Energy Bill [Lords]

Lindsay Hoyle Excerpts

Wednesday 14th September 2011 Commons Chamber

[Luciana Berger (Liverpool, Wavertree) (Lab/Co-op)]

I beg to move, That the clause be read a Second time.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

With this it will be convenient to discuss the following:

New clause 2—Duty of the Secretary of State to improve energy efficiency—

‘(1) The Secretary of State must prepare and publish a plan for achieving the principal purpose set out in section [Energy efficiency aim] in England.

(2) The plan must establish specific aims and describe the proposed means of achieving them, together with methods of reporting on progress towards meeting them.

(3) Where an aim is designated under this section, the Secretary of State must take all reasonable steps to achieve the aim.

(4) The plan prepared under subsection (1) must be published no later the 12 months after the day on which this section comes into force.

(5) The Secretary of State must, as soon as reasonably practicable after publishing a plan under this section lay it before Parliament.

(6) The Secretary of State must, within one year of each order setting a carbon budget under section 8(1) of the Climate Change Act 2008, review the plan prepared and published under this section.

(7) Where, following a review under subsection (6), the Secretary of State varies the plan, he must, as soon as reasonably practicable after so doing, publish the plan as so varied.’.

New clause 3—Carbon emissions in local authority areas—

‘(1) Within 12 months of this Bill receiving Royal Assent the Committee on Climate Change shall advise the Secretary of State about—

(a) the scale of action needed in local authority areas to help meet UK Climate Change Act carbon budgets;

(b) climate mitigation and adaptation policies that are effective when locally co-ordinated by councils.

(2) The advice given under subsection (1) should include but not be limited to—

(a) carbon emissions from a local authority’s own buildings and operations;

(b) carbon emissions from the local area;

(c) local renewable energy generation;

(d) national carbon reduction initiatives delivered at the local level

(3) The Committee on Climate Change may advise the Secretary of State on local level adaption to climate change to ensure that individual local carbon budgets are both appropriate for the circumstances of different local areas that the totality of all local carbon budgets is consistent with the requirements of subsection (1)(a).

(4) The Secretary of State must lay before Parliament a response to the advice given by the Committee on Climate Change under subsection (1) or (2), within six months of receiving the advice.

(5) For the purposes of this section—

(a) “budgetary period”, “carbon budget” and “national authorities” have the same meaning as in Part 1 of the Climate Change Act 2008;

(b) “local authority” means a county council or district council in England, or a London borough council, or the Council of Isles of Scilly.’.

New clause 4—Climate change strategy for local authority areas—

‘(1) Local authorities must develop and promote a climate change strategy for their local area.

(2) In preparing the strategy, local authorities must take into account any advice given by the Committee on Climate Change on local action to meet carbon budgets.

(3) In preparing the strategy, local authorities must consult with local residents, businesses, social enterprises and co-operatives and other institutions.

(4) Local authorities must publish and promote their local climate change strategy, publish an annual report on progress towards carrying out the strategy and engage with local citizens and community groups.

(5) The Secretary of State must work with local authorities and the Local Government Association to assist them in producing and implementing their climate change strategies, taking into account any relevant advice from the Committee on Climate Change.’.

New clause 7—Supplementing the Energy Company Obligation—

‘(1) The Secretary of State must, within six months of this Bill receiving Royal Assent, report to Parliament with proposals on the ways in which the Energy Company Obligation could be supplemented by—

(a) revenues from the European Emissions Trading Scheme;

(b) revenues from the Carbon Floor Price;

(c) an additional tax on the profits of gas transporters and suppliers, and electricity generators, distributors and suppliers; and

(d) such other funds as the Secretary of State considers appropriate.

(2) In considering the supplement to the Energy Company Obligation that may be made by the sources of funds listed in section (1) the Secretary of State must include an estimate of—

(a) the extent to which the additional sources of funds listed in subsection (1) could increase the contribution made by a carbon emissions reduction target and a home-heating target to meeting—

(i) the carbon budgets established under the Climate Change Act 2008; and

(ii) the fuel poverty target established under the Warm Homes and Energy Conservation Act 2000.

(b) the extent to which the additional sources of funds listed in subsection (1) could allow the Secretary of State to increase the level of a carbon emissions reduction target and a home-heating cost reduction target without increasing the cost of household gas or electricity bills.

