’s confessions about whether they have been in opposition when serving on Bill Committees, these amendments are an example of How to Oppose Bills in Committee 101: where you see a “may”, you make it into a “shall”. That is the first rule of opposing in any Committee. You go through the Bill and you strike them out. If it is “14 days”, you make it “28”, and if it is “28”, you make it “14”. A lot of people need to learn this. This mob here need to learn how to oppose legislation as much as anyone else does. They did not do much opposing when Labour was in power. They certainly did not do much of it in the past five years.
The Government spend nearly two pages on the framework, telling us that they are going to establish a scheme making provision for the Secretary of State to authorise all these good works. At the end of it they say that even if you do all that, you do not have to tell anybody, and you do not really have to do it—it is really just permissive. If this is worth doing, it is worth doing well. It is worth making it clear and explicit. It makes sure that Governments of all stripes at the appropriate time will have to measure their performance against their ambition. Until such time as we have a clearer definition of what the Government intend to do, when we get the vague and sometimes not too specific provisions in the framework regulations, we want to make sure that the Government are called to account and know that they must do this. Therefore it would be a sign of the Minister’s good intent if he were to accept this amendment or take it away and think about it.
This is fundamental to how you oppose legislation in Committee, but on the other hand it also makes a lot of sense to do this at this time because it would give a clear indication that they want it to be above board and intelligible to the parties that will be interested in those individuals. The great British public are not going to applaud you for doing this but I think that the people involved in this would take some comfort from the fact that the Government want to make their intentions clear and specific and that they are required to do so by the Bill.
My Lords, the noble Lord, Lord O’Neill, prompts me to rise in respect of some of the amendments tabled in the names of his colleagues on the opposition Front Bench—namely the may/shall amendments. The noble Lord, Lord Davies, and I have done many may/shall amendments over the years together and I remember enjoying every single one of them.
The noble Lord, Lord O’Neill, says that the 101 rule of amendments is to table the may/shall amendments. The noble Lord, Lord Davies of Oldham, and I have done many may/shall amendments over the years together and I remember enjoying every single one of them. The noble Lord, Lord O’Neill, says that the 101 rule of amendments is to table a may/shall amendment. I am afraid the noble Lord, Lord O’Neill, and indeed the noble Lord, Lord Davies of Oldham, are going to have to go back to school and retake 101, because the modern formulation is “must”. Noble Lords will find that that is what parliamentary draftsmen now use, and it is used in this Bill. I am afraid that noble Lords opposite have been producing amendments from another era, and I think that they can try a little harder. However, I would like to raise a more substantive point, if I may come to the amendment tabled by the noble Baroness, Lady Finlay of Llandaff, which is clearly extremely well intentioned. I have a slight concern about requiring Green Deal installers to fit any particular kind of alarm. I have every sympathy with requiring them to make that available if the person entering the Green Deal wants it, and indeed possibly other things like smoke detector alarms to the extent that they are not already fitted in the property. However, I do have a concern about absolutely requiring the installation as part of a Green Deal package. I think that it would fit better if it was an optional extra, which gives an opportunity for that to be plugged.
Picking up on the point that the noble Baroness, Lady Finlay, made, she used the word “ventilation”. I keep looking through the Bill to see where the word “ventilation” is. I made this point on Second Reading. It is really important that when you are considering the energy of a house, you consider ventilation. You gain or lose a huge amount of heat in that way. Nobody could possibly have an energy system without that. Obviously, one aspect of ventilation is to do with energy; another aspect is to do with safety, comfort and so on. Some kinds of housing would require new ventilation, and that should be part of the cost. I also raised the point on Second Reading as to whether this could be included as part of the Green Deal funding. From a technical point of view, it seems that it would be very eccentric not to include that, so I hope that that is considered as part of the Bill. It may be that ventilation and safety should be considered in a more general clause.
My Lords, I thought that I had an explanation of why there are so many amendments, but my noble friend Lady Noakes has put the cat among the pigeons by reversing what I thought was the case; but, as I said, we will get there in the end.
Clause 3 gives the Secretary of State powers to establish in regulations a scheme for authorising persons to act as Green Deal assessors, Green Deal providers and Green Deal installers, and provides for a code of conduct regulating these Green Deal participants. Subsequent Clauses 4, 5, 6, 7 and 8 deal with each step of this process in more detail and make provisions for customer redress. Correspondingly, Clause 28 enables the Secretary of State to delegate related regulatory functions to a public body.
Appropriate regulation of the Green Deal participants is vital if the customer is to be able to trust in the quality of the Green Deal itself. At the heart of this clause, therefore, is the ability to issue a code of practice with which Green Deal participants must comply.
I will now speak to Amendments 2B, 2C, 2E, 5A, 7B, 7BA, 7C, 8A and 8B, as they all relate to how we best protect Green Deal customers. I welcome the thrust of all these proposals, but I do not think they are ones that we should incorporate into this clause or elsewhere in the Bill at this time. Let me explain why. Amendments 2B, 2E, 5A and 8B seek to ensure that the scheme and code of practice hold customer protections. I would like to thank all noble Lords for highlighting through their amendments the importance of the framework regulation described in Clause 3. It is vital therefore that customers are able to recognise that the scheme benefits from quality assurance and is properly regulated. Without this degree of confidence the Green Deal simply does not work. More importantly, we must ensure that the consumer does not suffer from mis-selling in any way. This means that there must be accurate consumer information provided from suitably qualified and trained people. We cannot afford to make the same mistakes that have been made elsewhere, notably in Australia, where the Green Start scheme was axed due to quality-related problems.
I reassure noble Lords that we will indeed be using powers established by this clause to protect customers. However, we will do so only where existing legal provisions or other mechanisms for securing consumer protection are not already in existence on this basis. I hope that on this basis, the noble Lord will feel able to withdraw the amendment.
Amendment 7BA seeks to have carbon monoxide alarms installed in properties as part of the Green Deal. The noble Baroness, Lady Finlay of Llandaff, discussed the risk of carbon monoxide poisoning on Second Reading, and I am extremely grateful to her for raising this important issue. The risks of carbon monoxide poisoning are potentially very grave, and I recognise the important role played by alarms in saving lives.
The Bill establishes the framework for installation but the detail of these conditions and the measures will be set out in secondary legislation following consultation with stakeholders. This will allow us time to consider in more detail whether the suggested approach would be the best and most cost-effective way of addressing carbon monoxide build-up. I am grateful for the additional comments of my noble friend Lady Noakes; they will help us decide how we can best help and consider this vital suggestion by the noble Baroness, Lady Finlay of Llandaff.
I fully take on board the comments of the noble Lord, Lord Hunt of Chesterton, about ventilation. We shall consider those during this process.
On Amendment 7C, Clause 3 gives the Secretary of State powers to establish in regulations a scheme for authorising persons to act as Green Deal assessors, Green Deal providers and Green Deal installers, and for a code of conduct regulating these Green Deal participants. It also allows for a body to be authorised so that its members are in turn authorised to act as Green Deal participants. We are committed to underpinning the Green Deal with high standards, but it is important not to be held to a requirement if, in time, a different approach becomes relevant or necessary. This approach is reflected throughout the Green Deal provisions of the Bill.
Finally, Amendment 8 seeks to require that any services provided or products sold by Green Deal participants, in addition to those paid for through Green Deal finance, should also be subject to the Green Deal regulatory framework. Amendments 2C and 7B similarly seek to extend the Green Deal framework specifically, the accreditation of Green Deal participants and any marketing requirements under the code of conduct to apply to energy plans—energy efficiency improvements offered by Green Deal participants without Green Deal finance.
The amendments raise an important issue—the need to safeguard against homeowners being sold measures by Green Deal providers that, unknown to them, do not benefit from the same regulations as Green Deal. However, it does not follow that the whole of the Green Deal framework could be applied appropriately to any other product or service.
I reassure noble Lords that we will be able to require, through the overall scheme and code, that customers are made fully aware of the difference between those measures being offered that fall under the Green Deal scheme with all its safeguards, and those that fall outside. We will not accept companies using Green Deal accreditation as cover for less appropriate goods and services. Furthermore, Clause 3(7) extends the scheme or code to energy-efficiency plans that are not Green Deal plans and provides a power to impose additional requirements on energy-efficiency providers.
To be clear, our intention for subsection (7) is not to introduce new wide-scale regulation of a wider energy efficiency supply market. Instead it seeks to ensure that, where appropriate, elements of the scheme or code could be made to apply to wider efficiency provisions. Similarly, many of the forms of mis-selling which concern this House could already be prosecuted under existing general consumer protection legislation. Requiring a blanket compliance with Green Deal protections for all other measures could therefore cause unnecessary burdens for providers selling a range of goods and services.
Given this explanation, and with these assurances, I hope the noble Lord will withdraw the amendment.
