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I hope that the Minister will see the force of the arguments made by the Delegated Powers and Regulatory Reform Committee and will agree to this or some similar amendment. I beg to move.

7 pm

Lord Jenkin of Roding: My Lords, going back a very great many years, I remember when I was a law student at Cambridge. One read the reports of the Court of Appeal. Much the easiest judgments to read were those that said, "I agree with my learned friend", and had nothing to add. My noble friend's amendment is better than mine and I simply endorse and support it.

Lord Davies of Oldham: My Lords, the Minister is faced with a significant challenge to his position. If the noble Baroness, Lady Noakes, presents her detailed analysis of the Merits Committee and the strength of its arguments from the coalition side, it will not be at all a surprise for the opposition side. Quick learners as we are, we are quite happy on this occasion to be secondary to the issue and supportive of the amendment. The noble Baroness has indicated that the judgments of the Merits Committee in this House are always ones that we take very seriously indeed. We are grateful for the immense amount of work that goes on, the plethora of such legislation and the clarity that is always present in its reports. As the noble Baroness has said, it has given very clear guidance on this occasion on what should obtain with regard to this legislation. Therefore, the Opposition are delighted to offer their puny strength to the forces that are arranged alongside the noble Lord in the coalition, preaching the lessons of good will and good judgment.

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Lord O'Neill of Clackmannan: I followed the noble Baroness in the Second Reading debate and was somewhat surprised to agree with her on a number of issues. I have one question for her. As a consequence of this amendment-were it to be accepted-we would have not 52 but 53 statutory instruments flowing from the Bill. Paradoxically, one of the great critics of the ill defined character of this legislation will also add to it. Frankly, on this occasion, it is justified and I am happy to support the noble Baroness. As a general rule, however, I do not think that either of us-or many of us in this Committee-want to see any more orders being left to the rather inadequate, consultative and therefore scrutinising, approach that both Houses have. I hope that it will be a negative resolution in both Houses.

Lord Jenkin of Roding: Is the noble Lord imagining that these will all be separate orders? Is it not open to the Government to link a whole lot of these together in a single set of regulations or a single order?

Lord O'Neill of Clackmannan: The noble Lord is putting ideas in the Whips' and party managers' heads. We would like to see each of these being given proper weight and being discussed and debated as appropriate. If it takes 53 one-and-a-half hour sessions, so be it. That is the price that we have to pay for the proper scrutiny of legislation that could have been better drafted in the first instance.

Lord Marland: My Lords, it is marvellous to see such harmony in the room at the Government's expense. Given the force of the arguments, particularly those from the Opposition Benches at which one quakes with fear-although one quakes with fear less at the arguments of noble Lords on our Benches, who are so erudite in these matters-we will obviously consider the amendment and reflect on the recommendations already made by the Delegated Powers and Regulatory Reform Committee on the code of practice.

Baroness Noakes: That was a slightly less fulsome reply than I had hoped for. I hoped my noble friend would agree readily that this was an appropriate amendment. However, we are where we are and if the Minister does not bring something back on Report, I will. I beg leave to withdraw the amendment.

Amendment 5ZA withdrawn.

Amendments 5A to 8C not moved.

Clause 3 agreed.

Amendment 9

Moved by Lord Teverson

9: After Clause 3, insert the following new Clause-

"Protection for improvers

The Secretary of State shall have a duty to ensure through regulation, code of practice, and audit that improvers are protected from any collusion, anti-competitive activity, or being offered restricted options that favour particular products or organisations, on account of arrangements or agreements made between green deal providers whether advisers, installers, providers of finance or energy companies."

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Lord Teverson: My Lords, the amendment concerns a matter of principle. When reading through the detail of the Bill I had some difficulty in understanding exactly what protections there are for consumers in this system given that there are a number of different actors in the providers of services. We have the finance companies, I presume; the assessors; the experts who go out with or without their tick boxes; and the people who draw up the green plan or the broader energy plan. I am concerned about consumer confidence, about which the noble Lord, Lord Whitty, talked so well. There is a need for the legislation to contain a duty to ensure that there is no collusion-or even laziness in a negative way-which prevents consumers getting the best deal.

I do not believe the Competition Commission would be interested in this level of transaction, nor, I suspect, would it come under local authority trading standards. I will be interested to hear from the Minister how the Government see this area and what legislation they will bring forward to make sure that the various actors on the supply side provide the best deal for the improver; that there is not in the supply chain a person making sure that a particular building supplier always gets the right business or an assessor who makes sure that the person who draws up the energy plan is not always the same person.

