House of Lords
Wednesday, 2 March 2011.
Prayers—read by the Lord Bishop of Liverpool.
I am very grateful to my noble friend for that Answer. Does she appreciate that the British Hospitality Association estimates that 30,000 new beds will come on stream in the next two years, providing further employment, but that the current reality is that without our overseas nationals, our hotel and restaurant industry would probably collapse? A leading restaurant in Piccadilly employs people of 32 nationalities; a leading hotel on Park Lane employs people of 60 nationalities.
Parallel to that, we have a most serious youth unemployment situation in this country. Could not the Government therefore work in a creative way to try to build bridges between our hospitality industry and those who are unemployed, and to turn the negative attitude in this country to the industry and service industries generally?
As my noble friend identified, the hospitality sector has long been reliant on migrant workers. Of course we value the skills that they bring, but we recognise that more needs to be done to attract and train people locally. Industry bodies such as People 1st and Springboard are working to improve the appeal of the industry and to demonstrate to young people the enormously wide range of job opportunities available to them.
I have a registered interest as a board member of VisitBritain. Does the noble Baroness agree that one of the great advantages of tourism is that it can bring economic development to parts of the country that other industries do not reach? There are great opportunities for British tourism over the next year to 18 months with the royal wedding, the Olympics and the Queen’s Diamond Jubilee, but there are challenges too with rising oil prices. Will the noble Baroness ask the department to come back on the issue of visas for those coming from emerging markets? Many people from countries such as China find it very difficult to come to the United Kingdom because of the visa requirements. That one step alone would help to create even more jobs in tourism and give us an even better 18 months to two years.
The noble Baroness is absolutely right about the attractions of different parts of the country and the many big events that will happen around the UK, which we hope will bring an increase in tourism. On visas, there are figures to show that there has been a significant increase in the number of people from China applying for visas to come to this country, so the deterrent might not be as severe as the noble Baroness fears, but this is something that we keep under constant review.
Does the noble Baroness agree that it would help recruitment to the tourist industry if the Government made clear that they are taking a positive view of language teaching in British schools not merely for academic high-flyers but for all children?
The noble Baroness speaks to an issue that is after my own heart but which is slightly wide of the Question. Teaching languages and training people in this country to speak other languages is vital on all sorts of fronts. Hopefully, with the Olympics, there will be a boost because people who have trained in the hospitality sector will need to converse with all the visitors in their own language.
My Lords, if we are to have more people in the tourist industry, we must generate more visitors. A great deal will depend on repeat business. Can my noble friend tell us who in government is responsible for surveying and maintaining visitor experience in this country, and could she ask him or her to pay attention to terminal 3 at Heathrow?
Without wishing to move to another department, I think terminal 3 is slightly outside the responsibility of DCMS, but my noble friend raises a very valid point on it. Many of the responsibilities for tourist attractions are at local and regional rather than national level, but DCMS keeps the whole tourist experience under constant review and looks at how we can attract tourists and encourage them to come back again.
Does the Minister agree that the skills that are required in this industry are well catered for in the sector skills councils, in particular by People 1st, of which she has knowledge? Will she encourage government to ensure that apprenticeships are also made available within that industry?
The noble Baroness speaks with great experience of this area. Apprenticeships in the hospitality and tourism sector need to be encouraged. On the whole skills level, we hope that this sector, like others, will be given a terrific boost when the WorldSkills competition comes to London in October. We will be able to see the brightest and best of the UK competing against the best of the world. I encourage all noble Lords to go to the ExCeL centre in October to see how brilliant the skills of young people around the world can be.
Would the Minister not agree that north of the border the tourist industry would be greatly improved if daylight saving were in operation? Would it not help if time became a devolved subject so that the Scots could at least make their own decision on this, just as they do in Northern Ireland?
A Bill on daylight saving is currently being scrutinised in the other place, so we probably need to await the outcome of that. It has been clear that there is no intention that time should be devolved between the four countries of the UK. We would like to see all four countries agreeing on the same time zone.
As ever, the Minister has given us clear and concise answers and has answered many of the questions that I was going to put to her. I am sure she would agree that the people most at risk in our economy at the moment are young people between 18 and 25. Would she agree that the tourism industry is the one place where they could most easily be accommodated? What action are the Government taking to target more funds and resources on the tourism industry to stop a whole generation being denied their fair chance at employment in future?
As the noble Baroness will be aware, the Government are making funding available to the tourism and hospitality sector. On encouraging young people, I mentioned the skills competition, but there are programmes, such as FutureChef, which appeal directly to young people to encourage them to come in. This is a two-way trade. Not only do the opportunities have to be there, but young people have to demonstrate commitment and interest in the jobs. The Government will do as much as they can to encourage the jobs and the young people to fit them.
On daylight saving, is the Minister aware of the research by the Policy Studies Institute that shows that up to 80,000 jobs could be created in the UK tourist industry? Can she think of any other government decision that would cost no public money to help thousands of our young people back into work?
I thank my noble friend for that. Daylight saving is a timely issue. We have discussed it before, it is raised in the media and it is very much under discussion. However, it is currently under review in the other place, and I think we need to wait for the outcome of that Bill to see what happens following those discussions.
Banks: Mutual Ownership
My Lords, UKFI, which manages the Government’s investments and financial institutions is responsible for devising appropriate exit strategies. Its mandate requires it to act in a way that protects and creates value for money for the taxpayer and pays due regard to financial stability and competition considerations. It is currently exploring the options available for disposing of Northern Rock plc. All exit strategies will be considered, including remutualisation.
I am grateful to the Minister for his moderately helpful Answer, especially the reference to the activities of UKFI. Does he agree that traditionally and well deservedly mutuals have had a very high reputation among customers generally for satisfaction with their activities, that mutuals have engaged less than banks in speculative and risky activities, and that certainly they have provided a great deal of competition and diversification over the years? In this new set up today, when there will be some sales of existing state-owned parts of banks, will the Minister ensure that the mutuals get a great deal of understanding in this regard? Perhaps the Government could initiate a feasibility study through UKFI, which would be most helpful.
Yes, my Lords, I think I can agree with the noble Lord. The important thing is the stability of our financial system. The Government are committed to fostering diversity in financial services, including, where appropriate, mutual ownership, and to creating a more competitive banking industry. That is why we have set up the Independent Commission on Banking: to recommend reforms to the banking system that meet those objectives, including promoting financial stability and consumer choice.
Will my noble friend confirm that it is the Government’s intention that the shareholdings in question will be sold during the lifetime of this fixed-term Parliament? Will he also inform the House of the best estimate that the Office for Budget Responsibility has made of the proceeds of these sales?
My Lords, the Minister will be aware that all building societies that transferred into plcs in the 1990s are now no more. People realised that there was strength in the mutual principle and framework. Will he go further and assure the House that UKFI will engage with the Building Societies Association to ensure not just that there is a war on words but that there is a proposal on the table to ensure that we will have competition and diversity in the marketplace in the future?
I think I can perhaps go a little further in saying that the Government are implementing a number of legislative reforms that will allow financial mutuals greater flexibility to develop and expand, and so promote mutual ownership in financial services. These include such things as completing the passage through Parliament of the Legislative Reform (Industrial and Provident Societies and Credit Unions) Order, commencing the Co-operative and Community Benefit Societies and Credit Unions Act 2010, and bringing Northern Ireland credit unions under FSA regulation. As I have said, the Independent Commission on Banking will also consider competition in the banking sector and make recommendations on this as part of its report.
My Lords, the noble Lord will be aware of the excellent report in 2006 by the All-Party Parliamentary Group on Building Societies and Financial Mutuals that identified the beneficiaries of demutualisation as essentially the directors, who saw their remuneration go up. Among the biggest losers were those who live more to the financial margins, require basic bank accounts and are at risk of financial inclusion. Will he ask that when a future is considered for Northern Rock and others that this test of serving the financially excluded is part of the specification and that the work that mutuals do in this area is recognised?
My Lords, does the Minister agree that one of the major issues in this area is the lack of trust in the large banks? Does he accept that trust is much higher in organisations that retain a mutual element, such as the Nationwide Building Society or the John Lewis Partnership? Will he affirm that there is a need, whatever arrangements are being made, for real attention to be paid to the need for a restoration of trust within the sector, of which mutualisation might well be a very important part?
My Lords, does the noble Lord agree that mutual benefit societies of a wide variety are perhaps one of the earliest manifestations of the big society working, and that we will partly judge the Government’s views on the big society by the enthusiasm with which they pursue mutualisation in this area?
Bribery Act 2010
My Lords, the Government are committed to the implementation of the Bribery Act. We are urgently working on the guidance to commercial organisations to make it practical and useful for legitimate business and trade. After the guidance is published, there will be a three-month notice period before full implementation of the Act.
My Lords, I hope the Minister will forgive me for making my thanks for that not very satisfactory Answer fairly perfunctory. The fact is that the Act should be in force by now. Does he not agree that those who have been campaigning so vociferously against the entry into force of the Act have done Britain’s industry no favours whatever by suggesting that it can export successfully only by the use of these dubious practices? Does he not also agree that suggestions that this piece of legislation was rushed through Parliament before the election are a travesty, considering that the matter was subjected to pre-legislative scrutiny for a lengthy period in a committee of both Houses?
My Lords, I agree entirely with the noble Lord’s last point: the legislation was subject to very careful scrutiny. Since coming to office, we have also subjected the Act to a wide range of consultations aimed at making sure that the Act, which passed both Houses with all-party support, was fully understood and could be implemented fully. I take the noble Lord’s point, as I think that the Government do, that any suggestion that British industry can only make advances in overseas trade by bribery does unjust damage to our reputation as a fair-trading nation.
My Lords, I had the privilege of taking the Bill through this House. The Minister is quite right: it was received with widespread and vocal support from all sides of the House. That does not always happen with Ministry of Justice Bills. One criticism, however, was that legislation should have been put in place sooner, not as late as it was. As the noble Lord, Lord Hannay, has reminded us, one year after the Bill became an Act of Parliament, we still do not know when it will be implemented. Does the Minister agree that this is totally unsatisfactory and that he needs to go back to his department and insist that the Bill be implemented as soon as possible?
I hear what the noble Lord says. During the period we are talking about we have not been idle. My right honourable and learned friend the Lord Chancellor and Secretary of State for Justice has met representatives of the CBI, the multinational chairmen’s group of the International Chamber of Commerce, the Federation of Small Businesses, the British Chambers of Commerce and Transparency International. We are trying to make sure that this is understood and it is going to be implemented effectively. I certainly will take note of the comments made in this House today about the sense of urgency.
My Lords, is my noble friend aware that on boards of British companies that include American directors, British directors have long been embarrassed by the great enthusiasm with which their American colleagues cite the Foreign Corrupt Practices Act, well ahead of anything we have had alongside it for a very long time? Despite what my noble friend has said, is it not the case that it is becoming increasingly difficult to explain the delay, and that that is doing increasing damage to the reputation of British industry and, indeed, to the reputation of the Lord Chancellor himself?
My Lords, again I cannot help but draw attention to the fact that there is a sense of unity in the House on this. We are proceeding with all due speed on the matter. One thing that gives me encouragement, having sat in on a number of the meetings the Lord Chancellor has had with industry, is that industry itself seems to be quite capable of living with this Act. I take note of what my noble and learned friend has said, but I do not think that this is a matter of the reputation of the Lord Chancellor, although there is the question of implementation on which I hope these exchanges will be duly noted.
My Lords, there is time for all these questions. Perhaps we can hear first from my noble friend and then from the noble Lord.
My Lords, does my noble friend agree that bribery and corruption are hugely damaging to developing countries, not least to those in North Africa and the Middle East, and that that is a very important reason why the Government should not delay any further in bringing this Act into force?
My Lords, the Government are taking strong action on anti-corruption, including the recovery and freezing of corrupt assets in the areas the noble Lord has referred to, but the message is clear from this House that there is a matter of national reputation involved in any further delay. I duly take note of that.
My Lords, have any bribes, facilitations or other payments that might or could be bribes within the meaning of this Act been paid from public funds to Libyan officials over the course of the past few weeks? If so, at what level and by whom were those payments authorised?
My Lords, one of the great advantages of this House is that a Hansard report is made of interventions. I will ensure that the Hansard report of the exchanges that have come from all parts of the House are duly reported back to the relevant government departments.
My Lords, we published Improving Outcomes: A Strategy for Cancer on 12 January, which sets out a range of actions to improve outcomes for cancer patients. Earlier diagnosis is crucial to improving outcomes, and we have set out plans to deliver this through improving GP access to diagnostic tests, supporting symptom awareness initiatives, and extending cancer screening programmes. We are also improving access to treatment and the quality of support for survivors.
I thank the Minister for his Answer, which is very helpful because it prompts two questions. First, when does he think the procedures which he has put in place will succeed and cancer outcomes will improve, and in the mean time what is likely to happen to cancer outcomes? Secondly, could he also say what the state of radiotherapy treatment in England is?
My Lords, the strategy we have laid out is an ambitious one. It aims to save an additional 5,000 lives every year by 2014-15. That programme is supported by over £750 million of additional money over the next four years. It sets out actions to prevent cancer incidence and to improve the quality and efficiency of cancer services and of patients’ experiences of care. We are giving ourselves a little time, but we are under no illusions, and this is an agenda to be pursued very energetically. We are putting considerable additional money—from memory, it is £150 million—into radiotherapy services, but we also feel that there is an important issue around the use of existing radiotherapy equipment, which is often not utilised as effectively as it could be.
My Lords, would the noble Earl agree that the regional networks of specialist cancer services, established through the co-operation of clinicians themselves, have been instrumental in improving outcomes for patients? If so, how does he think that essentially collaborative model fits with the rigid and mandatory price competition that the Government now want to introduce into the NHS?
My Lords, the Government are not introducing price competition, it has never been our intention to do so, and the Bill that will come before the House will make it absolutely and abundantly clear that price competition is out of range. As regards the cancer networks, the noble Baroness is absolutely right. Over the past 10 years, these have played a crucial role in improving the quality of cancer treatment and the patient experience of care. The outcomes strategy that we have published explicitly states that next year there will be funding for cancer networks to support commissioning.
My noble friend introduced the question of diagnosis, which is increasingly a multi-professional matter, involving pathologists, surgeons, radiologists and so on. This seems self-evidently a good thing. However, is the department accumulating evidence to show that it is actually improving the outcomes? It is of course an expensive procedure to involve so many senior professionals together.
My noble friend is quite right. It does involve often a number of senior clinicians. The key to diagnosis, however, is to get in early, as I am sure he would recognise. The outcomes strategy commits us to saving the additional 5,000 lives very largely through additional identification of early cancer. In fact, 3,000 of the 5,000 lives that we are hoping to save will be saved, we hope, by earlier diagnosis. A good example of that is that over 90 per cent of bowel cancer patients diagnosed with the earliest stage of the disease survive five years from diagnosis, compared to only 6.6 per cent of those diagnosed with the advanced disease.
Would the noble Earl accept that this country has had a very proud record in carrying out clinical trials, not least in the field of cancer; and that since the passage of the European directive on clinical trials, the problem of getting ethical approval for multi-centred trials—in a variety of different centres—has become immense? Is he aware of the recent report of the Academy of Medical Sciences, from a committee chaired by Sir Michael Rawlins, which has made a number of crucial recommendations? If accepted by the Government, those would make the performance of these trials very much easier.
My Lords, I am indeed aware of that excellent report. It is being studied with care in my department. We hope to make an announcement reasonably soon in response to it. It contains some extremely important recommendations which, if implemented, should do a great deal to restore the country's position as a destination of choice for clinical trials.
My Lords, there has been no question from the Conservative Benches so perhaps on this occasion we can hear from my noble friend.
