Energy Bill [Lords]
The Committee consisted of the following Members:
Alison Groves, Committee Clerk
† attended the Committee
‘(9A) The ninth condition is that the assessment must clearly detail those energy efficiency improvements that qualify under the Green Deal and when making an assessment the assessor must—
(a) include all energy efficiency improvement options that qualify under the Green Deal;
(b) identify energy efficiency improvements that—
(i) sit outside the Green Deal; or
(ii) collectively exceed the total amount qualifiable under a Green Deal plan, where this is clearly identified on the assessment.’.—(Luciana Berger.)
Nadhim Zahawi (Stratford-on-Avon) (Con): May I say what a pleasure and privilege it is to serve under your incredibly disciplined and focused stewardship, Mr Leigh? As I was saying before we adjourned, the danger of the amendment is that, rather than the intended purpose of people being able to think outside the box and beyond the green deal, we could end up with a situation that deters people from going forward with any improvements that they may decide to make because we try to overcomplicate and belt-and-brace the legislation. The law of unintended consequences then kicks in. We already know, from the hon. Member for Liverpool, Wavertree, that it is already a big challenge for 14 million homes to be looked at by 2020. We also know that, since 2004, fuel poverty has been going the wrong way. I am a novice at this, but I would counsel the Minister to be careful.
The Minister of State, Department of Energy and Climate Change (Gregory Barker): I am grateful my hon. Friend and am in accord with his train of thought—he is right. It might be useful to refresh our memories. I think that I was in the course of closing the debate on the amendment. To briefly summarise, the amendment raised the distinction between the green deal plans and the energy plans, and the importance of assessors providing a comprehensive assessment. As I said, the language is parliamentary counsel’s drafting, and is designed to reflect the innovative aspect of the green deal mechanism, which is repayment through energy bills, fixed to the meter. I hope that I have made clear that our intention is, and always has been, for the assessment to be robust,
Caroline Lucas (Brighton, Pavilion) (Green): The Minister used the word “comprehensive”. It seems to me that that is exactly what the amendment seeks. I would support the amendment because it talks about a comprehensive energy plan and the different measures that a householder could take irrespective of whether they meet the much narrower criteria of the green deal finance. We are wasting a valuable opportunity of assessors going through the doors of a property if they do not do a comprehensive assessment of all the measures that could be taken, and then a subset of those being eligible for green deal finance.
Gregory Barker: I will have to disagree with the hon. Lady. It is important that we protect and preserve the integrity of the green deal offer. We should remember that the green deal accreditation, for various technologies, interventions and measures that are applicable, will be a permissive list. As prices come down, I hope that more and more innovative technologies will be added to it—it is by no means a static list. The green deal list of measures will, in itself, be comprehensive, and it will be up to the assessor to pick from that list which measures are most appropriate to that home. The idea that there are other sensible measures that could not be included in the green deal is, I think, slightly spurious. If they are good measures, they should be applicable for green deal consideration.
Huw Irranca-Davies (Ogmore) (Lab): This is a vital point that we do not want to move off from for the moment. We are talking not about a spurious list, but about a cross-governmental, cross-Whitehall list of recognised and certified technologies relating to things such as water efficiency. If the Bill were amended, such technologies could be pulled off the shelf and put into secondary legislation, and the Minister would be able to amend the list over time. I hope he understands that we are talking about extending not the green deal, but the range of additional technologies relating to things such as water efficiency. For years, Whitehall—I understand its situation—has struggled to find an opportunity to do that, but the Minister now has that opportunity right in front of him.
Gregory Barker: The coalition is very interested in finding new ways to drive forward water efficiency measures, but we are simply not in a position to add them to the green deal. It would be to misunderstand the green deal if we tried to place such things firmly within its structure. Work is going on in the Government to find a blue deal—that is how it is becoming known—that would work. However, energy efficiency in respect of water is in a totally different place from energy efficiency in respect of electricity or heating, because only 30% of the country is currently metered; everybody else just pays a standard charge, and it would be difficult at this stage to extrapolate any economic benefit for the household from making savings. When the country is largely covered
Similarly, I am worried that the amendment could be used to include measures that people deem are energy saving, but which do not pass the accreditation and testing regime that we will have for green deal measures. It could encourage unscrupulous salesmen—they need not be unscrupulous; they could just be over-enthusiastic—to sell the person having the green deal assessment measures that will not pay for themselves, which will push up the household’s energy bills, which will involve up-front costs or which will lock people into expensive consumer purchase agreements that attract a higher rate of interest than is available through the green deal. If a measure is sensible, offers a payback within 20 years and incorporates a reliable technology, it will sit in the green deal and have robust guarantees and warranties and a higher level of consumer protection. Trying to blur the edges between what is in the green deal and what sits outside it, will undermine confidence in what is offered by assessors.
It is within the remit of a green deal assessor to advise on the potential for renewable energy, for example; that will be part of the assessment, and, as part of the green deal assessment, they will—we have future-proofed the Bill to allow for this—advise on the potential for feed-in tariffs or renewable heat incentive-supported technologies. There is therefore that more holistic approach. If members of the Committee think that they will, in the same breath, be able to push technologies that do not involve the same element of consumer protection or rigorous testing, that could be dangerous, and I do not think that that is really what is intended by the amendment. That is why we are cautious and why we do not propose to accept the amendment.
Simon Wright (Norwich South) (LD): We have spent a lot of time talking about the physical, structural and technological recommendations that an assessor could make, but does the Minister agree that, in many cases, behavioural change can be just as important? Does he feel that the assessor could play a role in discussing with households what behavioural changes might be implemented as a result of going through the process?
Gregory Barker: Absolutely. I am sure that the training of an assessor will include recommendations for not only how the individual customer should use the specific equipment, but how they should expect to live in their home. They will explain to them carefully that, as part of the golden rule, they need to use heating in particular, as well as lighting, responsibly and in a certain way in order to capture the savings implicit in the measures being installed. Behaviour will be key to ensure that they capture those savings.
Mr David Anderson (Blaydon) (Lab): At the start of the debate, the Minister drew an analogy with an MOT test. He suggested that people are told that their clutch needs replacing, but the clutch is not part of the MOT test. A good, qualified mechanic would say to someone whose car was being serviced in their garage, “Look, you need to be aware that your clutch may need to be replaced. Here’s your MOT certificate, but you also
Gregory Barker: Of course, they will not be prohibited from doing that. They will have a commercial incentive to sell as much as they can to that individual, but we must make absolutely clear to consumers what is included in the green deal and what is not. If we blur that on the assessment and it is not really clear, people will end up paying for things that do not offer a proper return on their outlay. They will end up with more expensive things and people will be encouraged to add on. I do not know how we could have such a comprehensive assessment—a juggernaut of an assessment, covering every product and topic under the sun—without boundaries. The boundaries for the green-deal-approved interventions will be clear and robustly tested. The amendment could end up as a giant mis-selling proposition, rather like the Australian experience, which we are all keen to avoid.
Ian Lavery (Wansbeck) (Lab): If the Minister is so concerned that the bill payer may end up paying a lot more, which is not part of the green deal, would he consider introducing legislation to ensure that the assessors cannot do that?
Gregory Barker: Do not misunderstand me—there will be opportunities to sell additional services and to offer other products, but we do not want the consumer to be under any illusion in relation to additional services. If Marks and Spencer, or any other retailer, went into someone’s home to offer them a green deal, I am sure that it would also take the opportunity to market wallpaper, carpets and, if the walls are being lined, curtains and perhaps a sofa. This is a huge opportunity for home improvement, which will not be lost on responsible retailers. They will offer not just additional energy measures, but a whole package of other home improvement measures in a commercial atmosphere. What we must be clear about is what sits in the green deal—what offers the promise of no up-front cost and golden rule savings, and what sits outside. A wider assessment that is blurry could get us into dangerous territory.
Tessa Munt (Wells) (LD): To return to the MOT analogy, some things get one through the legal necessities, while others might be attached to energy saving. For example, somebody using a condensing dryer might appreciate the advice to get something that, instead of being D-efficiency rated, is A-efficiency rated. Marks and Spencer might want to sell them a more efficient condensing dryer. Surely the most important thing is for the consumer to be completely aware of what the legal necessities are and what the add-on bits are. In the same way as I suggested earlier, a 14-day cooling-off period might make that clear. People might be given two documents—letters or offers—that clarify what is green-deal necessity stuff and what are the other ways in which they might improve their energy consumption.
Gregory Barker: That is exactly what would happen as the Bill is arranged. There will be a clear delineation for the green deal and further suggestions that could relate to energy savings. However, if they related to good energy-saving propositions, they would by definition be included in the green deal. The only reason why something could not be in the green deal would be because either it did not meet consumer standards or warranties, or it did not offer money savings over a 20-year period. We are not giving a very narrow definition of what can or cannot be green-deal approved. We want it to be a real stimulus for innovation. We would receive a clear paper from our assessor, which would list what was recommended for the green deal. That would attract a cooling-off period, as my hon. Friend the Member for Wells suggested but, in addition, a range of other extras could be offered at the same time, which would be regarded as useful advice.
That will be covered by a code of conduct or practice, but I am reluctant to see such a process formalised as part of an assessment, as that could mean that some people think that other things that are part of their assessment are part of the green deal. Unless there is clear delineation between what is part of a useful and helpful retail offer and what is part of the green deal, I can see matters ending in confusion.
This has been a valuable discussion which has helped us to thrash out exactly what we mean by assessment. We attach importance to the high standards of consumer protection, which is why I agreed this morning to meet the hon. Member for Ogmore and others to discuss impartiality. I confirm that, over lunch, I instructed my officials to open discussions with parliamentary counsel about what could be included sensibly in the Bill in response to this morning’s debate, and I am certainly ready to take matters forward. On that basis, I hope that the amendment will be withdrawn.
Luciana Berger (Liverpool, Wavertree) (Lab/Co-op): I have listened carefully to the Minister. Before lunch, he compared the green deal assessment with an MOT, which was interesting. I was looking at the internet at lunch time and read about some worries that consumers have about MOTs. There were some startling figures from Which? that millions of drivers were ripped off by dodgy garages. Likewise, the result of another inquiry was that 14 million victims believe that they have been ripped off by dodgy mechanics. To draw a comparison with an MOT ignites worry, given that that is a relatively small cost compared with a charge of up to £10,000 on a home. The hon. Gentleman referred earlier to an assessor as a salesman, which is a concern. The amendment is as much about the cheapest solutions as it is about expensive solutions. I drew attention earlier to thermostats. I do not expect to take a green deal package out on a thermostat that might cost me £70.
Gregory Barker: But the hon. Lady would take out green deal finance on a whole package of measures, such as thermostats that added up collectively to £10,000. A range of individual line items would form part of the total green deal package.
This is a once-in-a-lifetime opportunity for people to have someone come to their home. The Minister said that various measures would be pushed through the deal. The amendment seeks not to push but to suggest other measures that could go below or beyond the green deal. The amendment says that the assessor must
The Minister discussed measures that have not yet been proven to save as much energy, but there are lots of microgeneration measures that might go beyond the green deal. This would be a fantastic opportunity for those households that could afford it to take them up.
Gregory Barker: It will not form part of the green deal finance, but it will form part of the green deal assessment, which will include energy-saving measures that will be financed under the Bill. In addition, the assessment will include recommendations for renewable heat technologies and microgeneration technologies. The hon. Lady does not quite appreciate what the green deal is about. There is a difference between the assessment and what is actually paid for.
Luciana Berger: The point about the amendment is that the assessment is as wide-ranging as possible to include all those measures that might be possible. I appreciate that renewable heat and microgeneration might be included, but there are other measures that go beyond that for those households that do not qualify or suit either of those technologies.
We have listened carefully to the Minister’s response. However, having spoken to my colleagues, I can say that he has still not reassured us. If the amendment is not quite right, will the Minister agree to work with us, without guarantees, to discuss it in detail with a view to revising it at the next stage? We are looking forward to working with the Government on an earlier amendment about disclosing the relationship between the green deal assessor and the green deal provider/installer.
Gregory Barker: As the hon. Lady knows, I am prepared to be collaborative wherever possible, but on this issue, she and her colleagues have not correctly understood what we are discussing and they have not grasped the differentiation between the green deal finance mechanism and the green deal assessment. We are in a good place here in terms of the Bill, and I urge my colleagues to vote against the amendment.
Huw Irranca-Davies: We have had a good debate on the clause. The Committee will be glad to know that I do not intend to detain it too long, as we have gone into details that we have not seen before, which has been very helpful.
Mr Anderson: On a point of order, Mr Leigh. Will you advise the Committee as to whether the Minister can take verbal advice from the civil servants? My understanding of the normal processes is that any communication should come via the Parliamentary Private Secretary.
Gregory Barker: On a further point of order, Mr Leigh. May I say that that comment is entirely outside the collaborative spirit of this Committee? It completely clashes with the way in which I am trying to deal with the hon. Gentleman’s concerns. If he wishes me to do it in a more formal way, it will restrict my ability to respond to Members. He is entirely, informally, out of order.
