Fiona Sara Shackleton, LVO, having been created Baroness Shackleton of Belgravia, of Belgravia in the City of Westminster, was introduced and took the oath, supported by Lord Harris of Peckham and Lord Sassoon, and signed an undertaking to abide by the Code of Conduct.
Elizabeth Deirdre Doocey, OBE, having been created Baroness Doocey, of Hampton in the London Borough of Richmond upon Thames, was introduced and made the solemn affirmation, supported by Baroness Harris of Richmond and Lord Oakeshott of Seagrove Bay, and signed an undertaking to abide by the Code of Conduct.
To ask Her Majesty's Government what proportion of government investment in science will be protected from cuts in public expenditure; and what advice they are giving to research institutions that are affected by any cuts.
The Parliamentary Under-Secretary of State, Department for Business, Innovation and Skills (Baroness Wilcox): My Lords, within BIS, a substantial amount of funding for science and research programmes-£4.6 billion per annum-has been protected within a ring-fence for the four years of the spending review. Separately, the spending review stated that the Department of Health will increase spending on health research in real terms, and we expect the Ministry of Defence research budget to increase in cash terms over the spending period. It is too early to tell what the implications of the spending review will mean for science spending in other departments.
On the part of the Question that deals with advice, the way in which independent institutions make decisions about increases or decreases in their level of research funding is a matter for those institutions.
Baroness Jones of Whitchurch: I thank the Minister for that reply, but does she acknowledge that only 50 per cent of recent government spending on science research falls within the protected budget, which the Government have heralded so much? Does she recognise that massive cuts are being predicted in departments such as DECC and Defra, as well as the £440 million by RDAs, which will be lost? At a time when our global competitors are increasing investment in R&D, what message does that send about our prospects for future economic growth?
Baroness Wilcox: As I have already said, a large proportion has been protected in a ring-fence, and two of the biggest spending departments outside BIS, the Department of Health and the Ministry of Defence, are maintaining or increasing their research budgets. Other government departments have not yet decided their research budgets; for them, this question is a little premature. We will have to look at other areas such as capital funding, as we know, and no doubt I shall answer questions on them in a moment. They have been very well provided for over the past few years, and I am afraid that capital funding will have to wait until we get front-line science where it should be, in front of the rest of the world.
On the announcements by my right honourable friend in another place, which he hopes and predicts he will be able to make, unfortunately I can say nothing about them at this stage. Like my noble friend, however, I hope that these investments will go ahead.
Lord Broers: My Lords, I declare my interest as chairman of Diamond Light Source, and expenditure there will certainly be very beneficial. While the Minister has mentioned capital expenditures and the cuts, will she give us an idea of whether the Government will try to recover these capital expenditures before the four years of the CSR are up? These 50 per cent cuts in capital that have been handed to the research councils will progressively deplete our equipment and reduce our competitiveness.
Baroness Wilcox: My Lords, the questions of the noble Lord, Lord Broers, always leave me slightly gasping because he is such an expert engineer and has such experience in the field. He must know that all we can say at the moment is where we are and what we hope to achieve in the next four years. I can say no more on this subject at the moment.
Lord Willis of Knaresborough: My Lords, I declare an interest as the chair of the Association of Medical Research Charities. While, like many people, we welcomed the Minister's very skilful settlement to the research councils on Monday, the reality is that there will be an 8 to 10 per cent cut in funding over the next four years. Will my noble friend confirm that there will be no cut in the full economic costs of research council grants to universities? Will she also confirm that the Charity Research Support Fund will be maintained fully, so that the £1 billion that research charities give to our universities for research will be maintained will full economic costs?
Baroness Wilcox: I will talk first about the Medical Research Council. I think there was a question in there about the budget. We have taken into account the fact that we expect the MRC to have additional commercial income from patent licensing et cetera, which will reduce the amount of headline budget increase. I understand the noble Lord's worries. I think I can commit us to spending as it is now but no further.
Lord McAvoy: My Lords, can the Minister give us an assessment of the damage done to the credibility of the Government's programme of cuts by the expressions of opposition to it by their own Liberal Ministers Webb, Moore and Cable?
Lord Hunt of Wirral: My Lords, will my noble friend accept from a former Cabinet Minister for Science and Technology how much she and her colleagues are to be congratulated on what is a strong settlement? Will she also recognise that on all sides of this House there is a positive commitment to the importance of the science budget? Can she share with us the figure for Wales, Scotland and Northern Ireland?