(3) The proposals reported under subsection (1) of this Clause must include an assessment of the extent to which the Energy Company Obligation could make a greater contribution to—

(a) the carbon budgets established under the Climate Change Act 2008, and

(b) the fuel poverty target established under the Warm Homes and Energy Conservation Act 2000

if charges levied on consumers’ bills under this obligation were levied on a per kilowatt hour basis.

(4) The assessment made under subsection (3) must take into account the effect on equity for those living in fuel poverty of levying charges on consumer bills under the Energy Company Obligation on a per kilowatt hour basis.’.

New clause 18—Disclosure of information for the purpose of reducing fuel poverty—

‘(1) The Secretary of State may by regulations make provision authorising the Secretary of State, or a person providing services to the Secretary of State, to supply relevant persons with social security and tax credit information about persons in receipt of welfare benefits.

(2) In this section “relevant person” means—

(a) a person who holds a licence under section 6(1)(d) of the Electricity Act 1989 (c. 29) or section 7A(1) of the Gas Act 1986 (c. 44) (supply of electricity or gas to premises), or

(b) a person providing services to the Secretary of State or to a person within paragraph (a).

(3) Regulations under this section must specify the purposes for which information may be supplied by virtue of subsection (1), which must be purposes in connection with reducing fuel poverty or making homes more energy efficient.

(4) Regulations under this section may authorise the supply of information by a relevant person to the Secretary of State or another relevant person—

(a) for the purpose of determining what information is to be supplied by virtue of subsection (1), or

(b) to enable information supplied to a relevant person by virtue of subsection (1) to be used by that or another relevant person for purposes within subsection (3).

(5) Regulations under this section may—

(a) make provision as to the use or disclosure of information supplied under the regulations (including provision creating criminal offences);

(b) provide for the recovery by the Secretary of State of costs incurred in connection with the supply or use of information under the regulations.

(6) In this section—

(a) “social security information” means information held by or on behalf of the Secretary of State and obtained as a result of, or for the purpose of, the exercise of the Secretary of State’s functions in relation to social security;

(b) “tax credit information” means information held by or on behalf of the Secretary of State and obtained as a result of, or for the purpose of, the exercise of the Secretary of State’s functions in relation to tax credits;

(c) “welfare benefit” means any prescribed benefit, allowance, payment or credit.’.

New clause 19—Additional information provided by energy suppliers—

‘The Secretary of State shall make provision for energy suppliers to—

(a) ensure a generic signpost message is displayed prominently on all customer bills from 1 December 2011, detailing how customers may be able to reduce their energy bills,

(b) ensure a letter reaches all of their customers by 1 December 2011, clearly detailing the extent to which customers overpay or underpay compared to that supplier’s cheapest standard direct debit tariff,

(c) implement, by 1 December 2012, the findings of research undertaken on the efficacy of—

(i) a generic signpost message, to be displayed prominently on customers’ bills;

(ii) a more detailed message, quoting pounds saved depending on payment method and tariff, as influenced by the customer’s actual usage over a 12-month period where appropriate;

in encouraging customers to switch to that supplier’s cheapest standard tariff available.’.

Amendment 2, in clause 42, page 27, line 37, after ‘landlord’, insert ‘, or his appointed agent,’.

Amendment 3, page 28, line 4, after ‘may not let’, insert

‘, let on behalf of the landlord as his appointed agent or market to let’.

Amendment 4, page 28, line 7, at end insert

‘such that the property shall not fall below the level of energy efficiency specified in subsection (1 )(c).’.

Amendment 5, page 28, line 13, after ‘“let the property”’, insert ‘and “market to let”’.

Amendment 19, page 28, line 31, at end insert—

‘(5A) The first domestic energy efficiency regulations shall be made no later than 30 September 2012.’.

Amendment 47, page 28, line 33, leave out ‘April 2018’ and insert ‘January 2016’.

Amendment 6, page 28, line 33, leave out ‘2018’ and insert ‘2016’.

Amendment 48, in clause 45, page 30, line 36, leave out ‘April 2016’ and insert ‘January 2013’.

Amendment 7, page 30, line 36, leave out ‘2016’ and insert ‘2013’.

Amendment 8, in clause 46, page 31, line 4, at end insert—

‘(e) any protections to be afforded to a tenant making a request under the regulations, including, if the Secretary of State considers it appropriate, the circumstances in which no notice under section 21(1)(b) or (4) of the Housing Act 1988 may be given pending the outcome of the request.