Mr Anderson: On a further point of order, Mr Leigh. I am rather concerned about what was effectively a veiled threat from the Minister. I served under the previous Government, and it was made clear to me that that is how the process is done, in exactly the same way as in the Chamber. It does not in any way stop us acting collaboratively. The fact that the Minister thinks that this will stop us doing that is a sign of weakness on his behalf.
The Chair: Does Mr Jones wish to take part in this point of order? That point of order is now disposed of. My ruling is, for better or for worse, that the rules of the House state that Members of Parliament may not receive verbal briefings on the floor.
Graham Jones: On a point of order, Mr Leigh. The Minister has just said that it restricts the debate within the Committee, but surely the point is that what he is suggesting would restrict the debate for the country. This debate is for the country to witness. If he is going to restrict it, it is not only this Committee but the UK public who will be denied a debate.
Huw Irranca-Davies: I am back on my feet, but I am happy to swap positions with the Minister. It was one the highlights of my career as a Parliamentary Private Secretary to be in that position and to negotiate with insightful civil servants. I will move on.
I do not want to delay the Committee for too long, but there are some important points that need to be clarified before we head on to later stages of the Bill. It is appropriate to do so in the debate on clause 4 rather
I am seeking the Minister’s clarification, or at least his thoughts, on whether there will be a clear differentiation in the Bill—this comes back to the points made on the amendment earlier—between the interest charges and the substantive part of the green deal, so that the consumer knows precisely what they are paying. I know that there are issues regarding people’s ability to understand complex bills. I am sure that the Minister is working through that with his team. It is vital for transparency that the customer knows that.
To go beyond that—we did not deal with this earlier—if all the costs at the point of declaration, with nothing hidden or bolted on later, are rightly included in the package, what does that do to the viability of the green deal? I wish to test the Minister’s assumptions on whether the green deal works, if all the cost elements are included within it. We want it to work, but what are his calculations?
I have asked whether the Minister can confirm that estimates and charges under the green deal will include the interest element. Research by the Great British Refurb campaign suggested that some 11% of those surveyed would consider taking out a green deal package if the interest rate was 4% or below—not if the interest rate was 5%, 6%, 7% or 8%. What are his calculations telling him?
Those examples all have slightly different modelling, which is why we need to know where the Minister is on this. Analysis by E3G suggested that a 25-year green deal package of £11,000, which would achieve 50% energy savings, is only able to meet the golden rule over the lifespan of that investment if the interest rate is 2% or less. If the interest rate is higher, it will not meet the golden rule. Friends of the Earth has suggested that a package with total measures of £8,223 only just meets the golden rule at a 4% interest rate over a 30-year period. Are those calculations completely wrong? Can the Minister reassure us about what modelling he has done?
We have not yet seen detailed modelling in Committee, even if we take into account what the Minister said during an earlier sitting about variable interest rates. If variable interest rates are included as a possibility, it is difficult to see how the integrity of the golden rule can be maintained over a sustained period unless additional head room is built in to ensure that it works with variable rates. However, I might be missing something. How is it possible to communicate the total cost and likely instalments on variable rates at the outset of a green deal that might last 15, 20 or 25 years or more? How will homeowners know what they are taking up and what the lifetime interest payments will be if they are not clear where the interest rate is set?
All those questions are still outstanding. How does the Minister think it possible to ensure that the total cost is presented at the outset to establish the golden rule, along with the instalments for each year, if the interest rate is not known? We have only just started to
We must know the Minister’s thinking. Has he done any modelling? Can he share it with the Committee so that we know before we come on to later stages of the Bill? If we assume, based on what I said, that a successful green deal will depend on relatively low interest rates to make it work, if 2% or 3% rates are not necessarily provided by open competition, some other support will be needed, possibly from the green investment bank. The Deputy Prime Minister hinted as much when he said on 23 May:
Is that true? It might be a way forward. If so, wonderful; let us hear it. At the moment, as I understand it, the green investment bank will be a reasonably well-funded but independent bank, run by independent financiers rather than civil servants, that will invest in proven technologies in energy generation—it will be an investment bank, not a grant-giving mechanism. At the same time, it will help new technologies that are not proven get off the ground. If it will also support the green deal, that is a heck of a task. Will the green investment bank underwrite interest rates on the green deal? That would, in fact, make it work.
It would be similar to the German approach. The KfW bank has been making energy efficiency loans at less than 3% to German householders for full house refits. Is there clarification on that? The green investment bank is triple A-rated and can guarantee low-interest loans. Neither utility companies nor any other private company can do that. If we get it right, the Minister’s aspirations for the green deal can be delivered. If not, the golden rule and the possibility of including all the cost elements within the package look precarious.
The Government are caught on the horns of a dilemma. I understand that the Minister wants to ensure that all the costs are included, and he has undertaken to continue the discussion in Committee, but if they are, how will the golden rule work? I know that during debate on subsequent clauses and amendments, we will discuss incentives. Perhaps that is part of the way forward, but on the specific questions that I have asked, the Committee deserves clarity. I know that the Minister and his team have been working hard, and I am sure that he can give it to us.
Graham Jones: On clause 4, one big issue involves the independence of the assessors and their advice and assessments. What safeguards will be in place to prevent mis-selling and improve trust so that the green deal can be successful? That is a key question that we are all asking. Green deal assessors need to be genuinely independent of providers.
That will have knock-on consequences; it is not just about words in a Bill. Which? research recently found that only 23% of customers trust their energy supplier to sell them the right tariff and that 77% do not, which is extremely concerning. Four of the big six energy suppliers are under investigation by Ofgem to determine whether they are complying with the new obligations to prevent mis-selling, as my hon. Friend the Member for Ogmore mentioned.
There are other real concerns, and my hon. Friend the Member for Liverpool, Wavertree touched on the issue of what is and is not sold. One subject that has not come up in the debate is reverse cross-selling of what is not in the green deal. If salesmen have the opportunity to gain entry to a property, they can advise that they are also green deal assessors or part of a green deal provider package. If, for example, they sell smart meter installations, that gives them access to a property, and leads to their making contact with a customer and providing the green deal. It is therefore important to look at what is not in the green deal.
The Minister has said that, through statutory instruments, the list will be revised to include all devices providing energy improvements. We should, however, look at technologies outside the green deal that may be used in reverse to gain access to properties, which is a key point. That might happen with the energy company obligation. We will encourage people to enter properties under the green deal and under ECO targets, although the Minister has said that with the green deal the two might go together. If ECO providers are the first in, as statutory providers through the energy companies, that gives them a preferential position as green deal providers, because they are already providing the ECO. We need to be mindful of reverse cross-selling, and I have real concerns about the link between assessors and providers.
In the last few minutes, the Minister announced that there will be protections against cold calling: he said that it will not be allowed. However, there is the further problem of tied assessors. I am concerned that, when there are tied assessors and providers, commissions will be involved, which might lead to the mis-selling of green deal products. It is well known that a huge amount of doorstep salesmen’s pay is in commissions—Which? estimated that 40% to 50% commissions—which is a cause for concern.
“There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on…and that is the role of commissions. My noble friend has raised a very important point where we need to work out”—[Official Report, House of Lords, 17 January 2011; Vol. 724, c. GC55.]
The Chair: Order. This is a clause stand part debate. We have already had wide debates on amendments, but I have allowed a clause stand part debate. The Committee must discuss the clause, and not commissions, cold
Graham Jones: Thank you, Mr Leigh. I was trying to say that we must be careful how property assessment is carried out. If people make contact with customers to assess a property, we must have a clear framework that protects customers and provides a basis for trust. We may debate the involvement of commissions later in our proceedings, but it is worth mentioning that that is a concern.
I shall touch on a couple of points that I could not make during our debate on the previous amendment. The Minister said that the list would be prescriptive and that there would be no flexibility. I am concerned that the Government might lag behind in innovation and that green deal providers will be selling old technology because the list will not be up to date with new technology. I am sure that the Government will respect that matter, but I am concerned about how fast we can react to the innovation and technology which the green deal itself will create. Ideas will flow even faster as the scheme increases supply and demand—I hope that old technology will not be sold.
Finally, will the Minister comment on the fact that the clause makes no mention of guarantees on products? If windows are installed that last only 10 years, how will they be part of a green deal assessment that may be for 25 years? Some products will have a limited lifespan. Will that matter be reflected in further legislation?
Gregory Barker: Some interesting points have been made in this short debate. The hon. Member for Ogmore referred to the analysis by E3G and to its calculations of what may or may not be financed through the golden rule. The trouble with that analysis is that it took no account of the energy company obligation. We fully accept that some home owners—particularly the fuel-poor and those who live in hard-to-treat properties—will be unable to install all the measures that would be required to bring their homes up to a good standard simply through a commercially based, paid-through-savings model, however robust and innovative such a model may be. That is precisely the reason why we have the ECO, which will deliver, over a decade at least, year on year, billions of pounds of support for exactly those measures. The E3G model completely ignored that provision.
The golden rule, which is the principle that the charge attached to the energy bill should not exceed the expected savings at the time of the assessment, will take account of the total cost of the green deal package. Interests rates are an integral part of that calculation, which is why we will insist on taking a conservative view on likely interest rate costs and on the paybacks of any particular intervention or technology. In addition, as the hon. Member for Southampton, Test, said so eloquently, a sensible view must be taken on any given tariff.
The tariff will include the expected costs of finance, including interest rates, as well as labour and products. At the outset of a green deal package, it would need to be made clear, not so much to the consumer but to the lender, that even if there was a flexible interest rate—we will have to thrash out in secondary legislation whether
On the interest rates likely to be offered, the honest answer is that no one really knows for sure yet what the mean interest rate is likely to be across a spread of the products. There are divergent views in the industry. Some reports have mentioned an 8% interest rate, but I have spoken to other major financiers who have predicated a much lower rate. Given the regulated nature of the payment stream and the much lower default risk, there is ample reason to believe that when the scheme comes into existence, and particularly when it builds up to scale and is able to access the capital markets when the debt is securitised, there will be access to rates that are far closer to mortgage rates than to conventional, personal loan interest rates. That is certainly our expectation, but I cannot say, hand on heart, exactly where that will lie.
That is why the Deputy Prime Minister rightly said in a speech to Climate Change Capital some days ago that we would stand by to see, particularly in the teething stages of the Bill, if there was a role for the green investment bank. However, I do not think that he or anyone else in Government anticipates that we would use the green investment bank in the same way as KfW uses, on a large scale, subsidised loans direct to the consumer. What we might envisage is some assistance in securitising a number of the initial players together and introducing some liquidity into that market to try to put a bit of va-va-voom into access to the lower interest rates that we have in the capital markets.
Huw Irranca-Davies: I thank the Minister for those helpful clarifications. We are starting to get a real picture of this now. What modelling has he done or commissioned, or is the industry doing, on the market or customer sensitivity to different interest rates? He must have some idea—and we need to have an idea—about what terms customers are on and what terms they can get on the green deal.
The important thing to get across to the Committee is that the interest rate is just one variable factor in the total cost of the green deal package. It is easy to focus too much on the interest rate; that is the sort of thing that some unscrupulous salesmen do. They offer a 0% finance deal on something they charge a high price for, compared with a reasonable interest rate but a much better deal on the commodity price. The important thing for the customer, ultimately, is the total value of the package: the total repayment cost of the intervention—the installation of the products—versus the savings made. The interest rate is an important variable factor
The beauty of the green deal is that it allows genuine competition and allows the market to come to bear. It is not like the old one-size-fits-all Government programmes. We will see innovation, with firms large and small competing to serve consumers in new ways. There is more work to be thrashed out, and ahead of that secondary legislation I hope that all members of the Committee will take the opportunity to contribute to the thinking on it as part of the consultation over the summer.
The hon. Member for Hyndburn made a number of points. He particularly focused on the provider-assessor split. I must tell him that when I first conceived of this policy, my initial thoughts were that there would be a complete separation between the person coming in to do the assessment and the provider/salesman who came afterwards, for exactly the reasons that he suggested. However, when we looked in more detail and spoke to market participants, it became apparent that if we wanted to see as many new entrants into the market as possible—to drive customer choice, to drive down the cost of these products and services to consumers and to have real competition—we had to make it attractive for them. We have not yet pinned down the cost of a green deal assessment, but there will be a cost to having it done. Given that cost, the ability to get back some of that cost will be important.
That is why we concluded that it would be acceptable for an assessor to act on behalf of an accredited green deal supplier, provided there were robust consumer protections such as a cooling-off period, as mentioned by my hon. Friend the Member for Wells; such as a clear declaration of who they are acting for; and such as total transparency, in terms of the commission paid and the ability of the consumer easily to take that assessment, which must be done to a uniform standard, to two, three or perhaps even more providers and easily obtain a compatible, complementary quote, which we would expect and encourage all consumers to do.
Claire Perry (Devizes) (Con): The Minister is demonstrating that he is listening to the points being made by all members of the Committee, and I strongly hope that we can get back to a mood of co-operation and enthusiasm for this incredibly important piece of legislation. May I just put on record that if the country saw the rather ridiculous example of old, petty politics, they would expect us to grow up and move on?