My noble friend, in his original Answer, talked about the importance of early diagnosis. Is he not concerned at the cascade of cases reported in the media of GPs sending patients home with flu symptoms and indigestion and not detecting the cancer until it is too late? What does my noble friend intend to do to improve GP training to assist the earlier diagnosis on which he rightly lays so much emphasis?
My Lords, of course those reports are a matter for concern, which is why we are clear that GP consortia should be supported as much as possible in terms of commissioning guidelines and information. One of the tasks of the NHS commissioning board will be to provide that support and information based on quality standards produced by the National Institute for Health and Clinical Excellence.
Armed Forces: Redundancy
My Lords, first, I am sure that the whole House will wish to join me in offering sincere condolences to the families and friends of Private Dean Hutchinson of 9 Regiment the Royal Logistic Corps and Private Robert Wood of 17 Port and Maritime Regiment the Royal Logistic Corps who were killed on operations in Afghanistan recently. My thoughts are also with the wounded, and I pay tribute to the courage and fortitude with which they face their rehabilitation.
With the leave of the House, I will now repeat a Statement made in the other place by my right honourable friend the Secretary of State for Defence. The Statement is as follows.
“On 19 October last year, in the strategic defence and security review, the Government announced reductions in the size of the Armed Forces—reducing the Army by 7,000, the Royal Air Force by 5,000 and the Royal Navy by 5,000. This was to reshape the Armed Forces for Future Force 2020 and also to respond to the budgetary pressures resulting from the need to reduce the inherited deficit and deal with the black hole in the MoD’s finances.
Following the announcement, normal procedure for proceeding with the redundancies was followed. Let me briefly describe this. The Armed Forces modelled the manpower they needed for Future Force 2020 and consulted their own people on the best methods and timescales for achieving this. The families federations have been kept informed. Following yesterday’s announcement of the RAF programme, the Army and Navy will follow on 4 April with their programmes. The Army and RAF will give individuals notice that they will be made redundant on 1 September, followed by the Navy on 30 September. The exact timing of further tranches has not yet been decided.
Afghanistan is the Government’s main defence effort. Decisions in the SDSR were therefore weighted towards the protection of capability for the mission in Afghanistan which, as the Prime Minister said, will see a transition to full Afghan lead in 2014.
Redundancy is never a painless process, whether in the Armed Forces or elsewhere, and it is sad to see committed and patriotic men and women lose their jobs. But in that process it is essential that they are made fully aware of the options available and the timescales involved. That means a timetable needs to be adhered to for the sake of themselves and their families.
It would simply be wrong to alter that timetable for the convenience of the Government. Personnel were expecting the announcement this week. To delay for political expediency would have been to betray their trust. Difficult though it may be, in this Government, political convenience will not be the final arbiter of our decisions”.
My Lords, I join the Minister in offering condolences to the families and friends of Private Dean Hutchinson and Private Robert Wood. It is right that the Minister draws attention to the wounded, some of whom will carry the price of their bravery for the rest of their lives.
I thank the Minister for repeating the Secretary of State’s response in another place as a Statement in this House and I thank him for giving me an early view of the Statement. This Statement, together with the Written Ministerial Statement yesterday, is about cuts in manpower and how they are to be achieved. It is extremely precise: it talks of 344 pilots who will continue training, another 170 who will not and so on. Sadly, we learn that even more precise details were supplied to the press yesterday at a conference at 2 pm—which was before this House received details, before we had details in the Written Ministerial Statement and before the details that came out today in the other place. Can the Minister tell me whether in fact such a detailed briefing did take place yesterday at the Ministry of Defence? I am sure that it did. I will not comment on whether that is a good thing—the House must comment on that. However, I am sure that Members of the House would wish that details had come here or to the other place first.
The Statement has to be taken together with yesterday’s Written Ministerial Statement. The essence of the two documents is that there is some detailed grand plan of what we are trying to achieve. It refers to Future Force 2020 and the SDSR as the basis for this. It speaks with such precision that you would think there was a precise description of where we are trying to get to with this grand plan. I can only assume that, within the Ministry of Defence, there is a clear view of what the force strength will be in 2015 and what the force strength will be in 2020. I can assure the Minister there are no figures in the SDSR to enlighten us and there are no figures I know of in the public domain. The Royal Air Force and the fast jets in particular are in the top of our minds and the Statement is principally about redundancies in the Royal Air Force. Can he give us some statement or indication of what front-line force these manpower adjustments are designed to yield in 2015 and what front-line force we are looking for in 2020? Can he also assure us that this Government, if elected, will provide funding from 2015 to 2020 to deliver the so far undefined Future Force 2020 promise?
I am sorry that these days one has to read the press to keep up to speed with the Government’s thinking on defence. In today’s Times, it is suggested that a further £1 billion of cuts will be needed between now and April. Is that true? Is it likely that he will be coming back to the House to tell us about more cuts, and will those cuts involve additional manpower losses or additional losses of capability?
I turn to what may be one of the most crucial elements of this Statement on redundancies: what I call the Afghanistan promise, which was made in the other place by Dr Fox on 8 November 2010. He said:
“It would not be possible for the Government to say that no one who had ever served in Afghanistan in any way, shape or form since 2001 would not be made redundant”.
At the end of the day, one accepts that there has to be a little more flexibility than something as extreme as that. But he went on to say:
“I reiterate what I have said: that because we need to maintain the Afghan rotation, no one currently serving in Afghanistan, or on notice to deploy, will face compulsory redundancy”.—[Official Report, Commons, 8/11/10; col. 13.]
Can the Minister confirm that anybody serving in Afghanistan on 8 November 2010 will not be made redundant under this? I believe that would be a perfectly reasonable interpretation of that promise. Unfortunately, yesterday’s Written Ministerial Statement was much softer. It said it would be those who had “recently” served in Afghanistan. Can the Minister confirm that “recently” means 8 November 2010 and if not, and he is actually resiling on the promise made on that date, can he define what “recently” now means?
What of those who are made redundant? The Written Ministerial Statement, at the bottom of page 2, starts to talk about what we will do for them. It starts off with good words about how we have a duty to these people and about how they have served us bravely, and now that they are made redundant they must face a future. It ends up by saying:
“A comprehensive package of support and advice on housing, finance and finding a job will be made available”.
That is starting to sound like something tangible. But it goes on to say:
“Over the coming months, Ministers will scrutinise those plans in detail, working closely with domestic departments, to ensure they are as good as can be achieved”—[Official Report, 1/3/11; col. WS 108.]
“as good as can be achieved”,
Surely, this is the moment to meet a promise that I thought I heard the Prime Minister make, to put the military covenant in law so that these assurances are tangible and can be delivered. The Minister has an opportunity, when he brings the forthcoming Bill to this House, to bring forward proposals to give a real, tangible base to the military covenant and I encourage him to do that. Will the Minister give us clarity on what sort of forces we are planning for, will he give us clarity on the Afghanistan promise and will he give us clarity on the military covenant? If he cannot, how does he expect to maintain the morale of our brave men and women?
My Lords, this is no new announcement. The department briefed the press at 2 o’clock yesterday but those being briefed were not allowed to leave the building until the WMS was laid. That is exactly what happened when the noble Lord’s party was in power; nothing has changed. We have gone out of our way to keep both Houses informed and will continue to do so. In the Oral Statement on the SDSR in October, the Prime Minister announced that the MoD would reduce the Armed Forces by 17,000 and that this would necessitate redundancies. That has been discussed in this House, including in an Urgent Question two weeks ago.
Yesterday, the Defence Secretary updated the other place, as I did here in a WMS, on the dates on which the various areas of the Armed Forces will look for redundancies. The RAF published its details yesterday; the Army and Navy will do so in April. Decisions on specific individuals will not be made until September. I must make it clear that we are not hiding anything and, as I have said before, I am always happy to organise briefings for any noble Lords in the MoD.
The noble Lord asked me about 2020. We have a clear view. As stated in the SDSR, the Future Force is structured to give us the ability to deploy highly capable assets quickly when needed but also to prepare a greater scale and range of capabilities if required. The aim is to do so affordably and in a way that minimises demands on our people, with five central concepts: readiness, reconstitution, reinforcement, regeneration and dependency. This flexible approach will allow us more effectively to counter the threats that we are most likely to face while maintaining the ability to respond to different threats in future.
The noble Lord asked me about further cuts. I can confirm to him that there is still a lot of work to be done on this; we are having a lot of discussions in the department, and I assure the noble Lord that the House will be the first to hear.
The noble Lord asked me about Afghan redundancies. Those engaged in combat operations for which they are in receipt of operational allowance, within six months of deploying on or recovering from those operations, on the day when the redundancy notices are issued will not be made redundant unless they are volunteers for it. I hope that that makes it clear.
The final question was what will happen when a serviceman or servicewoman is made redundant. All personnel will be entitled to receive support to transition to civilian life. Personnel leaving under the redundancy programme will qualify for the level of resettlement support for which they would have been eligible had they completed the commission or engagement on which they were serving when made redundant. We expect most if not all personnel to qualify for the full resettlement programme and the comprehensive services offered by the career transition partnership—the arrangement between the MoD and Right Management Limited. The package includes training courses, job-finding and individual counselling, CV and job interview preparation, analysis of transferable competences, conversion and skills enhancement training and information services. Under this package, job-finding support is available for up to two years after leaving the military.
My Lords, like other noble Lords, I associate myself with the remark that the Minister has made concerning those who have given their lives or been injured in the defence of our country. Our thoughts and prayers are with them and their families.
The National Security Council was supposed to be at the heart of our defence strategic planning. On Monday the Government confirmed that they wanted to see a no-fly zone established over Libya, but on Tuesday they confirmed that 11,000 of our service personnel were to be made redundant. If this is the quality of our strategic planning, would it not be better to keep the troops and sack the National Security Council?
Absolutely not, my Lords. We are reshaping our Royal Air Force to be configured for Future Force 2020. It makes sense that we reduce the number of pilots only if we are reducing the number of planes. On the question of a no-fly zone in Libya, no decisions have yet been taken.
My Lords, will the Minister confirm what I have heard at the coalface among soldiers, sailors and airmen—that the redundancy terms for this round may be significantly meaner than those that were available in the early 1990s when we had another large redundancy programme? If that is the case, why?
My Lords, it is not necessarily meaner than last time. A full plan is in place for the military redundancy programme with full information available to all service personnel to make decisions for themselves and their families as soon as possible. We have gone to great lengths to ensure that the process and the practical application of this is both fair and understandable, and we are putting great effort into ensuring that it is communicated appropriately to all members of the Armed Forces.
My Lords, we on these Benches associate ourselves with the Minister’s condolences. I take this opportunity to pay tribute to the Royal Army Chaplains Department, whose ministry is so appreciated by the bereaved and injured, and, indeed, to the chaplains of all our services.
I declare an interest as a former pupil of the Duke of York’s Royal Military School, which still serves the needs of children of people serving in the Armed Forces. Will the Minister assure us that the children’s places of those who have been made redundant will be safe at that school and that the educational arrangements that have been made for other children of those made redundant will be honoured by the Government?
My Lords, I thank the right reverend Prelate for his question. I agree with everything that he says about the Royal Army Chaplains Department. I was in Afghanistan last week and had the great honour to talk to a couple of those chaplains. They are doing very great work. I cannot give the right reverend Prelate an answer here and now on the specific case of the children about whom he asked, but I will write to him and deposit a copy of the letter in the Library.
My Lords, every case of wounded, injured or sick personnel will be assessed individually. No one will leave the Armed Forces through redundancy or otherwise until they have reached a point in their recovery where that is the right decision, however long it takes.
My Lords, I thank the Minister for repeating the Urgent Question. This is a very significant reduction for the Royal Air Force. Is this the end of the reductions, or are there more to come? It is very important for the service to know exactly where it is.
My Lords, the whole House holds the Minister in very high regard. We are all grateful for the attempts he makes to keep this House informed in what I am sure must be for him, as well as for many of us, very painful circumstances. However, these redundancies are not only very unfortunate but utterly short-sighted and irresponsible. The nation will rue the day when we lose those skills. In repeating the Statement, the Minister has increased the confusion about the nature of the guarantees that are being given by the Government to those who are serving in Afghanistan or who are on leave after operations there. How many more soldiers, sailors and airmen would have been covered by the guarantee had it been dated from 8 November than will be covered, given that the guarantee now runs only from the date of issue of the redundancy notices? If the Minister does not know the answer off the cuff—obviously, I forgive him if he does not—will he be kind enough to write to me and place a copy of the letter in the Library of the House?
I thank the noble Lord for that question. These are very painful cuts. When I became a Minister I did not look forward to making lots of cuts. It is a very difficult situation in which I find myself but we inherited this black hole and we have to act.
We did. The noble Lord asked how many people were affected. I cannot give him a figure at the Dispatch Box but I will write to him and deposit a copy of the letter in the Library.
The noble and gallant Lord, Lord Craig of Radley, asked about the Royal Air Force. There will be cuts to two Tornado squadrons. This week’s announcement to remove two squadrons of Tornados implements a decision taken by the previous Government during planning round 10.
My noble friend asks about recruitment, and I have an answer somewhere. The Armed Forces depend upon high-quality young men and women who want to join them for a rewarding and exciting career. The level of recruitment will be reduced during the redundancy period to suit new structures, but recruiting will continue.
My Lords, these painful redundancies are an outcome of the strategic defence and security review, which, as the Minister said, was aimed at delivering Future Force 2020. Can he confirm that that Future Force, as planned, will be achievable only with specific real-term growth in the defence budget in the second half of this decade? What assumptions are his department making about the financial planning levels for those years?
My Lords, will my noble friend clear up an additional matter about redundancy? The Statement says:
“The Army and RAF will give individuals notice that they will be made redundant on 1 September followed by the Navy on 30 September. The exact timing of further tranches has not yet been decided”.
Does this mean that in the Army and Navy, after 1 September and 30 September respectively, there will remain people who do not know whether the threat of redundancy will materialise for them? If it does not mean that, will he kindly say what it does mean?
My Lords, will my noble friend be kind enough to revisit the answer he gave to the noble and gallant Lord, Lord Boyce? His question, as I understood it, was: will the redundancy payments that are being offered to these people be meaner than those offered to people made redundant previously? I do not think that my noble friend answered that.
My Lords, the impression abroad is that the delay in arriving at a good and proper military covenant is that the MoD and the Government wish to get this lot out of the way, as has been discussed in your Lordships’ House this afternoon. Is it not a fact that great stress was placed in our debates in the past few weeks on the immediate need to bring forward a new military covenant that would not only set the scene for redundancies and everything else that we have been talking about, but would assume complete responsibility from the day that someone joins the services until he dies? It was made clear in several speeches that it was the responsibility of the Government to look after those who are being made redundant or who leave the services for any other reason. I say that because more and more evidence is appearing of soldiers, sailors and airmen slipping through the system, over the net and through the net, and now begging on the streets of Manchester, Birmingham and London. When will the military covenant be brought forward, so that we will know what the total responsibilities of this Government to soldiers, sailors and airmen are?
My Lords, the noble Viscount said that we give the appearance of wanting to get this lot out of the way. That is not the case. As the noble Viscount knows, we value all members of the Armed Forces. I understand that several service men and women will come forward for voluntary redundancy. The noble Viscount mentioned people slipping through the net. If he knows of any such cases, I would be very grateful if he could bring them to my attention.
As far as the military covenant is concerned, we are writing into law, through the Armed Forces Bill, the commitment that the Secretary of State for Defence will lay before Parliament every year a report on what is being done to live up to the covenant. We are committed to rebuilding the covenant to improve support for service personnel. We are doing everything we can to provide them with the right support, focused on the most important areas, despite the financial situation we inherited. We will soon publish a new tri-service Armed Forces covenant—the first of its kind. This will set out the relationship and obligations between the Armed Forces community, the Government and the nation. The report will also set out how we are supporting our Armed Forces, their veterans and families in such key areas as healthcare, housing and education. This will ensure that all future Governments must stand up for the Armed Forces.