Having said that, I understand that this is a complicated area. Clearly relationships will build up. It may be good that particular organisations and individuals work well with others within the supply chain but I am concerned that the consumer's interest is protected. Hence the amendment seeks the Secretary of State to have a duty to ensure that there is no collusion, either by design or through laziness, that delivers a less than optimal solution for the consumer. That is what the amendment is about. I am sure that any public Bill writer would be appalled by the state of the language and what it says, but I have tried to put it in plain language so that the Minister can come back and say to us how he feels this area should be approached within the context of a green energy plan. I beg to move.

Baroness Smith of Basildon: My Lords, I support the principle of what the noble Lord, Lord Teverson, is seeking to achieve. It is not dissimilar to the point I made earlier about whether there may be arrangements or relationships between an assessor and an installer whereby the assessor will always want to give business to a particular installer for the work to be done. It is difficult to ensure that there are not such arrangements and the wording of the amendment puts the issue back into the Minister's court to see how best this can be achieved. It is an important objective to consider because, as has been said a few times during the course of the debate, protection of the consumer and consumer confidence are all important. If the consumer thinks that a certain assessor will always go for particular kinds of products or arrangements, it will not lead to confidence in the Green Deal. I hope the Minister will take on board the principle, understand the point that it is seeking to make and consider ways in which it can be addressed.

Lord Marland: My Lords, Amendment 9 would require the Secretary of State to ensure through regulation, audit and the code of practice that improvers are

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protected from anti-competitive activity by Green Deal providers. Clearly anti-competitive behaviour and collusion among Green Deal providers is undesirable and we want to ensure that the risk of this is minimised through the design of the scheme. However, this requirement on the Secretary of State would mean that the Secretary of State would be obliged to put in place legislation which already exists in other parts of the law. Green Deal providers should be covered by existing competition law, notably the Competition Act 1998, which prevents businesses from entering into anti-competitive agreements and abusing dominant market positions. I do not see any need to effectively replicate those arrangements in the Bill.

Furthermore, for domestic households only licensed creditors will be able to operate as Green Deal providers and the existing credit regulation contained in the Consumer Credit Act would apply. I hope that that is enough to satisfy the noble Lord and that he will withdraw the amendment.

Lord O'Neill of Clackmannan: The Minister has indicated that competition will be properly regulated and that consumers will be protected. However, the Green Deal will be offered by supermarkets and, in some parts of the country, a single supermarket chain can have a virtual monopoly of retail outlets. While it would certainly be capable of offering the Green Deal, we have to be careful because the nature of the relationship may be that a single company will link up with a supermarket, that the supermarket will leave everything to the company and that the company will then make it quite attractive for supplier A or supplier B to come in.

I am not sure whether the public are confident that the free play of market forces in such near monopolistic situations is sufficient protection. I have some sympathy with the proposition, not because I think that all supermarket chains are potential abusers but because we know that in a number of areas of sourcing-we have only to listen to the farming community about the sourcing of fresh food, fruit, vegetables and the like-these supermarkets act quite ruthlessly. We want stronger assurances than the bland approach taken by the Minister in his reply to the debate. I am not confident that something akin to the status quo operating in these circumstances is enough when people will be entering into substantial financial undertakings. Whether or not they do so on the basis that they will never pay because the bills will be reduced does not enter into it. If people did not have confidence in the company to which they are almost forced to go by circumstances beyond their control-they may happen to live in an area which is dominated by a particular supermarket chain which has a dubious record on the way that it sources its goods-we would be concerned about consumer confidence.

7.15 pm

Baroness Smith of Basildon: Perhaps I may put a scenario to the Minister and ask for his comment so that I can see if I have misunderstood this. If an installer of double-glazing were to employ a team of assessors, and those assessors could do an assessment on a house, and one way of achieving carbon reduction

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was to have double-glazing in that home, in a sense there is nothing wrong in that, since it is one way of achieving the carbon reduction. However, it comes back to the point that it is the Green Deal plan by which they are achieving the carbon reduction. The householder has not got the choice of an energy plan from which to choose which Green Deal provisions they want to undertake. There could be a relationship where an installer employed an assessor who would always recommend that particular installer's products. It would be a way of achieving the Green Deal, but it might not necessarily be the best way or the only way. Does the Minister envisage that as a problem, or is that how he sees it could work?

