Baroness Smith of Basildon
Main Page: Baroness Smith of Basildon (Labour - Life peer)Energy Bill [HL]
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Baroness Smith of Basildon
I appreciate the clear willingness of the noble Baroness to answer quickly. I wish to raise a very similar point, about how this legislation fits in with the existing climate change legislation in Scotland. The Scottish Parliament has preceded us on some provisions. Can the noble Baroness give us some information on discussions with Scottish Ministers, and tell us what their response has been? Many of the issues that we have raised in relation to the Green Deal and other issues would apply to these provisions as well. Obviously we would not want to have the same discussions again; but if the noble Baroness can give some outline of the discussions she has had with Scottish Ministers, it would be very helpful.
Lord Whitty
My Lords, I was not expecting to be provoked to speak on this amendment or this clause, but I speak in my capacity as former chair of Consumer Focus. It was always a little uncertain where the boundaries between reserved legislation and responsibilities applied in this area. Fuel poverty is a devolved matter, as are most aspects of energy efficiency; but, of course, Ofgem regulation is a reserved matter. I feel that quite a number of the clauses that we are about to consider stray across both areas. I am not necessarily saying that we should hold up proceedings and delay consideration today but, before this Committee finalises its activities, it would be helpful for us—and, I think, for my colleagues in the Scottish Parliament—to have a clearer delineation of which jurisdiction applies to each area of intervention. It has caused some confusion in the past under the previous Government, and we are compounding it here if we leave these clauses precisely as they are at the end of our deliberations.
Baroness Smith of Basildon
I am grateful for the noble Baroness’s response, but perhaps I may ask for clarification on one point. She said that Scottish Ministers would be consulted about the amendments. I was trying to probe whether Scottish Ministers should be consulted pre-amendment. Have there been discussions about these clauses with Scottish Ministers?
Baroness Northover
Yes, indeed. I had hoped that I had made that clear. There are ongoing discussions and there have been a lot of discussions about the Bill, the amendments, and everything in relation to this issue. The noble Baroness can be reassured that that dialogue is very much ongoing, and we regard it as extremely important.
“Chapter 3ASocial rented housing“Review of energy efficiency in the socially rented housing sector: England and Wales
(1) For the purposes of this Chapter, a property is a “socially rented property” if—
(a) it is a low-cost rental accommodation within the meaning of section 69 of the Housing and Regeneration Act 2008 and the landlord is a private registered provider of social housing; or(b) the landlord is a body registered as a social landlord under Chapter 1 of Part 1 of the Housing Act 1996.(2) A socially rented property is referred to in this chapter as an “SR property”.
(3) The Secretary of State must conduct a review of the energy efficiency of socially rented properties.
(4) The review mentioned in subsection (3) must, in particular, include—
(a) a comparison of the energy efficiency of SR properties with non-SR properties in England and Wales;(b) a consideration of the extent to which financial assistance is available to landlords of SR properties, for the purposes of taking measures to improve the energy efficiency of their properties;(c) a consideration of the need for action to be taken for the purposes of improving the energy efficiency of SR properties; and(d) a consideration of the possible effects of any action recommended to be taken as a result of the findings from paragraph (c).”
Baroness Smith of Basildon
My Lords, I shall speak also to Amendment 28B. It is welcome that the Green Deal is available to owner-occupiers. We also welcome the review for private tenants. Our dispute on this issue is that ongoing work to improve the condition and energy efficiency of privately rented homes should not be dependent on the review. In Committee on Monday, we spoke of why it was important to urgently address fuel poverty and energy inefficiency in those homes. My amendments may partly clarify some confusion.
It seemed that on Monday some noble Lords were of the view that social housing was already included, and there was reference to the role of council houses in our discussions. However, 4 per cent of social rented properties suffer from excess cold. Tenants often have little control over their heating bills and have had no insulation or energy-efficient measures. They are often people on low incomes and they risk poor health by underheating their homes, because the cost of adequately heating them is too high. We may be talking about a relatively small number of people, but they are some of the most vulnerable in the country.
There are two reasons why these amendments are important. First, there is the social impact of energy efficiency, which impacts equally on social housing and private rented housing. If we really want to have an impact on our carbon targets—and we will later consider local carbon targets—we need to address the impact of energy-efficiency measures in the social rented sector. That is why we have tabled these amendments. I would be grateful if the Minister could address some areas of concern. Does he have any assessment or rating of the current condition of the social rented sector? If it is to be excluded, I should imagine that there is a reason.