Could we return to the terms of redundancy? I am somewhat confused about the meaning of “meanness”, compared with the meaning of “fairness”. An earlier question was asked about meanness and the noble Lord described the terms as being fair. The question is: fair to whom? I simply ask whether the terms of redundancy are the same as before—the noble and gallant Lord, Lord Boyce, referred to them—or different.
I am sorry to go on about this issue but when it comes to fairness and meanness, surely there is one way of answering the question. Will they get less this time, given the change in the value of money, than they got last time? If they will, prima facie it is meaner.
With respect, that is not really satisfactory. Could the Minister, who is very thoughtful on these matters, give the matter some thought and maybe put it in writing in a letter to the House? That would enable us to make a comparison. The point that has been brought up by the noble and gallant Lord is a very fair and important one. To have the rumour running around that this is meaner but fairer, or something of that nature, just plays into a demoralisation argument. Please do not go there.
My Lords, the noble Lord and the noble and gallant Lord raise a very important point. I am happy to put this in writing to the noble Lord, Lord Soley, and the noble and gallant Lord, Lord Boyce. I will certainly deposit copies of those letters in the Library to clarify this issue.
Energy Bill [HL]
Report (1st Day)
1: Before Clause 1, insert the following new Clause—
“Purpose of this Part
(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 (the target for 2050) and the carbon budget set for each budgetary period under Part 1 of that Act (carbon target and budgeting); 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 (strategy relating to fuel poverty).(2) In performing functions, exercising powers and reviewing the effectiveness of the green deal under this Part, the Secretary of State must have regard to—
(a) the principal purpose set out in subsection (1); and(b) the recommendations from time to time of the Committee on Climate Change where these are adopted by the Secretary of State.”
My Lords, I apologise for the slight delay in getting to my feet. I need some assistance from my colleagues, as the noble Lord will know.
These amendments are very similar to those that we brought forward in Committee, but we have taken into account the comments and concerns that the Minister expressed on that occasion. The amendments before us today seek two things. The first is the provision of an annual report to Parliament by the Secretary of State on how the ECO and the Green Deal are fairing. Secondly, they establish the purpose of both these new clauses in the Bill in terms of the Government’s objectives as stated in previous legislation.
In Committee, the Minister was understandably concerned about not imposing a new duty on installers or providers to take account of the recommendations of the Committee on Climate Change. That is not unreasonable, and we took it into account before putting the amendments before your Lordships today. Therefore, these amendments have been slimmed down. They would impose no new duties on the Government other than to provide an annual report—something to which I know the Minister is sympathetic—on the goals and aims, as stated in the impact assessment on the Bill, for carbon reduction and fairness. It is a way of putting the Bill into the context of government policy.
A report by the Secretary of State to Parliament on the operation of the Green Deal would be extremely helpful. Indeed, when dealing with a point raised by noble Lords in Committee, the Minister said:
“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”.—[Official Report, 17/1/11; col. GC 17.]
He will know of the criticisms that were made just yesterday of the Minister in the other place, Greg Barker, when he spoke at the Ecobuild conference in London. Concerns were raised by the UK Green Building Council, and the president of the Royal Institution of Chartered Surveyors said that there was not enough certainty or incentives for the industry, and that, although they supported the Government’s package of measures as being incredibly ambitious, they were concerned that it would not achieve the objectives. Like the Government, we want this Bill to achieve the objectives that have been set. They are ambitious, and some amendments have been tabled to help the Minister to achieve those objectives, to which we know he is committed.
Probably the most helpful parts of the amendments before us today relate to the annual report. The Secretary of State will have the opportunity to come back to Parliament, having looked at how the Green Deal is fairing. In the light of the commitments that the Minister made in Committee, there will be an opportunity for the Green Deal to be tweaked or changed and to see whether more can be done to create incentives. I beg to move.
My Lords, I support the amendment. The Minister will undoubtedly have been advised by officials and the Cabinet Office that it is not normal to put purpose clauses into Bills. However, that has always been nonsense. It is particularly important that we set out clearly in Parliament the purpose of these measures.
I commend the Government on developing the plans for the Green Deal, but undoubtedly not all the details have yet been thought through. Some will be thought through before the scheme is launched, some will appear in codes, some will appear in regulations and some will have to be dealt with in subsequent practice once we see whether the market is mobilised as effectively as the Government wish. However, the purpose will not change. With any changes down the line that the Government find it necessary to make, it is particularly important that we go back to the purpose of the Bill. That purpose is, in effect, twofold: to save energy and therefore carbon dioxide and greenhouse gases, and to reduce the incidence of fuel poverty. Both those need to be addressed and set out in something like a purpose clause with a requirement to report back.
As for fuel poverty, I speak as one of the two Ministers who drew up the original guidelines. My noble friend Lady Liddell was the other Minister who signed the original Act to set up targets for fuel poverty, and it is not an easy subject, but it is important that the Government and Parliament set out the objectives. The contribution towards the elimination of fuel poverty is clearly one such objective. That will not solve the problem, as other measures also need to be taken, but it is a contribution and any subsequent change down the line needs to be seen against it, particularly in relation to the Green Deal.
On the face of it, it is not clear how the basic principles of the Green Deal apply to the fuel poor, particularly those who are in tenanted accommodation, whether with social landlords or private landlords, because the best way of delivering that dimension of the Green Deal may be in a deal with the landlord, albeit that the tenant normally pays the bill. Some complicated arrangements will have to be made. That is not yet in the Bill and I do not expect it to be, but reference back to the objectives and obligations to report annually would help us to keep the objectives of this provision clear. I hope that the Government will adopt something like these clauses in the final version of the Bill, either today or in subsequent proceedings in another place.
My Lords, I hesitate to intervene, and if the Minister had risen quickly enough to keep the noble Lord, Lord Whitty, in his seat, I probably would not have intervened at all.
Although repetition is a good thing, we must bear in mind that the stated purposes have already been written into legislation and are already so ingrained in all our thinking habits that, frankly, to put them at the beginning of this Bill adds nothing. One problem with the amendment is that it requires “commensurate contributions” from two very diverse and very different things that will depend on a great deal of voluntary action by large numbers of people or groups, societies, local authorities, housing associations and so on. To me, the word “commensurate” makes this, worthy though it is, in effect meaningless because there are too many outside factors that mean that commensurate action will probably be only accidental because it depends on so many people, either tenants, landlords or the other categories of people whom I have already mentioned, volunteering to take part. It also depends on a lot of other factors, the primary one being the absolute certainty that the energy savings they will achieve, and the value of them, will be greater than the costs that they have to bear. Such arguments were expressed in Committee because of the uncertainty about what might happen with interest rates in the future.
The second point is that, even if we put this into place, the far more potent effect in reducing emissions from domestic households will be the work that will have to be done on the supply side of the energy industry to decarbonise the electricity supply. It is far more important to pay attention to that sort of aspect, where the effect can be far greater on a residential level, than this aspect, which will have a beneficial effect—there is no denying that—but not a huge effect because the amount of energy and the cost saved will be nowhere near the cost of making the domestic sector CO2-emissions free. In my view, the effect of the 2050 target implies that by 2050 the whole domestic sector has to be carbon-emission free. We need to focus much more on that effect and take this as it is now. It will be a benefit, of course, but it will be only a small benefit. I do not think that we should complicate the matter, and still less should we try to take actions that depend on the actions of others—that are commensurate—because we simply cannot control the situation with that degree of accuracy.
My Lords, I thank all noble Lords who have spoken and want to tell everyone that I am on my best behaviour because my boss is watching, so I will not say anything too controversial or concede too much.
It is a great opportunity for me to thank all noble Lords for the time and effort that they put into Committee to identify issues and work together to make this a much more valuable Bill. That is the expertise of the House. We can contribute, and we have done magnificently. We have given the Bill a thorough road test with great cross-party agreement, and I pay my personal thanks to those on the Opposition Benches for all the work that they have done—through very difficult physical circumstances in the noble Baroness’s case. I am delighted to see her able to get to her feet. She can always have assistance from our side, particularly when going into the right Lobby.
We have sought where possible to accommodate suggestions, but some cannot be achieved within the timeframe available on Report. However, we will endeavour to do so by Third Reading, and then further changes will be made in the other place. Of course, some amendments would not provide the functionality that is required, and even though we have listened very hard to them, unsurprisingly we will not accept them. I hope noble Lords will take that into account when they make their contributions. We have listened and we have all ridden together to make this a constructive document, and again I thank everyone for their support. I do not believe that it is necessary to set statutory powers, as referred to in Amendments 102 and 121, but I agree that there should be an aim for our energy efficiency policies. We will come back with proposals on that for consideration in the other place, which I hope will satisfy the noble Baroness. We cannot achieve that now, but we will be looking to achieve it as we go forward.
I am grateful for the contribution from the noble Lord, Lord Whitty. I was pleased to see that he had a playful smile when he referred to fuel poverty, which is fundamental to what we are trying to achieve. Fuel poverty has increased exponentially and we must put the brakes on that. Much of what we are trying to do with the Green Deal addresses that. My noble friend Lord Dixon-Smith rightly points, as he often does, to the issue of whether we should have continuing annual reports, and so on. Clearly the Government are committed to openness and transparency, and we have an annual report on progress towards our energy efficiency goals. We will consider the operation and performance of our energy efficiency policies, not least the Green Deal and the ECO, which will prominently feature in our reports published under the department’s annual energy statements. Such documents will provide all the information required on the activity of the department, including the Green Deal and ECOs. I hope that that reassurance will allow the noble Baroness to withdraw her amendment.
I thank the noble Lord for the way in which he has engaged with the Opposition during the Bill’s proceedings. He says that he will take things away and look at them again, which has been a theme throughout the Bill. All the amendments today are within that spirit of co-operation. I feel strongly about them, so I shall press the Minister for clarification. I think that what he is saying might satisfy our requirements, but we will test the will of the House unless I am clear about that.
There are two issues here. One is the annual report on ECOs and the Green Deal; the other is the purpose. Does the Minister intend to bring forward a purpose or aim clause which will specify what the Bill is to achieve in the context of government policy on emissions and other legislation? Will an annual report from the department include information about the Green Deal, such as how many homes have had Green Deal measures installed and what the emissions savings have been? If so, he has gone a long way to meet our concerns. If he is saying that those measures will be brought back either at Third Reading here or in the Commons, I will happily withdraw the amendment, but some clarification would be helpful.
Forgive me; I thought that I was quite clear on the subject. The department’s annual energy statement will provide details of the progress of the Green Deal and ECOs, which will answer the noble Baroness’s question. Obviously, in providing information about the Green Deal, it will provide information on the amount of activity that we are able to create with it. We are committed to that.
As for the aims, I state clearly that we will look at them, refine them and come back with proposals in the other place, if we can in the timescale available for further debate. It should be very encouraging for the noble Baroness that that will carry on through the passage of the Bill.
Amendment 1 withdrawn.
Clause 2 : Green deal plans: supplementary
2: Clause 2, page 3, line 2, after “electricity,” insert “liquid petroleum gas,”
This is a very small amendment aimed at clarifying the position of liquid petroleum gas under the Green Deal plans. Calor Gas, in particular, is anxious to have that clarification, and I am very grateful to it for briefing me on the amendment. Calor is very keen to involve itself in all ways which make its product as green—that is, as efficient—as possible; in particular, in the use of liquid petroleum gas in microgeneration boilers.
I understand that approximately 43 per cent of British homes are currently classified as hard-to-treat for greater efficiency purposes for a number of reasons, such as not having cavity walls or not being on the gas grid. A reasonable proportion of those homes appear to be unlikely to qualify for the Green Deal, either because they have little potential for improvement or because their heating bills are too high for the measures to have a positive financial impact. That could affect the position of those living in rural areas, where fuel poverty tends to be concentrated. Liquid petroleum gas systems, which are off the gas grid in hard-to-treat homes, may be the answer, offering the potential to reduce domestic fuel bills by up to 25 per cent, together with improved efficiency and lower carbon emissions. Does liquid petroleum gas qualify for the Green Deal? I beg to move.
My Lords, I commend this point to the Minister on behalf of people who live in rural areas. I hope that he will be able to say to us that it is perfectly all right, but the fact is that many people in my former constituency and constituencies like it rely on liquid petroleum gas. It would be a great pity if they could not improve their circumstances. It is an important part of our programme and it would be a pity if, by some oversight, it was left out.
I have some sympathy with the objectives of this amendment, but what strikes me as a problem is the structure of the Green Deal, which requires suppliers of energy to recover the debt that will have been advanced for the improvement of the house and transmit it to the providers. If one is talking about gas, electricity, and, I think, fuel oil, that would not be difficult, but in relation to LPG, a great deal of which, particularly in rural areas, is delivered to individual householders in individual canisters that have to be replaced from time to time, this fits rather uneasily into the main structure of the Green Deal. If this amendment is to be accepted, it will be incumbent on my noble friend on the Front Bench when she replies to explain how the debt would be recovered in relation to supplies of gas in canisters. It is not quite the same as gas and electricity supplied through the mains. It may well be that when she winds up the noble Baroness, Lady Gibson, will be able to explain what Calor Gas has in mind.
My Lords, I thank the noble Baroness for raising this issue and I also thank other noble Lords for contributing. The amendment moved by the noble Baroness, Lady Gibson, seeks to include in the Green Deal measures that save liquid petroleum gas. As she and my noble friend Lord Deben indicated, this goes to the deeper question of how we tackle properties that are not connected to the main gas supply and ensure that the Green Deal is as inclusive as possible. I can assure the noble Baroness that it is our intention that the Green Deal is flexible enough to allow appropriate measures to be installed in the maximum number of properties. I assure her that the provisions in the Bill are already wide enough to allow this. This may also reassure my noble friend Lord Teverson. We are even now working with stakeholders to ensure that this can include measures that save energy in buildings that are not on the main gas network. In these discussions, some of the issues that my noble friend Lord Jenkin has raised will no doubt have to be addressed. I hope that the noble Baroness found my explanation reassuring and that on that basis she will withdraw her amendment.
Before my noble friend sits down, perhaps I may say that these issues will have to be addressed, but are we not entitled at this stage to know what might be in the Government’s mind as regards people buying cylinders of gas from ordinary retailers, as is often the case? If there are powers in the Bill that cover this, that is fine. I would be happy to accept that, but one needs to know how this is going to fit into the main structure of the Green Deal.
I am assured that there are indeed provisions in the Bill that will cover this. It may very well be that my noble friend Lord Marland would like to explain them in greater detail to my noble friend Lord Jenkin, to assure him that all is as it should be.
I think I will leave the noble friends to talk to each other. I thank the noble Lord, Lord Jenkin, for the points he raised, and I thank the Minister for her response. I will refer the debate back to Calor Gas, which is very interested in the replies. I beg leave to withdraw the amendment.
Amendment 2 withdrawn.
Clause 3 : Framework regulations
3: Clause 3, page 3, line 42, leave out “may” and insert “must”
My Lords, I shall speak also to the other amendments in this group in my name and those of my noble friends on the Front Bench. I also look forward to the contribution that my noble friend Lord Whitty will make to the debate on his amendment in this group.
As the Minister is all too well aware, we raised these issues in Committee. In particular, we raised them against a background of concern that we should be clear about what is in legislation and what will be enforceable in circumstances where such an important concept as the Green Deal is to be communicated to the nation. The expectation is to make as rapid progress as we can for all the objectives, which noble Lords share, in terms of achieving carbon emission targets and improvements in the fuel efficiency of households. That will be a massive exercise. Therefore, what is being constructed in the scheme needs to be absolutely clear in legislation. That is why we have tabled amendments seeking to make an obligation on the Government under this clause and subsequent clauses relating to this area. The concern is obvious.