‘(1A) In determining whether it is appropriate to make provision under subsection (1)(e), the Secretary of State shall take into account the advice of any relevant body or bodies.’.

Amendment 24, in clause 70, page 52, line 28, at end insert—

‘(ab) to publish a report setting out the intended impact of a carbon emissions reduction order or a home-heating cost reduction order on fuel poverty and on the energy efficiency of domestic properties of different tenures.’.

Amendment 25, in clause 73, page 55, line 11, at end insert—

‘(2A) The Secretary of State may in addition require the register referred to in subsection (1) to record information on—

(a) the tenure of each property; and

(b) in the case of a domestic PR property, the name and address of the landlord.’.

Amendment 23, in clause 74, page 55, line 43, at end insert—

‘(2A) The Secretary of State may in addition require the register referred to in subsection (1) to record information on—

(a) the tenure of each property; and

(b) in the case of a domestic PR property, the name and address of the landlord.’.

Amendment 1, in clause 107, page 88, line 33, after subsection (1) insert—

‘(1A) In setting out the extent to which the green deal plans under Chapter 1 of Part 1 and energy company obligations have contributed to the Secretary of State fulfilling the duty under section 4(1)(b) of the Climate Change Act 2008 (carbon budgeting), the Secretary of State must if necessary explain why the appropriate contribution has not been made and the additional measures he will bring forward.’.

Amendment 9, in clause 108, page 89, line 6, leave out ‘residential accommodation’ and insert ‘buildings’.

Amendment 10, page 89, line 8, at end insert

‘in such a way as to ensure that the energy efficiency of buildings makes its optimal contribution to the delivery of a low carbon energy system at least cost.’.

Amendment 11, page 89, line 9, leave out subsection (2) and insert—

‘( ) In subsection (1) “energy system” means the production, transmission, distribution, storage and consumption of energy.’.

Amendment 12, page 89, line 14, at end insert—

‘(5) The Secretary of State must within 12 months of the passing of this Act publish a report on the steps that he has taken and proposes to take to discharge his duty under subsection (1).’.

Amendment 21, page 89, line 14, at end insert—

‘(5) For the purpose of assisting the Secretary of State to fulfil his duty pursuant to this section, each energy conservation authority must—

(a) take reasonable steps to increase the installation of energy efficiency improvements in residential accommodation in its area;

(b) involve persons and communities in its area in seeking to increase the installation of energy efficiency improvements in its area; and

(c) include a description of the steps it has taken pursuant to this section in its report pursuant to section 2 of the Home Energy Conservation Act 1995.

(6) An energy conservation authority must also consider whether, as a means of assisting the Secretary of State to fulfil his duty pursuant to the Climate Change Act 2008, it would be cost effective to draw up a sustainable energy plan for its area.

(7) In this section—

(a) “energy conservation authority” has the same meaning as in the Home Energy Conservation Act 1995;

(b) “energy efficiency improvements” are such measures as are specified by section 2(4), (5) and (6) of this Act; and

(c) “a sustainable energy plan” is a plan promoting energy from sustainable or renewable sources.’.

[Luciana Berger]

With so many households struggling under the weight of increased energy bills and fuel poverty at record levels, improving the energy efficiency of our nation’s building stock and reducing our energy use has never been more important. A successful green deal scheme would offer protection to worried consumers hit by unfair gas and electricity price rises and reduce our country’s damaging carbon emissions. As they stand, however, the Government’s proposals lack detail, fail to provide clarity to businesses and risk being inadequate. The new clauses and amendments that we have tabled for debate today seek to rectify the Bill’s weaknesses.

Since the Bill was first published last December, we have endeavoured to work constructively with Ministers to improve the proposals, not just because the green deal was born out of pilots begun under Labour in government, but because we recognise the urgent need to improve energy efficiency across our country. We are disappointed that the Bill did not receive Royal Assent before the summer recess, as the Government promised it would. Meeting that deadline was used by Ministers as a justification for expediting debate during the Bill’s previous stages. In addition, the large volume of secondary legislation involved calls into question whether the green deal will be up and running by October next year, which has been set as the Government’s deadline.

We offered a raft of proposals in Committee to increase consumer protection, boost small businesses and provide extra support for those struggling to heat their homes. Our vision of the green deal is one where co-operatives, small businesses, charities and social enterprises can compete equally alongside large companies that want to take part in the scheme. Our vision is of a scheme that supports Britain’s 2 million small businesses, rather than simply leaving them with warm words and empty order books, which is what the Government risk doing. The Government voted against our vision, although I am delighted that Ministers did not oppose our proposal for a green deal apprenticeship scheme. I assure the Minister that all of us on the Labour Benches will be joining him at the next general election to champion the Government’s policy—Labour’s green deal apprenticeship scheme.