Gregory Barker: I thank my hon. Friend for that intervention. Those consumer protections will include declarations on commissions and a ban on cold calling. I hope that will reassure members of the Committee. In respect of guarantees, as I said this morning, we plan to require green deal providers to provide a single guarantee to their customers. Hansard contains the full statement on that. That requirement for a single guarantee will make it so much easier for consumers, particularly when there is a range of different products on offer.
Graham Jones: I welcome the Minister’s comforting words on this issue. It is reassuring to know that he is considering these matters. Would he consider one other finite matter when he talks about a choice of assessors—a choice that I welcome—and a range of innovators? When an assessment is made, who owns that assessment? Will it be owned by the assessor and the company that they work for, or will it be owned by the participant?
Gregory Barker: That is a very easy question to answer. The assessment will be owned by the person whose house has been assessed and who has paid for the assessment. They will hand over their money, they will receive the assessment, and it will be theirs either to act on with the assessor’s company or to take to another supplier and assessor. I hope that I have reassured hon. Members on a number of important issues.
The Chair: Before I come to clause 5, this is just a rather old, boring rule of the House, but I am afraid that tea and coffee are banned substances as far as the rules are concerned. If anybody has any tea or coffee, could they please hide it?
‘(e) a condition that the plan includes a term enabling the provision of individual or community-based incentives to take up the Green Deal.’.
Amendment 32 aims to provide a mechanism that encourages both individuals and communities to take up the green deal, and to probe the Government on what incentives they intend to bring forward. We have heard a lot about incentives. They have been referred to a number of times by the Government. The Chancellor, in his Budget speech, said:
“Our green deal to reduce energy bills for homes will be introduced next year. I can confirm that we will act to incentivise and encourage its take-up.”—[Official Report, 23 March 2011; Vol. 525, c. 959.]
“We will continue to consider new incentives and levers to drive the programme forward as the market develops and we reach towards that very ambitious level of retrofitting 14 million homes by 2020 and 26 million homes by 2030.”—[Official Report, 10 May 2011; Vol. 527, c. 1130.]
We have discussed the issue a number of times. We know that that equates to 4,464 homes a day. We can discuss the amendment in light of the debate that we have just had on the previous amendment about the interest rate. We know that when the interest rate in Germany was at 2.65%—it is subsidised by the German
Back in November, there was an article in The Times that suggested that householders are being encouraged to take up the green deal through incentives paid for by energy suppliers, as part of the new energy company obligation. The article speculated that for green deal customers, that could include the chance to win a holiday, a discount on council tax, and a cash voucher or a rebate on energy bills. The Times also stated that the Secretary of State may consider making changes to the stamp duty system if those incentives do not encourage enough people to take out a green deal. He said that if those incentives proved insufficient to attract many home owners, the Government would consider introducing a tilt in stamp duty. Stamp duty could be reduced by 1%, or approximately £2,000 for the average home, for those who insulated to a high standard within a set period after purchasing a home.
Many other organisations have highlighted the need for incentives. In January, the Chartered Institute of Environmental Health expressed concern about the decision to phase out Warm Front grants and replace them with the green deal. It said that it
The CBI also expressed concern that the policy could become a lame duck if people are not encouraged to take it up. I know from my conversations with the CBI yesterday, and from its sixth climate change policy tracker, which was released yesterday, that UK investor confidence in the green sector remains low, and that ensuring effective incentives to stimulate the scale of green deal demand that the Government expect is absolutely crucial. The Federation of Master Builders also set out its disappointment at the lack of additional incentives announced in the Budget to create more demand in the market. I could go on. There is a very long list of organisations that have added their voice to the concerns. It includes the UK Green Building Council, Consumer Focus, Sustain, Friends of the Earth and the think-tank E3G.
Several organisations wrote to the Chancellor on 15 February to ask him to announce what measures there would be in the March Budget to incentivise people to take up the green deal. They included the WWF, Marks and Spencer, B&Q, the Federation of Master Builders, the UK Green Building Council, Green Alliance, Greenpeace, Friends of the Earth, the Great British Refurb, E3G and Transform UK.
We heard the announcement in the Budget that there would be incentives, but yet again there was no further detail on what they might be. We know what trade bodies and businesses think about the possibility of incentives, but what do the public think? They like the
While 56% of the public liked the pay-as-you-save scheme, that number could increase with financial incentives. A one-off council tax rebate is a real motivator; 49% of people are likely to take up the green deal if the Government offered a £500 council tax rebate. Changes to stamp duty are also popular, with the public considering it to be a fantastic incentive. British Gas has brought forward its own version of the green deal, and has carried out research into how effective it has been. It suggests that the scheme has had full appeal, but that additional nudges will be needed to drive the market. It put £30 million on to its balance sheet to test how the green deal would work, and that is happening throughout the country. It is pushing carrots such as council tax and stamp duty rebates and is supporting sticks, including proposals to regulate minimal rental standards.
In April 2009, the Department of Energy and Climate Change conducted research, together with the Energy Saving Trust and Quadrangle Research. It was extremely powerful in showing which incentives work, in terms of energy efficiency uptake through schemes such as the green deal, and which do not. The report noted that one-off, up-front incentives are generally preferred to incentives provided over a period of time. By giving the incentive up-front, it is possible to give up to 30% less and receive the same uptake results. The research also found that council tax rebates were one of the most powerful means of incentivising energy efficiency. Both the council rebate of £250 over three years and a one-off, up-front council rebate of £500 have an uplift of 15%.
We can learn a little more from the experience of British Gas. Since 2004, it has been working with more than 68 local councils to offer householders returns of up to £125, administered via council tax bills, after they have had subsidised cavity wall insulation installed in their homes. According to the research carried out by the Department of Energy and Climate Change, that council tax rebate has proven extremely popular, and demand for it is increasing, and it could lead to an increase in demand of 15%. In Braintree, Essex, 75% of respondents said that the British Gas council tax rebate was at least among the factors that led to their choosing to insulate at the time.
“we believe that there will need to be both market-led and government-led nudges to encourage customers to take up the Green Deal. It will be for individual companies to decide what position they wish to take in this market place and so what additional incentives they might offer to customers to support their own Green Deal proposition. However, we believe that additional government-led incentives will also be required to increase confidence in the Green Deal.”
Written evidence submitted to the Committee from Age UK made some important points about community initiatives under the green deal, which is why we referred in the amendment not only to individual incentives, but community-based incentives. It said:
“we believe there are circumstances where it may be more appropriate for a group of householders to work together—for example to develop a combined heat and power or district heating scheme, or where a group of hard-to-treat homes want to install ground source heat pumps (a task much more efficiently done if a neighbourhood is working together). In addition, people working as a community will tend to help each other, and reinforce each other’s determination to make energy savings. It will be important for the Green Deal to be able to deal with collective initiatives—perhaps where people come together as a co-operative or social enterprise—and that Green Deal finance or funding drawn from the ECO can be accessed by these schemes.”
I have some questions that I am keen for the Minister to address. How exactly does he believe that households, tenants, landlords and owners of commercial properties will be incentivised to take part in the green deal? Does he think that a stamp duty incentive will be needed to mitigate any potential effect on house prices, as E.ON has suggested?
I am keen to know what assessments the Minister has made of the merits of a council tax incentive. Will a carrot or stick method be used, or a combination of both? We heard during a previous sitting that there would be rewards for taking up the green deal, as well as a penalty for not doing so. I am keen to know what that might mean in practice. What will be the rewards and penalties? Can he assure us that any incentive offered will be carbon-neutral? I refer back to The Times article suggesting that home owners might get a free flight for their home improvements. I seek reassurance that that will not be allowed, as it would be contrary to the ideals espoused in the green deal. Finally, will the Minister commit to examining possible community-based incentives, as well as individual tax incentives, that will boost community cohesion?
Gregory Barker: That was a useful outing to remind us all of the importance of incentives. As I keep reminding the Committee, the green deal will be a lot more than simply what is in the Bill. I have no doubt that such an ambitious programme—the most ambitious roll-out of home improvements since the second world war—will require additional incentives. Later in Committee, we will introduce measures on penalties as well as incentives to ensure widespread take-up.
Before the launch of the green deal in the autumn of 2012, we need to set out our programme of incentives. That will give new market participants confidence that the programme of works will take off, that there will be demand, and that it will be worth while for them to make the large-scale, long-term investment that we want by entering this new and exciting market. Incentives will play a role, both for the consumer and as an additional carrot to encourage new entrants.
I understand that through amendment 32, hon. Members seek clarification on clause 5. The clause sets out what must and must not be included in the terms of the green deal plan—the contract between the customer and the green deal provider. The powers are intended to ensure that the customer is adequately protected and provided with sufficient information to make a reasoned choice about whether to enter into the contract. However, green deal providers may wish to incentivise improvers to take up a green deal plan. Indeed, as it is a market-based
This year’s Budget confirmed the Government’s commitment to act to incentivise and encourage take-up of the green deal. The Department of Energy and Climate Change will work with the Treasury and other Departments to consider possible options. It is worth remembering that in this year’s Budget speech, the Chancellor said:
I had a one-to-one meeting with the Chancellor at lunch time in the Treasury. He is absolutely committed to ensuring the success of the programme. The proper place for the range of measures is in the Chancellor’s Budget, not in the Bill.
I am sure that the Budget before next October will by no means be the last word on the matter. As the market develops, and with the benefit of experience of take-up, rather than simply through forecasts, we can identify parts of the market that are not responding so well. We can try to assist those parts of the community—those families and tenants—that are struggling or are resistant to taking up the green deal. We will need to design the correct instruments to reach out to them with the benefit of real, hard evidence.
The hon. Member for Liverpool, Wavertree, mentioned some such instruments, and I entirely share her analysis. From experience of a number of trial projects that British Gas has run, I am convinced that incentives relating to council tax are very powerful, because people seem to have a disproportionate hatred of paying it, compared with all other taxes; it moves them in ways in which they would not otherwise move. We need to harness that to positive ends.
As the hon. Member for Liverpool, Wavertree, said, we should also consider other incentives that galvanise community action and that are in tune with our localism and big society agendas. From schemes sponsored by British Gas, community schemes and the work that B&Q has done, we know that the biggest incentive always comes from collaborative community action. Real partnership at a local level, more than any individual financial incentive that I have seen, acts as a strong, powerful motivator to get people involved. Often, people are not reluctant, or resistant to such schemes; they simply lack the final motivation to commit and to get round to having the work done. If their neighbours are doing it and if it is going on in their street, village or community, that is often the most powerful tool of all. We must do more work to think of innovative ways to galvanise community action. The process is one of co-creation, and we are genuinely open to new ideas about how it will work on a cost-effective basis.
Luciana Berger: I am grateful for the Minister’s comments about community-based incentives, because sometimes work can be carried out only when many householders or tenants come together to do it. I sense that he is drawing to a close, so I reiterate a question that I am keen to have answered, which pertains as much to those community-based incentives as to ones based on individuals.
Gregory Barker: We have already announced that in the private rented sector we will oblige landlords to upgrade the houses and flats that they let to a minimum standard. If they do not comply with that by 2018, it will be illegal to let those properties. That clear penalty sends a strong message about our commitment to the measure.
As has been said, behavioural change is also an important element. I am pleased to say that my Department is working extremely closely with the Cabinet Office behavioural insights teams and a number of organisations outside Government to trial the impact of various individual and community-based incentives. However, we will seek to ensure, through regulation of the terms of the plan, that restrictions are placed on offering the improver any incentive, whether cash or otherwise, to minimise the risk of subsequent bill payers being placed at a disadvantage because someone has been over-compensated for taking on the initial, up-front benefit.
Huw Irranca-Davies: I am glad that the Minister has informed the Committee that the behavioural unit is involved, because that will be key to the success of the measure. He is holding negotiations with other Departments, including the Treasury, and I am very impressed that he met the Chancellor at lunch time; the Chancellor never asks me to come along for a drink, and he never rings. Will the Minister share the behavioural analysis unit’s outcomes with members of the Committee and others before we get to the phase of secondary regulation? We all want the incentives to be driven by good evidence and analysis, rather than having departmental silos, and rather than the Treasury perhaps saying, “That is the most brilliant idea, but we are not letting you do it.” Will he share that information as soon as he has it?
Gregory Barker: I reassure the hon. Gentleman that that work is ongoing. I do not know whether we will be in a position to publish it and share it with the Committee before the end of Committee proceedings, but we will be in a position to publish that information well in advance of any secondary regulations. We will all be able to share our analysis of those conclusions. I hope that the hon. Member for Liverpool, Wavertree, found that explanation reassuring and will consider withdrawing what was probably a probing amendment.
‘(e) a condition is that all fees that may be incurred by the householder or landlord throughout a green deal plan are communicated to the contracting householder or landlord in a clear, transparent and easy to understand format prior to the deal being secured.’.
‘(g) provision requiring the holder of the licence to disclose, via the customer’s energy bill, any Green Deal payments being collected through that bill as well as any arrears which may accumulate through non-payment of Green Deal charges.’.
This amendment would require energy companies to disclose any Green Deal payments on customers’ energy bills.