However, I should first put on record my gratitude to the noble Baroness, Lady Noakes, who in Committee assisted us by indicating that we had used somewhat archaic phraseology when we introduced the concept of “shall” and that if we want to hit this objective we should insist on “must”. The House will be pleased to note that our amendments are perfectly constructed to be entirely acceptable to parliamentary draftsmen and the language that they are wont to use in legislation.
We are concerned to ensure that the legislation lays clear obligations and not elements of discretion on the Minister—not that we have anything but total trust in this Minister and the person, who I imagine is from the Commons, to whom he referred as his boss. I understand that relationships in the coalition may be defined in all sorts of interesting ways, which is a dimension I suppose I am obliged to accept. I take it that the Minister recognises that, whatever assurances he gives, we are discussing here not the intent or good will of Ministers, which we take for granted and of which we had great evidence from this Minister and his colleague in the conduct of the debate in Committee. However, the intention and good will of Ministers is as nothing to the import of statute and the law of the land. That is why, despite the fact that we received from the Minister a constructive response in Committee, following which we of course withdrew our amendments for further reflection, we are still of the view that this clause will be improved if we substitute “must” for “may” on the part of the Government in order that the country can be entirely secure about what the legislation constructs and so that it is not open to determination or discretion at subsequent dates.
This is an issue on which the country has to be involved. This is so much a question of participants among so many people with regard to the delivery of the Green Deal that it behoves Parliament to be absolutely clear in the Bill, which will eventually, with the good will of us all, become an Act. The Act must be absolutely clear about the way in which the legislation intends to work. Accordingly, I beg to move.
My Lords, my Amendment 6 in this group provides the Minister with an option. I agree with my noble friend that in many respects what goes in the Act, and therefore in the regulations, would benefit from the Bill stating “must” rather than “may”, but my proposal would leave discretion to Ministers because of what I spoke about in the first group of amendments today. We are in a situation where the Green Deal is being developed fast and furiously but without total clarity as to how it is to be structured and how different groups or different types of building can benefit from the terms of the Green Deal.
My amendment therefore gives the Secretary of State the option to put into those regulations, or codes, provisions that address the particular circumstances of particular groups. If, as I suspect, the fuel poor, in particular the tenanted fuel poor, will be difficult to deal with on the same basis as the bulk of the Green Deal arrangements, the Government will need some special regulations to address the problem, and to deal in particular with the relationships of the landlord and the tenant, who actually pays the energy bill.
For example, as we have just debated in considering my noble friend Lady Gibson’s amendment, in rural areas there will be a lot of houses off the gas network that rely on either Calor gas or heating oil. For those people, there will be no attraction in the central mechanism of the Green Deal, as was rightly spelt out by the noble Lord, Lord Deben, and others who reflected on that. In some areas, such as the south-west of England, over 50 per cent of people are off the gas network. A larger number of people have houses which are difficult to heat because of structural reasons and which, again, will require a larger investment than is easily repayable through the normal level of energy bills.
Therefore, I suggest that the Government recognise that they may need to make some special provision for chronic fuel poverty, chronic hard-to-heat or locational difficulties, which make the normal run of Green Deal structures and Green Deal arrangements, and the financial arrangements that lie behind it, not applicable. There is no reason why the householders in that situation should not benefit from something akin to the Green Deal. The power would, as I say, be discretionary, so I hope that the Government will recognise the necessity of having such a power, which would give them a little bit of elbow room down the line. They could either adopt my amendment today or promise to come up with something similar in subsequent parliamentary proceedings on the Bill. I think that they will find they will need it.
My Lords, I hope the Minister will notice that the noble Lord, Lord Whitty, in that very interesting speech, gives the key to why “may” is better than “must”. It is simply that this is supposed to be a Bill that Ministers can apply most effectively to the particular circumstances. In many ways one of the reasons the Bill has had common support is that it is a brave Bill; it is an attempt to make a big change and to make a big change in partnership. It seems to me that to have “must” without any prioritisation or the like is a very difficult thing to have. You have to decide at any given time which provisions you are going to go for. Somebody could come back to you and say, “Well, you may have provided the first, second, fourth and seventh sets of regulations, but you have not provided the third”. You have not done so because until those regulations go into operation you cannot do the other things. There is a question of practicality that makes “may” much more sensible, which is why the noble Lord, Lord Whitty, has raised his particular proposal in the form that he has.
However, it appears to me that the noble Lord’s proposal may well be covered in other parts of the Bill. If he is right and it is not, it would seem sensible to make sure that it is possible for Ministers to make specific arrangements, which will reach out to people in peculiar circumstances.
One of the things that has happened in the course of discussion of the Bill is to recognise how many people are in peculiar circumstances. This is not an area where you have simple programmes, where you can say that everybody is like this. I listened to my noble friend talk about Calor gas. We have a totally different view of what Calor gas is. For me, it is a very large tank with a delivery, not these little pot things, which relate to a different circumstance. It is perfectly possible to deal with the very large pots where perhaps it is not so easy to deal with the small pots. I merely make the point because there is a fundamental difference in the ways these things happen.
I hope the Opposition will accept that, on this occasion, I am afraid that we will have to depend on the good will of Ministers, because otherwise they will be unreasonably constrained in how they implement these matters. I hope, therefore, that my noble friend will resist the amendments, not in a curmudgeonly way, but simply because it is better to do it this way. However, perhaps he could explain to the House whether the concern of the noble Lord, Lord Whitty, to make sure that this reaches into all the tiny corners is addressed. Many of us who have dealt with particular areas of the country will know how easy it is for decisions made in metropolitan London not to work in the back kitchen of a cottage in a small village near Saxmundham. That is a different world and we must be absolutely sure that we cover it. In my former constituency, the poorest people living in the most acute fuel poverty were to be found in what looked like idyllic cottages at the end of lanes. It is very important not to forget them.
Another issue that this group of amendments raises was discussed in Grand Committee. Much of the detail of this legislation will be found in regulations, and indeed we have been told that there are to be 19 different sets of regulations. I think we have accepted that that is an inevitable feature. My noble friend assured the Grand Committee, and indeed the House at Second Reading, that there would continue to be a great deal of consultation, and I take some comfort from that.
I have had a report of a meeting, held by the senior official in my noble friend’s department who is in charge of this activity, which was attended by 60 to 70 industry representatives. Apparently, she said that DECC is completely open-minded on the details and is listening to every point of view that is put forward—“listening” being the important word—and I welcome that. Furthermore, all the evidence will be published so that in due course we shall be able to see that other matters will be brought forward for continuing consultation. That is a reassuring point. Indeed, the issues raised by my noble friend Lord Deben and the noble Lord, Lord Whitty, are exactly what those sitting in the official Box will pick up on. They will recognise that when they come to draft the regulations, these things will have to be dealt with properly. From what I have heard from industry representatives, I am reassured about what the process actually is, and perhaps my noble friend will take some comfort from that.
My Lords, I should like to speak to Amendment 6, tabled by the noble Lord, Lord Whitty, which deals with making,
“specific provision for the green deal to address situations of fuel poverty”.
With this in mind, will householders in fuel poverty be able to afford the cost of the assessor? I believe that this cost, which might be £80, £100 or £120—I do not know—could be a barrier to the take-up of the Green Deal. £100 may be the entire weekly income of some householders in poverty, so rather than spend £100 on the assessor, they will choose to buy food or whatever. I suggested in Committee that this cost could be rolled up into the Green Deal so that no one has any up-front costs. The Minister’s response then was:
“As for rolling up the costs of the assessor, we would not encourage that, but there may be a framework in which it could happen. We will need to look into that further”.—[Official Report, 19/1/11; col. GC69.]
I wonder whether my noble friend has been able to look into it further and whether he can give me any comfort on the matter.
I thank noble Lords for their contributions. The noble Lord, Lord Whitty, has made a valuable point in asking whether the Bill should state “must” or “shall”—shall we or shan’t we?—so there are many imponderables. I am also grateful for the contributions made by my noble friends Lord Deben and Lord Jenkin of Roding, both of whom speak with great authority on these subjects.
The most important thing is that, as we take this Bill through its meandering course, we have the flexibility and the opportunity, as Ministers, to consult industry and all bodies that have an idea on this, and eventually to tighten the code of practice. At this point, however, it would not be appropriate for us unilaterally to change these words, which currently give the Government flexibility. I am heartened by and grateful for the words of the noble Lord, Lord Deben, that for the authority of Ministers it is imperative to have that flexibility. In the spirit in which we have conducted this Bill, I am happy to consider Amendment 3 in principle, as it is very important that the Secretary of State establishes a scheme through regulation. In considering the matter, it is rather important that we remove any doubts about the issue. That is why we are prepared to consider this amendment, but as the noble Lord, Lord Whitty, would suggest, we need flexibility in the other areas as we continue to go forward.
As to the cost of assessors, further consultation has taken place with industry. We strongly believe, as I said in Committee, that many of the suppliers will pay for the assessment, because it is to their benefit. Typically, I would imagine, if one went to B&Q, as one does when buying a home, one might be provided with a list of approved assessors and an assessor would then go in and make the assessment, which would be paid for by the provider. Our research with industry and with the potential providers suggests that that will, we hope, answer the important question of my noble friend Lord Cathcart.
In the spirit of what I have just said, I hope that my comments on these amendments find favour, and that the amendment will be withdrawn.
My Lords, I am grateful for the tone which the Minister has taken, as he did throughout the Committee stage, indicating that he will further consider our proposals. He will forgive me if I indicate that “considering” is not quite a promise of change, and he has had one further look at it as a result of our deliberations in Committee. I want to pay due credit for that deliberation.
I think that the noble Lord has an amendment on the code of conduct in the next group that would greatly strengthen his case and his position, and if he had prayed that in aid in relation to why “may” should remain rather than be replaced with “must”, I would certainly have been floored. Possibly, however, he wants to make the case for the next group of amendments in his own good time, and I recognise that. What I am indicating is that it is an indication of the Government’s approach to these issues. Our approach is as one. The reason why we are concerned to have concepts like “must” in the Bill, at certain crucial structural points, is obvious. I accept entirely my noble friend Lord Whitty’s point about an additional feature that should be taken into consideration, to which he would not necessarily want to attribute the concept of obligation.
On the structural issue, the reason why we think an obligation should be present is simply that we have got to communicate a message to many of our citizens who, as the noble Lord, Lord Deben, indicated, comprise an enormous variety. The enormous numbers of people in the nation who have to respond to this legislation, hopefully in a constructive way, are such that the legislation needs to be as clear as possible, so that the message that is sent out is sufficiently clear to be readily understood.
As I indicated, because of the Minister’s response to these amendments and even more in his actions with regard to future intentions—I refer to the next group of amendments, which are government amendments that are constructively expressed—I am happy to withdraw my amendment at this stage.
Amendment 3 withdrawn.
4: Clause 3, page 4, line 14, after “issuing” insert “, revision or revocation”
My Lords, as the noble Lord, Lord Davies of Oldham, has telegraphed, this group of amendments respond to the excellent comments made by my noble friend Lady Noakes—such is the harmony that flows between the parties at the moment I was going to say his noble friend Lady Noakes—and my noble friend Lord Jenkin of Roding. The Delegated Powers Committee also prompted a number of these amendments. I hope they are self-explanatory and respond wholeheartedly to suggestions by my noble friend Lord Jenkin of Roding, to whom we are, as always, extremely grateful. I hope that the amendments satisfy his requirements and those of the Delegated Powers Committee. I beg to move.
My Lords, I am indeed entirely satisfied with this group of amendments. This gives me an opportunity to say that the Government tabled no fewer than 145 amendments to the Bill. I assure the noble Lord that I did not have to count them. He was kind enough to send them to those of us who are active on the Bill numbered one to 145. It was a little difficult sometimes to match them up with the numbers of the amendments that finally appeared officially on the list.
Sorry, my Lords; I was a little slow on my feet because I was somewhat taken aback by the speed with which the government amendment was moved, as the noble Lord, Lord Jenkin, indicated. With this number to get through, I suppose the group needs to be disposed of with some dispatch, but I had anticipated a slightly longer description from the Minister of what the amendments in the group purport to do.
Suffice it to say that the burden of my remarks on the previous group of amendments is that Amendments 50, 51, 52 and 56, which relate to how the code will be considered as far as parliamentary practice is concerned, go a long way to meeting anxieties about how we can be responsive to the application of the new deal. We need a framework into which we can all contribute. I have not the slightest doubt that we have an exercise of considerable complexity and real challenge. It means the commitment of real resources for people against fairly distant objectives. For some people, the gains will be future gains on behalf of the community while there is an immediate practical personal cost. That is why Parliament must be assured that we have provided a framework that works effectively.
The Minister listened to our concerns in Committee and these amendments, particularly those relating to the code of practice, are extremely constructive. I will be happy to support the amendments when they are put before the House.
Amendment 4 agreed.
5: Clause 3, page 4, line 27, at end insert—
“( ) Regulations for fees payable under this section may establish a reduced fee for charities and social enterprises applying for initial or continued authorisation as green deal participants.”
My Lords, I proposed a similar amendment to this in Committee and was greatly encouraged by the Minister’s response, which prompts me to bring it forward again today. In some ways, we might call this the big society amendment. My last role in Government was as Third Sector Minister and in it I saw—as I am sure many other noble Lords in their time in different departments, former Members of the other place in their constituencies and indeed noble Lords in their work in the community all have—how the role of the charitable sector and social enterprises in helping the most vulnerable in society, particularly those who are fuel poor or fuel vulnerable, is something society as a whole has welcomed. I know the Government want to attract those kinds of non-profit making or third sector organisations into public sector provision. However, there is an opportunity here for the wider charitable and social enterprise sector to be involved in the kind of work that it does best in conjunction with Government.
Although the Minister was very encouraging in Committee, I think some noble Lords misunderstood my explanation of this amendment, which merely seeks within the framework regulations, where a fee is payable for the initial or continued authorisation of the scheme, that the fee be reduced for those organisations such as charities and social enterprises. I am perfectly happy, in the welcome spirit of co-operation that the Minister has displayed today, to look at alternative definitions and for him to come back with one.
I accept that many—indeed most—of the providers, installers and operations will be, as the Minister said, market-driven. However, we should do everything we can to encourage those charities, social enterprises and non-profit-making organisations that have a special and specific role in helping the vulnerable, those with special needs, the disabled and those with learning disabilities. I found the Minister’s response last time very encouraging so I thought I would give him another opportunity to come forward. He has been very gracious today in accepting the proposal that has been put forward and I know that he would not want to see—as I would not—any potential assessor or installer excluded from the market when they have the ability to help those that most need it.
The amendment is also about ensuring that we have a Green Deal that reaches as many people as possible—I know we all want to see a big take-up. Attracting those charities, social enterprises and voluntary sector organisations into the market can only help increase the number of households that take up the Green Deal, as well as giving that specific help and support to the poor and the vulnerable. I look forward to the Minister’s response. I feel strongly on this issue and I know he does as well. I hope he can satisfy me on this issue and we are able to withdraw the amendment. However, if we are unable to, we will want to test the view of the House on this.
I thank the noble Lords for their suggested amendments. This amendment seeks to ensure that where the code of practice specifies that an authorisation fee is payable by Green Deal participants, it should be reduced for charities and social enterprises. We recognise that these bodies will have—must have—an important role to play in helping to deliver the Green Deal. We are already considering how secondary legislation could allow for authorisation fees to be set at a variable level, depending on the nature or status of the organisation. We appreciate noble Lords’ desire for more clarity on this matter and I assure them that we are continuing to consider this issue further and will bring back a government amendment if necessary to this effect in the other place. We are seeking to make sure that this is as comprehensive as possible.