The previous Government introduced the Decent Homes Standard scheme and there was improvement in areas such as replacement boilers but we are aware that there is a lot of work to be done, so we have put forward these two amendments. Amendment 28A would ensure that the socially rented housing sector in England and Wales should also be included under these measures.
Lord Whitty
My Lords, in some social housing there is a district heating scheme. I am strongly in favour of decentralised energy but one of the reasons why it has got a bad name in some areas is because of the lack of consumer protection. With district heating it is often difficult for the tenant or, whatever the form of tenure, for the individual flat to control the use of energy. It is therefore important that consumer protection dimensions apply to those kinds of social housing.
There are examples where the schemes have led to a substantial increase in the fuel costs over which the tenants and leaseholders have no control. Among the tenants in particular, and in some cases among the leaseholders because they will be pensioners who bought under the right to buy scheme and have not got a great income, there will effectively be fuel poverty by the normal definition as a result of something over which they have no control—in other words, the level of use of energy within their own premises.
That is an additional dimension to why we need to be clear on social housing and how far social housing is covered by the provisions of this Bill.
Lord Marland
I will explain the Government’s thinking behind this to the noble Lord. This is a market-driven opportunity. The Government are not trying to be prescriptive. If two people were running a race, which one was winning easily by quite some margin, as the social rented sector is doing, you would train the runner who was not quick enough and encourage him to compete in the race. Here we have the social rented sector, which is by some margin ahead of the scale. It would be wrong to bring in legislation at this point that said, “Sorry, you’re not far enough ahead, despite beating the others. We intend to make sure that you get even further ahead”. The main aim of the Bill is to let the market drive the situation. At some point—the noble Lord is quite right—we will review the progress that the market has made and use any powers that are necessary.
The social rented sector should be congratulated. The noble Lord, Lord O’Neill of Clackmannan, said as much and I totally agree with him. That sector has led by example; we should encourage, not discourage, it. It is not my intention at this point to redraft part of the Bill to be prescriptive about this sector. I take on board that it is a critical area, which continues to make progress. Through this Bill, we will ensure that it does.
Baroness Smith of Basildon
I am grateful to the noble Lord for his explanation and to my noble friend Lord O’Neill. However, I struggle with his analogy of two runners. One is ahead, so we do not help that one. However, we do not have two runners here; we do not have two sectors in competition. To stretch his analogy, we have two teams. In the team that is doing well, there are some who are lagging a long way behind. A trainer would give support to them.
We should congratulate the social housing sector. With a lot of support from the previous Government, it has done extremely well in moving ahead on energy efficiency. However, that is not to say that every single home in the social rented sector is as energy efficient as possible. I recently spoke to a couple who have not had a new boiler for more than 20 years and whose electricity bill for heating last winter was £400. That is shocking. The point is that it is not the kind of house that someone lives in—whether it is privately rented, owner-occupied or socially rented—but the need to have energy-efficiency measures. Housing stock that is 10 points higher in the social rented sector or the private rented sector is quite good but the private rented sector starts from a very low base. Therefore, although it is better, it is not good enough.
Last week the Minister said that he wanted to skip out of the Committee, and he almost had the same effect on me when I heard him say that this was a very good idea. At one point I thought I heard him say that he would look at the issue, although he seems to have moved away from that. If he thinks that there is another way within the Bill—
Lord Marland
Perhaps I may clarify that for the noble Baroness. We intend to look at this matter as part of the review. The whole point is that we have to keep reviewing the whole procedure to see whether it operates properly. I hope that that gives her enough encouragement, particularly as we will be reviewing the progress that this sector, the private rented sector and the non-domestic and domestic sectors make with the Green Deal. If progress is not made, we will of course provide the necessary encouragement. The noble Baroness made a comment about teams and so on. This group is ahead of the curve. We must congratulate it and let it carry on about its business. It has taken the initiative and we do not want to frustrate that by being prescriptive. That is not how this Government will operate amid market-driven forces. The noble Baroness was absolutely right to bring to our attention how important it is that this sector makes progress, and the Government will carry out a review to make sure that it does.