I am grateful to the Minister for his constructive reply, and I am grateful to the other noble Lords on the Committee both for their amendments and, of course, for the occasion in which one can go through a learning process. I hope the noble Baroness, Lady Noakes, will accept that we are quick learners on this side—after all, we had less time in opposition than perhaps she had to get the terms right. I will bear in mind that our debate will have moved on, and it will certainly move on to “must” in the future, with the same implications. The Minister has indicated why he is not prepared to accept the amendments, but he has also accepted the reasoning behind the amendments. In one obvious point he made clear reference to the Australian situation, and we all know the perils of producing laws which do not work. In many ways the situation is made worse rather than improved by the confusion that occurs in such circumstances, so I am grateful to him for his response and acknowledgement of that position. I hope he will accept that we have been concerned in our amendments to ensure that the legislation has the degree of clarity and certainty that makes a success of our common endeavours. I beg leave to withdraw the amendment.
Amendment 2B withdrawn.
Amendment 2C not moved.
2D: Clause 3, page 3, line 44, at end insert—
“( ) to ensure that assessors and providers have the qualifications and skills to perform their functions under the Green Deal;”
In moving Amendment 2D, I shall speak also to Amendments 2G and 5B. It is probably difficult to speak to 8C until the noble Lord, Lord Teverson, has done so, but I may make a passing reference to it in support.
It is worth reiterating the extent and the expectation the Government have of the Green Deal because it sets these amendments in context and shows why we think they are so important. The Secretary of State has made it clear that he thinks that something like 26 million homes could be transformed by the Green Deal, which is a great ambition. It could create 250,000 new jobs and lever funding of £7 billion into the private sector. Quite rightly, the Secretary of State has also made it clear that there will be no cowboy operators under the Green Deal. This is extraordinarily important because, if we are looking at consumer confidence, it will be essential that consumers have confidence in the new deal and not just in the installers but in the assessors and providers through every stage of the arrangements.
The Minister made a similar point about consumer confidence in his comments and I hope therefore that he can take these amendments on board. They seek to ensure that the assessors, providers and installers of the Green Deal have the qualifications, skills and aptitudes to perform their functions appropriately and fully under the new deal. We also look at the standard to which they work on assessments.
One reason why I am so concerned about skills is that those who work in the industry and are involved in training have expressed their concerns to me and to other noble Lords. There is a campaign known as Cut Your Carbon, a partnership between the Construction Industry Training Board, that deals with construction skills, the Sector Skills Councils, the Federation of Master Builders and the National Specialist Contractors Council. They have all sought to raise awareness of the kind of skills that will be required to fulfil the Green Deal and the ambition of 26 million homes that could be transformed.
Cutting carbon emissions is going to mean a change in the construction industry and in the industry that will have to undertake the Green Deal. They have to change the skills that many in their workforce have. They have to upskill and reskill. Currently there is a gap between what the clients would demand under a Green Deal—and, indeed, any other energy programme—and the understanding of the role and ability for small and medium-sized enterprises to deliver the low-carbon solutions that we will need to find in order to fulfil the Green Deal.
One of the things that concerns the SME sector is that the opportunities for it to win work through cutting carbon are not really understood. It has to understand what is required of it to ensure that the Green Deal is a success. The skills level needs to be increased and the training has to be in place. The Minister has said on several occasions that this is commercially led and is about the market. However, the Government have a role in ensuring that the workforce of this country has the skills and can provide the quality of work that is needed to undertake the work that is referenced in the legislation.
The Government’s estimate at the higher end is 250,00 new jobs—although, more recently, that has been brought down to 100,000. If we are going to have these new jobs there needs to be a lead-in time to ensure that there are the trainers available and that those who are taking part have gone through the training programme. That requires investment. As past recessions show, construction is one of those industries that people move out of during a recession. We need to hold on to those people; if we look at what is likely to be the trajectory of the Green Deal, which will start off slowly and perhaps pick up as we would hope the private sector comes on board after the review, we need to ensure that those who do not leave the industry have been provided with the skills, standards and qualifications that they need. Alongside that, we need to look at the accreditation, quality and standards of the work that is undertaken because we need to be able to trust the credentials of those bodies, installers and assessors who are undertaking the work so that the consumer has confirmation, certainty and confidence in the work that is undertaken.
Alongside the need for this, Amendment 2D says that the Green Deal must ensure that assessors and providers have the necessary qualifications and skills. Amendment 2G would ensure that it is in the framework regulations that the Green Deal assessors must comply with a standard assessment measurement. One of the problems with the assessors is that, if they work to different standard assessment measures—and there is some confusion and doubt at the moment that they would be working to the same level—different assessors may provide different levels of work. The consumer would have a lack of confidence if two Green Deal assessors in similar properties gave two very different assessments. There needs to be a standard assessment framework. I am not convinced that the current frameworks offer us the assurance that we need.
I am not clear how the Government intend to measure the improvements to energy efficiency. There are various ways of doing it but we will presumably use the energy performance certificates as a base. Will we say that a building has gone up from an E to a G to a C to a D? How will it be assessed? In every instance where an assessor undertakes the work, that has to be the same. That a Green Deal assessor and installer has to follow the same standard assessment process must be in the code of conduct. If not, there would be a lack of confidence in the whole scheme, which is said to be broken; we need that confidence.
We broadly support the amendment of the noble Lord, Lord Teverson. We have a question for him when he speaks to his amendment. If the Government can give a power or responsibility, they should be able to take that power or responsibility away. This should be a basic principle. I look forward to hearing from the noble Lord, Lord Teverson, how this should be done. The legislation highlights some of the gaps, which is why we have made the point about secondary legislation and why it is necessary to have more detailed information in the Bill.
In order to give the consumer confidence, I would need to be assured that the levels and skills of those undertaking the assessments and installation is more than adequate so that we do not need to redress it too often with the kind of regulatory schemes that will need to be put in place under this Bill. I beg to move.
I shall speak first to my Amendment 8C. I am trying to be helpful to the Government, as is the noble Baroness, Lady Smith. Where the Government talk about withdrawing authorisation from Green Deal providers, there has to be an authorising body as there is a mechanism within the Bill for those organisations to be authorised in the first place. So there should also be a means, in extremis—we hope it would never be used—whereby authorisation can be taken away from those authorisers as well.
I tread carefully here, but on the amendments of the noble Baroness, Lady Smith, it would be almost impossible to disagree with Amendment 2D which seeks,
“to ensure that assessors and providers have the qualifications and skills”,
to perform their functions under the Green Deal. I question Amendment 2G, however. In my mind, the jury is out on this. I have a concern about this whole scheme in terms of quality. I know that this is not what the noble Baroness means, but I am concerned that we have moved towards some kind of tick-box assessment; that if you meet certain criteria, then everything is fine. It is more important in many ways that a level of intelligence is attached to these processes, in a similar way to consumer protection in the financial services industry where there is an overall requirement for suppliers to act intelligently in the overall interests of the customer. While there is a place for standard assessments, they do not always meet that quality element. When we are talking about a programme that is to be as large as we hope it will be, the quality element is of great importance. I am not sure whether just assessment processes with a list of issues completely fulfil that. I am not necessarily talking against the amendment, but I am very anxious that there should be a qualitative demand in the Bill that providers think intelligently and provide plans that are specific to households and people; and that assessors are not working to a completely standardised format but in terms of whether a quality product will be provided within that market.
My Lords, I have sympathy with what the noble Lord, Lord Teverson, has just said, particularly about Amendment 2G. When one thinks of the enormous range of the buildings that are going to be subject to the Green Deal process, it is with the utmost difficulty that one imagines how one could have a standard assessment measurement. What one looks for are sufficiently skilled and trained assessors who can look at a widely differing range of buildings and use their skill and judgment, in the time-honoured phrase, to come to a conclusion and make an assessment. We will come to this in Clause 4, where the requirements are very fully spelt out.
The idea of a standard assessment seems to me to inevitably result in a “tick-box” culture, which has been an unpleasant factor in so much of what one faces in modern life: people feel it is sufficient simply to tick the boxes. If we are going to have fully trained and qualified people—an objective I totally support—then we must rely on their skill and judgment to decide on the appropriate assessment for the hugely differing range of buildings with which they will be confronted. One would expect there to be assessors who specialise in particular kinds of buildings, because they will have the experience and expertise to deal with them. I am therefore unhappy with amendment 2G.
I have given training a good deal of attention over the past year or two. I believe that the present Government and BIS have produced a splendid blueprint of what they envisage the process of skills training to be. There is no question that the skills training system which operated under the preceding Government left much to be desired in achieving results. I declare an interest—as I have before—as the president of the National Skills Academy for Nuclear; I have also been involved with Cogent and a number of others. I have had dealings with Energy & Utility Skills, a highly effective body. It was the one—I raised this on the Floor of the House before the election—which tried to fit in to the national scheme for training people to install smart meters, and was firmly told that it could not have help with that. I am happy to say that Ministers in the present Government have addressed this problem fully. If we are to make a success of that—we may come to this later—there must be a proper system for training people to install these meters.
We need to keep a careful eye—this is a key stage in the whole Green Deal process—on how the training of the assessors will be handled. If my noble friend can give us some more information, that would be very helpful. Yes, we are going to have a code, and we will come to that later under another amendment. But I think this will be a key part of the whole process.