Huw Irranca-Davies: I will be interested to hear the contribution from the hon. Member for Brighton, Pavilion, because I suspect that through her amendment 106, she is trying to get at a similar point to the one that we are making through amendment 34. I hope that the Minister will be sympathetic. The aim of amendment 34 is to promote greater consumer protection through increased transparency in the assessment process, and to give consumers a much better knowledge of the anticipated expenses of the entire green deal process before they arise.
Green deal assessment should fall within the golden rule standards, as the Minister has already told us, but consumers will still need to be aware of all the costs, when they will incur them, and the timetable for when they will break even. In the green deal, that information is not guaranteed to be disclosed up-front in a comprehensive and comprehensible manner. In our previous discussions that touched on this, we all agreed that there will be full disclosure of all the costs, and that they will appear on the bills, so the amendments are greatly in sympathy with what the Minister has been saying. The hon. Member for Brighton, Pavilion, and I may, between us, have provided the letter of the legislation that he needs to make his commitments tangible.
Let me say why we moved amendment 34. Over the years, we have been bitten when schemes have been passed by Parliament and we have not foreseen the consequences. Take the car insurance industry. The hidden costs of that industry have often been discussed. Some commentators estimate that up to £200 million a year is made through car insurance companies making unannounced changes to inclusions in the basic coverage. I am sure there are Members here who, like me, have suffered from that. Tucked away in the small print, it suddenly turns out that there is an extra cost for things that were taken to be included in the standard package. There is not a direct analogy between that and what we are offering in the green deal, but that is what we are trying to avoid.
It is hard to find a bank that has not been engrossed in scandal over exorbitant overdraft fees and charging customers excessive rates for withdrawing an amount in excess of their account balance. I hesitate even to mention airline providers’ hidden charges, and the fuss that there has been over that, or the airlines’ robust defence that travellers should know better. We moved the amendment in the spirit of what the Minister has already said. We want to make tangible and real in the Bill an overview that says that all charges will be disclosed, so that the customer—whether they are an individual householder or a small business, for whom the issue is as important—will know in advance exactly what they are signing up for.
Graham Jones: This may be going back over a point, but I would like clarification on it. I am concerned about assessors being linked to green deal providers, although I understand the Minister’s comments. I am also concerned about the cost of the service, although he has said that that will be on the front of the assessment.
Huw Irranca-Davies: My hon. Friend makes a good point, which I am sure the Minister has listened to and will address. I will make two other arguments for the amendment. It would allow green deal providers, in certain circumstances, to receive compensation from bill payers if the green deal is paid back earlier than expected. Concerns were raised in the other place that, without such a provision, green deal providers might build extra charges into the scheme and pass them on to consumers to cover that eventuality. In fact, Baroness Smith of Basildon has said that although the Opposition may have concerns about the proposals, we want to look more closely at the detail of how it would work. Will the Minister confirm that the early payback charges will be made clear to consumers early on? Will those set charges be identified in the green deal contract? We are working on the assumption that the charges might be different for each provider that offers competitive finance deals.
In September 2009, Ofgem introduced new conditions to the licences of energy suppliers in the UK to tackle what was seen as the unjustified price differences between various tariffs. Those measures directly addressed the widespread overcharging of certain groups of customers—including the vulnerable ones whom we have talked about—identified by Ofgem during its energy supply probe in 2008. In the light of Ofgem’s experience of the overcharging of vulnerable customers, has the Minister analysed whether there are any lessons to be learned for the green deal? As an example of points that have already been raised, will prepayment customers be charged higher interest rates than those with direct debits? That is a live issue for tackling poverty generally and, in the wider context, we do not want to exacerbate an existing problem.
Will green deal interest rates differ in the way I have suggested, as energy prices do? What does the green deal mean for single-fuel customers, and will that be clearly identified up front? Many in our communities who are not only socially but financially excluded do not have bank accounts; at most, they might have a Post Office card account or a very basic account. They might be in hock to lending shops, more and more of which are springing up, or to people who knock on their doors. Will those without bank accounts be able to access the green deal? Issues relating to the ability to access credit already affect not only those without bank accounts, but those on prepayment meters.
Caroline Lucas: I thank the hon. Gentleman, because my amendment seeks to go in the same direction as his. It is about trying to enhance the visibility and transparency of measures, and bills in particular, so that people can see that all charges are properly disclosed.
My amendment goes in a slightly different direction, however, in that one of my concerns is about green deal arrears, the visibility of those arrears on consumers’ bills, and how consumers pay for them. In the previous sitting, the Minister helpfully made clear that the intention is to disaggregate the different components of the bill so that they are visible, albeit that the final amount is one composite sum that the consumer cannot pick from. I understand his argument, and I also clearly understand that there is a balance to be struck when it comes to ensuring that the green deal financing organisations have confidence in the whole process.
However, I remain concerned that under the Bill, a householder who is in legitimate dispute about elements of their green deal package and wishes to withhold funding from that package would not be able to do so. The only way that they could do so, essentially, would be by not paying the bill, but they would then have their energy sources cut off. There is a very real concern about that. It goes against basic principles of consumer protection, in which disconnection is possible as a result of non-payment of the energy costs, not the associated costs. I worry that we are taking a step backwards with the Bill, because we are looking at weaker protection for the consumer.
As I have said, I recognise that a balance must be struck between that issue and giving confidence to the finance providers. At the moment, however, the balance is not sufficiently in favour of the consumer who has a legitimate reason to want to withhold the green deal element of their bill, perhaps because the measures were poorly installed or the assessment was incorrect. At the moment, I see no measure for redress for such consumers.
I hope that the Minister can tell us more of his thoughts on this amendment and the one that we discussed before it, because there are two important principles to consider. One is the overarching principle of disclosure—of ensuring that the charges are very clear. The second is the importance of having some understanding about those consumers who are in arrears and who have legitimate reasons for wishing to withhold at least part of the payment of their bill.
Gregory Barker: I am grateful to hon. Members for raising these important issues. The amendment seeks to ensure that any fees are clearly and transparently communicated to the consumer. Let me reassure members of the Committee that the Government are absolutely committed to ensuring that the green deal customer is given every necessary piece of information on the green deal charge made by their energy company, including any information about outstanding arrears.
Clause 19 already enables energy supplier licences to be modified so as to require suppliers to provide bill payers with information about their green deal plans. We expect that the green deal charge will be presented as a line item on routine electricity bills, as the hon. Member for Brighton, Pavilion, said so succinctly. We anticipate that green deal arrears will be presented by the electricity supplier in the same manner as electricity supply arrears.
Consumers will also be provided, under the Consumer Credit Act 1974, with an annual statement of credit, detailing all payments made in the preceding year and any arrears. That Act applies to domestic green deal
Furthermore, clause 5 gives the Secretary of State the power, through regulation, to put additional protections into the green deal regime as part of the terms of a green deal plan, if necessary. Through that power, we will seek to ensure that all fees are clearly and transparently communicated to the bill payer and, if appropriate, the landlord.
Through the terms of the green deal plan, clause 5 also ensures that key protections are in place around financing, advice, measures and installation, so the concern that amendment 34 seeks to address is already being addressed. Clause 5 sets out that the improver must agree to the amount and timing of the payments that are to be made, and it ensures that they obtain all the necessary consents required to make green deal improvements. It is important to retain flexibility and consumer choice, which is why subsection (2) prevents the green deal plan from placing restrictions on the ability of the bill payer to change the intervals at which their energy bills are to be paid.
Subsections (2) and (3) ensure that no charge over a person’s property may be taken by way of security and that early repayment cannot be required of the bill payer, except in circumstances to be set out under regulations. Moreover, a bill payer’s liability for maintaining green deal repayments cannot be extended beyond the period for which they are the bill payer at the property. That is absolutely fundamental to the green deal payment mechanism and is part of the new element that makes it so different from similar pay-as-you-save schemes. It really gets to the crux of our new payment mechanism, and ensures that it is not a conventional loan process or a credit-scored advance. That ensures that the bill payer will not be liable to repay all the finance that remains as a charge on the energy bill.
Furthermore, regulations can require terms to be included that would protect bill payers’ interests by providing guarantees in respect of the improvements, as well as by specifying how problems with the improvements are to be dealt with. The clause sets out important protections for consumers and others entering into green deal plans, as well as for green deal participants.
In respect of protecting vulnerable consumers, the green deal is entirely compatible with prepayments. We are extending the full Ofgem framework over the collection of the green deal charge, so I can assure the hon. Member for Ogmore that the bill will be treated as a whole. The protections that apply to vulnerable customers or those with prepayment meters who run into difficulties with their electricity bill will be extended to the green deal. Arrears will be treated in exactly the same way. The bill is completely indivisible in that respect. I trust that I have reassured members of the Committee that we have really made it clear that we need important protections for consumers, as well as for others entering into green deal plans, so I hope that the amendment will be withdrawn.
Huw Irranca-Davies: No, I am making a speech—although not one of my full-blown speeches. I will not be here for ages. Further to the Minister’s comments, balanced against the words “expect” and “anticipate”, if I were to write to him reiterating our worries and our real red line that there must be clarity on the bills for customers, both businesses and individual households, perhaps he will write to me in more detail and explain how he intends to turn “expect” and “anticipate” into, a “This will be done” statement, so that no providers will have an opt-out. We do not want them to be able to say that the Minister can expect and anticipate all he wants. Unless he tells them to do it, as we have learnt before with what has happened in the energy and banking sectors, it does not happen. I am looking forward to the Minister intervening.
Gregory Barker: I am very happy to give the hon. Gentleman the reassurance he seeks. My parliamentary language was such that I was anticipating that such action would take place. It should not be taken for being anything less than an assurance that we will make sure that it does happen. I shall write to him and other members of the Committee to spell matters out in more detail.
I want to press the Minister a little further on arrears. Consumers in financial difficulty might face the situation when they cannot afford to pay back green deal arrears as well as their ongoing green deal charges, fuel arrears and ongoing energy consumption bills. It is an important element of consumer protection that customers cannot be cut off from energy supplies for non-payment of non-energy related charges. Although the hon. Gentleman has helpfully explained that the figure is separated out when it comes to the bill, if consumers are in difficulties in paying it back, it should be possible for them not to be cut off for not paying back the green deal element. I do not think that he deal with that matter in his response.
Gregory Barker: The hon. Lady has raised an important point. The bills are indivisible. Consumers will not be able to pick out the green deal from their bill, deduct it and send a cheque or a payment to their energy supplier. The corollary is that the same protection for consumers that is afforded by Ofgem in respect of disconnection will be afforded to the whole bill, not only the part that relates to energy—
Ian Lavery: Thank you very much, and thank you for that clarification, Mr Leigh. Will the Minister explain why the bill is indivisible? On the Energy and Climate Change Committee, we sat with the big six and there are absolutely hundreds of thousands of problems with people not understanding bills as they currently are. We really should be learning from that.
Gregory Barker: The hon. Gentleman misunderstands me. When I said “indivisible”, I meant the figure at the bottom line at the point of payment. I am not saying that it should not be far more transparent. I am working at the moment on the matter and have met the hon. Member for Liverpool, Wavertree at the Department to establish a new, clearer way in which to present customer information on bills that meets our aspiration for clarity and simplicity, but at the same time gives the level of detail that a consumer has the right to expect from an energy supplier.
The hon. Member for Brighton, Pavilion asked whether consumers can stop paying if they have a legitimate complaint about the quality of work. That is a slightly different point, nevertheless it is equally important. We have a specific redress framework to cover exactly those circumstances so there will be a formal process whereby people can take up with the official body their complaints about installations, which will have the power either to strike off the payments or the green deal accreditation of the individuals who undertook the work in the home if it were not redressed satisfactorily.
We are considering whether the consumer should be allowed to stop paying in certain circumstances or whether they could be reimbursed in a different way. However, we will set out such matters in more detail under licences and regulations. We shall certainly take on board the hon. Lady’s worries, and there will be further opportunities for her to look at matters in more detail.
Huw Irranca-Davies: I know that I bombarded the Minister with questions, for which I apologise, but there was one point to which he did not respond. Will those without bank accounts be able to access the green deal?
Gregory Barker: Yes, certainly. As I have said, there is absolutely no reason why they cannot access the green deal. Those people with pre-payment meters can access it. There is no class of customer who currently pays an
I want to come back to the issue of pre-payment metres, which keeps being mentioned. It is a huge issue. The statistics about pre-payment meters and the associated difficulties show that these will not only be hard to treat homes—more than likely, they will be hard to treat—but the customers in those homes will be hard to reach too. I am concerned about how the mechanism will work and I do not think that the Minister has provided as much detail about it as he could. I am sure that he has thought it through and I would like him to provide more detail about it.
Of those people with pre-payment meters, only 19% are owner-occupiers, 35% are in the private rented sector and 46% are with registered social landlords. I want to give the Committee some other statistics about pre-payment meters, to put their use in context. At the moment, 51% of people on pre-payment meters have an income of less than £13,500. In addition, 62% of people with pre-payment meters are on means-tested benefits, including disability benefits. So we are talking about the most vulnerable people and if the green deal is to be a success we must reach them—
Graham Jones: The use of pre-payment meters is an important issue that needs to be discussed, because so many people are affected by pre-payment meters. I do not want to go back over the points that I have just made. However, I want to refer to subsection (2)(a)(i), which deals with
On pre-payment meters, arranging payments in instalments will be exceedingly difficult. National Energy Action has highlighted its deep concerns about how financially disadvantaged households might have to limit their energy consumption artificially and prioritise green deal payments before credit is applied to the meter. That is an important issue.