Baroness Smith of Basildon
There are a number of points to pursue on that. The most important point that the Minister made was that he was going to carry out a review. I am not sure which review he is referring to but he said that there would be a review of the private rented sector, this sector and the owner-occupied sector. Therefore, on the basis of there being reviews to look into the matter, I am more than happy to withdraw the amendment.
Lord Judd
I will come to that. I genuinely have no doubts about his intellectual and, indeed, moral commitment on these issues. I have talked with him and I know that he feels deeply about this. I therefore hope that he accepts that much of what we are saying in Committee is to support him in the debates which always take place within Whitehall about turning generalised aspirations into effective action.
I remember in the opening deliberations on the Bill at Second Reading that very powerful speech by my noble friend Lord Giddens. I am sorry that he has not been able to be with us in Committee, but, given all his experience and qualifications, he left no one in any doubt about how he saw these issues as imperative and needing the highest priority. I am sure that he would not mind me telling the Committee that not long after that speech, I went to a meeting elsewhere in this building to which he had been invited to speak on the subject. He started his remarks—which again were very telling—by saying that his message was so grim and would fill so many people with despondency, because of the urgency of the situation, that he wanted to start his remarks with a joke. He said: “There were two parrots. One said to the other, ‘I’m not feeling very well today’. The other said, ‘I’m sorry. What’s wrong?’. The first parrot said, ‘I think I have a touch of the homo sapiens’. The other said, ‘I wouldn’t worry, it does not last very long’”. That was a very sobering way in which to start his remarks.
My amendment is very much in the context of the discussion that we have just had on the previous amendment. I have heard for too long the repeated and vehement expression of aspirations. This is not a partisan point—it happens right across the Floor. Because of the urgency and the challenge to the survival of the species, we must really start being specific about this. It is no good just having targets and systems; we must have specific arrangements and measures to ensure that things are happening fast and effectively. That is why I have tabled my amendment.
I applaud the amendment proposed by my noble friend that comes after this one, and I fully support it, but I wanted to spell out some of the specifics, as they strike me. The Committee on Climate Change has said very firmly that a step change in action is needed if we are to meet UK climate change commitments. The vast majority of UK emissions—some 80 per cent—result from local activity, how we heat and power our homes and workplaces and how we get around. As well as getting the big national decisions right, reducing local energy use is really critical. Local government is in a strong position to lead and co-ordinate this local action. There is some outstanding work by trailblazing councils working with their communities to roll out strategies that create green jobs, cut fuel poverty and reduce traffic. But, nationwide, not nearly enough is happening. The challenge of climate change is too grave and urgent to be left to just those councils that choose to prioritise action.
The coalition—and I am sorry about this—has scrapped the local government performance framework, including the framework for councils to act on emissions reduction. From what I hear and read, early signs are that the result of this, and of other spending cuts, is the deprioritisation of action, with moves to weaken targets at the very time when they should be strengthened, the mothballing of area-wide strategies and the sacking of climate change officers. That is the reality of what is happening on the front line—the exact opposite of what we have all just been getting passionate about. A nationwide system is clearly needed to support councils and ensure that emissions come down in every local authority area.
I emphasise that I very much support my noble friend in her later amendment, but I should like to draw out the fact that councils that are trying to do the right thing are telling us that making action on climate change a core responsibility helps them to prioritise action alongside other duties at this time of economic pressure and spending cuts. I emphasise, too, that council leaders are calling for the system to be linked to the ambition of the Climate Change Act. Councils that are already delivering on strategies to cut emissions by at least 40 per cent by 2020 are demonstrating that acting in line with the Climate Change Act may be ambitious but it is realistic. The aim of what is proposed in this amendment is to ensure a step change in action while empowering local people to decide on the emissions-cutting measures that will best serve their communities. I beg to move.
Baroness Smith of Basildon
My Lords, I shall speak to Amendment 29ZB and also about the general principle of local carbon budgets, on which we have tabled two other amendments. We have just heard the noble Lord, Lord Judd, and the noble Lord, Lord Deben, will also speak on this issue.