I am sure the noble Baroness would agree that we do not want to end up in a situation where, by specifying one or two organisations, we thereby exclude others. We fully accept the notion she is putting forward that the authorisation fee might be variable. We are seeking to work out how best you take that forward so that it is as effective and inclusive as possible, as opposed to being too specific around some particular groups that might be identified now, thus inadvertently excluding others. That is why we are still looking at this. However, we fully support what the noble Baroness seeks to do and if this is best put in primary legislation, an amendment will be brought forward. That will probably be in the other place because of the timing, but we are seeking to work out how best to achieve it. That is why we ask her at this stage to withdraw her amendment so that we can work this out better. We invite her to contribute to the discussions about how best to achieve that. I therefore invite the noble Baroness to withdraw her amendment.
My Lords, the Minister’s encouragements to me were certainly not misplaced and I am very grateful to the noble Baroness for that answer. I entirely agree. It was never my intention to specify individual organisations or their categories. The variable fees approach is very much the way to proceed and I am happy to work with her to see how best we can achieve that. I look forward to seeing the amendments, if necessary, in the other place. On that basis, I am again happy to withdraw my amendment.
Amendment 5 withdrawn.
Amendments 6 to 8 not moved.
8A: Clause 3, page 4, line 46, at end insert—
“( ) The provision made by the code in relation to green deal participants must also extend to matters in connection with energy plans that are promoted or arranged at the same time as green deal plans.”
I feel that I have the appearance of a jack-in-a-box at this Dispatch Box. Hansard may make of that what it will. The amendments put forward in today’s sixth group—I beg to move Amendment 8A and to speak to the others in the group—all seek to achieve the same aims. They are all supportive and reflect the discussion that we had in Committee. Certainly, our Amendments 8A and 8B look to ensure that protection is there if an assessor identifies within the Green Deal—this also expands to the energy plan—that plans that are promoted or arranged at the same time as the Green Deal plans should also have protection from the same code of practice, so there is no confusion for those who have work undertaken in their homes.
We are certainly very supportive of Amendment 11, as proposed by the noble Lord, Lord Teverson. I think he is trying to raise exactly the kind of issues that we raised in Committee. The amendments before us reflect our discussion in Committee, when I raised the point about having an energy plan from which the consumer could choose their Green Deal plan. That is in effect covered by this amendment. Much of his amendment, and ours, hits the key areas that concern people about the Green Deal. The assessor will identify what measures can be taken to improve energy efficiency. They must act in the best interests of the improver—that is, the consumer—but it is the customer or improver who chooses which measures in the energy plan then go into the Green Deal plan. Subsection (4) of the proposed new clause in Amendment 11, as proposed by the noble Lord, Lord Teverson, ties in with our purpose clause and reporting clause, which the Minister so graciously accepted the need for earlier, but on a smaller scale to let us know the impact by consumer.
Again, the amendment proposed by my noble friend Lord Whitty is excellent. One way to best protect the consumer at any stage is through transparency and openness. If we always ensure that we have those, that fits in entirely with the Government’s approach on other issues as well. Our amendments are very much worth supporting. The key for consumer protection is that if consumers have a Green Deal plan, other measures introduced in their energy plan should all have the same protection, so that the consumer does not feel at a later stage that they have been somehow conned. I believe this will give confidence to the consumer and to the public in taking up the Green Deal.
My Lords, we have had a long and useful discussion about making sure that consumers receive the best deal that they can from the Green Deal. One of the areas that I felt was missing when we considered the original Bill in Committee was a duty for providers, for people who were bringing plans forward to consumers, to ensure that that was the right plan for that household and that family. I thank the Minister for the discussions we have had, and that I know he has had with other parties, on this area. I welcome the fact that the Bill is being brought forward relatively near the beginning of the parliamentary Session so that we can get the Green Deal implemented next year.
In putting the amendment forward, I was looking to get on the record the Minister’s further thoughts about how this area will operate. I have wrestled in my own mind to a large degree with how the tripartite arrangement of the financier, the adviser and the person who does the work will come together. We must avoid a bias in the solution whereby the person who draws up the plan fits it to the provider whom they are dealing with or fits the term of the finance deal to the finance provider, so that we do not have a situation where a biased recommendation is put forward that the consumer then feels they have to accept. How will the people who do the assessment be paid for if they are not connected to the other people?
My conclusion, having thought this through at some length with my meagre intellectual powers—
I hear shouts of derision. I am sure that the way this will operate—I do not say this negatively; it seems to be a fact of life—is that those three pillars of the deal that the consumer faces will be as one. I cannot see every potential provider, worker or builder going out there and getting the smart financial deals from the money markets, not just in London but worldwide or whatever, that larger organisations can. I cannot foresee a situation in which the advisers go out independently and then whether or not they get a deal depends on whether they get a fee. I do not think that any household will pay a fee. There is no provision for fees in the Bill.
The way in which this will work is that integrated major organisations—there is still a question about how smaller builders and SMEs will participate in the scheme, though maybe that is a broader issue—will come forward with major deals. There will then have to be competition so that the consumer can go out to maybe two or three of those major providers and get alternative deals, with alternative financial implications for the sort of deal that they go for.
I am interested to hear some further thoughts from the department about how this will effectively operate from the consumer’s point of view in terms of whom they come into contact with and who the deals will be sold by. How will we make sure that the competition is sufficient and that people feel confident enough that they take advantage of inviting more than one potential provider into their household? How will the Minister ensure, whether through a duty or through quality assurance, that those plans, even when there is competition, really reflect the best interests of the consumer? This whole area, as the Minister has said many times, is critical to ensuring that the scheme has credibility. It will roll out in the volume that we all want only if consumers find this to be a credible option that they can trust and that they know is going to give them not just a good deal but the best and the right one.
My noble friend’s meagre intelligence has led him to ask a series of very important questions. I put “meagre” in quotes; it would be quite wrong for him to stand by his own words.
I have a slight anxiety about this matter. As my noble friend rightly said, a number of parties are involved in producing the Green Deal for the customer. I had assumed that it was the role of the assessor to determine whether a proposal being put forward by a provider would achieve the objectives of the Green Deal. It seems to me—certainly a lot of people in the industry think that this will be the case—that a very wide range of bodies will wish to become providers under the Bill, not just banks, building societies or financial institutions. It has been suggested that major retailers might wish to become involved as well as local authorities, housing associations and a range of other bodies. I am not entirely clear how far the responsibility for ensuring that the plan is in the best interests of the consumer can necessarily rest with the provider.
My noble friend’s amendment emphasises the provider in this regard. The provider is entitled to rely on the advice of the assessor as the assessor will advise all parties on the validity of the proposals being put forward. Therefore, it would be very helpful if my noble friend could make this clear when he replies to the debate. I quite understand that these matters are being discussed with all the interests involved, but we must have some idea where the responsibility primarily lies. It is difficult to suggest that it lies with the provider, as my noble friend’s amendment does. The provider is entitled to rely on the advice of the assessor. As my noble friend rightly says, I hope that these matters can be decided in a competitive environment so that the consumer has a choice.
My Lords, I wish to pursue the point made by the two previous speakers. This is an extremely important area in which the fine detail will determine whether the scheme works. I draw attention to the implicit assumption in the Bill that there is such a thing as a unique assessment. Regardless of who makes the assessment—whether it is done by the person who ultimately provides or an independent assessor—these are matters on which there can be different views and with which a householder may be dissatisfied and may legitimately and reasonably want a second assessment.
My Lords, I support all the amendments in this group and wish to speak specifically to Amendments 14 and 15. These are the remnants of a pretty broad discussion that we had in Committee about the need to ensure consumer confidence in this scheme. Indeed, the noble Lord, Lord Oxburgh, has just referred to that matter. The noble Lords, Lord Teverson and Lord Jenkin, have indicated in relatively few sentences what a complicated arrangement this might appear to consumers. One of the reasons they need assurance is because this is more than a trilateral arrangement. In most cases there will be an assessor, who should be independent, and a provider, who will be the main provider and deal with the scheme, but the actual installer might be someone entirely different and under a certified, authorised subcontract to B&Q, the bank, Marks and Spencer or whoever might be the main provider. Then behind all that, financial arrangements that are closer to the householder may or may not come further downstream. It will be confusing. For that reason, the consumer—the householder or the landlord—needs serious confidence-building measures.
We were assured in Committee that some of those measures, apart from a bit of tweaking in the Bill, are already on the statute book in the provisions of the Consumer Credit Act and that they apply in this case. Most of those measures are, in fact; I am greatly reassured by that and I am grateful to the Minister for spelling that out. However, some areas are not so clearly covered by the consumer credit arrangements, and there are other markets where the consumer credit arrangements have not proved to be sufficient.
My two amendments address cross-selling and mis-selling. Amendment 14 talks about the assessments being dealt with by assessors who are independent of the providers. That does not mean that they will be totally independent, but that their assessment should be made on an unbiased basis and that they do not make recommendations that are geared to the specific offers of particular providers. Were that not to be the case, not only would the consumer interest be damaged but the Government’s desire—rightly so—to make this a competitive market would be seriously undermined.
The noble Lord, Lord Oxburgh, is right to say that there is ultimately no such thing as a completely objective assessment. However, it has to be an honest and clear assessment that is clear of bias towards any potential provider or installer. Amendment 14 deals with that, because there are no measures in the Bill to prevent Green Deal assessors being incentivised by providers to make assessments in their interests. It is important that the consumer is reassured on that. Similar provisions in other areas of financial credit have not proved to be sufficient to avoid biased financial advice appearing in some markets. Indeed, the FSA is still struggling with some of those issues.
My second amendment deals with transparency. Again, I am not sure that the Consumer Credit Act is sufficient. There are references to fees at various points in the Bill. The noble Earl, Lord Cathcart, referred to the fee for assessment, and I agree with him that it would be highly desirable if in all cases, not simply for the fuel poor, the fee for assessment was rolled up in the totality of the deal and arrangements were made for cross payment, as necessary. If you are faced with a threshold fee, that is a discouragement. You might end up paying the same money, but it should be part of the credit arrangement, not a separate arrangement.
There are subsequent references to fees, not all of which are entirely clear, and some of which may relate to exit fees. I understand that exit fees are an important provision for some credit providers in different markets, but it has to be made absolutely clear in the original agreement if there is to be an exit fee. We know that in other financial markets—mortgages and others—the regulations relating to exit fees are not clear enough. Certainly in the information provided to a person taking out a mortgage it is not always spelt out sufficiently when there is a substantial exit fee. In this case, the fee may relate to the owing of money, not to the person with whom you have dealt or who installed the energy-saving measures but to a financial company that lies behind that, via an energy bill from your energy supplier, and it is important that exit fees, if they exist, are specified. It is highly desirable that exit fees should not be another inhibition to the householder or a subsequent householder when deciding to move away from a particular supplier or form of credit.
Transparency is very important, and the current provisions of the Consumer Credit Act do not seem to tie this up sufficiently for application to these deals. The complexity of the arrangements, and the difficulty of explaining the range of organisations that will be involved in the totality of the deal for the average householder, make it even more important than in some other markets—where there is clearly a bilateral arrangement—that transparency exists. I therefore hope that the Government will take these amendments seriously.
Just to underline this, the real danger for the Government seems to come at the beginning. If one or two of these things go wrong because consumers are put off taking up the scheme, or very early on have some misunderstanding—to put it at its most neutral—with the installer, the provider or the financial vehicle, the rumour that this is not a good scheme will spread rapidly. We all want the scheme to succeed—to have a wide take-up and make the maximum possible impact on energy efficiency. However, it could stumble at a very early hurdle unless consumers are reassured. These two measures would help to reassure them.
My Lords, I have just been handed a speaking note, which has slightly confused me. Ireland has beaten England in the one-day cricket—so much for the Green Deal. I am sorry to take away from the serious aspect of what we are talking about and I hope noble Lords will forgive me for imparting that. I know the noble Lord, Lord Davies of Oldham, will be as distraught as I am to hear that news.
The noble Lord, Lord Whitty, makes a very serious point, as always with his knowledge of consumers. At the heart of the Green Deal must be consumer confidence. Without consumer confidence we will not get this deal off the ground. It is imperative that the Government do this. The noble Baroness, Lady Smith, and the noble Lord, Lord Teverson, raise what I think are probing points that need to be ironed out in the passage of this Bill. The ironing out will be carried out with the platform of the Green Deal being very much consumer confidence, as we have debated in this Chamber and in Grand Committee rather exhaustively. On that basis, noble Lords will forgive me for reading out my speaking note, which is unusual for me. I will do it on this occasion because I want to get it right. Like the noble Lord, Lord Teverson, I suffer from meagre intelligence, so this has to be done in very big language.
Amendments 11 and 14 seek to ensure that consumers are offered the best possible energy efficiency solution. Clause 4 is central to the Green Deal and sets out the circumstances in which a Green Deal plan can be offered to the consumer. We envisage that a standardised methodology—mentioned by the noble Lord, Lord Oxburgh—will be used to carry out the assessment. This will ensure that the assessment is carried out in a robust, impartial way so that any measures recommended are suitable for the property in question and not influenced by other considerations.
Where the responsibility lies was the question asked by my noble friend Lord Jenkin of Roding. Assessors are responsible for getting the technical impartial assessment right. The Green Deal providers will be able to rely on this. They are responsible for financial advice. Installers will be responsible for the standard of installation.
I carry that theme a little further in response to the noble Lord, Lord Teverson, on how the financing will work for small builders, for example. Assessors and installers will not need to raise the capital. The Green Deal plan is between the Green Deal provider and the consumer, but that does not mean that assessors and installers will be paid a commission. Nor does it preclude independent assessment. In addition, Clause 3 provides for the code of practice that will regulate the proficiency of the Green Deal participants. The provisions in this clause seek to ensure that consumers are offered the best possible energy efficiency solution for their property.
Amendment 15 seeks to ensure that the consumer is made aware of any applicable fees in a clear and transparent way. The consumer credit regime applies to domestic Green Deals and already imposes requirements to ensure that consumers are made aware of the total cost of the finance, including any fees that may be incurred. However, we recognise that the consumer credit regime, to which the noble Lord, Lord Whitty, referred, might not capture all possible situations when fees may be incurred, and we will look at this issue in more detail. However, Clauses 4(1)(b) and 5(1)(b) will enable us to set out in framework regulations any conditions that must be met before a plan is entered into or matters that must be addressed under the terms of the plan.
Amendments 8A and 8B seek to extend the provisions of the code to all energy plans that are sold or promoted at the same time as the Green Deal. I reassure noble Lords that we will make provisions within the scheme and the code to ensure that consumers are made fully aware of the differences between measures sold under a Green Deal plan, with all its safeguards, and those that fall outside such a plan. Clause 3 already enables the scheme and code of conduct to be applied to energy plans that are not Green Deal plans. It is our intention to seek to ensure, where appropriate, that elements of the scheme or code can apply to wider energy provisions
In conclusion, I believe that the consumer credit regime and the Bill already contain all the necessary requirements to achieve what is intended in these amendments. I reiterate that confidence is absolutely fundamental to what we are trying to achieve. On that basis, I ask the noble Baroness to withdraw the amendment.
I am grateful to the noble Lord for another very helpful answer. Perhaps before I say anything specific about the amendments, I may offer him some helpful advice. Both he and I are new to our roles in your Lordships’ House. I am told that one thing that no noble Lord or Attendant ever does is tell my noble friend Lord Davies of Oldham the result of a cricket match. I am also informed that he is rather grumpy because, having recorded the match to watch later, he now knows the result. Therefore, the noble Lord, Lord Marland, should be grateful that it is me and not him sitting next to my noble friend.