I have referred before to the fact that I had my house installed under the old CERT scheme, and it was an unhappy experience: one simply ran into the sand. At first I went through the Energy Saving Trust, and that became completely futile, so I started again with my own supplier. In the end that produced a solution, although an expensive one, as I had to pay for all the scaffolding, which was very tiresome. But I was satisfied in the end that the expert who came from British Gas to decide what my house needed was highly qualified and that the installer was able to do a good job. Those are the key things which will generate confidence in whether the Green Deal scheme will take off as we hope it will. This is an important requirement, which hinges on skills and training, and not on standard assessments.
My Lords, when one wishes to be pejorative about processes, the words “tick box” slip easily off the lips. We ought to have a sense of proportion, however. We are talking about treating 14 million houses. We are talking about probably not installing boilers. We are talking already about probably not having internal wall insulation in solid-walled houses on the grounds that each of these is too expensive. So we are talking about having various kinds of insulation, whether it be cavity-wall or roof-attic insulation. This is not the most complex of operations. Sometimes they can be time-consuming, but not that often. We are not going to be installing nuclear power stations in each household. We are talking about a relatively simple set of measures that will be within a budget that we have already heard will not be unduly ambitious given the need to pay back over the period.
We are, however, also talking about a massive job in which there has to be consistency and in which there has to be a squad of people who can go around and speedily assess what is required to be done. They are not going to be quantity surveyors. They are probably going to be people who might have worked in the building trade, but maybe not. They may well be trained to NVQ 2 and, if we are lucky, 3. There are a number of people who are trained by Energy Action Scotland and National Energy Action—two organisations involved in fuel poverty which I have dealings with, and I have an interest that has been declared. They may well be skilled people. I have another interest as a consultant to the Specialist Engineering Contractors Group, which does a lot of work in insulation and heating and electrical work. I would be hard pushed, however, to think that if you wanted to make money out of the Green Deal you would go for being a cavity-wall insulator or an attic insulator when you may well make more money out of installing new boilers and the like.
These people are perhaps not the most highly skilled, but I am sure they will be highly committed. They will certainly not be the most highly paid, and therefore the performance standards that we can expect of them have to be straightforward and easily understood. The complexity of the work they will be required to do will not in itself be that great if we are to achieve over time and speedily the kind of things that the Minister has already spoken about in relation to the Green Deal. So we have to have a sense of perspective about this. If we do have forms and a standardised approach and basic training then it is probably inevitable that people will go round with a clipboard and a biro and tick boxes. It will not be because they are necessarily superficial or necessarily barely competent; it will be that the requirements of the job will be probably little more than that. Therefore we need a sense of proportion.
If we are going to pluck the low-hanging fruit, which is at the heart of this process—Green Deal is about quickly insulating a lot of homes which have not been dealt with already—we will be dealing with the simpler and less expensive projects first. That is not to say that they should be cheap and cheerful or unsafe or that people are going to be taken to the cleaners. I am merely saying that we should have a sense of proportion and that within that we have got to avoid over-prescription. We do not want to have the health and safety approach—the jobsworth of exactly the wrong kind. We need to get this job done quickly and efficiently and therefore we need good training, clear processes and forms that people are not intimidated by.
If you do not have simple forms, you have complicated ones because, as sure as eggs is eggs, there will be forms involved. There will be some kind of hand-held computer which the operators will understand but the person whose house is being affected will probably not necessarily understand it, whether it is in the estimation or the implementation.
We ought to be a wee bit careful when we use disparagingly the tick-box dismissal, because I think that, in some respects, it will be almost inevitable that that will be what is required. If it is required, and if that is the consequence of the nature of our approach to the task, it is essential that these people are trained to the level that the job requires and that they are able to carry it out in a way which is consistent across the country as a whole. I think, therefore, that what we are saying in these amendments measures up to that and, once again, makes it more explicit than the proposed legislation already does.
For these reasons, I would support this amendment; not because, as I say, I want it to be unduly simple—not because I want it to be open to bureaucratic or jobsworth approaches—but rather, recognising the scale of most of the tasks, so that an approach of this nature will be commensurate with the national challenge that we have, which we have to meet quickly. These people will be going into households and probably doing 20 a day, if they are doing their job properly. We will have to get these people in the field doing that pretty quickly, so the training will have to be effective very quickly. I am talking here about something which is a national priority if we are to meet the 2020 and ultimately the 2050 targets. We do not have to exaggerate the significance of the Green Deal commitment. Suffice it to say that, if we do not achieve the Green Deal ambition, then the further targets of 2020 and 2050 will be that much more difficult to realise. I certainly think that the approach that we are taking is inclined to reduce bureaucracy, to keep it simple and straightforward and to give proper recognition to the scale of the individual task that will be required in each household.
My Lords, the amendments moved by the noble Baroness, Lady Smith, raise a number of important themes. I am sure that my noble friend the Minister would agree with that, given the importance that he places on accreditation in order to guarantee consumer protection and user protection. I just want to comment on some of those themes. I should declare an interest as chairman of the United Kingdom Accreditation Service, which is the government-recognised national accreditation body.
The first point that I want to make is to clear up the common misunderstanding about the two terms “accreditation” and “certification”. I can do no better than refer to the impact assessment that the department produced for this Bill. In paragraph 115, on page 40, it makes the following short point:
“Accreditation and certification are two related but distinct activities. ‘Certification’ is the process that leads to ascertaining someone has a particular qualification, and ‘accreditation’ is the process by which certification is awarded responsibly”.
I suggest, first of all, that we are using the word “accreditation” where perhaps we should be using the word “certification” in some of the debates that we have been having. Accreditation underpins the scheme by which operators and participants will receive certificates. Accreditation therefore determines the robustness of the scheme by which compliance with the required standards will be judged.
My second point is that the word “accreditation” can mean different things to different people. Given the importance of accreditation to consumer protection, it has been recognised at an intergovernmental level that, when the word “accreditation” is used, it should mean the same thing to all parties. In fact, the European Union passed a regulation two or three years ago that requires every member state to have a national accreditation body, and for the use of the word “accreditation” by that Government to refer to a consistent set of disciplines and rigour. Thus the previous Government passed a regulation in December 2008 which recognised UKAS’s role as the de facto national accreditation body and formalised our role in that purpose. Therefore I can speak with some authority on what, at an intergovernmental level, accreditation should mean, by way of reassurance to those who are users and consumers of goods and services.
First of all, the assessment and verification when accrediting a regime looks at technical competence, and this of course is a point that Amendment 2D focuses on. It measures the capability of a participant, be it a company or an individual, to deliver that competence and to deliver the services underpinned by that competence. It looks at the ability of individuals and companies who might be certified by accredited certification to maintain that competence and that capability over a period of time; in other words, it is not a one-off assessment but an ongoing assessment of that company’s or that individual’s capabilities. It therefore looks at reliability, integrity and governance. Very importantly, it looks at outcomes and performance, making sure that outcomes and performance deliver against the standards that have been preset; in this instance, they would be preset by the Minister and by the Government. In other words, accreditation should mean a wholly comprehensive judgment about the ability of the certification system to properly certify either individuals or companies in terms of their performance, their goods and their services. It really should be a badge of confidence to anyone who has any doubts about the goods and services they might be acquiring.
The Minister over and over again has made the point—as indeed have other Members of your Lordships’ House, in Committee and on the Floor of the House—that the accreditation and the certification which this Bill requires as underpinning the Green Deal must deliver that high level of consumer protection and public confidence. It must deliver the guarantee of quality that I know the Minster wants to see. It must deliver the trust. I understand exactly why the noble Baroness has raised this Amendment in order to explore this area. I think that it is a very important attribute which is going to underpin the Minister’s ambitions in terms of how the Green Deal delivers the outcomes that the wider public, homeowners and others can have confidence in.
I am not sure about Amendment 2G and agree with my noble friends Lord Teverson and Lord Jenkin about the standard assessment measurement. I understand the noble Lord, Lord O’Neill, when he says that there needs to be some methodology that enables a large number of participants to operate across a large number of diverse circumstances and deliver some sort of consistent output. The point about consistency of outcomes is where I absolutely agree with the noble Lord, but to require a standard assessment measurement could lead to some unintended consequences. I speak with my full experience of other schemes that we accredit on behalf of the Government.
I will give you an example. The gas safety scheme that was called CORGI benefits from the fact that we accredit five or six different routes to certification. If you are a gas installer and you want to be certified, those five or six different options for certification offer different types of assessment measurement. They do not offer a standard approach, the value of which is that it encourages innovation, competition and flexibility in order to provide the certification process best suited to different types of gas installer. I would strongly suggest to my noble friend the Minister that we want the same arrangement with the Green Deal. We want to avoid an absolutely rigid, standard assessment process.
The important point is that, however one achieves accredited certification as being compliant with the requirements of the Green Deal, you meet the standards that have been set down. As long as you meet the standards that are set down, how exactly the measurement has been made is less important. UKAS, though, guarantees on behalf of the Government that, if the certification process or body is accredited as being capable of delivering that standard, it is consistent with what the standard requires. That we avoid a too rigid approach to the exact process is very important.