At the start of discussions on this Bill, I suggested by way of an amendment that the Government should seek to quantify the level of carbon reduction they are seeking to achieve with this legislation, either directly or as a by-product of legislation, given that in improving energy efficiency we reduce carbon. The noble Lord, Lord Marland, said that he was in complete agreement on the relevance of the Bill to carbon targets and to the fuel poor. Today we are seeking to build on that agreement and that relevance.
The value and purpose of local carbon targets is quite evident. Local authorities were very keen to take up the previous Government’s pilot schemes which examined how carbon could be reduced by setting targets locally. The success and popularity of these schemes is quite significant. There is fairly widespread support for this approach. The Minister will be aware of the support from his ministerial colleagues, not just from his own department but from other departments as well. The Minister’s noble friend Greg Barker has said:
“It can’t all be done from the centre. We can put in the big infrastructure”,
but,
“fundamentally this is a transition that has to”,
have the active engagement of people locally. He added:
“I’m working now with my officials, having worked very extensively with Friends of the Earth in opposition, on local carbon budgets to try and come up with something that is effective, that is fair and useful, but also doesn’t impose undue burdens on councils”.
The key is the real difference that having local carbon budgets could make.
I am disappointed that since the 2010 spending review we have pulled back and local authorities are no longer required to choose which national indicators they wish to report on. The Department of Energy and Climate Change will still produce local carbon figures, so we are still recognising the relevance of local carbon reduction. This Bill, which already works with local authorities, is an ideal opportunity to bring forward these kinds of measures and work with local authorities and I am grateful to the Minister for the opportunity to raise this.
This issue has some very key supporters. One of the things said quite rightly by Greg Barker is that we have to find a way that is fair and effective but does not produce undue burdens on local authorities. The attitude of local government to local carbon budgets is one of support; clearly they would not support anything they considered placed undue burdens on them.
The Minister may have seen the letter to Secretary of State Chris Huhne from local authority leaders of all parties—Councillor Barbara Janke, the Liberal Democrat leader of Bristol City Council; Sir Richard Leese, the leader of Manchester City Council which is of course Labour and Councillor Mike Heenan, Conservative leader of Stafford Borough Council. There were pages and pages of local authority leaders of all parties who want to support this. I am sure the other noble Lords received the same letter I did from the leader of the Conservative-controlled West Sussex County Council, Louise Goldsmith, as well as from Barbara Janke and Sir Richard Leese.
These council leaders, players not only in their local authority but in their community, would not be seeking to impose burdens on their local authority if they thought they were ineffective, or that they were too costly or that they would not work. They are proposing them because they know they can do it and they know they can make a difference. The Localism Bill is very interesting but one of its big problems is that local authorities may not have the money to implement some of the things they wish to do. This amendment is an opportunity, in the spirit of localism, to introduce measures to have local targets to meet carbon budgets.
Baroness Smith of Basildon
The noble Lord asked if the promoters could tell him what local authorities could do. I admit I am rather surprised that, as a local councillor himself, he asked the question, because he knows about Bristol. I know that the Minister is anxious to reply, I hope positively. Perhaps I may draw the attention of the noble Lord, Lord Teverson, to the local carbon framework pilots. I can give him the information, although it is easily available, on the work already undertaken by local authorities. Bournemouth, for example, has encouraged microgeneration in the domestic sector and production of energy from waste. There has been retrofitting for homes in Bristol. These pilots undertook a number of programmes to see what levers local authorities have and what practical measures they can take. It is because the outcome of those pilots was successful that not just I but all noble Lords would feel confident in putting these proposals before the Committee.
Lord Teverson
I thank the noble Baroness for that. My comment would then be that that shows how important local authorities are in this area. A number of them are probably significant as a proportion of total carbon within their regions.
Baroness Smith of Basildon
Perhaps I may ask the Minister to clarify a couple of points. I am sad to say that I am disappointed with his response. The Green Deal is only one part of what is being put forward here with regard to local carbon budgets. The Bill is not just about the Green Deal; it is also about reducing emissions, about energy efficiency and the private rented sector. Therefore, I am disappointed that the Minister cannot look at this issue more carefully.
With regard to localism, he said that he cannot impose powers on local authorities. However, we are not seeking to impose; localism is also about giving local authorities the powers that they ask for, and in this case there is a very clear cross-party steer from local authorities unanimously seeking these powers.