Despite that victory, we still have huge concerns that the Bill will not be as effective as it should be. As a result, we have tabled the new clauses and amendments in this group, which, if passed, would define the scale and purpose of the green deal. They would incentivise councils and engage local communities in the fight against climate change, give businesses the confidence to invest by linking the scheme to the UK’s statutory carbon reduction targets, and end the misery for the hundreds of thousands of men, women and children who are left freezing, shivering under their blankets because they live in cold homes that are not fit for the 21st century.

Labour’s new clauses 1 and 2 would address the lack of clarity in the Bill, better define the purpose of the green deal and ensure that businesses have the clarity and confidence they need in the green deal scheme. Together with amendment 1, our new clauses would explicitly link the green deal to meeting the UK’s targets in our carbon budgets and our fuel poverty targets. New clauses 1 and 2 would place a duty on the Secretary of State to produce a plan for improving energy efficiency and a duty on the Government to report to Parliament on the green deal’s progress towards achieving carbon reductions.

We have heard many soundbites from Ministers about the green deal, such as their description of it as “the biggest home improvement programme since the second world war”, but the Bill contains no strategy for delivering it. We have heard today about the 14 million homes to be improved by 2020, yet we have seen no way to measure whether the green deal is delivering the refit of 4,800 properties a day, or 145,000 a month. None of that is in the Bill. As it stands, there is a danger that the green deal will not live up to the hype. I do not relish saying that: the Opposition want the Bill to be better, not worse, and we want the green deal to succeed, not fail. That is why we believe the Government must go further.

We are not the only ones voicing legitimate concern. After Committee, 51 organisations, including the World Wildlife Fund, Asda and the Federation of Small Businesses, sent a letter to the Secretary of State setting out the concerns that they still had about the Bill. They wrote:

“the debate during the Committee Stage of the Energy Bill has left us concerned that the energy saving programme is not yet guaranteed to be a coherent and ambitious programme, and that the Bill requires further significant improvements. We believe there needs to be an over-arching energy saving plan from the Government to ensure clarity of what is needed to be delivered by the market…Business will find it difficult to be in a position to deliver towards the Government’s aspirations on the Green Deal without this further clarity and certainty.”

The letter concluded:

“It is our view that the Government amendments need to go significantly further and currently do not deliver on the principles reflected in the Warm Homes Amendment. They do not deliver a policy ambition equivalent to the Government’s aspirations or ensure the provision of a plan to cut carbon emissions from buildings and contribute to eliminating fuel poverty.”

The letter proposes three ways to improve the Bill. The first is that

“an aim must be clarified in the Energy Bill that is tied to meeting the target set under…the Climate Change Act 2008, and importantly the individual carbon budgets. The aim must also be tied to the elimination of fuel poverty.”

The second is that an

“amendment to prepare and publish a plan to deliver these aims must be included in the Energy Bill.”

The third proposal is that a

“reporting amendment should ensure…the energy saving programme is linked with other…requirements”.

All three improvements could be made today if the Government accepted our new clauses.

The letter is signed by organisations as diverse as B&Q, Marks and Spencer, Friends of the Earth, the Co-operative Group and the National Insulation Association—the very organisations and businesses that the Government hope will deliver the green deal. Environmental groups, businesses and trade associations are all telling the Government the same thing: “You haven’t got this right. You need to go further.” They are asking the Government to do what the Opposition have suggested in this House and in the other place, but we are now running out of opportunities for the Minister to listen and change his mind.

In Committee, the Government added clause 108 to explain their ambitions for the green deal better, but unfortunately it is inadequate. The clause contains no qualified level of ambition and excludes non-residential properties. By repealing section 2 of the Sustainable Energy Act 2003 and introducing clause 108 to the Bill, the Government are in fact diluting existing energy efficiency requirements. That is why we have tabled amendment 1, alongside new clauses 1 and 2, to ensure that the Government’s green deal definitely results in real carbon reductions. We will press new clauses 1 and 2 to a vote if Government support is not forthcoming, because they are crucial to the success of the programme.