Lord Marland: I think that noble Lords are looking at this in a narrow sphere. I am not familiar with parts of the world where there is only one supermarket chain operating in that part of the world. I take the view of the noble Lord, Lord O'Neill. In my part of the world, there are four or five operating quite regularly. If you add to that B&Qs and the suppliers of all forms of household improvement, it multiplies. Therefore there is distinct competition. You have to add to that the energy companies, social enterprises, housing associations and all manner of retailers who can ensure that the market is competitive. I totally take on board what the noble Lord, Lord O'Neill of Clackmannan, has said, that it would be terrible if there was only one supplier in a part of the world. However, given the extent of suppliers that are available, I do not realistically think that market forces would apply.

Referring to the interesting point raised by the noble Baroness, Lady Smith, I am not entirely sure that I follow. If her point is that the double-glazing salesperson was promoting a product that was exclusively to their benefit, I am not sure that this would happen because market forces would dictate that anyone inviting someone into their home to give an assessment of the requirement and the cost of it would automatically put that out to tender. Even if these people were inappropriately selling the product, they themselves, before they are allowed to sell that product, have to be authorised under the scheme; and the scheme, as we have already debated, will have many a safeguard and recourse against unauthorised behaviour by an authorised provider or assessor.

It comes back to the central theme. We have to get these right, we have to ensure that the standards are properly maintained, and we have to ensure that competitiveness is allowed into the market.

Lord Teverson: How do the Government see the status of assessors? Does the Minister see them as being like independent financial advisers in the financial world? Can they be employed by B&Q or Everest? Can they actually be employees of those organisations, and can that be made quite transparent? Do they have to be self-employed? That is what I am trying to get to the depth of here. It is not in any way a criticism. It is actually trying to understand how this works in practice. I come back to the financial services industry or even-dare I say to the noble Lord?-the insurance industry. There is a whole history of mis-selling despite strong regulation, perhaps because people got commissions-I would be interested in comments in

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terms of whether commissions are permissible under this system. There are clearly advantages to the upfront sales force or the people who recommend because there is a temptation, under certain circumstances-which may not be illegal but might be dubious or not in the interests of the customer-not to recommend the best solution necessarily, or a particular solution. Most people will not want to get more than one assessor. They will want to get an assessor who they see as independent of mind, maybe through a proper assessment process or not-coming back to the previous debate. I am interested in how the Minister sees the status of assessors. Can they be a full-time employer, employee or an organisation that tends to specialise in certain solutions? I am just interested in how the Government see that working out in terms of a code of practice or maybe in the way that this scheme has to operate, because I believe that it is fundamentally important.

Lord Marland: My Lords, there is nothing to prevent an assessor working for an organisation, but the reality is that they have to be independent of that organisation in terms of their assessment. There has to be a Chinese wall. To answer my noble friend Lord Teverson's excellent question, assessors can come from all walks of life. They could be quantity surveyors, representatives of B&Q or representatives of a supermarket, but they have to retain an independence and fulfil the standards that are required of them under the Green Deal regulatory mechanisms that we have been debating today.

I would also point out that a lot of the products that we are talking about here are not new to the market. It is not as if we are suddenly coming into the market with a wonderful new product. Double-glazing has been sold consistently through the country for a long time. Loft lagging has been consistently sold, and there are consumer protections in place under the Act which provide for proper regulation.

There is one point which I would like to reflect on and come back to my noble friend Lord Teverson on, however, and that is the role of commissions. My noble friend has raised a very important point where we need to work out the impact and how these assessors are remunerated.

Baroness Smith of Basildon: I have listened carefully to the Minister. I think that he is trying to reassure noble Lords on this important commission point, but I am not reassured. Clause 3(4)(a) to (g), on the code of practice, would seem to allow an installer to employ an assessor, and to allow that assessor-within this code of practice, this framework arrangement and the Green Deal-to recommend energy efficient measures that fall within the remit of one installer that is employing that assessor. I do not understand how an assessor can be employed by an installer and be independent. I am grateful that the Minister will look at this again. However, depending on what he comes back with, we may wish to return to this at a later date.

Lord Teverson: My Lords, I thank the Minister for going through this and perhaps spending more time on it than he would wish. However, I think it is a core part of making this system work and putting it above

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question. Public money is not involved but we are talking about consumers' own money under a government scheme. That is why it is particularly important. I was going to offer to look up the various bits of competition legislation that he mentioned but I suspect that I will not get round to that before Report.

I thank the Minister for looking into this area. It would be useful for the department to explore this and to have a clear view on how it will work to avoid what I would call mis-selling within the market place. I beg leave to withdraw the amendment.

Amendment 9 withdrawn.