The Minister also said that he did not feel the amendment was necessary because local authorities are going to buy into the Green Deal. He said—I wrote this down as he said it—that there are great financial benefits for local authorities to buy into the Green Deal. Can he tell me what those financial benefits are, because that may well help local authorities when they are seeking to do something about carbon budgets? I hope that the Minister can take this matter away and think about it. If he does, he will see that there is very strong non-party support for it in the Committee. I think that we would all be happy with any wording as long as there was a report to the Government. However, I urge him to think again and not dismiss this matter out of hand, particularly when his ministerial colleague, Greg Barker, has talked about his discussions with organisations such as Friends of the Earth and said how keen he is to pursue this issue.
Lord Marland
The first point is that these amendments come under the section relating to the Green Deal, apart from the amendment in the name of the noble Lord, Lord Deben, which comes along later. The substantive issue here is the Green Deal, but the other substantive issue is that it is not for us to impose on local authorities what they should and should not do. As I said earlier, it is for us to produce a product that they are incentivised to put into homes and which they encourage other people to put into homes. This is what we are doing with the Green Deal. There are other elements relating to the energy sector, and of course we will encourage local authorities to set themselves achievable carbon reduction targets. However, it is for local authorities to buy into that; at this point, it is not for government to be prescriptive. I know that it is a tradition of the Labour Government to decide what everyone must do, and when and where they must do it. However, that is not the tradition of this Government. We are saying, “Here we are. Here’s an opportunity. Get on and do it”.
Lord Marland
I am not denying any of this. In an ideal world, that is what we would do, but it is up to the Department for Communities and Local Government, not our department, to ensure that there is a common theme running through this. Of course, we are working very closely with them to ensure standardisation. It is absolutely in our department’s interest, and the Government’s, that local authorities come up with a standardised plan. Of course, we are working within Government to try to achieve that, but it is not for us in this debate to be prescriptive of local government on what it should and should not do. It is for us to carry back the views of noble Lords to other departments, which is what I intend to do, and to make these valuable suggestions. That is the point that I am trying to make.
Do not get me wrong. I repeat what I have said: we are absolutely committed to driving down carbon emissions. It is a very important target for this Government. We have to get the 10 per cent reduction through government—it is a government diktat. That has to be achieved through the local authority and, if the local authority department does not drive it through, local authorities will be exposed in the tables that will be produced about reducing carbon emissions. So there is a mechanism. If local authorities have any sense, of course, they will try to standardise among themselves, but it is not for me today to make commitments. It is for me to take back these suggestions and report them back to the various departments.
I apologise for momentarily suggesting that this was to do with the Green Deal. Of course it is not; it is to do with the Bill as a whole. The noble Baroness was quite right to point that out, and I take back the comments.
Baroness Smith of Basildon
I would not want the noble Lord to think that we have any doubts about his commitment to reducing carbon and ensuring that this Bill is a success, but I do not think that he has understood the point that the noble Lord, Lord Deben, and I made about this not being a pressure or a duty on local authorities other than one that they seek for themselves.
The Minister said that there were great financial benefits for local authorities to bind the Green Deal. This will be significant in this debate and further debates, although we are not talking about the Green Deal at the moment. I appreciate that he may not have the information available, but it would help us to see whether there are other ways to achieve this objective for local government.
Lord Marland
I can answer that immediately. If local government is working with two or three suppliers, it may enter into a binding commission-sharing arrangement or something like that. So there could be financial benefits in supply or in being one of the registered assessors or accreditors, when there may be charges on behalf of building merchants, and so on. That is where there are potential financial benefits.
Baroness Noakes
My Lords, in tabling my opposition to Clause 61 standing part of the Bill, I am delighted to see that I am joined by not one or two but three noble Lords from the Official Opposition. For the convenience of the Committee, I shall also speak to Clauses 62 to 67 and Schedule 1 standing part of the Bill. Other noble Lords may wish to speak to those clauses later, but the points that I make on Clause 61 apply with equal force to the remainder of this chapter in this part of the Bill. As my noble friend Lord Jenkin has already noted, Chapter 4 deals with the energy company obligation, and I should state at the outset that I am not going to be talking about the energy company obligation itself. The issue that I raise with my stand part notifications is whether it is appropriate to legislate for something which has not yet been properly worked out by the Government.