The problem is that the green deal is set up for instalments, whereas pre-payment meters operate on an “as and when” basis. So we have two systems and the Bill does not seem to accommodate the fact that people on pre-payment meters cannot meet the instalments. Subsection (2)(d) says:
It is not only NEA that has expressed concerns about pre-payment meters. Consumer Focus, the National Association of Citizens Advice Bureaux and Ofgem have also expressed their concerns about the build-up of green deal arrears on pre-payment cards. Those repayments cannot be calculated if they are in arrears in accordance with an ability to pay, because there are technological limitations on pre-payment meters, of course. They can only be paid by a lump sum when credit is added to the card. That will be deducted from the amount of energy that they will be able to apply to the meter.
There are real issues about disconnections and credit. I hope that the Minister will try to resolve this issue. There is an answer, but one of the issues I am not satisfied with is that the primary legislation to disconnect will be amended to allow people with pre-payment meters to be cut off, simply for not paying their green deal portion.
‘(c) the landlord’s consent to Green Deal improvements is unreasonably withheld;
(d) the bill payer’s consent to Green Deal improvements is unreasonably withheld.’.
The Minister will have in front of him a note relating to this clause, as he has for other clauses. It will be in his ring binder, and it will be headed “Resist”. My powers of clairvoyance would not be overly strained to say that there will be a note below that, which will say, “This particular amendment is superfluous, because in clause 43(2) it states that a landlord should not unreasonably refuse a request mentioned in subsection (3) and so block the implementation of a green deal programme.”
I will now lose the thin sliver of an audience that I had for my previous remarks by referring to the architecture of the Bill. Clause 43(2), while preventing the unreasonable refusal by a landlord of a tenant’s request for the green deal programme, does so in the context of tenants’ energy efficiency improvements regulations, which relate to the relationship between a landlord and a tenant and what rights the tenant has to ensure that the landlord does not unreasonably refuse that request. The fact of the matter is that the role of landlords extends considerably beyond the relationship between a landlord and a tenant,
A landlord can have a landlord. A landlord can be the landlord of a leasehold block of flats, for example, which in turn has a landlord responsible for the ground rent and to whom the landlord of the block of flats will pay a ground rent. That landlord can, conceivably, unreasonably refuse a green deal programme on the basis that that person is the freeholder of the land on which the block of flats stands. There may be reasons why that landlord could so refuse.
To have the clause within the overall framework regulations, which we all agree should be in place, requiring that a landlord’s consent to green deal improvements should not be unreasonably withheld, would cover the tenants’ landlord regulations and catch the whole question of who is the landlord, rather than the more limited question of who is the landlord that relates to an immediate tenant’s request. It would be advisable to include that provision in the overall framework rather than in the more particular tenant-landlord framework. The amendment would not weaken the sub-framework, because it would over-ride them both.
Similarly, the amendment relates to the bill payer’s consent to green deal improvements being unreasonably withheld, which is important from the other point of view. For example, registered social landlords have a substantial role in leasing blocks of flats to tenants. Such landlords might propose to undertake a programme of green deal improvements, or a general agreement to do so might be made between them and the tenants. Although the green deal programmes would be individual to tenants, the permission to make those improvements would not be, because they would, to some extent, be collective improvements. For example, insulation might be recommended for the whole block and all the tenants would benefit from it, but they would all have to agree to allow it to go ahead. If a single tenant unreasonably said, “No, I don’t agree,” it is likely that the entire programme would fall to the ground—the tenant would, effectively, have held it to ransom.
That may seem a far-fetched view of the likelihood of people attempting to impede improvements that would benefit them and everyone else in their blocks. However, I have experience—as, I am sure, have other hon. Members—of attempting to provide benefits for people living in blocks. In my own constituency, I tried to install security measures for the tenants of a particular block and I failed to do so because of one tenant.
Tessa Munt: I have had experience of enfranchisement, when groups of tenants gang together and buy out their landlord—privately, in general. If that happens in a large block of flats or on an estate, contact might be lost with tenants, because the homes may be held by a trust, for example, and it might become incredibly difficult to get hold of them. We should also be aware of that situation, and perhaps the Minister can find some way to capture it so that individual tenants cannot block improvements purely by their absence.
I was attempting to illustrate my point by describing how I tried to install a security system for a block of flats, when one tenant effectively sabotaged the complete process, and did so, in my view, pretty unreasonably. They stood against the benefit of all their neighbours and themselves, not for financial benefit—they simply decided that they did not want the system. We all want the green deal to be as successful as it should be, but it might fail to take place in the substantial area of where registered social landlords—as they solidly think they should—attempt to undertake a process of getting green deal benefits for the tenants in their blocks of flats, either by leading or by acting with partners. Hence, a provision not for a railroad permission to undertake changes, but simply to prevent tenants unreasonably withholding permission would be an important part of the architecture of the Bill.
Therefore, I hope the Minister will flip over the page saying, “Resist”. If he is not able to take on board the entire amendment, will he at least assure me that he will at least look at it? It would substantially strengthen the Bill and increase the likelihood that the green deal works, which would reflect well on how the Bill turns out.
Caroline Lucas: The amendment is enormously important for all properties in multi-occupancy, such as blocks of flats. I understand that many registered social landlords are pushing strongly for the amendment. It would give them a greater opportunity to deliver the green deal on a block-by-block basis, which might be extended to an estate-by-estate basis. That would also give a sense of momentum. If individuals in surrounding properties see improvements being made, they will be encouraged to take up the green deal, and they would benefit from lower costs through the increased economies of scale for the provider. That would be an important step towards ensuring that the green deal meets its potential by being delivered through an area-based approach. The wording of the amendment is very wide. It is not a blanket approach; it refers to tenants having unreasonable objections.
If anyone has a civil liberties objection, I remind them that we are talking about an enormous security threat. Climate change is a huge threat to our security. When we last faced a major security threat, during the second world war, we did not let people say, “I would rather not put up a black-out curtain, because it spoils my view of the stars.” That is a comparable parallel to make at a time of security threat.
Caroline Lucas: Not yet. No, I am not suggesting that—just in case the Daily Mail ever looks at Hansard. Seriously, there are parallels to be made with the collective sense of getting something done and of not letting positive measures be stymied because people unreasonably withhold consent.
May I raise the case of a constituent who is a leaseholder in a block of flats in Brighton? She successfully persuaded many other tenants to go ahead with a range of energy efficiency measures, including double glazing, but they ran into the problem that the lease does not allow them to use the service charge for energy improvements unless specifically and explicitly stated as such. Apparently, most leases state that service charges are for the replacement and not the improvement of infrastructure. It would therefore be possible to use the service charge to replace single-glazed, metal window frames, but not to install double glazing.
In parallel with our work today, that issue should be addressed by making an amendment to the Landlord and Tenant Act 1987, for example, which would ensure that there is a wider remit for the service charge. If the service charge could be extended to the provision of reasonable insulation measures to improve the energy efficiency of a flat or block of flats, that would be a useful step towards enabling energy efficiency measures to be spread out across not only detached homes, but the many blocks of flats and estates in our constituencies. I support the amendment, and I hope that the Minister will take seriously the suggestion, which I will follow up with a letter to him, about changing the terms of that piece of legislation on tenants.
Luciana Berger: This is an important amendment that came up in the Lords. I will return to that in a moment to remind the Minister of the discussions that took place on an amendment that we tabled in the other place, and what the Minister in the other place said in reply.
The amendment goes to the heart of many issues, particularly those of consent and situations where improver and bill payer are different people. We have heard many different scenarios from my hon. Friend the hon. Member for Southampton, Test and the hon. Member for Brighton, Pavilion. We know that improvements such as cavity or solid-wall insulation would need to be carried out on a whole block, not an individual residence. We want to avoid the situation where a single household blocks access to warmer homes and reduced bills for all the other households in a block. We also want, in the same breath, to prevent measures from being forced on households, as they will pay for them, albeit through energy savings.
“adequate provision within this clause for the framework regulations to set out more detail on the issue of consent where the improver and bill payer are different people. It is important that such detail is contained within the framework regulations, as the detailed arrangements may be subject to change as the Green Deal develops. These regulations will be subject to the affirmative procedure. In addition, it is not our intention to force the Green Deal on to any party. It must be allowed to work on a voluntary basis, even where the improver and the bill payer are different people. We are proposing powers under the private rented sector chapter that
I am keen to know what role the Government see for social housing, an issue that arose in the other place. In Committee, Lord Marland rejected our proposals to add a section specifically on social rented housing. He said that the intention of chapters 2 and 3 of the Bill, which I know we will discuss later, is to provide powers to improve the energy efficiency of private rented properties should it be required, but that it is not the Government’s intention to intervene in the same way in the social housing market. Will the Minister address that? Lord Marland also said that the review would consider take-up in the social sector as well as the private rented and non-domestic sectors. If the Minister could address that in his response, I would be most grateful.
Gregory Barker: This has been a useful debate. I assure the hon. Members for Southampton, Test and for Brighton, Pavilion that I am extremely sympathetic to the points that they made. The bottom line is that it is a tricky area, because it affects both EU competence and the Human Rights Act, so it is a minefield of human rights and consumer protections. The issue also overlaps with areas that fall under the competency of the Department for Communities and Local Government and the Department for Business, Innovation and Skills. We are treading carefully through it, mindful of the unintended or perverse consequences that might result if we blatantly legislated for it on the face of the Bill, but we are endeavouring to seek a way through.
I assure hon. Members that the sentiment behind amendment 114, which seeks to ensure that regulations could provide for circumstances in which a landlord or bill payer withholds consent to the green deal unreasonably, is a nut that we are determined to crack, and sensible arguments were made in the amendment’s favour. I am pleased to report that there is already provision in the chapter of the Bill on the private rented sector, to which we have yet to come, that will enable us to deal with situations in which a domestic landlord unreasonably refuses a tenant’s request for consent to the green deal.
Regarding the rights of bill payers to say no to the green deal, we need to tread particularly carefully here, because it impacts on consumer rights. There is a key principle that no one should be forced to accept a green deal charge on their energy bill against their wishes, but again we have to reconcile that with a case where an individual might unreasonably hold up the improvement of a large block.
Dr Whitehead: I thank the Minister for his response so far. I remain concerned about the point I raised regarding the landlords of landlords and the extent to which we will catch within clause 43(2) a whole range of people who could put themselves in the position of landlord, and who therefore could unreasonably withhold permission for a green deal programme to go ahead.
Tessa Munt: I would like the Minister to clarify a point. When someone is dealing with a lease, we can use the terminology “landlord” or “landlords”. That would cover everyone, right the way from the freehold head landlord through to the various layers of landlord. Has the Minister had the opportunity to consult some of the larger estates in London, which are different from what we might think of as estates? Grosvenor, Howard de Walden and the Church Commissioners own vast numbers of properties in London and other cities. Has there been any consultation with those sorts of landlord who, if one could get their buy in, could have a massive impact?
Gregory Barker: Yes. I can reassure my hon. Friend that even in opposition, we began comprehensive discussions with large landlords of that nature and social housing landlords. We have created an informal body within the Department that has been tasked to engage specifically with those stakeholders. We are collaborating with them to try to pick our way through the area to ensure that we get a robust solution that is watertight and does exactly what we seek to do.
I agree that consent barriers are an important consideration. In the early days of the green deal, we will be watching closely, once we have got some real-time experience, to see if and how such barriers arise. Ahead of that, my officials are investigating possible solutions that will respect existing consumer rights.
The hon. Member for Brighton, Pavilion raised an important point about service charges and asked whether they can incorporate reasonable efficiency measures as well as like-for-like replacements. That is a good point. Unfortunately, that becomes fundamentally a housing matter, which comes under the competence of the DCLG. However, she has undertaken to write to me. If she does so, I will certainly happily take the matter up on her behalf, or in conjunction with her, with the Minister for Housing and Local Government, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), to see whether we can get some forward movement there. Trying to update those practices would be incredibly complementary to the good working of the green deal.
Huw Irranca-Davies: I do not want to trespass in what has been a good debate. Does the Minister at least hope to report back to the Committee before the final stages of the Bill on how those discussions with the DCLG go? That seems to be a way of giving reassurance before we get to the secondary legislation.
On the points made by the hon. Member for Liverpool, Wavertree on the private sector and the review of take-up in social housing, we will have an opportunity to discuss our amendments to chapters 2 and 3 later in the Committee, but I can assure her that we are already actively engaging with the sector and have had some real interest from social housing groups in being among the very first to
Huw Irranca-Davies: I want to tease out the Minister’s thoughts a bit further with two questions. Are the existing dispute resolutions between landlord and tenant being explored in his discussions, and factored into a way to resolve the issues? Landlord to tenant is one issue, but the other issue that has been raised is landlord to leaseholder. If a complete block of tenants has signed up, but two recalcitrant leaseholders say, “No way will you touch my property,” how will that be resolved? I cannot see a contractual way of doing it.