The Deputy Chairman of Committees (Baroness Pitkeathley): Before I call the next amendment, I must apologise to the noble Lord, Lord Jenkin of Roding, for omitting to call his manuscript Amendment 8D. It has already been debated but I should check with him that he was content not to move it.

Lord Jenkin of Roding: Not moved.

Amendment 8D not moved.

Amendment 10

Moved by Lord Teverson

10: Before Clause 4, insert the following new Clause-

"Duty of green deal providers

(1) It is the duty of green deal providers to ensure that the energy plan reasonably reflects the best overall energy solution or solutions for that property, while also taking into consideration the total cost, and the period of payback of any scheme.

(2) Green deal providers must be able to show evidence that they have taken due care to promote the best interests of the improver.

(3) Where appropriate, suitable options should be offered to improvers so that they may make a choice.

(4) An energy plan must include an estimate of the annual savings of carbon dioxide emissions."

Lord Teverson: My Lords, this is another broad and, in some ways, probing amendment. I have gone through the Bill. The Minister might be able to put me right but I could not see anywhere that there was an actual duty on the Green Deal providers to make sure that they actually provided the best deal that there was available. I then had to think what is the right deal to put forward in order to write this amendment. Even with the broad strategic messages that I had written down, that became quite difficult.

It is important that it should be made clear in the Bill, which is the primary legislation, that there is a duty on the Green Deal providers, who are in a position of preference-and I was going to say that the noble Lord, who is not here any more, used the right phrase-to make sure that it is the best deal. What is that? I believe that they need to show some sort of documentary evidence-and we again come back to the assessment argument or the list one way or another-in the way that financial services providers have to, that they have gone through certain processes, not just generic ones but ones to do with the situation of the property and the household itself. This is not just about property. It is in a way about what that

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household can actually afford, or the payback period in which they can work. There are variations within the golden rule. The golden rule must be met, but it perhaps can be met in a number of different ways. There is a duty of care here.

I would like to think that there was also, where possible, options and choices-not too many, not too complicated and not for their own sake-and that there should be some ability to have a discussion about what is the right solution out of a number of possibilities. I also believe that, for the energy plan that is agreed, there should be, at the end of the day, a carbon emissions statement that brings that area back into the consumer's view. Why are we doing all of this? It is to save energy and to be of benefit to the consumer and the household individually. However, it is also very useful to illustrate on the plan that this is also about decarbonising the economy and reducing carbon emissions.

In this amendment I am trying to make it clear that-again, I quite understand that there is a complicity below this-there is a duty on Green Deal providers to make sure that households are able to make good decisions from good information. In a way it comes back again to that debate that we had before. It is very important that there is not just a quality check in terms of assessors but that they have to use their grey cells as well as just a checklist to make sure that the scheme that is put forward is a good one. I would like it to look beyond the Green Deal issue.

7.30 pm

Lord Moynihan: I begin my intervention by apologising that I was not with you at Second Reading. Unfortunately, the challenge of London 2012 and the Olympic Games took precedence on that occasion. However, I shall be pleased to be with you during as many hours of the Committee stage of the Bill as possible.

Is not the point that my noble friend is making absolutely key to the discussions that we were having earlier on the subject of accreditation and certification? I ask him to focus on that because it if we can get the accreditation and certification system right, along the lines that my noble friend was discussing on an earlier amendment, we would go a long way to ensuring that we achieve the goals and objectives that my noble friend has set out.

Lord Teverson: I agree with my noble friend entirely. The quality of the assessor is most important, but that has to be supplemented by the duty of providing good information or a good plan as well. On that basis I beg to move.

Lord Jenkin of Roding: There is both good and bad in this suggested new clause. The point about the first three subsections seems to me to be inherent in the nature of the scheme. However, I do not know whether this is the right way to make clear that the scheme is intended to give the consumer, the householder, the best deal available. I am sure that there will be many circumstances where the assessor will have to weigh up the situation and say, "Are we asking too much?", which means that it could not be paid back within a reasonable time; and, "Are we asking too little?",

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which means that the householder could have paid rather more. This may need to be written into the Bill in some form. With the use of the words,

you are opening up the possibility that someone will sue if they can be persuaded that they could have got a better one. Somehow one has got to try and avoid that. That is the good part.

Subsection (4) is totally impractical and undesirable. As I said at Second Reading, one of the great advantages of the Green Deal over the CERT programme is that this is not written directly around carbon savings but is intended to provide the householder-the consumer-with incentives for lower bills and warmer houses. To require that in every individual case someone has to sit down and estimate what the carbon savings are likely to be seems to me to be unrealistic. I apologise to my noble friend for using what may seem to be fairly strong words, but everyone has recognised that one of the advantages of this is that people may choose to have warmer homes and pay back rather more because they will not get as much savings as they might have had had the whole thing gone into saving energy costs. How is anybody going to conceivably estimate that at the outset?