I have mentioned in Committee the use of framework legislation, and I also raised it at Second Reading. The chapters of the Bill that we have already looked at—the Green Deal and the private rented sector provisions—are also very much lacking in detail. Indeed, to almost any of the many detailed questions put to my noble friend, he has tended to default to saying that this will all be dealt with in the later consultation on the regulations which will appear at some stage in the future. Perhaps I may remark that on that basis my noble friend has so far had a remarkably easy ride on this Bill.
As has been pointed out, it is customary with most framework Bills of this nature for advance drafts of related statutory instruments to be made available during the Committee stage of a Bill. This is important, because it allows the House to discover any issues in the way in which the Government intend to use the powers, which could be better dealt with in the Bill, or whether any safeguards are necessary. That is why it is quite normal for the Government to produce drafts of the related statutory instruments for the Committee—particularly in your Lordships’ House, where our obligations as a revising Chamber are more acutely felt than perhaps in the other place. We have not been offered that on any part of the Bill.
The Bill falls into that very small category of Bills which present a serious challenge to Parliament, and in particular to the role of your Lordships’ House as a revising Chamber. Our work is typically detailed and thorough, but it is virtually impossible to be detailed and thorough when dealing with long lists of enabling powers. The Bill is certainly not as bad as the Legislative and Regulatory Reform Act, which I am sure the noble Lord, Lord Davies of Oldham, will recall. It is not even as bad as the Public Bodies Bill, which is far from out of the woods in its passage through your Lordships’ House. However, the Bill is similar to both those pieces of legislation.
Let me read from the Sixth Report of 2010-11 of the Constitution Committee on the Public Bodies Bill. After rehearsing the history of the Legislative and Regulatory Reform Act, the report states at paragraph 13:
“The Public Bodies Bill … strikes at the very heart of our constitutional system, being a type of ‘framework’ or ‘enabling’ legislation that drains the lifeblood of legislative amendment and debate across a very broad range of public arrangements. In particular, it hits directly at the role of the House of Lords as a revising chamber”.
As I have said, this Bill is not nearly as bad as the Public Bodies Bill, but it is firmly in the same category.
I have singled out Chapter 4 of Part 1, rather than the chapters dealing with the Green Deal or the private rented sector, because Chapter 4 is so unclear and so lacking in detail on how the powers will be used, that it is simply not right to give the Executive the power to draft far-reaching regulations to impose the energy company obligation as they think fit, subject only to the affirmative procedure. That of course admits of no amendment and is a very unsatisfactory procedure for dealing with legislation which requires detailed, line-by-line scrutiny, in the way that we customarily approach things.
The impact assessment in respect of Chapter 4 has several pages of complete waffle. It is perhaps easier to go to the summary impact assessment, and I shall read from page 8. Under “Costs”, it states:
“There are no costs associated with the primary powers”—
the primary powers in Chapter 4 of Part 1—
“however, depending on the level of the ECO there is a potential for significant costs to suppliers in meeting the obligation which ultimately we expect to borne by consumers”.
Under “Benefits”, it is stated:
“There are not direct benefits from the primary powers, however they do enable future policy which has the potential to deliver benefits associated with energy and thermal efficiency measures”.
I note from the summary that there are likely to be significant costs. They are not costs that will be borne by the companies or taxpayers; they are costs which, as is fully anticipated in the impact assessment, will be passed on to customers. Therefore, there could be significant rises in energy bills, but neither customers nor the energy companies or Parliament will have any real influence over their size or incidence.
My contention is that this part of the Bill is simply not ready for passage as primary legislation. I do not challenge the fact that something may well be necessary in due course, but I believe that it would be correct for the Government to decide what to do, to consult on it and then to bring forward primary legislation to implement it, giving both Houses of Parliament—but in particular your Lordships’ House as a revising Chamber—the opportunity to do the job that it does so well. In that way, Parliament could give proper consideration to the practicality and fairness of how this area is to be tackled and its impact on companies and, importantly, on consumers. For these reasons, I do not think that these clauses should stand part of the Bill.
Baroness Smith of Basildon
My Lords, I want to make a very similar point relating to Clause 61 but also to Chapter 4 as a whole. We raised with the Minister previously the question of the amount of legislation that will need to be resolved through secondary legislation. There are 52 separate items in this Bill that would be dealt with through secondary legislation. I have had difficulty in understanding in detail what the ECO proposals really mean and how they will operate. It is a serious matter when it is difficult for noble Lords to assess the impact of the operation and the amount of money that will be involved for consumers as well as providers, because so little information can be provided in the legislation. It is all to be done by secondary legislation.