Gregory Barker: I can assure the hon. Gentleman that the dispute resolutions will be covered in the way he suggests. On his second question, we are actively looking at that issue, to try to arrive at a solution. These complex issues do not lend themselves particularly well to simple drafting, but we are determined to crack it. I hope that that gives the hon. Member for Southampton, Test the reassurance he needs to withdraw the amendment.
Dr Whitehead: I think I am about to withdraw my amendment, but could the Minister first expand slightly on the phrase “we hope to crack it”? Does he intend to crack it before Third Reading, does he have a longer-term view, which might come back to us in regulations, or does he not have a timetable for how to crack it but is assuring us that he will?
Gregory Barker: I think the answer to all three questions is yes. Yes, as we scrutinise the rest of the Bill we will see that there are ways of dealing with the measure, but we will need to address it further in secondary legislation. I do not pretend that we will have the complete answer in secondary legislation. I think that we will need to carefully look at the experience of the green deal roll-out and be prepared to come back and amend secondary legislation to ensure that we have cracked it in reality, because there are these unintended consequences. I will want to see it up and running and operating in real life, so putting it in secondary legislation will make it much easier to come back and tweak it to ensure that we really do crack the nut.
Dr Whitehead: On the basis that “it will be cracked” one way or another, and that the Minister will surely crack it because he is good at cracking things, I beg to ask leave to withdraw the amendment.
Luciana Berger: I do not intend to take a great deal of time in discussing clause 16; I just wanted to make a point to the Minister briefly. Clauses 12 to 15 deal with the disclosure of green deal plans, outlining some of the specific details about when a green deal should be disclosed and how that should happen. I want to ask the Minister about the sanctions for non-compliance in relation to disclosure of the green deal plan. I would like him to outline to the Committee what his intentions are, given that clause 16(1) says:
and given the fact that there will be sanctions for non-compliance in relation to disclosing the green deal plan, including the imposition of a civil penalty. I am very keen for the Minister to share with the Committee what the intention is in respect of those sanctions, particularly the imposition of a civil penalty, if a green deal plan is not disclosed.
Gregory Barker: The clause enables the Secretary of State to provide for sanctions to ensure that those with obligations to disclose or secure an acknowledgement under clauses 12 and 14, and under regulations made under clauses 13 and 15, meet those obligations. It allows for the following specific provisions: sanctions for non-compliance, including civil penalties; requiring the green deal provider to cancel liability of a bill-payer to pay green deal plan instalments; requiring a green deal provider to refund any payments that have already been made; and requiring those at fault to pay compensation to green deal providers.
We will work with relevant industry stakeholders to develop options about how we achieve these arrangements, and then we will consult before setting them out in regulations. Our aim will be to use existing and well-established systems of sanction and redress where possible, but we need to be confident that the sanctions will be sufficient to deter non-compliance. Further work will be necessary to determine what level of civil penalty will be effective, and the Government will work with stakeholders to ensure that the sanctions are proportionate.
The question has been asked, “Will the sanctions introduce a new criminal offence?” The answer is no. There are already a number of criminal offences and penalties that may be relevant in extreme cases, where someone deliberately attempted to hide a green deal for material gain at somebody else’s expense. However, we anticipate that civil penalties—by which I mean fines—will be most appropriate in most cases, together with the ability to require those who have not met their obligations to pay compensation.
We will work with stakeholders to determine the best approach. Our starting point is that the penalties must be sufficient to deter non-compliance and we will work with industry stakeholders, such as the Law Society and the Royal Institution of Chartered Surveyors, to determine both the mechanism and the level of sanctions that will be required to ensure compliance.
Luciana Berger: I thank the Minister for his helpful response because, to date, we have not received details of what will happen in practice. I look forward to exploring matters further when the consultation has taken place and the secondary legislation has been drafted.
‘(3A) Provision made by virtue of subsection (2)(b) which falls within subsection (3)(c) may include provision requiring the holder of the licence, where a bill payer has failed to pay a sum due under an energy bill, to remit a proportion of any payment received to a green deal provider.’.
‘or nominated by a green deal provider’.—(Gregory Barker.)
Graham Jones: Thank you for your guidance, Mr Leigh, on an earlier clause. It did mention instalments but, given your advice, it is perhaps better to raise the matter while discussing clause 17. I do not wish to repeat what will already be on the record, but pre-payment meters are a huge issue. They are mostly installed in hard-to-treat homes and in the homes of people in fuel poverty, to whom we must reach out. There are real worries about how the provision will work, how people will pay the green deal, and what will happen when pre-payment over the summer and winter months does not work out. How will people pay back arrears? Will the charge be fixed? Will people be disconnected? The Bill would change the gas and electricity disconnection legislation, which will adversely affect people on pre-payment. I am sure that the Minister is well aware of all the issues involved, but I want him to discuss briefly, but in some detail, the situation with pre-payment meters and explain what will happen if people paying fixed charges end up in arrears.
Gregory Barker: I can be brief and hopefully reassure the hon. Gentleman that it is certainly not our expectation that there will be more disconnections. If anything, because we will be improving the energy efficiency of people’s homes, their bills should fall and, as a result, the number of disconnections should fall. The clause allows an obligation to be placed on energy companies to facilitate the collection of green deal payments. The supplier will collect the green deal charge from the relevant customers and pass it on to the green deal provider or finance provider.
The Government are minded to give the role to electricity companies, not gas companies. That is consistent with arrangements with the feed-in tariff scheme and the warm homes discount, and will minimise the costs to energy companies that, in turn, can be passed on to consumers. We are confident that consumers will recognise that their total energy bills should be lower with a green deal, even if energy efficiency measures reduce their gas bill rather than their electricity bill. We will also continue to examine options for strengthening the cognitive link between the two different bills.
The clause will allow us to implement, following consultation, an opt-out or opt-in for smaller suppliers to allow them to avoid the administrative burden of handling the green deal payments. It will also allow us to specify the actions taken by the energy supplier when a customer defaults on a green deal charge and the handling of suspension or cancellation of green deal payments.
Tessa Munt: I have had a pre-payment meter for a significant part of my life. The Minister will be aware that should a person go away for a period of two weeks, the meter takes a daily rate, which is a proportion of the standing charge. If a person left £2 in credit on their meter and then went away for two weeks, they would have no power when they came back. If they chose to credit the sum of perhaps £10 on their pre-payment card, the daily standing charge would be removed before they got any power, so they could find themselves putting £10 on the meter and still not having any of the energy.
If I may assist, I suspect that what the hon. Member for Hyndburn was asking was whether the green deal part of one’s bill becomes—I imagine—a second charge to the standing charge, so that, should someone charge up their card with £15, they then find that the £10 and the standing charge are taken. That might get them up to the current date, but they would then find that perhaps £3 was taken for the green deal repayment and they had only £2 of energy left. I hope that that assists.
Gregory Barker: I think that does assist. I have to be honest with the Committee: I do not think I can do justice to my hon. Friend’s very detailed question as I am not familiar, off the top of my head, with the intricacies of the pre-payment mechanism.
Tessa Munt: As this will exercise those who are concerned about fuel poverty and the people who are particularly disadvantaged, may I suggest that the hon. Member for Hyndburn and I—and anybody else who is concerned—write to the Minister, and there might be another opportunity to discuss the matter more fully. There is considerable concern. We need to ensure that the energy companies do not disadvantage people disproportionately through the way in which pre-payment meters work.
Gregory Barker: I would be very happy to receive the letter from my hon. Friend. This is a complex area, and clearly the intent is to advantage, not disadvantage, the fuel-poor, who will benefit not only from the green deal but from the energy company obligation. There is also a degree of confusion around the word “charge”. Obviously, it is not a charge in the conventional sense; it is not a charge on a property. The expression “first charge” is not particularly helpful, albeit that it conveys the meaning that the hon. Member for Hyndburn was trying to get across.
Tessa Munt: I think that the hon. Member for Hyndburn was requesting that the Government convey to people who use pre-payment meters, cards or other pre-payment systems the advantages that would be afforded them were they to participate in the green deal. Receipts form organisations such as PayPoint have a significant area at the bottom that could be used by the Government to advertise. It is open to anybody to place a message on the bottom of a pre-payment receipt. If one wishes to communicate with the people who use card or payment meters—
Gregory Barker: That is a very good point. I have heard that from my officials. If my hon. Friend would like to include that in the letter that she has offered to write, I would appreciate that. It is our intention to amend licences to deal with the matter, so that the green deal repayment can be collected in a way that is compatible with the current processes, by which I mean that power can be supplied while also paying off the charge in part, as with the current arrears process. By attaching it to electricity rather than gas bills, it is much less likely that arrears will accrue over the summer months. It is also worth noting that clause 21 requires the Secretary of State to consult a wider range of appropriate stakeholders, including the holder of any licence being modified, Ofgem and other persons. This clause delivers a key principle of the green deal, namely that energy suppliers should collect the repayments. I hope that that explanation has been helpful.
Graham Jones: Would it help the Minister—I say this having taken on board the comments of the hon. Member for Devizes—if we met to discuss this issue? It is very important—it is not an insignificant technical detail—and a large volume of customers are affected by it. It might be worth while to have an informal chat about what can be done to assist the Bill and the Minister in providing help for pre-payment customers.
Gregory Barker: I would be happy to do that, but perhaps it would be helpful if we did so on receipt of the letter that my hon. Friend the Member for Wells has offered to write. I am happy to have a meeting as part of the consultation on the licence changes, which will be
‘(2A) The modifications made by virtue of subsection (1) will, in particular—
(a) have particular regard to the interests of consumers who are one or more of the following—
(i) disabled or chronically sick individuals;
(ii) individuals of pensionable age;
(iii) individuals on low income;
(iv) individuals with one or more resident children aged 16 or under;
(a) prevent disconnection of the supply to a Green Deal property where—
(i) the bill payer is in financial difficulties and is complying with an agreement, or reduced repayment plan, of which the Green Deal is part;
(ii) the Green Deal charges were not disclosed to the purchasers or tenant by the seller and/or landlord and/or their agents;
(iii) the bill payer is in a legitimate dispute with the Green Deal provider;
(iv) a failure in the metering system, including pre-payment and smart-meter systems, results in a consumer being unable to make Green Deal payments; or
(v) other circumstances as specified by the Secretary of State.’.
Tessa Munt: We have already discussed some of the issues that I want to raise, but I would still like to cover them briefly. Clause 18 covers the power of the Secretary of State to modify gas and electricity supply licences. The amendment would remove subsection (2), which, according to the explanatory notes, limits those powers so that they may be used only
“for the purpose of making provision for: the steps that must be taken by the holder of the licence following a bill payer’s failure to make green deal payments; the circumstances in which a licence holder may disconnect the supply to a green deal property; and enabling, in certain circumstances, a licence holder to use a security deposit paid by the bill payer to pay green deal payments to the green deal provider.”
Amendment 112 would replace that subsection and deals with the interests of individual consumers who are disabled, chronically sick, of pensionable age, on low incomes, or with one or more resident children aged 16 or under. It would also prevent the disconnection of the supply to a green deal property where the bill payer is in financial difficulties and complying with an
At present, suppliers can only disconnect a household for failure to pay the charges associated with the supply of energy and metering costs, such as standing charges. It has been long established that debts for which one might lose one’s home, liberty or supply of essential goods and services, such as energy, should be prioritised over other debts. To allow disconnection for the non-payment of green deal repayments simply as a result of the mechanism through which the loan is repaid would subvert that principle.
Consumers may face situations in which they cannot afford to pay the green deal charge, but can afford to pay for their ongoing energy consumption, or they may wish to dispute elements of the green deal package, which we have already discussed. I am particularly concerned that, although disconnection is rare, the National Association of Citizens Advice Bureaux has evidence that indicates that customers, including those vulnerable customers whom I have already listed, may be threatened with disconnection for fuel supply arrears. Where customers are in financial difficulty, threats of disconnection can lead them to make repayments at an unaffordable or unsustainable rate, or behave in a way that is contrary to their best interests, for example by seeking loans through less formal arrangements than usual. I am particularly concerned about that.
The Energy Retail Association, which is made up of the six largest energy suppliers, offers a self-regulatory framework. ERA members state that they will not knowingly disconnect vulnerable customers, including older people, sick people and disabled people and their carers. They also have arrangements for those with young children. However, the energy supply licence conditions with which all energy suppliers must comply prohibit suppliers from disconnecting households occupied solely by people of pensionable age, or those people and children, only during the winter months. They also require suppliers to avoid disconnecting households that include any occupant who is disabled, has a chronic illness or is of pensionable age, but only during the winter.
Although those conditions were strengthened recently to ensure that suppliers take all reasonable steps to examine their customers’ circumstances before disconnection, if suppliers are permitted to disconnect households for failing to pay green deal charges, those mandatory protections must be strengthened further, for example by extending them to families with young children. I am particularly keen for the Minister to clarify that the secondary legislation will cater for that.