The noble Lord has gone a long way towards understanding our concerns. As my noble friend Lord Whitty said, the relationships between the assessor, the installer, the provider and the customer are very complex, and this scheme is not going to work unless we have consumer confidence. However, I am reassured by the Minister’s comments that he understands the nature of the problem and is seeking to resolve it. If, at a later stage, he is able to bring forward regulations that show that energy efficiency improvements under the energy plan that are not part of the Green Deal can still be subject to the same consumer protections, that will be very helpful. It might also be helpful to investigate some of these matters further at Third Reading. However, I am grateful to the noble Lord. I think that he understands why we have concerns—they relate only to a wish to make this work and today he has gone a long way towards reassuring us. Therefore, I am happy to beg leave to withdraw the amendment.
Amendment 8A withdrawn.
Amendments 8B and 9 not moved.
10: Clause 3, page 5, line 22, at end insert—
“( ) In this Chapter references to a code of practice include references to a code of practice which has been revised by virtue of subsection (3)(d).”
Amendment 10 agreed.
Amendment 11 not moved.
Clause 4 : Assessment of property etc
12: Clause 4, page 5, line 24, at end insert—
“( ) An assessment made and provided under this section must clearly detail those energy efficiency improvements that qualify under the green deal.
( ) In making an assessment, the assessor must include all energy efficiency improvements options that qualify under the green deal.
( ) Nothing in this section prevents a green deal assessor from identifying energy efficiency improvements in their assessment that—
(a) sit outside the green deal; or(b) collectively exceed the total amount qualifiable under a green deal plan, where this is clearly identified on the assessment.”
My Lords, the amendments in this group are again about consumer choice and consumer confidence. As we said previously, the main objective of the Green Deal is commendable, although it is possible to go beyond the Green Deal with what is before us. Again, the assessor could potentially also be an improver.
There is no problem in identifying measures over and above those which can be provided by the Green Deal which improve energy efficiency. We welcome that. However, there could be a problem with an assessor who is paid or contracted by an installer or a provider, as the noble Lord said previously, as there could be a conflict of interest. In that relationship, who would make the decision on what are the appropriate measures to be undertaken under the Green Deal?
Very helpfully, the Minister said in Committee that:
“We must allow the consumer to make the choice, but we must ensure that the choice that he makes is regulated with proper standards”.
That is appropriate. Our major concern is that if the assessor tells the customer that a number of measures can be undertaken under the Green Deal, a point made by the noble Lord, Lord Jenkin of Roding, who decides what is appropriate? If the relationship between the assessor and the installer is a financial one, we are then concerned that the customer receives the correct information from the assessor. We have raised this issue before and we are trying to avoid any possible conflict of interest between an assessor and an installer. The Minister also said in Committee:
“In many cases, we envisage the Green Deal provider employing or contracting the assessor. The assessor would identify the potential for energy savings using the standardised methodology”.—[Official Report, 19/1/11; col. GC 66.]
I do not think we have got to the bottom of this difficult point about how the appropriate measures for a home are decided on. In Amendments 12 and 13 we are trying to ensure that any assessment clearly identifies everything that qualifies under the Green Deal. It has to include all energy improvement under the Green Deal; but there is nothing to stop an assessor identifying energy improvements in the early assessment outside the Green Deal or going over and above what the Green Deal includes. Any potential conflict of interest between an assessor’s functions and their connection with any installer or provider can be disclosed in writing. If the improver and the bill payer are aware of that relationship, they are able to make a choice in line with what the Minister said in Committee. That would ensure that at no stage is the improver, the householder, put under pressure, in any way, by an assessor to accept measures that an assessor could be putting forward because of the relationship with an installer. That is difficult and comes back to the independence of the assessor and how that can be achieved. It is similar to the point made by my noble friend Lord Whitty a moment ago.
The excellent amendment in the name of the noble Lord, Lord Berkeley, comes back to the points made at the beginning, which the noble Lord was happy to look into further as regards an annual report and having further information. This is the transparency issue. If the Secretary of State can do a cost-benefit assessment, to identify the benefits of the Green Deal, that would give confidence not just to the consumer but also to the energy industry. Much of it will be in terms of the Green Deal and the industry having the confidence to invest in undertaking the Green Deal.
I hope that the Minister understands why these measures have been brought forward today. We want to ensure that consumers have absolute confidence that they are not being given information that serves the commercial interests of others and to ensure that whatever measures are recommended to them, or that they choose, are in the best interests of energy efficiency for their homes. I beg to move.
I shall speak to Amendment 160A which is in this group. It follows on from what my noble friend Lady Smith said about transparency, information and confidence in the field of energy conservation. As noble Lords will know, this is a rerun of Amendment 34 in Committee. I pay tribute to the noble Baroness, Lady Maddock, for her tireless work in supporting energy conservation and for moving the amendment eloquently in Committee. She emphasised the lack of interest of Governments over the years in the issue of saving energy rather than producing more to meet an often unnecessary demand. My noble friend Lord O’Neill of Clackmannan supported her and urged publication of the information.
I am trying again to see whether I can squeeze a little more out of Ministers at this stage. I pay tribute to the Association for the Conservation of Energy which has been tireless in promoting this part of the energy debate on conservation, which is often put into the “too difficult” category by government. The noble Baroness, Lady Northover, responded in Committee and said that the Government are already obliged to report annually to Parliament on the progress towards legally binding carbon budgets. She also said that,
“the principle of this amendment is sensible and laudable, although we feel that the case for specific reporting from Government may be stronger for the energy company obligation”.—[Official Report, 19/1/11; col. GC 107.]
Surely the information on conservation is as important as is the information on energy production.
I remind the House of a few facts given in Committee. The European Climate Foundation reports that emissions from buildings can be reduced by 95 per cent, which breaks down into 40 per cent from reduced demand and 45 per cent as a result of the electrification of heating. It is important to bring all these figures together at least in one report—we can debate whether or not it is annual—given the enormous challenges the Government have in meeting our carbon reduction targets.
It is also worth reminding the House that Chris Huhne, the Secretary of State for Energy and Climate Change, said that the cheapest way of closing the gap between energy demand and supply is to cut energy use. Many other Ministers have said similar things. The Association for the Conservation of Energy has been calling for a cost benefit assessment of energy saving for many years and it asked the Government about six months ago whether they had carried out a long-term assessment of the costs and benefits of energy saving and efficiency as against those of energy generation. The answer was that there was nothing specific in the public domain. I suggest that there should be because consumers need that information. I hope that when the Minister responds he will accept the principle of the amendment and agree that the Government should publish a cost-benefit assessment. How can the Government have properly thought through their overall energy policy without that? If they do not have that information, they should have. If they do have it, perhaps they should publish it.
I refer noble Lords to the Long Title of the Bill, which refers in line 5 to,
“information relating to energy consumption, efficiency and tariffs”.
It would be a small step for the Government to produce a report and then we would know both sides of the equation: the production; and the consumption and conservation.
As has already been said, I moved a similar amendment in Committee so I am happy to support the noble Lord, Lord Berkeley, today. At a time when we are trying to persuade people about all the things we need to do to tackle climate change and CO2 production, we ought to have the best analysis and figures to back up our arguments.
There is little I can add to what the noble Lord, Lord Berkeley, but if we are to persuade the sceptics, we need the very best figures. I withdrew my amendment in Committee—we were in Grand Committee and we could not go any further—but I hope that since our discussion the Government have looked at this and thought, “Why on earth can't we do it?”. It is not that difficult. There is lots of information available to draw the figures together. That would be very helpful for all of us. A lot of time and energy is going into the Bill because we believe that it is the right way forward. Let us have the complete evidence to back it up.
I hope that, even if the Government cannot say yes today, they will go away to look at the common sense behind the amendment.
My Lords, as always, there have been some valuable contributions for which I am extremely grateful. To deal first with the amendments tabled by the noble Baroness, Lady Smith of Basildon, it is clearly fundamental that there is transparency and independence, that the reputation of assessors is impeccable, and that we avoid the cowboy culture that could exist, and in certain parts of industry has existed, in the assessment work. That is fundamental to the confidence that consumers must have in the Green Deal. Therefore, we will set out in secondary legislation more detail of the standardised methodology, which will protect the consumer from the cowboy culture and any further abuse.
I thank the noble Lord, Lord Berkeley, whose thoughts on energy efficiency are extremely well known. We are extremely sympathetic to them. Unless we educate people to use less electricity, we will end up using more, and the quickest way to reduce consumption is by using less energy. A lot of the work that we are doing on smart meters in homes will give people an everyday assessment of what electricity they use in their homes. At times, they will find it quite frightening, as I do with my children, whom I have referenced before, when I point to the excellent device we have that is also extremely frightening. The noble Lord, and the noble Baroness, Lady Maddock, rightly referred to the work that ACE has done, which we applaud and listen to in detail. It is fundamental that we develop a pattern of education so that energy use is reduced.
We can readily identify that with the levers that we have available. In October of this year, we will produce our fourth carbon budget report, which will provide evidence of the cost-effectiveness of economy-wide packages under consideration. That report will continue. The costs and benefits to society of particular technologies are assessed through extensive consultation within industry, so a lot of information is provided to us from industry groups. In addition, we provide publications on carbon budgets, energy market reform, feed-in tariffs, CERTs and green deals, so a huge amount of information is provided, which helps us readily to assess the extent to which carbon production and energy use are being reduced.
I am grateful to the Minister, who has sought to be very co-operative and helpful in his comments. However, two things stand out for me. One is that he is right that there is a great deal of information out there for the consumer. In fact, there is so much that it is totally confusing for most people. The simple cost-benefit assessment that is referred to in the amendment tabled by the noble Lord, Lord Berkeley, would not only help the Government in developing policy but would be helpful to the consumer. Having information readily available is something that we all require.
The Minister welcomed both our amendments, but he did not pick up on one point. If he is able to assure me that he will come back on it later, it would be helpful. The issue relates to information being provided to the improver and the bill payer about the relationship between the assessor and the installer. That is necessary for transparency and openness. If that relationship is open, there can be no suggestion that there is anything underhand or against the interests of the consumer. If there is a doubt in the consumer’s mind, people will not have confidence in the Green Deal. I can see the noble Lord nodding at me, which is always a welcome sign, so I hope that he will look at these issues—he is now making extremely strange faces; I preferred the nod—and addresses these issues to take that point into account. Openness about that relationship is crucial.
On the basis of what he said, and on the basis that he will look again at the matter on which he nodded to me, I beg leave to withdraw the amendment.
Amendment 12 withdrawn.
Amendments 13 and 14 not moved.
Clause 5 : Terms of plan etc
Amendment 15 not moved.
Clause 6 : Consents and redress etc
16: Clause 6, page 7, line 42, at end insert—
“( ) Where consent to green deal improvements is sought by an improver, that consent shall not be unreasonably withheld.”
My Lords, we discussed this issue in Committee, and the Minister gave, as ever, a constructive response, but to the wrong anxiety as far as we were concerned. He seemed to construe our concern as being about the Green Deal being forced upon someone. Consent is clearly the basis on which we seek to proceed, but there might be a tenant who comes under some degree of pressure, so the Minister’s response was to indicate that the Bill would have a framework of regulations that would give protection. I accept the Minister’s position on that without reservation, and I am very grateful to him for expressing that concern.
It might have been my fault in not making it explicit enough when speaking to the amendment, but my concern was almost entirely the other way round. The improver and the bill payer are two different people, and I envisaged that the improver might be involved in the improvement of a substantial number of properties, such as a block of flats which he owned. He might get improvements from 99 out of 100 tenants, but what if one objected and said he was not prepared to sign up to this deal and what if it is difficult for the work to go on without the issue being considered in its totality? We have to envisage that with certain kinds of improvements, the whole building has to be improved or nothing is effective. I was concerned to express the anxiety expressed in this amendment about what happens when an improver is bent upon improvements to the property that meet the objectives of the Green Deal, subscribe to all the benefits that the Bill contains and therefore fulfil the objectives of everyone in this House, but one person stands out against them.
I think that that is a genuine anxiety. I tried to raise the issue in Committee. As I have said, it may have been entirely my fault in that I was not explicit enough or that the amendment was not drafted as accurately as possible, but the response that I received was not directed at this specific problem. I want reassurance from the Minister that he has considered my anxieties and those that might be shared by other noble Lords, that this problem has been tackled satisfactorily in the provisions in the Bill, and that therefore we can see circumstances in which we all recognise that improvements will go ahead only through consensus. There has to be an understanding of that.
However, what about the minority position in extreme cases in which someone is excessively affected, not least because, as we all appreciate, for some individuals the benefits from the improvements to the property might look fairly limited? They know that they will get an increase in their bills pretty soon. The benefits might lie in the future and such individuals might consider that their personal circumstances, in a long-term perspective of that kind, are too long term for the pay-off. I am interested in where ordinary citizens, to say nothing of the awkward squad, might find themselves in a position in which they see no benefit but where they are a very small minority and all other tenants in the building see the advantages. I am interested in how the Bill copes with that issue. I beg to move.
My Lords, I was very attracted to this proposal, but I should like to share with your Lordships why I do not think that it is sensible in the end. I am attracted to it because there are a lot of curmudgeonly people in this world—you do not even have to have an argument to say that people have a good reason to do something. There are curmudgeonly people who say, “I don’t want this. Why have I got to do this?”. I can quite see the argument. I also have a concern for those who think that other people might benefit and therefore have a slightly dog in the manger attitude.
I come back to the purpose of this Bill, part of which is to get advocates for what we are trying to do around the nation: that is, convincing and converting people to what we are trying to do. I find it difficult to imagine circumstances in which a discussion should go on among flat owners—perhaps there is a landlord, ground rent is paid or whatever—about improving the building. I do not like the idea that behind that is the threat. This is contrary to the way in which the Bill is supposed to operate.
The Minister has said again and again that if this does not work, there will have to be further regulations. The Bill is designed to make that possible, but in the first flush we should try to get a widespread range of people advocating the proposal and convincing their neighbours to go along with it. If we do not do that, one of the most important roles of this Bill will be interrupted.
I have been in both Houses over many years and one of the words that I most dislike is “reasonably”. The difficulty is that the definition of “shall not be reasonably withheld” is difficult in the case that we are talking about now, simply because most people object to something in a way that they consider to be reasonable. They might be very unreasonable people, but when they come to the argument they feel that they have put forward a reasonable argument.
I return to the purpose of the Bill. I am very concerned that we should start this whole process of the Green Deal with an understanding that this is the Government seeking—if I were a modernist I would say “reaching out”—to convince the population as a whole that they have created a framework within which, with consent, we are going to do a large amount to reduce the amount of energy that we use to improve the housing stock and to do all the things that we want to do.
I therefore hope that the Minister will resist this particular amendment, not because we might not be driven to it—indeed, the noble Lord, Lord Davies, might be right; we might be driven to it—but because I hope that at least we can start off with the intention of the missionary, to win converts to this, rather than with the intention of the mercenary, to force people to do what you want them to do. All my instincts about something I believe in strongly are to the former, but I have a belief in the end that the latter might well win more converts.
My Lords, whether or not the Minister accepts the amendment, it is clearly an issue because there are curmudgeonly tenants and curmudgeonly landlords. The Minister’s understanding of the amendment in Committee and the way in which my noble friend Lord Davies has explained it today will arise. Whether or not she accepts that this provision should be in the Bill, the reality is that the basic concept of the Green Deal is that you pay back through the energy bill, yet the person actually making the improvements, or paying for the improvements in the first place in the normal sense of the word, might do so as part of a general improvement plan. It might be the landlord when the tenant pays the bill, or it might well be the tenant who wants to see these improvements and the landlord pays the bill, whether or not that bill is then re-charged to the tenant. So you have some complicated arrangements here.