I am grateful to the noble Lord for giving way. It was not my intention to say that there should be some kind of Napoleonic order whereby a single method should be approached. We have to recognise that there may well be differing situations or challenges. However, the point that I was trying to get across is that a consistency within that is still needed—a consistency that sometimes sacrifices and reduces complexity to make it a little more simple and straightforward. It should not be a rigid one-size-fits-all approach. I am sorry if I gave that impression because I do not think that we are more than a few millimetres apart on this issue.
I do not believe that we are. I am grateful to the noble Lord for that clarification. We are in the same space. We both agree that flexibility can be a strength of the scheme by which certification to the required standard is sought. The important thing for the Government and for those who seek, as it were, to use the Green Deal, is that there is consistency with which all those who participate comply with the standard.
On the amendment of my noble friend Lord Teverson regarding suspension and expulsion, I make a brief comment about the broader point that an accreditation scheme run by UKAS should make sure that, long before the Minister has to step in in order to suspend or exclude, the system itself should make all those judgments within its own processes. The point of certification should be able to judge non-compliance. If it is major non-compliance, one needs to make a judgment between suspension and permanent withdrawal. The accreditation body should be capable of suspending or withdrawing a certification system if they are similarly not meeting the required standards that the scheme expects.
This group of amendments raises some very important issues. I am not persuaded that the way that the Bill is currently written needs to be changed in order to deliver the strengths that I believe that the Government are looking for. However, I am grateful. We have had an opportunity to debate some of the key attributes that the Green Deal will be underpinned by.
I thank noble Lords for tabling these amendments which seek to ensure that the Green Deal participants are working to a specified standard using agreed methodologies. I welcome the various comments that have been made because it will help us set out our provisions in more detail. Amendments 2D, 2G and 5B all seek to ensure that the Green Deal assessment is carried out by qualified assessors. A specified methodology for completing this assessment is contained within the code of conduct. These are also covered in Clauses 3(4)(a) and 3(9).
I am glad to note that the noble Lord, Lord O’Neill, and my noble friend Lord Lindsay are not far apart. It is fundamental that standards are set, that they become the cornerstone of this whole assessment and that if we get that right we get the rest of it right. I am also grateful to my noble friend Lord Lindsay for pointing out the difference between accreditation and certification. This needs further discussion and investigation and we will undertake to look at that to make sure we get it right. It is fundamental and I agree with the noble Baroness, Lady Smith of Basildon, that getting these assessments and the quality is fundamental to the confidence of the customer and the whole scheme.
We could have a workforce of 250,000 working to satisfy the Green Deal requirements but of course that depends on take-up, and we will inevitably find that if the take-up is not as great then there will not be that many. We believe that the maximum is about 250,000. If I heard the noble Lord, Lord Neill, correctly, he said we were thinking of excluding boilers and solid wall insulation, external and internal. That is not the case. Subject to the golden rule, these will be included. I think I heard the noble Lord correctly and it is worth clarifying this.
I agree that it is important that assessments are produced by those with suitable training and practical know-how and that is why Clause 3 of the Bill currently sets out provisions for a code of practice that all Green Deal participants will be required to sign up to as part of their participation. Furthermore, the Clause states that this code of practice may set out the qualifications and skills that these assessors must possess in order to practise.
I thank noble Lords for their suggested amendment to ensure that the code of conduct requires assessors to produce their assessment in line with standard methodology. The Bill currently sets out the intention for all assessors. Subsection (8) allows for the withdrawal of authorisation for particular participants and allows a membership body to withdraw authorisation from its members. Although Clause 3(5) may allow for regulating the membership body by legal advice, my legal advice is that it may not be sufficiently clear that we have powers to withdraw authorisation. I therefore agree that we should consider this amendment further.
My Lords, I am grateful to the Minister. I welcome the approach that he has taken throughout this Committee. He is taking on board comments that have been made today, and I know that he will take them back and perhaps we will see some changes at Report. I just grinned when he talked about the code of conduct because—I do not know whether the noble Baroness, Lady Noakes, picked this up—he said that the code of conduct “must” set out the qualifications and skills. At the moment it does not; it only says it “may”. So I welcome his change of language to “must” set out the qualifications of skills, rather than “shall”, as my amendment suggested.
It has been a useful debate, and I always defer to those with greater knowledge on issues. I do not think that there is much difference between us. All of us agree that those undertaking the work, whether assessments or installation, have to have the appropriate skills and qualifications. It is entirely appropriate that although they are accredited in some way, that can be withdrawn. But the reason for raising the issue of standard assessments was not to propose a tick-box procedure—although there will undoubtedly be some kind of tick-box procedure—or uniformity of the work that will be required. However, the issue has been raised. The National Housing Federation raised concerns that the current assessment—I think it is the SAP—does not always work. I was trying to get to a consistency in standards of measurement.
Given that the Green Deal, in terms of what work can be undertaken in a home, has to be cost-effective and follow the golden rule, some kind of standardised assessment to understand what fulfils the golden rule in that way, if the savings have been made, and some sort of consistency, will be required. That is of interest to customers. So I am not suggesting that every house needs to have the same installation and the same work done. There will have to be intelligence taken on board by those installing. However, a lot of the measures will be very safe, and it would be a somewhat ludicrous position if two houses next door to each other were both given different ways of achieving it. It brings us back to the issue we had around the Green Deal plans and the energy plans because, under the Green Deal plans, it could be the same work but with different ways of achieving the same objectives; and the decision would be taken by the assessor, not by the householder. I think that is an issue of the householder having confidence that the assessor is given the correct information.
I thank the noble Baroness for giving way. I would like to make an illustration there, which may come on to something later on. She mentions that two houses together should not have different solutions. The big challenge is that both those houses, and probably the rest of the street, are assessed as a whole, and a better solution of the 20 houses has made them the one or two. That is why I have a slight concern about too systematised an approach. I think the noble Lord, Lord O’Neill, made a magnificent case for a degree of that approach; but I think that that point illustrates that, if it is too tram-lined, then we can get into too much trouble, and I understand she is not saying that.
I am not suggesting that it should work on tram-lines, but there will need to be a consistency that is understood. The other point is that there should be some kind of guidance and standard of assessment. The noble Lord, Lord Jenkin of Roding, said in his comments that assessors will have particular expertise in methods of insulation or whatever. There is a concern that assessors may be linked to a particular company and may want to promote the products of that company and a particular method of energy efficiency. That is something that I think all of us want to avoid. The assessor should be free to look at any way in which you can promote energy efficiency or maximise energy efficiency in the home. I hope the noble Lord can take these points away. There needs to be some consistency in the standard that is required. If we can reach that through the level of skills, qualifications or training, then that would be appropriate. We will always want to ensure that the consumer comes first, and the consumer can be assured in all cases that they are getting correct and accurate information. I beg leave to withdraw the amendment.
Amendment 2D withdrawn.
Amendment 2E not moved.
2F: Clause 3, page 4, line 6, at end insert—
“( ) for the payment of a reduced fee for charities and social enterprises;”
My Lords, I draw on my experience as a Minister with responsibility for the third sector and for social enterprise in the previous Government. I will make a very brief comment which will not take much debate, and I hope the noble Lord will be able to accept this and take it away and undertake to look at it. While accepting that this would be commercial, we would not want to exclude those charities, non-profit organisations and social enterprises that have a particular interest in helping those who are vulnerable—perhaps people with learning difficulties or people who are fuel poor. If the level of fee that is charged to those organisations that do not seek to make a profit will be different from the fee charged to a commercial organisation, there will be a different impact on each of those organisations. All that I am seeking to explore through this amendment is whether the Minister will consider—and how we define legislation can vary in open discussion—whether a reduced fee can be charged for those organisations that have charitable objectives.
The second amendment would also look at the size of the organisation—the kind of provider. It comes back to the same point: payment may not be proportionate, if there is the same level of fee for both the smaller charity, say, and the large company. The amendment endorses the idea of whether we consider a lower fee, a lower payment, for those kinds of non-profit or charitable organisations or organisations with charitable objectives.
I am most grateful to the noble Baroness for that explanation: I had entirely misunderstood the amendment’s intention. It refers to,
“ensuring that such payment is proportionate to the size and nature of the green deal assessor and provider”.
I thought that we were talking about individuals, but the noble Baroness has made it clear she is talking about companies, not the size of the man who is doing the assessing. I realised that there must have been a serious purpose behind the amendment, and she has now explained it.
I think that both these amendments are exceedingly difficult. One can always have sympathy with charities and other people who work for good, or not for profit—or whatever it might be—but at the same time, for the most part, professional services must be paid for. Unless somebody is doing work pro bono, which lawyers and others do from time to time, professional services must be paid for on a proper professional basis. That is what we are talking about. The idea that one should have reduced costs depending on the nature of the client is a difficult concept to import.
We are concerned to ensure that this will be as simple a process as possible. I said at Second Reading that I thought this had the ability to become a much more workable and simpler scheme for all parties to understand than has been the case under the CERT scheme, but I think this amendment would add a complication which I would not support. I am sorry to disappoint the noble Baroness, but I think professional services must be paid for properly.