We have a classic case here where the carbon savings, which certainly lie at the heart of this in order to achieve our carbon targets, are the consequence and not the primary objective. As I said at Second Reading, people will respond much more easily and readily to an offer of lower bills or a warmer home than they will to someone coming along and telling them that they have to cut their carbon footprint. Subsection (4) is very difficult and I would find it hard to support if it were to find its way into the Bill.

Baroness Smith of Basildon: My Lords, I feel that in some ways we have already had this debate during the course of the Bill. We are perhaps all looking at different ways of addressing the same kinds of issues and problems that arise. Whether or not this is the best way forward I do not know. It comes down to the fact that, in any property where an assessor looks at what could be done to achieve energy efficiency, there will possibly be several options of what can be achieved under the Green Deal, and different assessors may give different options.

The concern is: who makes the decision and what options in the energy plan can be achieved under the Green Deal? Would it be the installer, the provider, the assessor or the householder? I am not clear where the decision-making process for the best energy solution lies. I make the same point as the noble Lord, Lord Jenkin, and ask whether the best possible solution would be challengeable? Who would make the decision about the best possible solution? This brings me to the point about how decisions are made and what energy plans and efficiency improvements can be taken into account under the Green Deal. It would be helpful if we had clarity on who makes the decision on that.

I like the idea of the householder having input into that decision and of having an energy plan as well as a Green Deal plan. I would welcome the Minister's comments on how this would work in practice.

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Lord Marland: My Lords, this is an interesting amendment. The question raised by my noble friend Lord Teverson of what is the best deal remains unanswered, because a best deal to some people is quality; to others it is price; and, arguably, the best deal to most is a combination of quality and price.

Amendment 10 seeks to introduce a new clause addressing consumer protection mechanisms. While we accept the thrust of the amendment and what it is trying to achieve, I believe that the issue is already addressed in Clauses 3 and 4. Clause 4 is central to the Green Deal and defines the terms on which it can be offered to customers. I urge noble Lords to look at it again. Subsections (2) and (3) require that an accredited Green Deal assessor has assessed the property in accordance with the standards that we set out in the framework regulations and has recommended energy efficiency improvements on this basis. The assessor would identify the potential for energy savings using the standardised methodology as set down. The outcome of the assessment would be provided to the improver and would be used by the provider as the basis of an offer for Green Deal finance.

Subsections (4) and (5) require that an accredited Green Deal provider, the body seeking to contract the work, should give the customer an estimate of the savings on energy bills that are likely to result from the proposed energy efficiency improvements and over what time period these are likely to accrue. The Green Deal provider is required to base his estimates on a standardised methodology to be set out in regulations, thereby ensuring consistency and rigour in the process.

In addition, Clause 3 sets out requirements for the code of conduct which will make provisions as to the qualification and training of Green Deal participants. This will ensure that Green Deal participants operate to competent standards. We will look to see what, if any, further requirement should be placed on Green

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Deal providers to ensure robust consumer protection. We will set out these conditions in the code of conduct.

Lastly, I believe that we have the flexibility to make requirements in secondary legislation to enable us to move swiftly to close any loopholes that may become apparent once the scheme is operational. Paradoxically, agreeing this amendment for primary legislation could lessen our ability to protect customers. I believe that the Bill already contains the necessary provisions to achieve what is intended by the amendment and I would ask the noble Lord to withdraw it.

Lord Teverson: I thank the Minister for going through that explanation. He is right to say that there is a list of provisions within the Bill that point in the direction of the right quality of decision-making and of ensuring that all the procedures are right. However, I am not sure that there is a duty to get the right deal for the consumer at the end of the day. However, I note the Minister's intention that that should be the case, as I am sure we would all want. Perhaps I can ask him to look at it again.

I should also like briefly to reply to my noble friend Lord Jenkin of Roding. My amendment makes it quite clear that subsection (1) is concerned with overall energy solutions and that subsection (4) is concerned just with an estimate, which I do not think would be very difficult to make. I know the Minister has exactly the same objectives here and I hope he will look at it again. I beg leave to withdraw the amendment.

Amendment 10 withdrawn.

Baroness Northover: My Lords, this may be a convenient moment for the Committee to adjourn until Wednesday at 3.45 pm.

Committee adjourned at 7.40 pm.

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