It might have helped the issue to be resolved if there had been a purpose clause at the beginning of this chapter, not dissimilar to the one that I proposed at the beginning of the Bill. Such a clause could set out what this chapter is seeking to do and the purpose of the energy company obligations. Without it, it is very difficult to assess the proposals put forward in the different clauses. Therefore, I have some specific questions for the Minister, although he may not be able to answer them, because the answers have not yet been compiled.
The noble Lord will recall that, possibly at Second Reading but certainly in the meetings that he has been generous enough to have with noble Lords prior to and throughout the passage of the Bill, I have raised with him the concern that the noble Baroness, Lady Noakes, has also spoken about—the need to have drafts of statutory instruments before us when we are considering these matters. Seeing the detail of where the Government intend to go would help to inform our discussions; otherwise, they are held in something of a vacuum. I certainly find it difficult to discuss the detail of the clauses.
Perhaps I may raise some specific questions to which the Minister may be able to respond. One question with which I struggle is whether the ECO is effectively and appropriately linked with the Green Deal. Without that link, I am not sure that the ECO can deliver, which is why I mentioned the purpose clause at the beginning. Like the noble Baroness, Lady Noakes, at times I find the impact assessment difficult to read, and it is probably best not to try reading it during a late-night sitting of this House. The impact assessment states:
“The domestic sector has the potential to play a big role in meeting the UK’s carbon budgets by delivering cost-effective emission reductions. Under Green Deal there is a range of policies aimed at helping households install cost effective energy efficiency measures. However there are a range of market failures (positive externalities) and barriers (e.g. consumer inertia) that are likely to continue to restrict households from undertaking cost-effective abatement measures”.
It goes on to set out the difficulties, saying that,
“it is necessary to gain the powers to intervene to ensure that energy and thermal efficiency programmes are focussed on delivering measures in vulnerable and hard to treat houses”.
Because the purpose of the obligation and how it underpins the Green Deal are not defined, the provisions in the Bill for the energy companies do not state how these measures are intended to be delivered or how those most vulnerable households will be assisted. There is a lack of clarity about how this will work, and I am sure that the Government could do more to assist the Committee in bringing forward some information regarding it.
Lord Marland
That is a matter of opinion. That is the opinion of the noble Baroness, but I find the document quite informative, as I know many others do. We will disagree on that.
The reality is that we must, in tabling the Green Deal, look at all the ancillary events that come alongside it. We are trying to improve and work towards reducing fuel poverty. That is why we are embarking on, effectively, a review of CERT to make it better. CERT was a very good initiative and endeavour but it did not hit the targets to the extent that was needed. It had several misadventures, including too many light bulbs appearing on people’s doorsteps. Therefore, the ECO will be a development on that theme.
We consider the views of this House very carefully. If we did not, we would not be starting this Bill here, as we have done. We would not be entering into very long debates on every aspect of it before it gets to the House of Commons. We would not be taking away the comments of everyone in this Room to think about in between sessions and when we get to the next stage. I think that is a genuine commitment by this Government to listen, to improve and to get things fit for purpose. I hope this satisfies those people who have raised these points.
Baroness Smith of Basildon
I am grateful to the noble Lord. He has gone some way to answering some of my questions, but not all the way, I regret. I welcome his point about linking the Green Deal and the ECO. If that could be enshrined in what comes before us, it would be helpful and, in the light of our later amendments, it might cover some of those points. His confirmation about roughly the amount of money involved is helpful. However, a number of questions remain. I will read again the document to which he referred and see if it answers them.
I am sorry if the noble Lord feels tetchy about my questions, but the Lords’ scrutiny is important. If I may raise one note of contention, I was most concerned that it would have wider implications when he seemed to threaten the use of more SIs if the Opposition seek to properly scrutinise legislation. The way to have shorter debates, if that is what he is looking for, is to have more detail; that is why I ask the questions. However, his comment gives me cause for concern, and, when we get the Hansard I will re-read what he has said about having more SIs if the Opposition insist on scrutiny.