I thank the noble Baroness for raising this amendment. It is critical, particularly at this time, that we take into account the charitable sector, of which she has great knowledge. Indeed, so do I to a certain extent, from involvement with a number of charities. Obviously, I can only accept amendments such as these once they have been agreed with counsel and other Ministers, but we will consider how best to take on board this policy aim, which I think all of us would endorse and support in this sector.
I thank the Minister for that. I understand the concerns of the noble Lord, Lord Jenkin of Roding. He mentioned the client. It is not the clients who would pay a reduced fee, but the provider of the services. I am grateful to the Minister for his acceptance, and I look forward to seeing what comes forward in due course.
Amendment 2F withdrawn.
Amendment 2G not moved.
3: Clause 3, page 4, line 25, at end insert—
“( ) requiring unannounced random inspections and mystery shopping of green deal participants on a regular basis”
In moving Amendment 3 I shall also speak to Amendment 6, with which it is grouped. The amendments deal with consumer protection and redress, issues which I raised at Second Reading. The Minister was kind enough to say then that the points I raised about an ombudsman were well made, so I hope some of the points that I and other noble Lords will make under these amendments will be accepted.
On Amendment 3, consumers will not have the experience to be able to undertake assessments. They will not have the knowledge, and there will need to be independent assessments by a single body such as an ombudsman to give people the confidence they need. Indeed, as the Minister and the noble Lord, Lord Davies of Oldham, have mentioned, if we do not give people confidence at the time of purchasing, this scheme will fall flat on its face and all the Government’s good aims will not be delivered.
Some noble Lords may not be familiar with the myriad television programmes that set out to pick up the cowboys where people are being mis-sold products. If the Government do not do something along these lines to weed out the cowboys, then be assured the television companies will, and that will have exactly the opposite effect to that which we intend. I ask the Minister to consider ensuring that an ombudsman undertakes random inspections and mystery shopping assessments.
Moving on to Amendment 6—
Before the noble Baroness leaves this point, it is all very well asking the Government to do something, but they do not do it themselves. Surely we have to be more explicit. Is that not a matter for the consumer protection department of local authorities? And if it is, at a time of cuts, it is a bit unrealistic to assume that they will be able to assume responsibility to do that kind of work, given that there are 14 million homes that could be the subject of these cowboys’ attentions.
I am grateful to the noble Lord for raising that point. At Second Reading, I raised the point about the need for a single body, a single entity or ombudsman, to take on these additional responsibilities. The Minister said he would go away and think about the creation of such a single body or ombudsman. I am looking forward to hearing what he might say, particularly on that point.
Moving on to insurance, it is important, given the new nature of this service for many consumers, that at the point of sale there is an insurance product available for people to give them the confidence that, throughout the lifetime of the installation, there is security for them. Clearly consumers can opt out—the amendments states that people can opt in—but I think it is important that when they enter into these contracts there is an insurance product they can have confidence in. This is a new area. There is no insurance product for this at the moment; certainly in the early days they will not be able to go to one of the insurance comparison websites and find products. They will need assurance that there is a product specific to this area to give them the confidence to move forward and take up the Green Deal as we would wish them to do. I beg to move.
My Lords, we are considering, among other things, what is to go into the code of practice. We are not at this stage legislating that these are going to be duties placed by the Bill immediately on the various participants, but it is what the code of practice needs to cover. This raises the point that has already been mentioned; I will mention it very shortly again. There will have to be a balance. If you are going to attract providers to initiate the process by setting up a scheme which involves assessors, installers, the energy companies and so on, there must not be too many obstacles or disincentives placed in their way. Equally, there needs to be fairness for the consumer whose house is going to be made more energy efficient. Throughout this process we must make it clear that we have that balance right.
I have read some of the briefs, one or two of which are reflected in the amendments that have been tabled by my noble friends. I rang one and said if you get all these amendments accepted, you will kill the scheme stone dead. There will be so many obstacles and barriers that the objective of the scheme to get the largest possible number of homes and small business offices properly treated and properly energy efficient will in fact not happen. The response was, “We still think that these are necessary to protect the consumer”. A balance has to be struck.
The one thing that I am attracted to is a proper system for making complaints and having them dealt with. That seems something that the code of practice could very well deal with quite effectively. Nothing is worse than if something goes wrong and you do not know where or how to try to get it put right or you waste hours on the telephone trying to find people who will deal with your complaint. That could be a very important element in ensuring the confidence of the people whose premises are due to be made more efficient. If one adds all the other things together, one is creating barriers. We must be very careful not to raise too many barriers otherwise the scheme simply will not achieve its objectives.
I support the bulk of these amendments. They may eventually appear in a somewhat different form but they are important for the success of the scheme. I apologise that I was not here at the beginning of the discussion of the consumer protection amendments and that I was in somewhat sunnier climes on Second Reading. This is the first time that I have intervened in this debate and I hope that colleagues will not mind me reiterating my general position.
I am strongly in favour of the Green Deal approach for its effect on carbon cuts, fuel poverty and the bills of consumers of all kinds. However, it is a complicated thing to put together. There are several things that would kill it stone dead, as the noble Lord, Lord Jenkin, said, one of which is that the industry is not mobilised because it is disincentivised. However, an equally possible reason for the thing falling stone dead would be if consumers do not have confidence that the work that they are being asked by choice to undertake in their own homes is done in an effective way and that, were there to be any flaws in it, they would have suitable protection and redress.
We are talking about 14 million householders and landlords and 250,000 potential workers in this area. There are bound to be things that go wrong and people understand that. However, they also need to be assured that the general quality of the people that they are asking into their homes and, ultimately, they or their successors are paying for, do a proper job and that there is some protection if they do not. The confidence of the householder and the landlord is essential in this area, otherwise there will not be a sufficient take-up of the scheme.
We have talked a little about certification and accreditation. This group of amendments addresses checking on quality in a reasonably random way. There is the issue of warranty and of having standardised —or at least the offer of standardised—insurance. If we are undertaking building work in our homes, we would expect all of those to exist. If we ignore the need for that, we consumers deserve to be ripped off by cowboy builders or whatever—as many are.
There is an added complication because the people that the householder will be dealing with—the people who, effectively, they will be repaying for this work through their lower energy bills—will not in general be the same as the people who are doing the work, nor the same as the people that will be in their homes, nor the same as they would expect the quality of work from. We do not quite yet know what the range of new Green Deal providers will be. However, there will be finance companies, maybe retailers, banks, energy service companies and energy supply companies. Relatively few of these will be the same as the people making the installation. They will in one sense be subcontractors and, hopefully, the subcontractors will be accredited and certified in some form. There will be standards which they will all meet or which the majority will meet most of the time. However, the householder will need to be assured that there is that standard; that there is the protection of an effective warranty and insurance system; and that there is an appeals and redress process built into the totality of the system.
The noble Lord, Lord Jenkin, may well be right that this is ultimately an issue for the code of practice, but the primary legislation does have to instruct the Secretary of State on the areas which should be covered in the code of practice. It may be that the wording here is a little over-prescriptive for the Minister’s taste but, before we complete the consideration of the Bill, we need to be assured that these issues will be covered; that the Secretary of State will have the responsibility for ensuring that they are covered; and that therefore both the upfront providers, the people the householders deal with, and everybody who enters into the commitments required by the Green Deal meet those standards.
I therefore support this group of amendments. I suspect that the Minister and his officials will find different ways of presenting them and I would be open to that. However, if they are not covered, we will have to return to them at a later stage because consumer confidence is absolutely essential for the success of this scheme.
My Lords, on behalf of the Opposition I wish to state how much we support the broad thrust of these amendments. I accept entirely the point that the noble Lord, Lord Jenkin, emphasises: that a balance has got to be struck and that it has to be practicable in terms of encouraging people to provide these services. The noble Baroness, Lady Parminter, is absolutely right, however, that should there be a failure in the scheme and a level of malpractice and unfortunate efforts reflected in television programmes or other parts of the media which are able to dramatise failure, the confidence of the public will be lost, and that is bound to affect the speed with which we reach targets and the effectiveness of the work done across the country.
It is not necessary for me to reiterate the points that my noble friend Lord Whitty has made. We are glad to see him present in the Committee and bringing his important expertise to this area with regard to the consuming public. He is right to emphasise that there is no area more significant to any member of the public than when work is done in the home, particularly when, as he says, work is being done not by the people who actually provide the materials and the insulation but by sub-contractors. We all know the difficulties we face with regard to this—we have seen instances from time to time in other aspects—and it is important that we safeguard this position as far as possible.
I know the Minister will indicate that he also recognises the importance of the protection of the consumer, but he will also wish to restrict the amount of direction from the Committee and from the House with regard to the code of practice. I have no doubt that he is going to indicate that at the present time. He will accept that this is a critical area and therefore it behoves us to emphasise the significant points that we are making with regard to the code of practice. The balance which the noble Lord, Lord Jenkin, has emphasised must guarantee the adequate protection of the consumer.
My Lords, I am very grateful to the noble Baroness, Lady Parminter, for raising this issue. I welcome the noble Lord, Lord Whitty, to this debate. I am glad that he was able to enjoy some winter sun while the rest of us were at the coalface here. As always, his contributions are welcome.