Huw Irranca-Davies: Very briefly, I not only have a great deal of sympathy for but agree strongly with the sentiments expressed by the hon. Member for Wells. My question to the Minister, however, is slightly differently phrased. Can he assure us that the safeguards for vulnerable customers that currently apply elsewhere will also apply to the green deal? I am doubtful about stipulating and listing. Although I agree with the individual categories of vulnerable potential consumers that the hon. Lady
Gregory Barker: I am grateful for the opportunity to thrash out these important points. The amendments concern the steps that can be taken if a customer defaults in paying green deal charges. It is a key component of the green deal model that green deal payments should be treated in the same way as charges for the supply of energy. That should mean that the risk of non-payment of the green deal charge will be broadly the same as the risk of non-payment of energy supply charges, keeping the expected default rate for the green deal equivalent to the historically low default rate for energy supply. That is crucial. In order to get the low-cost finance necessary to make the green deal as competitive as possible, we must ensure a low default rate and low-risk cost of capital. Amendment 111 would remove the possibility of introducing equivalent collection methods via energy supply licence modifications, and would therefore greatly increase the cost of finance for the green deal. That is my concern.
Amendment 112 concerns vulnerable consumers and the prevention of disconnection of energy supply in certain circumstances. Energy suppliers are already obliged to offer particular services to domestic customers experiencing difficulties in paying their energy bills. They must offer a means by which payments can be deducted from a social security benefit such as Fuel Direct, made through means other than a pre-payment meter or made through a pre-payment meter where that is safe and reasonably practicable. It is absolutely our intention that the green deal should be entirely consistent with those existing practices.
The safety net agreement between the big six energy suppliers ensures that suppliers will never knowingly disconnect energy supply to vulnerable consumers at any time of the year. That will apply across the board to the green deal as well, as part of those energy bills.
Where the disclosure and acknowledgement obligations contained in the Bill have not been complied with clause 16 provides for a customer to seek redress. We will set out in the green deal regulations the detail of how that will work in practice, having engaged in the type of consultation and stakeholder engagement that I am sure my hon. Friend the Member for Wells will be able to play a meaningful part in. Redress could include cancelling the customer’s liability to pay green deal instalments. Clearly, more detail will need to be fleshed out in secondary legislation, but I hope that she has found my explanation reassuring and on that basis will feel able to withdraw her amendment.
Tessa Munt: I do not wish to repeat the arguments, because I know that I have brought this issue up with the Minister before. However, it concerns me—not a little—that if somebody moves from an ordinary bill payment arrangement to a pre-payment meter arrangement their energy charges increase. The basic unit of energy is more costly if people use a pre-payment meter and it seems desperately unfair that that should be the case. I
Huw Irranca-Davies: This is the benefit of Committee proceedings. In her discussions with the Minister, will the hon. Lady explore what incentives there could be for people on pre-payment meters, including the potential negation of the additional charges that currently incur, which could be an incentive to inspire the take-up of the green deal among those customers? Would she consider exploring that issue with the Minister?
Tessa Munt: The Minister will have heard what the hon. Gentleman has just said. I am very happy to talk further about this issue. Perhaps I could do so outside the Committee; I am happy to talk outside the Committee. But I want to know what the Minister’s thoughts are on this situation. It is hugely disadvantageous to people who are already vulnerable, because of their financial situation. That is particularly true of people in my constituency who do seasonal work and part-time work for long periods of the year, and for whom the average salary is only £18,000. If someone is put on a pre-payment meter, there is no way that they should ever have to pay more for their energy just because of the misfortune of their circumstances, which could go on for years and years. Indeed, it may be a lifetime situation for people who live in rural areas and other areas of seasonal work.
Gregory Barker: The hon. Lady makes a very good point. I do not think that it detracts from anything that I said in my earlier remarks. However, the point that she is making really relates more to tariffs and the iniquity that they can impose on the most vulnerable rather than to the green deal per se. There will be an opportunity, later in our proceedings in the Committee, to talk specifically about tariffs and then we can perhaps explore the concerns that she has expressed and perhaps elucidate further on this important issue specifically in relation to tariffs.
Tessa Munt: I will bring up the issue whenever the Minister wants and as often as he wants. It is something that I care about deeply and I am always trying to find a way of wedging in discussion of it.
Claire Perry: May I associate myself with this interest in reaching out to the most disadvantaged households and trying to ensure that they benefit from the green deal? Perhaps the Minister could tell us, in his closing remarks on this clause, that as much as possible will be done to communicate with debt-counselling agencies and citizens advice bureaux. We are not necessarily talking about households who read all the stuff that comes through their letterboxes and realise what steps they can take if they feel that they are in some way being disadvantaged with a potential shut-off of electricity. We really ought to reach out to those people on this important issue.
‘(2A) The first purpose is the purpose of requiring, at specified times, the holder of the licence to provide bill payers with specified information in connection with their green deal plans.
(2B) The second purpose is the purpose of requiring the holder of the licence to disclose on request specified information about the payment of energy bills by a person who is, or is to be, the bill payer for a property in respect of which there is, or is proposed to be, a green deal plan.
(2C) The only persons to whom the licence holder may be required to disclose information by virtue of subsection (2B) are—
(a) where there is a green deal plan, the green deal provider under the plan;
(b) where there is proposed to be a green deal plan, a person who is authorised under the framework regulations to act as a green deal provider.
(2D) The licence holder may be required to disclose the information requested only where—
(a) the green deal provider or authorised person states that the request is made for purposes connected with the green deal plan or proposed green deal plan;
(b) the green deal provider or authorised person provides evidence that the bill payer has consented to—
(i) disclosure of the information to that provider or person for those purposes, and
(ii) onward disclosure of the disclosed information to and by other persons for those purposes;
(c) the information relates to a time within the 5 years immediately preceding the request; and
(d) the licence holder has the information.’.
Gregory Barker: Amendments 46 to 49 seek to ensure that energy suppliers must respond to requests from green deal providers for data on the energy payment history of individuals seeking to enter into a green deal plan. I should make it clear that evidence of customer consent will be required prior to that transfer of data. I will explain the reasons for introducing the amendments.
To make the green deal work we need, a point that hon. Members have raised, low-cost finance at scale at the lowest, most competitive interest rates. The likely route to achieving that will be through the capital markets, issuing bonds backed by the cash flow from
There is another benefit to that arrangement. Green deal providers will have access to credit information about potential customers; for example, through credit reference agencies. However, that will be less accurate as a predictor of ability to repay the green deal than an individual’s energy payment history. It may lead the green deal provider to exercise unnecessary caution, as energy bill default occurs at lower rates than other credit arrangements, such as credit card repayments.
I explained earlier that we do not intend to make energy suppliers liable for defaults. Unfortunately, that weakens their incentive to share information with green deal providers to minimise default risk. By requiring the sharing of energy payment information, with consent, a wider customer pool will be served. That should not be a great burden on energy companies. We will not introduce new data collection requirements. The legislation will apply only to information already held. We intend to enable them to charge for access to data, with a cap on the charge level. I urge hon. Members to support these important amendments.
Caroline Lucas: I hope that the Minister will be able to reassure me on a few concerns that I have about the amendments. I am concerned that they could lead to the cherry-picking of green deal customers by providers, or could result in some customers being asked to pay higher interest rates because they are perceived to be a greater credit risk, based on their record of paying energy bills. The Minister has previously said that the green deal will be available whether people own or rent, and as this is not like personal debt, personal credit ratings are not a factor. That is what the Minister has said in the past. Can he reassure me that the amendments are not a backdoor method of assessing a householders ability to repay? I fear that the amendment could bring that in, and that would be a concern.
Gregory Barker: No. The hon. Lady is absolutely right. I am grateful to her for raising that point, as it allows me to assure her and others who may take an interest in the issue. I understand why they might think that, but that is absolutely not the point of the amendment. The amendment is designed not to allow individual green deal providers to cherry-pick, on a credit rating basis, who they supply. We have been absolutely clear from the start that one of the great benefits of the green deal is that it is not credit-scored and it is not a conventional form of personal finance. It is not a loan in the conventional way. This has allowed for the overall aggregate package of credit information to be analysed and for the appropriate interest rate to be attached to it, which accurately reflects the overall risk profile of the total package of aggregated green deal customers. It allows a sufficient level of detail to be provided for the bond market analyst to correctly analyse and rate the overall amount of bonds being placed in the market. It is a capital markets mechanism; not one for the individual consumers.
Huw Irranca-Davies: Is the hon. Member for Brighton, Pavilion clear from what the Minister has said as to whether the limited credit history on their energy bills can or cannot be used to vary the repayments, because I am not?
Gregory Barker: I am a reasonable fellow, so I will. We are not requiring any new data to be collected and will allow the energy companies to make a reasonable charge for data. The reason for collecting the data is to not allow individual properties or customers to be cherry-picked from the totality of data collected. That means that it is possible to offer credit, rather than to assume that all poorer households are bad risk. Personal credit ratings are a key part of this, because the charge is attached to a bill. It is unlikely, however, to affect the rates. The credit analysis will only be used to allow responsible lending.
This is not a way of allowing energy companies to come in and differentiate or refuse a green deal package to any individual tenant or any individual home owner. It is a means of being able to correctly analyse the bundle of credit, before it is put on the bond market, with an appropriate interest rate. I assume that different green deal providers will attract different rates of interest, depending on the overall credit profile of the package that they attempt to bring to the market.
Caroline Lucas: I thank the Minister for that. I appreciate what he has described as the intention of the amendments, but I am not clear whether there is any recourse to penalties or anything else if there is evidence to suggest that, contrary to the intention, the finance providers are cherry-picking.
Gregory Barker: First, we will be looking, as part of the further detail that we will bring forward in secondary regulation, whether we need to require a flat interest rate, so that there is an inability for providers to differentiate between customers. Secondly, we will not—I am sorry I have lost my train of thought. What was the hon. Lady’s question?
Gregory Barker: We will look at penalties. That will be within the overall code of practice that affects all green deal providers. They will all be bound by it in the first instance. In the second instance, if they are unreasonably withholding credit, they would lose their green deal status.
Luciana Berger: To add to the points made by the hon. Member for Brighton, Pavilion, I am not assured by the Minister’s response on unintended consequences either. I am keen to give those 2.5 million customers who are in debt to their energy supplier in some way every opportunity to have the green deal, particularly if,
I have some questions that I am keen for the Minister to answer. The energy prepayment history is attached to an individual, but the green deal is attached to the property. Will the Minister reconcile how that will work in his amendments? Also, if groups wanting green deal improvements need support, and there are individual properties within those groups, how will that be assessed? Does that make sense?
Gregory Barker: Not quite, but I will endeavour to answer the first question. The hon. Lady is correct: the broad thrust or underpinning of the whole mechanism is that repayment will be through the energy bill; it is not based on conventional consumer credit. The green deal will be available to all, regardless of status, provided there is a history of paying an energy bill.
The use of credit profiling will help to prevent irresponsible lending. It will be a further aid to the golden rule to ensure that there is no irresponsible lending to households that could not support it. It may also be another way to access the energy company obligation. Some people on very low incomes might be prepared to max out on the green deal, so it is sensible to consider the ability of the most vulnerable to sustain high energy bills, rather than to look simply at the property. That will ensure that the most vulnerable, in particular, will not get unnecessarily into debt and run into the problems about which we are all concerned.
The amendment will help to ensure that credit can be offered equitably, and we need an energy pre-payment history so that the first bill payer is protected. We do not want people taking on energy bill obligations that they are simply unable to pay, because if they are new to a home—if they have just arrived and do not have a history of paying the bill for that property—that situation might arise. That is where the provision is likely to be most helpful. If a tenant or home owner has been in the property for some time, the credit history is clearly irrelevant, as they have obviously been able to pay the energy bill, but if they have just moved into a new home it is sensible to ascertain their ability to pay.
Caroline Lucas: I thank the Minister for that explanation, but it has raised another question. He may have answered it, but perhaps he might make the point clear again. If the interest rate can vary depending on the credit-worthiness of the householder, what happens if a responsible householder moves out and the person moving in has a less robust credit history? Does that mean that, as they negotiate to move into a property, they have to wait to have their credit-worthiness properly assessed before taking on the green deal, because the green deal is attached to the property and not the householder? If a new householder has a very different profile from that of the householder who has just left, how will that vetting or assessment process happen in practice as they buy or move into a new property?
Tessa Munt: Does the Minister foresee a situation in which an agent in charge of letting a property carries out a rent check on a tenant, or asks for a guarantor? Might that in some way encourage a particular tenant to become the second occupant of a property that has benefited from the green deal? Will there be any sub-checking of people who take over arrangements in which a green deal is already in place?
Gregory Barker: No. There is no subsequent sub-checking liability. From that point on, the green deal becomes an integral, indivisible part of the ongoing energy bill, with any subsequent property occupant enjoying all the benefits of the property’s reduced running costs. That reduction will lower the energy bill, but a charge, for which the occupant will be responsible, will be included in the composite bill.
Tessa Munt: I wonder what would happen with groups of students in university towns. Parents are usually the guarantors of students’ rent, so I wonder what the impact of that will be. I want to test what happens in that situation, because we will effectively be checking the credit-worthiness of the parents. Students are likely to stay in accommodation for only nine months or so in a year.