One of the reasons why this matter is important is that the private rented sector has the least energy-efficient building structurally and has the highest incidence of fuel poverty proportionately. Therefore—I go back to my earlier point—before we launch this we need to have these things sorted out. I accept what the noble Lord, Lord Deben, says: that in a sense we do not want to appear to be holding a dagger to the throat of whoever is taking these decisions, or whoever is being curmudgeonly in his terms, but we need a way around this problem. I am not sure I have heard from the Minister yet that we have a way around this problem. Hopefully by the time she produces regulations, we will at least have the outline of a way around this problem, and, as I say, if it is not solved in the private rented sector, then a whole part of the potential benefits of this Bill will be lost.
My Lords, I am grateful for the amendment, which raises an important issue about human nature, if nothing else.
Removing consent barriers from the Green Deal journey is of course crucial to the success of the initiative. We agree with the sentiment behind the amendment. We want as many people as possible to take out a Green Deal, and the consent process must therefore be as straightforward as possible. However, we also need to be aware of the rights of property owners and tenants to object to works on their property or the addition of a Green Deal charge to their energy bill. Given this, we need to ensure that any options to overcome consent barriers achieve a balance between respect for these existing rights and unblocking barriers, which could hinder people’s ability to take out the Green Deal.
The noble Lord has just flagged up a very important and very complex issue. I assure him that officials clearly fully understood what the noble Lord said in Committee and are actively working to address the barriers. We will continue dialogue across government to identify solutions. The work is ongoing. I hope that that reassures him. He flagged up a very important area that is now being worked on. Because of that we are not yet in a position to accept the amendment.
I am certainly struck by what my noble friend Lord Deben says in regard to this and hope that he will continue to lead in this area as he always has. I like the notion of the missionary as opposed to the mercenary, but it is worth bearing in mind that some people are not too keen on missionaries either. I hope that at this stage the noble Lord will be willing to withdraw his amendment.
My Lords, I am grateful to all noble Lords who have participated in the debate. What has been identified, as I think the noble Lord, Lord Deben, acknowledged, and certainly as my noble friend Lord Whitty did, is that this is a difficult area but one that we have to confront if we are going to effect improvements. Again I am grateful to my noble friend Lord Whitty for pointing out how important the private rented sector is and how much the improvements have to be generated in that area to reach the targets to which we all subscribe. The success of the Bill will depend on success in that area as much as in any other.
I appreciate the response made by the noble Baroness, but she will appreciate that she is asking the House to take things somewhat on trust: namely, that the Government recognise a problem but are not quite in a position yet to identify what their solution might be. That is a very difficult thing to say while a Bill is passing through Parliament because, as we all appreciate in this House, this might be close to being the last time that we can address ourselves to this issue. Consequently, we must hope that the department is successful in the work that it has done under the guidance of Ministers who, I have no doubt, will be strenuous in these terms.
Because I am happy to put my trust in Ministers with regard to the objectives of the Bill, I will indeed withdraw the amendment in a few moments, but I hope they recognise that Parliament will expect answers to this and related problems of similar complexity and difficulty, because, although I am entirely with the noble Lord, Lord Deben, that the best approach is the missionary approach, we have an exercise to sell and we all have a role to play in that to convince our fellow citizens of the advantages. A lot of progress has been made. If you look at public opinion polls in response to concerns about issues that the Bill seeks to confront, there is no doubt that we are making progress. However, there is a long way to go and things differ enormously from a general response in an opinion poll and where—dare I say it?—hard cash and the mercenary come into play. Therefore, I wish the Government well and I beg leave to withdraw my amendment.
Amendment 16 withdrawn.
Clause 7 : Installation of improvements
17: Clause 7, page 8, line 5, leave out paragraphs (a) and (b) and insert “any product installed in making the improvements—
(a) meets the standard specified in the code of practice in relation to the product or description of product, or(b) is listed in a document which—(i) is issued by the Secretary of State or a person authorised by the Secretary of State in connection with the code, and(ii) is referred to in the code as listing the products which are to be taken as meeting the required standard.”
My Lords, government Amendments 17, 19, 20 and 50 relate to the framework for ensuring that the products installed under the Green Deal are of an appropriate standard. This issue came up in Committee and we are seeking to address it.
We must, of course, ensure that products going into homes and businesses are of high quality, are safe and are installed by accredited installers. The amendments to Clause 7 provide that products must meet standards to be set out in a code of practice. Where products are not already subject to rigorous standards, we will require them to be certified using a testing methodology to be set out in the code. Many energy efficiency products are already required to comply with standards, and we will use these as far as possible. The fundamental principles about which measures are eligible will be set out in secondary legislation. DECC will consult on the draft regulations and the code of practice in the autumn.
Clause 7 contains an option to produce a long list of specific products that comply with the standards. We will consult on whether it is appropriate to produce a list such as this because we must protect consumers without stifling innovation in the market. It is critical that any list is capable of being updated regularly when new products come on to the market. We are enabling the list to be issued and updated by an external body, for example the body appointed to administer the code of practice. I hope, therefore, that the House will welcome the government amendment.
We are sympathetic to the proposal set out in Amendment 18 that an oversight body should govern such a list. However, the government amendment allows for this as well as additional approaches, should they be chosen by the Secretary of State as appropriate. Given that, I hope that my noble friend will be happy to withdraw the amendment. I beg to move.
Amendment 18 (to Amendment 17)
18: Clause 7, line 7, after “code,” insert—
“( ) is administered and updated by a green deal oversight body,”
My Lords, I am pleased that my noble friend is sympathetic towards this amendment. I should explain that it was going to be spoken to by my noble friend Lady Parminter, who regrettably is defending Britain’s interests in Brussels with her European sub-committee at the moment, so she cannot be here today. The basis for this amendment is that in Grand Committee, we had quite an extensive discussion around making sure that within this system there would be some form of ombudsman or final appeal for consumers so that people would feel assured that any dispute would be looked at in a proper and independent fashion, and could be resolved in a sensible and cost-effective way. The process should be friendly to consumers and would come to an objective conclusion, but would not cost them a lot of money to go through it.
I know that my noble friend has looked through the government amendments to see how this could be achieved and feels that this is one of the more appropriate ways of dealing with the issue. Disguised in the rather generic language of the “green deal oversight body”, which in the language of 1984 would probably mean something quite big brotherish, the amendment is trying to use the Government’s form of language in order to introduce the concept. Given that, while I welcome the Government’s own amendments, I am disappointed that we have not yet found a way of bringing this dimension to the Green Deal. I would be keen to hear from the Minister in her response at the end of the debate how this particular need, which goes back to consumer confidence in the process, could be met. I am not absolutely sure that the government amendments put forward at this stage will do that. I beg to move.
This group of amendments provides a welcome opportunity to talk about one particular participant in the whole process, and that is the many firms which supply the products. There is an enormous range of them and they are hugely important if the objectives of the Bill are to be achieved. All I want to say in a very few remarks is that I hope that the department really will listen to those people who have had the experience of supplying products to the various participants under the Green Deal’s predecessors. The impression of the trade association that represents the builders’ merchants is that there was actually a great deal of malpractice under the CERT programme, which it describes as operating as a closed shop and distorting the market with unfair subsidies. In my Second Reading speech, I warmly welcomed the new approach set out in the Green Deal and the energy companies’ obligation as it represents a considerable improvement on the previous system. I am delighted that it has been so widely welcomed around the House.
The participation of the supply chain is very important to this process. Suppliers have a great deal of experience and provide a wide range of products including loft and solid wall insulation, replacement windows and doors, heating, hot water systems and associated insulation, draft proofing and all the rest. It seems to me that those suppliers have a great deal of wisdom to convey to those who are trying to draw up the regulations and the code under Clause 7. This is an opportunity to stress the importance of the supply chain.
I believe that the department is listening to the trade association concerned and therefore I wish only to say firmly that it would do well to listen hard. Its representatives have experience and are deeply involved in the whole process, and they totally support both the concept and the practice of the Green Deal. Just as we do, they want it to be as successful as possible. I hope that my noble friend will be able to give me an assurance that this will indeed be something that the department will do.
My Lords, at the previous stage of this Bill, I tabled an amendment about carbon monoxide alarms. I have not retabled it now because I have had reassurances from the Minister. These amendments are about compliance with appropriate standards, so I rise simply to seek an assurance that the standards will cover both primary products and secondary products, which must be appropriate carbon monoxide alarms to accompany the installation of appliances which may produce carbon monoxide. Sadly, we have a steady string of notifications of carbon monoxide poisoning. Charlotte Church was recently poisoned but she survived because luckily she lives in a large house and her grandfather had told her to get a carbon monoxide alarm because of her symptoms. No one is immune, from the most famous names to those one has never heard of.
A further reason that the concept of a Green Deal oversight body is appealing is that, while many victims of carbon monoxide poisoning survive, unfortunately many will do so only with neurological and other damage. They need to be listened to and their claims to be heeded. I therefore seek a reassurance from the Minister that the issue of carbon monoxide alarms has not been forgotten or sidetracked, and that it will be considered as part of the appropriate standards to be set out in a code of practice as a result of this Bill.
My Lords, first, I declare an interest because, in the course of advising people on corporate responsibility, that can hardly be done without talking to quite a number of businesses that at some stage may be involved in this process—and not only the businesses, but the people. That enables one to ask the Minister to be extremely careful about a long list of appropriately ticked-off equipment. This is an area of fast-moving innovation. I have to tell the Minister that, in the work which I do professionally, one of the most difficult things is to keep up in this particular area, so rapid is the development. One of the problems that any of us who work in this kind of area face is the way that government legislation can hold up the market, stop development, and make it more difficult for new things to come forth.
I understand that we have to have a balance, and to stop people installing the wrong thing, the bad thing, the thing that does not do what it says. However, I beg her to look extremely carefully at the mechanism, so that it encourages innovation and makes it possible for new products to come onto the market rapidly, some of which will be cheaper and better able to meet the needs of the Green Deal. We need to have a system which does not inhibit the very necessary innovation which in part will be driven by the Green Deal. We do not want to have a situation in which the Green Deal is driving that innovation, and then find that people cannot meet the requirements because it takes six months to get it on the list, or because there is some technical reason why you cannot get it on the list. There are so many examples today of things which would do very well if we had not passed some regulation, when nobody knew how to do this, so that the new product cannot actually be recommended.
There is a second thing that I hope the Minister will think of, though this is not the appropriate place for her to put it. I am always worried when we talk about products without talking about people. You can have the best products in the world, but a cack-handed involvement in them will result in a worse position than the one you started off with. I discovered this from my professional work, in this case, when we did some work with plumbers. The fact is that there are no regulations ensuring that plumbers can be competent. You could have a product under this legislation which would be perfectly well ticked off, but a plumber doing the work could make it absolutely impossible to operate it as the rules and the certification would suggest.
This is an appropriate moment to say to the Minister that I hope very much that, in considering the products and making sure that they are suitable, we remember that products need installation. The installers must in fact be capable of installing them properly, or all the regulations on products in the world will not deliver the goods. I hope that the Minister will ensure that, when her civil servants are looking at this, they will see these two things together. They have to be part and parcel of the same mechanism, and that mechanism must not in any way inhibit the innovation which I very much hope will be the result of this legislation.
My Lords, I, too, strongly support this amendment. Innovation is moving extremely fast here. A couple of weeks ago, I had the privilege of being a judge in the final of the Shell springboard competition, which, as many noble Lords will be aware, aims to encourage and support small companies which are bringing what I might loosely describe as green technologies to the market. One of the two winners of this competition produced a technology which will have profound implications for the Green Deal—namely, a domestic voltage regulator. That is not a person; it is a very small piece of machinery. Without becoming too technical, I should explain that the appliances in our houses work on 220 volts. For technical reasons of the grid, typically it supplies us with something like 240 volts and 250 volts. That excess voltage, at best, does not do any harm to our domestic appliances, and at worst it damages them, because they receive too high a voltage, and it is indeed wasted. A domestic voltage regulator regulates down to 220 volts, and the consequence is that one proportionately reduces one’s electricity use. This is now a well-tried technology, and has the scope of reducing domestic use of electricity across the country as a whole by around 10 per cent, which is a massive saving. This is the kind of technology that we need to make sure is taken up rapidly. It has now been thoroughly tested, is already available, and has been in use for a number of years at the large-scale commercial level.
My Lords, these amendments to Clause 7 seek to strengthen the framework for ensuring the quality of Green Deal improvements and products, and address a number of points made in Committee. Amendment 17 provides that Green Deal improvements must meet standards set out in the code of practice, and that if the Government decide to use the power to create a list of products that meet the standard, this can be administered and updated frequently. Amendment 19 makes provision for a testing methodology and certification process for products. Amendment 20 is simply a repositioning of text which was previously contained in Clause 7(3)(a), and makes clear that the code of practice is issued under the authorisation scheme in the framework regulations.
In Committee, we had a full discussion on the challenge between the need for certainty of standards and codes, and their drafting and interpretation to the complexity in the housing stock. Although there was a recognition that certain standards of work, of procedures to follow, and of improvements in products should be consistent in the provision of the Green Deal, there was a recognition that flexibility would be required to meet varying properties with differing levels of energy efficiency. The Committee reconciled the differing approaches by expressing a wish for a guarantee of quality to be recognised, so that there would be consistency of outcomes that would provide a greater level of confidence, vitally required to produce the maximum uptake of the Green Deal. The Minister and his team have listened to what has been said on this. These amendments, as proposed by the Minister, meet the Committee’s concerns, and I am grateful that the Government have come forward with them on Report.
My Lords, I thank noble Lords for their contributions to this debate, and particularly the Opposition Front Bench for their welcome of the government amendments. The Government believe that the approach of my noble friend Lord Teverson could be permitted under these amendments, though I recognise that an ombudsman is not specifically mentioned. There has been quite a debate about how specific you should be, and on the pluses and minuses of that within this, which is a tension within the Bill as a whole. How do you ensure that you have got customer protection and standards, and how do you make sure that does not then become too prescriptive and restrictive? As the noble Lord, Lord Jenkin, mentioned, there has been wide consultation with many of those who operate in this area, and I can assure him that, in terms of addressing these areas, the Government will continue to do that. Their experience of the problems that have arisen in the past will be very useful in terms of feeding in to ensure that the work taken forward addresses those kinds of problems.
The noble Baroness, Lady Finlay, mentioned carbon monoxide monitors, and primary and secondary products like this do come under what we are discussing here. She recognises that my noble friend Lord Marland gave a very sympathetic hearing to the very important point that she made at an earlier stage. Again, that is something that comes within this.
The noble Lord, Lord Deben, is right about the difficulties of having a specific list and the noble Lord, Lord Oxburgh, also referred to that. It is extremely important that the Bill is not out of date by the time it is finally concluded in the other place. We have to be extremely careful about lists. There is a balance between trying to ensure that what happens is not too specific and that we have a high standard, but that we are stimulating innovation and not stifling it, as noble Lords said.
In the light of those assurances about what we seek to do, I trust that noble Lords will accept the government amendments. Although we fully understand where the noble Lord, Lord Teverson, is coming from with regard to the ombudsman, we hope that at this stage he will be willing to withdraw his amendment.
My Lords, I thank the Minister for her reply and I will withdraw the amendment. I say that to save the tension and stress of the House, which is never good at this time of year. However, I genuinely feel that something should appear in the Bill, whether it is the oversight body or the ombudsman, ombudsperson or whatever it would be these days. I ask my noble friend to think further about that as we reach Third Reading or as the Bill moves to the other place, as this is an important area for confidence and dispute resolution within the way that the Bill works. At this point, however, I am happy to withdraw the amendment.
Amendment 18 (to Amendment 17) withdrawn.
Amendment 17 agreed.
Amendments 19 and 20
19: Clause 7, page 8, line 9, at end insert—
“( ) In specifying the standard in relation to a product or description of product for the purposes of subsection (3)(a), the code of practice may make provision as to the testing and certification of the product or description of product.”