I have said many times that there is no doubt that consumer confidence is at the heart of the Green Deal. We have to get the regulation framework right so that, as the noble Lord, Lord Davies of Oldham, says, people feel confident about receiving people into their homes and that standards are maintained. I am grateful to the noble Lord, Lord Jenkin, for his practical approach to this matter, having welcomed people into his own home to help him with the Green Deal insulation.
I will speak to amendments 3, 4, 5, 6, 7 and 8 as they address customer protection for Green Deal customers. Amendments 4, 6 and 7 seek to ensure consumers are protected by adequate warranties and insurance. We envisage that anyone operating as a Green Deal assessor or installer will need to have appropriate professional indemnity cover but the Bill already provides sufficient powers. As to regulation, a subject raised by my noble friend Baroness Parminter, there are plenty of regulations in place for people selling insurance. I speak with some experience in that field. Clause 3(4)(c) makes provision for this to be a requirement within the code of practice, with which all Green Deal participants will have to comply. Clause 3(8) provides for appropriate sanctions and redress should the assessor or installer not meet the Green Deal standards.
Clause 5(5)(b) also provides for conditions to be set in secondary legislation requiring a guarantee covering improvements to be included in a Green Deal plan. Details regarding the provision of guarantees will become clearer following further consultation with relevant parties as secondary legislation is developed. This will address matters such as the specific nature of the guarantee, the necessary duration of cover and how the cost of providing the guarantee is met. It is therefore not appropriate to put more detailed requirements regarding guarantees and warranties in the Bill. I hope that noble Lords will be reassured that we intend to include the principle of these amendments in regulations and not move their amendments.
Amendments 3 and 5 deal with the detail on how standards will be enforced, specifically through what my official called “mystery shopping”, which is a new one on me—I hope my wife is not taught about mystery shopping—and through access to an Ombudsman. The regulatory framework needs to be developed in more detail but in essence, yes, it is highly likely to include commonplace means of ensuring standards, such as mystery shopping. However, it would not be appropriate to place this level of detail in the Bill. We will bring forward more details of our regulatory framework during the progress of the Bill.
We are committed to providing customers with a simple, seamless Green Deal service and are considering what is the best institutional framework to ensure that it is as simple as possible for a customer to get problems fixed or to seek redress. For example, it is not our intention that customers should have to contact different regulators for each circumstance. We will bring forward more details of our proposed framework during the progress of the Bill. With these reassurances, I hope noble Lords feel able to withdraw their amendments.
Finally, Amendment 8 seeks to broaden protections designed for Green Deal products to cover any non-Green Deal services or goods provided by Green Deal participants at the same time. The amendment raises an important issue: the need to safeguard against home owners being sold measures by Green Deal providers that, unknown to them, do not benefit from the same regulation as the Green Deal itself. We have, however, already discussed this point and I have commented that it should not follow that the whole of the Green Deal framework can be applied appropriately to any other product or service.
Amendment 3 withdrawn.
Amendments 4 and 5 not moved.
5ZA: Clause 3, page 4, line 26, after “scheme” insert “must be made by order and”
My Lords, as has been pointed out, Amendment 5ZA is a manuscript amendment. First, I apologise to the Committee for not putting this down until this morning. This brings me to an issue that the noble Lord, Lord O’Neill, raised earlier, about the 101 of amendments. One of the 101s of amendments, after you have got past “may/shall” is to look at the report of the Delegated Powers and Regulatory Reform Committee or the Constitution Committee or some of our other excellent Select Committees to see which points are raised that need to be debated in Grand Committee. Over the weekend, when I was looking at the amendments that had been tabled, I realised that nobody had put down the amendment that flowed out of the eighth report of the Delegated Powers and Regulatory Reform Committee. However, the other amendment in this group is Amendment 8D in the name of my noble friend Lord Jenkin of Roding, who came to the same conclusion over the weekend because our amendments address substantially the same point.
I shall explain the point raised by the Delegated Powers Committee. It relates to the code of practice under Clause 3. The scheme established by the framework regulations, which is in subsection (3) includes, in paragraphs (h) and (i), that those regulations may provide for securing compliance with, inter alia, any conditions of the code and, in paragraph (i), the consequences of non-compliance.
We then come to the code requirements, which will be mandatory. Those are found in subsection (4) of Clause 3, and they cover a large number of things which have a financial bearing on those who are participating in the Green Deal. For example, they cover insurance, which has been covered by the amendments that noble Lords have just spoken to. They cover the payment of Green Deal assessors, circumstances in which assessors may charge customers, and quite a lot of things affecting the way the finances are going to work for those involved in the Green Deal. These are not insignificant issues that are going to be found in the code of practice. As the Delegated Powers Committee pointed out, this code is not of the “have regard to” variety, which a lot of statutory codes are; this code is of the “must comply with” variety. So these are very important.
Clause 3(8) shows the consequences of non-compliance with the code. They can include cancelling any liability, requiring Green Deal providers to suspend or cancel liability of a bill payer and requiring a Green Deal participant to pay compensation or a financial penalty. Nowhere in subsection (8) is there any restriction in monetary amounts or any other kind of amount.
As the Delegated Powers Committee pointed out, the code of practice which is going to cover all these very significant issues is subject to no parliamentary procedure at all. It is just something that will be decided by the Minister. The report recommends in paragraph (8):
“The use of a code for provision of this kind appears to us to be a form of sub-delegation of statutory prescription into an instrument that would currently attract no form of parliamentary scrutiny. In view of its mandatory nature, and the possible consequences of non-compliance, the Committee considers that the code under clause 3 should be subject to parliamentary control by way of a draft negative procedure, and we recommend accordingly”.
Over the weekend, I drafted the amendment to Clause 33 which would have put the draft negative procedure into the relevant clause of the Bill. However, for the purposes of today, I did not table that as a manuscript amendment because the substance to be discussed is whether there should be parliamentary procedure. In my amendment I have merely said that the code has to be made by order; that would then require some parliamentary procedure, but we would need to define that later.
I say to my noble friend Lord Jenkin of Roding that his Amendment 8D has not provided the draft negative procedure. It has provided an ordinary negative procedure. The Delegated Powers Committee intended to go a bit further and require a draft instrument to be laid for a certain number of days before the instrument could be made. That is probably a better procedure to be used in this case.
I hope that the Minister will see the force of the arguments made by the Delegated Powers and Regulatory Reform Committee and will agree to this or some similar amendment. I beg to move.
My Lords, going back a very great many years, I remember when I was a law student at Cambridge. One read the reports of the Court of Appeal. Much the easiest judgments to read were those that said, “I agree with my learned friend”, and had nothing to add. My noble friend’s amendment is better than mine and I simply endorse and support it.
My Lords, the Minister is faced with a significant challenge to his position. If the noble Baroness, Lady Noakes, presents her detailed analysis of the Merits Committee and the strength of its arguments from the coalition side, it will not be at all a surprise for the opposition side. Quick learners as we are, we are quite happy on this occasion to be secondary to the issue and supportive of the amendment. The noble Baroness has indicated that the judgments of the Merits Committee in this House are always ones that we take very seriously indeed. We are grateful for the immense amount of work that goes on, the plethora of such legislation and the clarity that is always present in its reports. As the noble Baroness has said, it has given very clear guidance on this occasion on what should obtain with regard to this legislation. Therefore, the Opposition are delighted to offer their puny strength to the forces that are arranged alongside the noble Lord in the coalition, preaching the lessons of good will and good judgment.
I followed the noble Baroness in the Second Reading debate and was somewhat surprised to agree with her on a number of issues. I have one question for her. As a consequence of this amendment—were it to be accepted—we would have not 52 but 53 statutory instruments flowing from the Bill. Paradoxically, one of the great critics of the ill defined character of this legislation will also add to it. Frankly, on this occasion, it is justified and I am happy to support the noble Baroness. As a general rule, however, I do not think that either of us—or many of us in this Committee—want to see any more orders being left to the rather inadequate, consultative and therefore scrutinising, approach that both Houses have. I hope that it will be a negative resolution in both Houses.
The noble Lord is putting ideas in the Whips’ and party managers’ heads. We would like to see each of these being given proper weight and being discussed and debated as appropriate. If it takes 53 one-and-a-half hour sessions, so be it. That is the price that we have to pay for the proper scrutiny of legislation that could have been better drafted in the first instance.
My Lords, it is marvellous to see such harmony in the room at the Government’s expense. Given the force of the arguments, particularly those from the Opposition Benches at which one quakes with fear—although one quakes with fear less at the arguments of noble Lords on our Benches, who are so erudite in these matters—we will obviously consider the amendment and reflect on the recommendations already made by the Delegated Powers and Regulatory Reform Committee on the code of practice.
That was a slightly less fulsome reply than I had hoped for. I hoped my noble friend would agree readily that this was an appropriate amendment. However, we are where we are and if the Minister does not bring something back on Report, I will. I beg leave to withdraw the amendment.
Amendment 5ZA withdrawn.
Amendments 5A to 8C not moved.
Clause 3 agreed.