Lord Marland
I am not concerned about scrutiny. Of course that is what SIs are for—to add on and improve legislation that is already in place. I merely said: do we think that the debate going on in the main Chamber at the moment is reasonable? Do we think things are being properly scrutinised and debated in the right way? Certain parts of the House of Lords do, large parts of it do not, and that is where the matter stands. I have no problem, of course, with proper scrutiny on these things and putting things towards the House. However, in the time available in this Parliament, we will probably not have the opportunity to get many more Energy Bills through that will be able to change various things. Therefore the opportunities available to us are through statutory instruments, and those are what we intend to use.
Baroness Smith of Basildon
I am not clear which Bill the noble Lord was talking about. The Bill that I am talking about is the Energy Bill before us today. However, in both cases the Opposition are fulfilling their legitimate and proper role in effective scrutiny.
I have a couple more questions. I know that the noble Lord has tried to answer the question, but I will re-read the Green Deal document as it addresses the issues that I have on the ECO. I am merely seeking clarity. I am genuinely not able to work out from the impact assessment, the legislation and the Explanatory Notes exactly how the ECO is going to work. That was the first of my questions. I am disappointed that I did not get answers to all of them, but I am sure that we can return to them. Perhaps the Minister could work with his officials and, before we get to Report stage, if there is more information available on the operation of the ECO, it would be very helpful to have that.
While it would be nice to have the actual statutory instruments before us then, I appreciate the Minister’s position. I have been a Minister. I have taken through legislation with statutory instruments. I have taken through a number of statutory instruments. However, if we were to have some of the information detail prior to that, it would assist this Committee and your Lordships’ House in being able to make a proper judgment. It is impossible to do so on what we have before us. I do not think that there is a person in this Committee who does not want the ECO to do exactly what the Minister wants it to do—address the issues of the fuel poor and the hardest-to-treat properties.
It would be very helpful to have clarification on two particular points. One is the cost to the consumer. That comes back to the idea of the consumer levy. I appreciate that CERT and CESP both included the consumer levy, but there was also Warm Front at that time, which was substantially greater than it is now. Perhaps the Minister can come back to us on that one.
The Minister also said that the energy companies would pay for large amounts of the ECO through their profits. Has he consulted the energy companies on that and what has there response been? If they intend to absorb the cost of the ECO through their profits, that would interest the Committee and the House, unless the energy companies intend to pass on the additional cost as well to their customers.
The final point is the one I made a moment ago about the report from GEMA, the Gas and Electricity Markets Authority. The Government are still consulting on what to do. That is why I understood it was in the Public Bodies Bill and that it could be moved from Schedule 7 to other schedules. But in this Bill it does seem that a more specific point is being made—I hope the Minister is listening and not just using his mobile phone—and I wonder if it is possible to give us more information on that, though I may be wasting my breath in raising the questions. I am not sure if the Minister is taking note.
Lord O'Neill of Clackmannan
I have had the opportunity to read this document and the three paragraphs referring to the ECO. It gives some detail but not a lot. Perhaps before we get to Report stage, if there is a delay and if things do take a long time, the civil servants will have the opportunity to provide us with the information we are asking for. It says that the ECO will be focused on houses needing support over and above the Green Deal. Can he tell us the manner in which this focusing will take place?
Secondly, he said the ECO will be able to combine legal powers to incentivise ECO support and Green Deal finance. Perhaps we could get some indication of how the incentivisation process will be carried out, because it would appear that the Government realistically anticipate in this document that something could go wrong. They are saying that these legal powers would be introduced only following a review of the company’s behaviour, if there was evidence that the households would lose out. We would want to know what losing out meant. If we can get some idea of the focusing process, if we can get some idea of the legal powers and the incentivisation mechanisms, and if we could get some information about how the Government would assess the means whereby companies would lose out, this would meet a number of our concerns, even if it was not in draft statutory instrument form. It would help if there was a slightly more explicit note.
I was rather surprised when the Minister referred to this document because we have all seen it before. It was a nicely produced thing but it was sufficiently insubstantial never to have appeared on the desk with the other papers. If the briefest reading and not a great deal of analysis under closer scrutiny can throw up four points like that, and if this is to be the defence of the Green Deal—the last but final word—then frankly we need rather more than we have at the moment.