New clauses 3 and 4 would ensure that Britain’s transition to a low-carbon economy is fair. They would place power into the hands of councils and give them the freedom and flexibility to engage with local communities in finding innovative solutions to tackling climate change. They would boost the economy and create jobs by encouraging investment in green businesses. In practice, they would establish a three-stage process. The first part would involve the independent Committee on Climate Change examining the carbon output in every locality and assessing what reasonable action could be taken to reduce carbon emissions; those data would then be used by councils and central Government to agree a local carbon strategy, providing a road map for how the area would reduce its emissions. The local authority could use the strategy to engage the local community and voluntary groups in efforts to reduce carbon emissions and improve energy efficiency.

That idea is not new. The previous Labour Government introduced a pilot programme involving nine councils in January 2010. I am pleased that the Minister announced in Committee that further pilots were to follow, but what we are proposing would allow us to take advantage of economic opportunities that we are failing to exploit. The Federation of Small Businesses, speaking in support of local carbon plans, argues:

“Small businesses are keen to go green…but are not getting the help or incentives they need to do so”.

It goes on to say that they need

“a framework that is flexible and supportive to encourage small businesses rather than penalise them.”

Our new clauses would provide such a framework. They would provide certainty about the scale of carbon reductions locally while allowing local authorities to retain flexibility on how they go about achieving the cuts. It is vital that businesses play an integral role in tackling climate change. According to the FSB, at least one third of the UK’s emissions are from businesses, and the Carbon Trust estimates that 20% of the UK’s emissions are from small and medium-sized enterprises. The FSB calculates that if all UK businesses and public sector organisations install energy-efficient measures, at least £3.6 billion could be saved every year, thanks to the reduction in energy consumption. As well as helping businesses to cut energy usage and reduce costs, estimates of the potential for low-carbon job creation are significant.

--- Later in debate ---

Our new clauses and amendments would substantially strengthen a Bill that lacks clarity and detail. They would make improving the energy efficiency of our building stock a key part of our strategy for meeting the United Kingdom’s carbon budgets. They would put local communities at the heart of tackling climate change, boost small businesses and non-profit-making organisations —particularly co-operatives and charities—and provide extra support for those who struggle to stay warm. I urge the Government to accept them.

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

I have now to announce the result of a Division deferred from a previous day. On the motion relating to access to a lawyer, the Ayes were 303 and the Noes were 192, so the Question was agreed to.

[The Division list is published at the end of today’s debates.]

[Mr John Baron (Basildon and Billericay) (Con)]

I want to speak to new clause 19, to which my name is attached.

There is much evidence to suggest that too many customers are overpaying for their energy and failing to take advantage of the best offers from energy suppliers. The coalition agreement rightly contains a commitment that energy suppliers will provide information about cheaper tariffs on the bills and statements that they send to their customers, but although energy bills have become longer, evidence suggests that the additional information has had only a limited effect in encouraging customers to switch to cheaper tariffs. What is required is much clearer information on tariffs, tailored to a customer’s actual usage and payment option, to help customers to move to a company’s cheapest tariff. New clause 19 aims to make that a reality.

The case for more clarity on bills is very strong. The average annual energy bill has doubled since 2004; bills have risen significantly this year alone, and may do so yet again before the winter. According to analysis by Which?, the cost of energy is the number one financial concern of nine out of 10 customers. It is of particular concern to the vulnerable in society, especially those who live in fuel poverty. Estimates of their number vary, but I do not think there is any disagreement on the fact that there are between 5 million and 6 million of them.

The problem is that tariff structures are too complex. According to Ofgem’s retail market review, well over 300 tariffs were available to customers at the beginning of 2011. Research by Ofgem and Which? has found that people are baffled by not just the number but the many components of energy tariffs, such as standing charges, tiered rates, discounts and cashback offers. Ofgem calculates that one third of those who switch do not achieve a price reduction, although the vast majority switch in order to save money. That fuels cynicism in the energy market. Only one in three customers trusts the supplier to sell them the best tariff, and Ofgem believes that as many as six in 10 energy customers are inactive, many being completely disengaged from the energy market and potentially paying over the odds.

A further complication is that different payment methods have different outcomes. According to Ofgem, a customer who at the beginning of last year had changed their payment method from standard credit—paying on receipt of a bill—to direct debit could have saved more than £120. Which? estimates that more than 11 million households could benefit from switching to a direct debit payment method. I do not claim that all such households would want to, or that all would be able to, because many do not have a bank account, but that figure is great enough for this issue to warrant closer scrutiny.