9: After Clause 3, insert the following new Clause—
“Protection for improvers
The Secretary of State shall have a duty to ensure through regulation, code of practice, and audit that improvers are protected from any collusion, anti-competitive activity, or being offered restricted options that favour particular products or organisations, on account of arrangements or agreements made between green deal providers whether advisers, installers, providers of finance or energy companies.”
My Lords, the amendment concerns a matter of principle. When reading through the detail of the Bill I had some difficulty in understanding exactly what protections there are for consumers in this system given that there are a number of different actors in the providers of services. We have the finance companies, I presume; the assessors; the experts who go out with or without their tick boxes; and the people who draw up the green plan or the broader energy plan. I am concerned about consumer confidence, about which the noble Lord, Lord Whitty, talked so well. There is a need for the legislation to contain a duty to ensure that there is no collusion—or even laziness in a negative way—which prevents consumers getting the best deal.
I do not believe the Competition Commission would be interested in this level of transaction, nor, I suspect, would it come under local authority trading standards. I will be interested to hear from the Minister how the Government see this area and what legislation they will bring forward to make sure that the various actors on the supply side provide the best deal for the improver; that there is not in the supply chain a person making sure that a particular building supplier always gets the right business or an assessor who makes sure that the person who draws up the energy plan is not always the same person.
Having said that, I understand that this is a complicated area. Clearly relationships will build up. It may be good that particular organisations and individuals work well with others within the supply chain but I am concerned that the consumer’s interest is protected. Hence the amendment seeks the Secretary of State to have a duty to ensure that there is no collusion, either by design or through laziness, that delivers a less than optimal solution for the consumer. That is what the amendment is about. I am sure that any public Bill writer would be appalled by the state of the language and what it says, but I have tried to put it in plain language so that the Minister can come back and say to us how he feels this area should be approached within the context of a green energy plan. I beg to move.
My Lords, I support the principle of what the noble Lord, Lord Teverson, is seeking to achieve. It is not dissimilar to the point I made earlier about whether there may be arrangements or relationships between an assessor and an installer whereby the assessor will always want to give business to a particular installer for the work to be done. It is difficult to ensure that there are not such arrangements and the wording of the amendment puts the issue back into the Minister’s court to see how best this can be achieved. It is an important objective to consider because, as has been said a few times during the course of the debate, protection of the consumer and consumer confidence are all important. If the consumer thinks that a certain assessor will always go for particular kinds of products or arrangements, it will not lead to confidence in the Green Deal. I hope the Minister will take on board the principle, understand the point that it is seeking to make and consider ways in which it can be addressed.
My Lords, Amendment 9 would require the Secretary of State to ensure through regulation, audit and the code of practice that improvers are protected from anti-competitive activity by Green Deal providers. Clearly anti-competitive behaviour and collusion among Green Deal providers is undesirable and we want to ensure that the risk of this is minimised through the design of the scheme. However, this requirement on the Secretary of State would mean that the Secretary of State would be obliged to put in place legislation which already exists in other parts of the law. Green Deal providers should be covered by existing competition law, notably the Competition Act 1998, which prevents businesses from entering into anti-competitive agreements and abusing dominant market positions. I do not see any need to effectively replicate those arrangements in the Bill.
Furthermore, for domestic households only licensed creditors will be able to operate as Green Deal providers and the existing credit regulation contained in the Consumer Credit Act would apply. I hope that that is enough to satisfy the noble Lord and that he will withdraw the amendment.
The Minister has indicated that competition will be properly regulated and that consumers will be protected. However, the Green Deal will be offered by supermarkets and, in some parts of the country, a single supermarket chain can have a virtual monopoly of retail outlets. While it would certainly be capable of offering the Green Deal, we have to be careful because the nature of the relationship may be that a single company will link up with a supermarket, that the supermarket will leave everything to the company and that the company will then make it quite attractive for supplier A or supplier B to come in.
I am not sure whether the public are confident that the free play of market forces in such near monopolistic situations is sufficient protection. I have some sympathy with the proposition, not because I think that all supermarket chains are potential abusers but because we know that in a number of areas of sourcing—we have only to listen to the farming community about the sourcing of fresh food, fruit, vegetables and the like—these supermarkets act quite ruthlessly. We want stronger assurances than the bland approach taken by the Minister in his reply to the debate. I am not confident that something akin to the status quo operating in these circumstances is enough when people will be entering into substantial financial undertakings. Whether or not they do so on the basis that they will never pay because the bills will be reduced does not enter into it. If people did not have confidence in the company to which they are almost forced to go by circumstances beyond their control—they may happen to live in an area which is dominated by a particular supermarket chain which has a dubious record on the way that it sources its goods—we would be concerned about consumer confidence.
Perhaps I may put a scenario to the Minister and ask for his comment so that I can see if I have misunderstood this. If an installer of double-glazing were to employ a team of assessors, and those assessors could do an assessment on a house, and one way of achieving carbon reduction was to have double-glazing in that home, in a sense there is nothing wrong in that, since it is one way of achieving the carbon reduction. However, it comes back to the point that it is the Green Deal plan by which they are achieving the carbon reduction. The householder has not got the choice of an energy plan from which to choose which Green Deal provisions they want to undertake. There could be a relationship where an installer employed an assessor who would always recommend that particular installer’s products. It would be a way of achieving the Green Deal, but it might not necessarily be the best way or the only way. Does the Minister envisage that as a problem, or is that how he sees it could work?
I think that noble Lords are looking at this in a narrow sphere. I am not familiar with parts of the world where there is only one supermarket chain operating in that part of the world. I take the view of the noble Lord, Lord O’Neill. In my part of the world, there are four or five operating quite regularly. If you add to that B&Qs and the suppliers of all forms of household improvement, it multiplies. Therefore there is distinct competition. You have to add to that the energy companies, social enterprises, housing associations and all manner of retailers who can ensure that the market is competitive. I totally take on board what the noble Lord, Lord O’Neill of Clackmannan, has said, that it would be terrible if there was only one supplier in a part of the world. However, given the extent of suppliers that are available, I do not realistically think that market forces would apply.
Referring to the interesting point raised by the noble Baroness, Lady Smith, I am not entirely sure that I follow. If her point is that the double-glazing salesperson was promoting a product that was exclusively to their benefit, I am not sure that this would happen because market forces would dictate that anyone inviting someone into their home to give an assessment of the requirement and the cost of it would automatically put that out to tender. Even if these people were inappropriately selling the product, they themselves, before they are allowed to sell that product, have to be authorised under the scheme; and the scheme, as we have already debated, will have many a safeguard and recourse against unauthorised behaviour by an authorised provider or assessor.
It comes back to the central theme. We have to get these right, we have to ensure that the standards are properly maintained, and we have to ensure that competitiveness is allowed into the market.
How do the Government see the status of assessors? Does the Minister see them as being like independent financial advisers in the financial world? Can they be employed by B&Q or Everest? Can they actually be employees of those organisations, and can that be made quite transparent? Do they have to be self-employed? That is what I am trying to get to the depth of here. It is not in any way a criticism. It is actually trying to understand how this works in practice. I come back to the financial services industry or even—dare I say to the noble Lord?—the insurance industry. There is a whole history of mis-selling despite strong regulation, perhaps because people got commissions—I would be interested in comments in terms of whether commissions are permissible under this system. There are clearly advantages to the upfront sales force or the people who recommend because there is a temptation, under certain circumstances—which may not be illegal but might be dubious or not in the interests of the customer—not to recommend the best solution necessarily, or a particular solution. Most people will not want to get more than one assessor. They will want to get an assessor who they see as independent of mind, maybe through a proper assessment process or not—coming back to the previous debate. I am interested in how the Minister sees the status of assessors. Can they be a full-time employer, employee or an organisation that tends to specialise in certain solutions? I am just interested in how the Government see that working out in terms of a code of practice or maybe in the way that this scheme has to operate, because I believe that it is fundamentally important.
My Lords, there is nothing to prevent an assessor working for an organisation, but the reality is that they have to be independent of that organisation in terms of their assessment. There has to be a Chinese wall. To answer my noble friend Lord Teverson’s excellent question, assessors can come from all walks of life. They could be quantity surveyors, representatives of B&Q or representatives of a supermarket, but they have to retain an independence and fulfil the standards that are required of them under the Green Deal regulatory mechanisms that we have been debating today.
I would also point out that a lot of the products that we are talking about here are not new to the market. It is not as if we are suddenly coming into the market with a wonderful new product. Double-glazing has been sold consistently through the country for a long time. Loft lagging has been consistently sold, and there are consumer protections in place under the Act which provide for proper regulation.
There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on, however, and that is the role of commissions. My noble friend has raised a very important point where we need to work out the impact and how these assessors are remunerated.
I have listened carefully to the Minister. I think that he is trying to reassure noble Lords on this important commission point, but I am not reassured. Clause 3(4)(a) to (g), on the code of practice, would seem to allow an installer to employ an assessor, and to allow that assessor—within this code of practice, this framework arrangement and the Green Deal—to recommend energy efficient measures that fall within the remit of one installer that is employing that assessor. I do not understand how an assessor can be employed by an installer and be independent. I am grateful that the Minister will look at this again. However, depending on what he comes back with, we may wish to return to this at a later date.