Gregory Barker: No, that is not the intention. The golden rule overcomes almost all those credit questions. Post-green deal, bills should be lower than they were after the green deal. [Hon. Members: “Before.”] Sorry, before the green deal; I am now completely confused. As the green deal falls under the Consumer Credit Act, the first person to take up the green deal will be required to go through the process to ensure that there is responsible lending.
This tool is designed not for the individual home owner, but for the markets, so that they can correctly analyse the risk of potentially hundreds of thousands of income streams that will be aggregated and put on the bond market. It is an enhancement tool for the capital markets, so that they can correctly price debt, hopefully at a much lower cost than would otherwise be the case.
‘(4) Conditions included in a licence under section 7A(1) of the Gas Act 1986 by virtue of the power under subsection (1) and the purpose mentioned in subsection (2B) may do any of the things authorised by section 7B(5)(a)(i) or (iii) of that Act (which applies to the power of the Gas and Electricity Markets Authority with respect to licence conditions under section 7B(4)(a)).
(5) Conditions included in a licence under section 6(1)(d) of the Electricity Act 1989 by virtue of the power under subsection (1) and the purpose mentioned in subsection (2B) may do any of the things authorised by section 7(3)(a) or (c) or (4) of that Act (which applies to the power of the Gas and Electricity Markets Authority with respect to licence conditions under section 7(1)(a)).’.—(Gregory Barker.)
‘(4) Modifications made under sections 17 to 20—
(a) shall be made by statutory instrument;
(b) shall not be made unless a draft has been laid before and approved by resolution of each House of Parliament.’
This amendment would make all modifications to the Gas Act 1986 or the Electricity Act 1989 subject to the affirmative procedure in both Houses of Parliament.
‘(2) Before the Code is issued a draft of the code must be approved by resolution of each House of Parliament.’.
This amendment would make the code of practice for the purposes of the Green Deal subject to the affirmative procedure in both Houses of Parliament.
‘(3) A statutory instrument containing regulations or an order under this chapter shall not be made unless a draft has been laid before, and approved by, resolution of each House of Parliament.’.
This amendment would make any regulations or orders related to the Green Deal subject to the affirmative procedure in both Houses of Parliament.
Caroline Lucas: My amendments follow on from the Minister’s comment in Tuesday’s Committee sitting that any order made under clause 1(9) would be subject to the affirmative procedure, while any green deal code of practice would be subject to the negative procedure. If I am right that there is that discrepancy, I call on the
The Committee is being asked to approve a Bill the final result of which will depend far more on what is detailed in secondary legislation than on the words before us today. I know that the use of secondary legislation has increased over a number of Parliaments, but this Bill takes that practice to a new extreme. Indeed, assessments suggest that 50 or 60 clauses of the Bill—about half of it—depend on secondary legislation. I do not mean to suggest that I do not trust the Minister to write some excellent secondary legislation, but I do not think that he is completely infallible.
The Minister himself has recognised that the Bill has already been improved through the parliamentary process, first in the other place and then on Second Reading and in Committee, and I simply ask him not to deprive the Bill’s all-important secondary legislation of the same quality of contribution. I recognise that the Bill was amended in another place to accept the recommendations made by the Delegated Powers and Regulatory Reform Committee, but notwithstanding those improvements, I believe that without the changes I suggest, too many elements that are central to the green deal will not be sufficiently scrutinised by Parliament, to their detriment. I therefore call on the Minister to accept my amendments and commit to involving Parliament to a much greater degree in the development of the Bill’s secondary legislation.
Gregory Barker: As the hon. Lady has set out, the amendments relate to the parliamentary procedure that applies to the three powers in the Bill. Amendment 107 would require changes to energy supply licences to be introduced only through a statutory instrument and only after a positive endorsement by each House. Amendment 108 would require the draft code of practice to be laid before Parliament and approved by each House under the affirmative procedure. Amendment 109 would require all orders and regulations in the Bill to be laid before Parliament under the affirmative procedure.
The Government view the modifications as unnecessary. A large number of them would involve technical provisions to establish the system for collecting green deal payments. I understand the wider, important point that the hon. Lady makes. We are committed to ensuring that the substantive measures of the green deal that will come into force under secondary legislation are not only debated and scrutinised, but are publicised and receive a proper airing. It is in our interests to ensure that.
It is worth noting, however, that the Delegated Powers and Regulatory Reform Committee did not comment on the absence of parliamentary procedure in the green deal licence modification powers, and the Government agree with that. We are committed to consulting widely on any changes to energy supply licences that are needed to ensure the smooth functioning of the green deal, as is clearly set out under clause 21.
Clause 35 already provides for parliamentary scrutiny of the code of practice. A draft code will be laid before Parliament and will not be issued if either House resolves
I appreciate the important points that the hon. Member for Brighton, Pavilion, makes about the need for full and thorough scrutiny of the detail in the green deal, particularly given that so much of it is being left to secondary legislation. However, I urge her to understand that a significant amount of that is of a very technical nature. We risk clogging up Parliament and almost offering a smokescreen to the Government, who could, if they were so minded, push through matters that were more controversial under a covering volley of technical jargon. I assure her that matters of real importance, specified in the Bill, will be subject to the proper affirmative procedure. However, given the accompanying technical detail, reviewing those matters would not be a practical use of Parliament’s and hon. Members’ time. Given those arguments, and in light of previous, similar discussions, I hope that the hon. Lady is reassured and feels able to withdraw her amendment.
Caroline Lucas: I thank the Minister. I am not entirely reassured, because it is precisely in the technical detail that the meat of the debate lies, as we have discovered in our discussions today and in previous sittings. The devil is in the detail, and the way in which the technicalities pan out will make the difference in whether the measures are a success. Can the Minister provide a list of measures that will be brought back, so that we know exactly when affirmative action will be an option for us in future?
Gregory Barker: The hon. Lady’s suggestion is sensible. I am very happy to provide an indicative guide, so that all Committee members know which parts of the Bill are likely to be affected. We have, however, just sped through a series of clauses without a single word of debate because they were largely uncontroversial and not technical. That is not uncommon parliamentary practice, and it allows us to zero in on the matters that are of most concern to stakeholders and our constituents.
‘(6AA) Any order made by virtue of subsection (1) or (4)(b) must provide for—
(a) a single point of contact for energy services consumers seeking advice and redress;
(b) exercising of functions across energy services sectors to resolve consumer complaints involving one or more energy services; and
(c) sharing of complaints-handling data for the benefit of consumers, where “energy services” include—
(i) accredited energy services advice, including energy performance certificates and Green Deal advice services;
(ii) supply of energy or heating fuels, including gas;
(iii) energy efficiency services, including those delivered under the green deal or energy company obligation;
(iv) smart metering services;
(v) microgeneration systems;
(vi) domestic renewable heat systems;
(vii) district heating services;
(viii) other specified services.’.
In the interests of brevity, I will keep my comments short. The amendment was tabled before 2 June, which was when DECC published the document entitled “Consumer protection in the Green Deal”, and I am therefore seeking to flesh out two points. The first is about the announcement of the green deal advice line. I am keen to hear a few more details from the Minister about how he anticipates the advice line to operate and whether he envisages the Department or the private sector running it. How does he anticipate funding the advice line? What training will be given to those staff giving advice?
We have also heard about the formal appointment of the United Kingdom Accreditation Service—UKAS—and I am keen to hear from the Minister exactly how it will ensure that assessors and installers adhere to robust standards in order to participate in the green deal. In the light of our amendments to clause 3, where we sought to change the wording from “may” to “must”, not passing, will the Minister assure us that both assessors and installers will adhere to the robust standards that I have mentioned?
Gregory Barker: I thank the hon. Lady for bringing forward the amendment. However, the Bill already provides for independent green deal advice, which will cover both green deal finance and the energy company obligation, as well as—I am pleased to say—microgeneration. This will be capable of providing consumers with information about the rights and protections that are available to them, as well as the referral to the relevant ombudsman. Our aim is to make the green deal arrangements align with redress routes for other energy services in a coherent way that is accessible and transparent to the customer. We also recognise the role that sharing of complaints data can play in improving performance to benefit the consumer, and we will explore the detail of how that
In respect of the advice line, we will put that out to tender, and we are currently taking advice on the correct shape of that function. We certainly want to ensure that we learn from the previous services that were given by the likes of the Energy Saving Trust and the Carbon Trust on such schemes in the past, but we think that we can do better than the advice lines that have been offered in the past. That is why we are trying to put it out to tender to a wider group and take it to a higher level of consumer protection and advice. I hope that the hon. Lady has found that explanation reassuring and, on that basis, will withdraw her amendment.
Gregory Barker: I will now speak to amendments 5 to 8, 11, 13, 19 and 22, which the Committee will be relieved to know are technical in nature. Clause 33 will require the Secretary of State to provide for a right of appeal in the event that he or a specified public body imposes a sanction or takes other action following, for example, a breach of the code of practice by a green deal participant or a failure by a seller to comply with a disclosure obligation.
Amendments 5, 7, 8, 11, 13, 19 and 22 will allow Scottish Ministers to amend and revoke their existing subordinate legislation so that the green deal appeals mechanism can be implemented properly in Scotland. The amendments mirror powers that the Secretary of State already has under clause 33 to amend subordinate legislation in England and Wales. The amendments will help to ensure that an effective and robust appeals mechanism is available both north and south of the border.
Amendment 6 is a technical amendment, tabled at the suggestion of our colleagues in Scotland to reflect the fact that it is more correct to refer to a Scottish court or tribunal making an award of “expenses” rather than “costs”. On that basis, I hope that hon. Members will support the amendments.
I want to make a couple of points on the potential consequences of the amendments and how the LCM process relates to some of the regulations that, as has been said several times, will be significant to how the green deal takes effect in Scotland. There may be good reasons why there are differences between Scotland and England on some aspects of regulation, but there are concerns about the potential for differences that may confuse consumers, given that much of the green deal relies on secondary legislation, an assessment and suppliers. I want to seek reassurance that the Government and the devolved Administration in Edinburgh have thought about those potential significant differences. A lot of the people that they will rely on to make the green deal effective to people are companies that operate across Great Britain.
I also want reassurance that the information provided to consumers is correct for the appropriate part of Britain. There have been problems in the past with a number of things across borders and jurisdictions, when people were used to having a single market providing information that was not technically correct for the people in Scotland. There is a potential for divergence within the green deal, which reflects the comments that the Minister made previously about the green deal being of universal interest and available to all. We do not want there to be less confidence in Scotland than there should be.
Gregory Barker: I am happy to give the hon. Gentleman an absolute assurance. We have a good relationship with the Scottish Administration on such issues, and we have been working in good collaboration at official and ministerial levels.
‘(5A) If the Scottish Ministers consider it appropriate for the purpose of, or in consequence of, any provision falling within subsection (3)(a), (d), (f) or (g), they may by regulations revoke or amend any subordinate legislation, or any provision included in an instrument made under an Act of the Scottish Parliament, if the provision making the revocation or amendment would be within the legislative competence of the Scottish Parliament if it were included in an Act of that Parliament.’.—(Gregory Barker.)
Gregory Barker: This group of technical amendments is designed to ensure that, where the Bill refers to secondary legislation to be made by Scottish Ministers, the language used is consistent with the Interpretation and Legislative Reform (Scotland) Act 2010. The amendments do not make any changes to the policy underlying the Bill. I hope that the Committee will support these technical amendments.
‘(6) Regulations under section 10(2), 14(7) or (8) or 15(4) are subject to the negative procedure.’.
‘(6A) Regulations under section 33(5A) are subject to the affirmative procedure.’.—(Gregory Barker.)
‘(8A) Before amending under section 9 a provision of the Building Regulations 2010 (S.I. 2010/2214), the Secretary of State must, if and so far as the function under which the provision was made is exercisable by the Welsh Ministers, obtain their consent.’.
Gregory Barker: The amendment requires the Secretary of State to obtain the consent of Welsh Ministers before making amendments to the Building Regulations 2010 using the powers contained in clause 9, relating to the confirmation of the green deal plan and disclosure. The requirement reflects the fact that, from the end of this year, certain functions in this area will be transferred to Welsh Ministers. The requirement to obtain consent applies only to amendments that extend to Wales and does not apply to amendments that are purely incidental or consequential. I hope that the Committee will support this group of amendments.
The amendment is welcome, but I ask for an assurance from the Minister. A number of initiatives in the Bill are significant to Wales but, equally, a number of Welsh Assembly Government programmes, such as the Arbed and Nyth programmes, deal with similar areas. I want to ensure serious interaction and that Welsh Ministers are consulted on such initiatives at all stages, including on secondary legislation and any regulations inspired by them. The Ministers should have full access to data about the uptake of the clause, the green deal generally and the ECO in Wales, because it will help them effectively target their own programmes alongside the green deal.
‘(12) Before making regulations or an order under this Chapter, the Secretary of State must report to Parliament with proposals on a specific Green Deal apprenticeships programme.’.—(Huw Irranca-Davies.)