20: Clause 7, page 8, line 11, at end insert—
“( ) In this section references to the code of practice are to the code of practice issued for the purposes of the scheme under the framework regulations.”
Amendments 19 and 20 agreed.
Clause 8 : Confirmation of plan
21: Clause 8, page 8, line 30, leave out “amended” and insert “updated”
My Lords, Amendment 21 is in an extensive group of amendments that relate to the energy performance certificate. As I have said on a number of occasions, we are extensively reviewing the energy performance certificate to ensure that it is fit for purpose for the Green Deal and that there is no confusion between the certificate’s relationship with buying and selling a home and achieving energy performance under the Green Deal.
As currently drafted, the Bill would apply the energy performance of buildings regulations, with modifications, where a Green Deal plan is present. This would enable Green Deal information to be added to an EPC and kept up-to-date. In this way, we will be able to monitor the progress referred to earlier by other noble Lords and thereby measure the success of the Green Deal’s energy-saving benefits.
Amendments 58, 170, 172 and 174 make consequential amendments relating to parliamentary procedure, extent and commencement. I hope that noble Lords will recognise that these are effective and transparent ways of fulfilling our criteria for disclosure in the Green Deal. I beg to move.
When we were discussing the number of government amendments earlier, the noble Lord, Lord Jenkin of Roding, made an appropriate comment about how we are all grateful to the Minister for tabling the amendments early. To have early sight of them was indeed helpful as, in the true spirit of the complications of energy legislation, it is sometimes difficult to trace them back and follow them through—that is more of a problem with the following group of amendments—although I am sure that all noble Lord have been able to do so.
The noble Lord has taken on board comments that we made throughout Committee stage about monitoring and having information and transparency. With this group of amendments the Minister has responded to issues raised by the Committee and I am grateful to him for doing so.
Amendment 21 agreed.
22: Clause 8, page 8, line 30, at end insert—
“( ) The reference in this section to securing that a document is updated includes a reference to securing that a document is replaced by a document of the same description.”
Amendment 22 agreed.
Clause 9 : Confirmation of plan: supplementary provision for England and Wales
Amendments 23 to 26
23: Clause 9, page 8, line 35, at end insert “or the 2010 Regulations”
24: Clause 9, page 8, line 36, leave out from “The” to end of line 39 and insert “Secretary of State may by regulations make provision amending the 2007 Regulations or the 2010 Regulations or both (as the case may require) in connection with a document required to be produced or updated by virtue of section 8(4)(b) or (c)”
25: Clause 9, page 8, line 40, leave out from “The” to end of line 4 on page 9 and insert “amendments made by virtue of subsection (2) may, in particular, include amendments for the purpose of requiring a document to contain additional or updated information in connection with the plan or the improvements installed under the plan”
26: Clause 9, page 9, line 7, at end insert—
““the 2010 Regulations” means the Building Regulations 2010 (S.I. 2010/2214)”
Amendments 23 to 26 agreed.
Clause 10 : Confirmation of plan: supplementary provision for Scotland
Amendments 27 and 28
27: Clause 10, page 9, line 12, leave out from “provision” to end of line 15 and insert “amending the 2008 Regulations in connection with a document required to be produced or updated by virtue of section 8(4)(b) or (c)”
28: Clause 10, page 9, line 16, leave out from “The” to end of line 23 and insert “amendments made by virtue of subsection (2) may, in particular, include amendments for the purpose of requiring a document to contain additional or updated information in connection with the plan or the improvements installed under the plan”
Amendments 27 and 28 agreed.
Clause 11 : Updating information produced under section 8
Amendments 29 to 40
29: Clause 11, page 9, line 29, leave out “amended” and insert “updated”
30: Clause 11, page 9, line 29, at end insert—
“( ) Subsection (3) applies if one or more of the first, second or third conditions is met.”
31: Clause 11, page 9, leave out line 30 and insert “The first condition is that—”
32: Clause 11, page 9, line 33, after “Regulations” insert “or the 2010 Regulations”
33: Clause 11, page 9, line 34, leave out from “the” to “information” in line 36 and insert “2007 Regulations or the 2010 Regulations or both by virtue of section 9(3) to require a document of that description to contain additional or updated”
34: Clause 11, page 9, line 36, at end insert—
“(2A) The second condition is that—
(a) by virtue of section 8(4)(b) or (c), the framework regulations specify a document of a description which is required to be produced under the 2008 Regulations, and(b) provision is made in the 2008 Regulations by virtue of section 10(3) to require a document of that description to contain additional or updated information.”
35: Clause 11, page 9, line 36, at end insert—
“(2B) The third condition is that, by virtue of section 8(4)(b) or (c), the framework regulations specify a document of a description other than one falling within subsection (2) or (2A).”
36: Clause 11, page 9, line 38, leave out paragraphs (a) and (b) and insert “as to the circumstances in which a document of a description falling within subsection (2), (2A) or (2B) (as the case may require) is required to be updated or further updated in accordance with provision made by the Secretary of State in the regulations”
37: Clause 11, page 9, line 41, leave out subsections (4) to (7)
38: Clause 11, page 10, line 16, leave out from “In” to second “the” and insert “subsection (2) “the 2007 Regulations” and “the 2010 Regulations” have”
39: Clause 11, page 10, line 18, leave out “subsections (5) and (6)” and insert “subsection (2A)”
40: Clause 11, page 10, line 19, at end insert—
“( ) In this section references to a document being required to be updated or further updated include references to a document being required to be replaced by a document of the same description.”
Amendments 29 to 40 agreed.
After Clause 12
41: After Clause 12, insert the following new Clause—
“Disclosure of green deal plan in connection with other transactions etc
(1) This section applies where—
(a) there is to be a transaction or other arrangement in respect of a green deal property (not falling within section 12(1)), and(b) the transaction or arrangement is of a description specified in regulations made by the Secretary of State.(2) The regulations may require a person of a description specified in the regulations to—
(a) obtain the document mentioned in section 8(4) or, if that provision has not yet been complied with, produce a document containing the same information in connection with the green deal plan as that document would have contained, and(b) provide the document free of charge to a person of a description specified in the regulations at the time so specified.(3) The regulations may provide for an obligation imposed on a person by virtue of subsection (2) to be discharged by a person acting on the person’s behalf.
(4) In this section the reference to a green deal property is to be read in accordance with section 12(5)(b).”
My Lords, Amendments 41 and 42 are a straightforward extension of the existing disclosure and acknowledgement provisions to ensure that all relevant circumstances are captured. The principle behind Clauses 12 and 13 is that those taking on responsibility for repayment of the Green Deal should have the presence of the charge disclosed to them, and acknowledge that they are aware of it. After further consideration, we have concluded that additional powers are needed so that we can require disclosure and acknowledgment in circumstances that do not fall within Clauses 12 and 13.
As drafted, Clauses 12 and 13 rely on there being a relevant property transaction for the sale, rent or licensing of a property to trigger the obligations to disclose and acknowledge. However, the provisions will not cover all circumstances—something that was flagged up in Committee—such as where a property is transferred by executors to a beneficiary under a will, or when a property is given by one person to another. The new owner ought to be made aware of the Green Deal, and this is the purpose of the amendment.
Robust disclosure and acknowledgment requirements protect individuals and businesses by ensuring they know they are taking on a Green Deal plan when they choose to move into a property. This helps to minimise the number of disputed Green Deal plans, which means that payments are maintained and the cost of finance is kept as low as possible. We will work with stakeholders on how these new provisions will apply in practice. Our aim is to use existing systems where possible, and we will consult before setting out these arrangements in regulations.
Amendments 43 to 45 enable the sanctions contemplated by Clause 14 to apply to those other circumstances or other transactions where disclosure and acknowledgment may be required under the new provisions.
Amendments 59 to 61, 171, 173 and 175 deal with consequential issues such as parliamentary procedure, extent and commencement elsewhere in the Bill.
In conclusion, I can assure noble Lords that these powers are necessary and proportionate to protect the consumer and to ensure the effective operation of the Green Deal. Furthermore, I would be grateful if noble Lords could note the Government’s intention to introduce, in the other place, a further amendment relevant to consumer protection under the Green Deal. This future amendment will propose that, in certain exceptional circumstances such as particularly long Green Deals, Green Deal providers will be able to recover more compensation from bill payers when a Green Deal is repaid early than is currently permitted under the Consumer Credit Act. Where extra compensation is recoverable, this will be within the limits set by the consumer credit directive. Without such a measure the cost of finance is likely to be increased, thus driving up costs for all Green Deal consumers.
I am highlighting the future introduction of this amendment now to reflect noble Lords’ close interest in consumer protection matters—something that has also been flagged up today—which are an issue of utmost importance to the Government in the development of this legislation. We propose to introduce such an amendment in the other place to allow further time to ensure that, in making this change to the Consumer Credit Act, we are able properly to balance the interests of Green Deal providers with the protection of consumers, which is so important within the Green Deal scheme. I beg to move.
Once again, I am grateful to the noble Baroness for her comments, which show that the Government have listened to what was said in Committee. She referred in particular to the provision of information where a property changes hands through an executor following a legacy. That issue was raised by my noble friend Lord Davies of Oldham, and I am grateful to the Government for looking at it.
I am very pleased that she has told us now about amendments that she will seek to have tabled in the other place, which will want to scrutinise those proposals. We have concerns—we will have to look at the detail of how this works out—that additional compensation may be charged for early repayment. Indeed, that was a concern raised by the noble Lord, Lord Whitty, in Committee, so I appreciate her informing us now of the Government’s intention.
Another point that I want to make is that I was very pleased at her opening comments on the importance of disclosure of information about charges. She may recall that one of our amendments—I cannot recall whether it was tabled by the noble Lord, Lord Whitty, or by myself, but it was supported by us all—was on pre-payment meters, which often mean that people pay much higher rates for electricity or gas than those of us who pay by direct debit or in response to a bill. One of our proposals in Committee, which was not accepted at the time but which I think the Government said they would look at again, was that greater information should be provided for those customers about exactly how much the Green Deal costs them and how much their energy bill costs. If the Government are bringing in greater transparency so that information on charges can be disclosed, we would like to see that point included. Therefore, perhaps that issue can be looked at at the same time.
Amendment 41 agreed.
42: After Clause 13, insert the following new Clause—
“Acknowledgment of green deal plan in connection with other transactions etc
(1) This section applies where—
(a) there is to be a transaction or other arrangement in respect of a green deal property (not falling within section 13(1)), and(b) the transaction or arrangement is of a description specified in regulations made under this subsection by the Secretary of State.(2) Regulations under subsection (1) may require a person of a description specified in the regulations to secure, at a time and in a document so specified, that an acknowledgment is made by a person of a description so specified that—
(a) the bill payer at the property is liable to make payments under the green deal plan, and(b) certain terms of that plan are binding on the bill payer.(3) Where the green deal property is in England or Wales, regulations made by the Secretary of State under this subsection may provide for any acknowledgment required by virtue of subsection (2) to be in the form prescribed in the regulations under this subsection.
(4) Where the green deal property is in Scotland, regulations made by the Scottish Ministers under this subsection may provide for any acknowledgment required by virtue of subsection (2) to be in the form prescribed in the regulations under this subsection.
(5) In this section references to a green deal property are to be read in accordance with section 12(5)(b).”
Amendment 42 agreed.
Clause 14 : Sanctions for non-compliance with section 12 or 13
Amendments 43 to 45
43: Clause 14, page 11, line 38, at end insert “or imposed by virtue of regulations under section (Disclosure of green deal plan in connection with other transactions etc)”
44: Clause 14, page 11, line 38, at end insert “or imposed by virtue of regulations under section (Acknowledgment of green deal plan in connection with other transactions etc)”
45: Clause 14, page 12, line 7, after “licensor” insert “or another person”
Amendments 43 to 45 agreed.
Clause 15 : Power to modify energy licences in connection with green deal payments
46: Clause 15, page 12, line 40, leave out paragraph (c)
One of the features of this whole Green Deal, which has run right through the discussions, is that it will be the suppliers of gas, electricity and, no doubt, other products, who have to collect the payments from the improver, through their energy bills, in order to repay the loan that will have been made by the provider to enable the improvements to be made. This is an important new role for the gas and electricity supply companies. They have unanimously—I have spoken to a number of the companies—welcomed the whole process in this Bill. They recognise that this will bring a range of energy efficiency measures to homes and businesses.
However, they have a very serious concern about an aspect of this process of cash control. My noble friends on the Front Bench will remember that I have raised this at every stage of the Bill, including at Second Reading. They do not want to become liable for the Green Deal debt. If there is a default on the payment, it is difficult to understand why the gas and electricity companies should be the ones that bear that. Perhaps I may spell this out because that is what this amendment is all about. Clause 15 as currently drafted provides power for the Minister to modify gas and electricity licences, and industry codes and agreements maintained pursuant to a licence, for the purpose of requiring and enabling licence holders,
“to take, or not to take, specified action in relation to Green Deal payments”.
That is very wide indeed. The power can be exercised by the Minister subject only to routine public consultation. It really is quite a peremptory power.
The Government intend to use this new power, as has been made clear, to make the energy supply industry responsible for billing the customer and collecting the Green Deal payments from consumers as part of the industry's ongoing consumer billing and cash collection functions. The energy supply companies are very used to doing that and have their own, sometimes quite elaborate, procedures. Clause 15(3) sets out a non-exhaustive list of the purposes for which energy licences can be modified through the use of the new power. With one exception, they all seem to be very sensible and I have no quarrel. The exception—this is where the industry really does have some very strong objections—is subsection (3)(c). I should like to read it, as it really is very stark. The Minister may make provision that may include,
“provision as to the circumstances in which the holder of the licence is required to make payments to a green deal provider by reference to green deal payments which are due but which have not been made”.
The possibility is immediately opened up that the bill payer may not actually pay his or her share or contribution to the repaying of the loan that has gone to the improvement of their house, and yet the sum still has to be paid over by the energy supply company to the provider. So, as well as collecting the Green Deal payments that are made, the companies appear to be going to be liable for those that are not made and they will therefore have to accept the default risk.
The significance of this is that it will then go on to their balance sheet liabilities. Otherwise, what does the clause mean? That is their anxiety. And it is worse than that: under accounting rules, they could end up having to bear the full financial liability for the whole of the sum that remains owing on the Green Deal project. Under the relevant accounting rules, if suppliers were required to bear default by consumers, the total loan amount would have to appear on the balance sheets. I have talked to one company which said that this could amount to billions of pounds.
This is an industry that is being asked by the Government to face up to the fact that it will need to invest anything up to £200 billion in generation, transmission and distribution over the next few years. The last thing it wants is suddenly to find itself having to face a new liability—not just for the individual payment that has not been made but for the entire debt that would then, as I say, under the accountancy rules, have to be debited to the company’s balance sheet. In other words, the companies are the ones who appear, under this clause, to have to accept the entire risk of default. I find it very difficult to see how that can be justified.
The providers are the ones who are making the loan because, no doubt, they will see a return on the advance that they will be making. That is part of the whole deal. All the energy supply companies are doing is accepting the repayments from the bill payer and passing them on to the provider. To make them liable not only for the payments that they do not receive but for the whole of the debt that is then owing seems to me to be utterly unreasonable. They are quite clear—I have discussed this with several of the companies—that this could be very damaging to their balance sheets and to the prospect of their being able to raise the large sums of money they are going to have to spend on new investment.
I have discussed this at some length with a number of the companies and I think that they have a good case. Therefore one must ask that this subsection be removed from the Bill. It is just not right that the liability should lie in that way. I find it very difficult to believe that that is what the Government actually intended. Someone has to bear the costs of default—one understands that—but it is jolly difficult to see how the companies that have to collect the debts have to be the ones that bear the burden. I beg to move.