My Lords, I thank the Minister for going through this and perhaps spending more time on it than he would wish. However, I think it is a core part of making this system work and putting it above question. Public money is not involved but we are talking about consumers’ own money under a government scheme. That is why it is particularly important. I was going to offer to look up the various bits of competition legislation that he mentioned but I suspect that I will not get round to that before Report.
I thank the Minister for looking into this area. It would be useful for the department to explore this and to have a clear view on how it will work to avoid what I would call mis-selling within the market place. I beg leave to withdraw the amendment.
Amendment 9 withdrawn.
Before I call the next amendment, I must apologise to the noble Lord, Lord Jenkin of Roding, for omitting to call his manuscript Amendment 8D. It has already been debated but I should check with him that he was content not to move it.
Amendment 8D not moved.
10: Before Clause 4, insert the following new Clause—
“Duty of green deal providers
(1) It is the duty of green deal providers to ensure that the energy plan reasonably reflects the best overall energy solution or solutions for that property, while also taking into consideration the total cost, and the period of payback of any scheme.
(2) Green deal providers must be able to show evidence that they have taken due care to promote the best interests of the improver.
(3) Where appropriate, suitable options should be offered to improvers so that they may make a choice.
(4) An energy plan must include an estimate of the annual savings of carbon dioxide emissions.”
My Lords, this is another broad and, in some ways, probing amendment. I have gone through the Bill. The Minister might be able to put me right but I could not see anywhere that there was an actual duty on the Green Deal providers to make sure that they actually provided the best deal that there was available. I then had to think what is the right deal to put forward in order to write this amendment. Even with the broad strategic messages that I had written down, that became quite difficult.
It is important that it should be made clear in the Bill, which is the primary legislation, that there is a duty on the Green Deal providers, who are in a position of preference—and I was going to say that the noble Lord, who is not here any more, used the right phrase—to make sure that it is the best deal. What is that? I believe that they need to show some sort of documentary evidence—and we again come back to the assessment argument or the list one way or another—in the way that financial services providers have to, that they have gone through certain processes, not just generic ones but ones to do with the situation of the property and the household itself. This is not just about property. It is in a way about what that household can actually afford, or the payback period in which they can work. There are variations within the golden rule. The golden rule must be met, but it perhaps can be met in a number of different ways. There is a duty of care here.
I would like to think that there was also, where possible, options and choices—not too many, not too complicated and not for their own sake—and that there should be some ability to have a discussion about what is the right solution out of a number of possibilities. I also believe that, for the energy plan that is agreed, there should be, at the end of the day, a carbon emissions statement that brings that area back into the consumer’s view. Why are we doing all of this? It is to save energy and to be of benefit to the consumer and the household individually. However, it is also very useful to illustrate on the plan that this is also about decarbonising the economy and reducing carbon emissions.
In this amendment I am trying to make it clear that—again, I quite understand that there is a complicity below this—there is a duty on Green Deal providers to make sure that households are able to make good decisions from good information. In a way it comes back again to that debate that we had before. It is very important that there is not just a quality check in terms of assessors but that they have to use their grey cells as well as just a checklist to make sure that the scheme that is put forward is a good one. I would like it to look beyond the Green Deal issue.
I begin my intervention by apologising that I was not with you at Second Reading. Unfortunately, the challenge of London 2012 and the Olympic Games took precedence on that occasion. However, I shall be pleased to be with you during as many hours of the Committee stage of the Bill as possible.
Is not the point that my noble friend is making absolutely key to the discussions that we were having earlier on the subject of accreditation and certification? I ask him to focus on that because it if we can get the accreditation and certification system right, along the lines that my noble friend was discussing on an earlier amendment, we would go a long way to ensuring that we achieve the goals and objectives that my noble friend has set out.
There is both good and bad in this suggested new clause. The point about the first three subsections seems to me to be inherent in the nature of the scheme. However, I do not know whether this is the right way to make clear that the scheme is intended to give the consumer, the householder, the best deal available. I am sure that there will be many circumstances where the assessor will have to weigh up the situation and say, “Are we asking too much?”, which means that it could not be paid back within a reasonable time; and, “Are we asking too little?”, which means that the householder could have paid rather more. This may need to be written into the Bill in some form. With the use of the words,
“the best overall energy solution”,
you are opening up the possibility that someone will sue if they can be persuaded that they could have got a better one. Somehow one has got to try and avoid that. That is the good part.
Subsection (4) is totally impractical and undesirable. As I said at Second Reading, one of the great advantages of the Green Deal over the CERT programme is that this is not written directly around carbon savings but is intended to provide the householder—the consumer—with incentives for lower bills and warmer houses. To require that in every individual case someone has to sit down and estimate what the carbon savings are likely to be seems to me to be unrealistic. I apologise to my noble friend for using what may seem to be fairly strong words, but everyone has recognised that one of the advantages of this is that people may choose to have warmer homes and pay back rather more because they will not get as much savings as they might have had had the whole thing gone into saving energy costs. How is anybody going to conceivably estimate that at the outset?
We have a classic case here where the carbon savings, which certainly lie at the heart of this in order to achieve our carbon targets, are the consequence and not the primary objective. As I said at Second Reading, people will respond much more easily and readily to an offer of lower bills or a warmer home than they will to someone coming along and telling them that they have to cut their carbon footprint. Subsection (4) is very difficult and I would find it hard to support if it were to find its way into the Bill.
My Lords, I feel that in some ways we have already had this debate during the course of the Bill. We are perhaps all looking at different ways of addressing the same kinds of issues and problems that arise. Whether or not this is the best way forward I do not know. It comes down to the fact that, in any property where an assessor looks at what could be done to achieve energy efficiency, there will possibly be several options of what can be achieved under the Green Deal, and different assessors may give different options.
The concern is: who makes the decision and what options in the energy plan can be achieved under the Green Deal? Would it be the installer, the provider, the assessor or the householder? I am not clear where the decision-making process for the best energy solution lies. I make the same point as the noble Lord, Lord Jenkin, and ask whether the best possible solution would be challengeable? Who would make the decision about the best possible solution? This brings me to the point about how decisions are made and what energy plans and efficiency improvements can be taken into account under the Green Deal. It would be helpful if we had clarity on who makes the decision on that.
I like the idea of the householder having input into that decision and of having an energy plan as well as a Green Deal plan. I would welcome the Minister’s comments on how this would work in practice.
My Lords, this is an interesting amendment. The question raised by my noble friend Lord Teverson of what is the best deal remains unanswered, because a best deal to some people is quality; to others it is price; and, arguably, the best deal to most is a combination of quality and price.
Amendment 10 seeks to introduce a new clause addressing consumer protection mechanisms. While we accept the thrust of the amendment and what it is trying to achieve, I believe that the issue is already addressed in Clauses 3 and 4. Clause 4 is central to the Green Deal and defines the terms on which it can be offered to customers. I urge noble Lords to look at it again. Subsections (2) and (3) require that an accredited Green Deal assessor has assessed the property in accordance with the standards that we set out in the framework regulations and has recommended energy efficiency improvements on this basis. The assessor would identify the potential for energy savings using the standardised methodology as set down. The outcome of the assessment would be provided to the improver and would be used by the provider as the basis of an offer for Green Deal finance.
Subsections (4) and (5) require that an accredited Green Deal provider, the body seeking to contract the work, should give the customer an estimate of the savings on energy bills that are likely to result from the proposed energy efficiency improvements and over what time period these are likely to accrue. The Green Deal provider is required to base his estimates on a standardised methodology to be set out in regulations, thereby ensuring consistency and rigour in the process.
In addition, Clause 3 sets out requirements for the code of conduct which will make provisions as to the qualification and training of Green Deal participants. This will ensure that Green Deal participants operate to competent standards. We will look to see what, if any, further requirement should be placed on Green Deal providers to ensure robust consumer protection. We will set out these conditions in the code of conduct.
Lastly, I believe that we have the flexibility to make requirements in secondary legislation to enable us to move swiftly to close any loopholes that may become apparent once the scheme is operational. Paradoxically, agreeing this amendment for primary legislation could lessen our ability to protect customers. I believe that the Bill already contains the necessary provisions to achieve what is intended by the amendment and I would ask the noble Lord to withdraw it.
I thank the Minister for going through that explanation. He is right to say that there is a list of provisions within the Bill that point in the direction of the right quality of decision-making and of ensuring that all the procedures are right. However, I am not sure that there is a duty to get the right deal for the consumer at the end of the day. However, I note the Minister’s intention that that should be the case, as I am sure we would all want. Perhaps I can ask him to look at it again.
I should also like briefly to reply to my noble friend Lord Jenkin of Roding. My amendment makes it quite clear that subsection (1) is concerned with overall energy solutions and that subsection (4) is concerned just with an estimate, which I do not think would be very difficult to make. I know the Minister has exactly the same objectives here and I hope he will look at it again. I beg leave to withdraw the amendment.
Amendment 10 withdrawn.
Committee adjourned at 7.40 pm.