Baroness Wilcox: I thank my noble friend for that question. On how much of what we say applies to Wales, Scotland or Northern Ireland, I can confirm that the research council fund across the United Kingdom is without geographical bias. My department works closely with the Governments and funding bodies in Wales, Scotland and Northern Ireland to come to these decisions. It seems a fair decision, and we have had a strong settlement. I think the science community is surprised by how well we have managed to do, given that when we came in we faced real financial problems. Science is so important to this country.
Lord Peston: Is the noble Baroness aware that one of the few areas in which our country remains world-class is that of fundamental research in the natural sciences? If there is one area that is in grave danger of being cut it is fundamental research in the natural sciences, revealing the total inadequacy of the Government's approach to these matters.
Baroness Wilcox: My Lords, there are many areas in which we have had to make cuts. Let us face it; no Government want to come in and make cuts as soon as they get there. It is not a position that we wanted to
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The Parliamentary Under-Secretary of State for Schools (Lord Hill of Oareford): My Lords, following the spending review, all funded programmes are being closely examined to determine their value for money and contribution to government priorities. I am pleased to confirm that the process has been completed for this scheme, and the language assistants programme will continue to be funded in England over the spending review period.
Baroness Coussins: My Lords, I thank the Minister for that reply. Does he accept that the programme deserves to be guaranteed beyond the spending review period? Without a year abroad as a language assistant, the quality of a modern languages degree will be undermined, especially for students who hope to go on to become teachers or professional linguists. Does he also agree that what works out at a cost of around only £126 a head is extraordinarily good value for money?
Lord Hill of Oareford: My Lords, I am very happy to confirm that it clearly is a successful programme, which is why we are happy to continue to fund it for the rest of the spending review period. However, I think that I would get into the most enormous trouble if I started committing the Government into the next spending review period.
Baroness Walmsley: My Lords, given the abolition of Becta, how will the Government ensure that schools have the appropriate ICT equipment, back-up and know-how to allow them to make the very cost-effective use that some schools are already making of teleconferencing in accessing native language speakers? Some schools are doing that very cost-effectively. Teleconferencing allows one native language speaker to support several schools from one location, but they must have the technology to do it.
Lord Hill of Oareford: My Lords, I am grateful to the noble Baroness for bringing that scheme to my attention. Clearly, technology can have an important role in many aspects of education, including the teaching of modern foreign languages. Given the work that Becta has done over a long period, including the work
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Lord Kinnock: The continuation of the British Council language assistants programme to 2015 is welcome. However, as the noble Baroness, Lady Coussins, said, it should go further for very practical reasons. Will the Minister acknowledge that, through this programme and many other means, the British Council has consistently fulfilled its mission of increasing the international understanding of, and trust in, the United Kingdom? Does he recall that in recent years the council has cut its UK workforce by a third, increased its turnover by over a third to more than £700 million and further demonstrated its increased face-to-face contact, especially with young people, by increasing that number from under 13 million to 20 million? Against that background, is it not clear that the Government's cut of 26 per cent in public funding for the British Council is evidence that under this Government virtue hath its own punishment?
Lord Hill of Oareford: My Lords, I am very happy to acknowledge the contribution made by the British Council, particularly in the language assistants programme. I completely accept the extremely important role that that plays, particularly with young people. One of the reasons why I am very supportive of the work which the noble Baroness, Lady Coussins, is doing to promote the teaching of modern foreign languages is that it helps to build ties between different countries. Those ties and the cultural role of that work are extremely important.
Lord Alton of Liverpool: My Lords, is the Minister aware of the work that is being done by the British Council in North Korea? I recently saw the work of English language teachers there. Over the past decade, they have been teaching teachers to teach English in schools in that most benighted of places. It is a wonderful sign of hope that English has now become the second language in North Korea as a result of the work of the British Council. Surely, we should do nothing whatever to jeopardise the small steps that are being taken in remote parts of the world where English may offer the best hope for people living in benighted places such as North Korea.
Lord Hill of Oareford: I agree with the point that the noble Lord makes but I also think that it is very much a two-way traffic. That is one of the benefits of this scheme. Other countries benefit from our young people going there and helping to spread English and we benefit from young people from those countries coming here and helping our young people to learn languages.
Baroness Morgan of Drefelin: My Lords, clearly the Government have a lot of thinking to do to build fully on the Dearing report and to develop fully their policy on languages and IT. The Business Secretary is concerned about the Government's rush to reform and the resulting
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Lord Hill of Oareford: My Lords, whichever travelling metaphor is used that my brain is not quick enough to think of, I feel extremely comfortable with the direction of travel taken by the Government on their education reforms. I consider myself extremely fortunate to have been able early on to introduce the Academies Bill. So far, we have received more than 330 applications from schools to convert to academies. We are making rapid progress across the piece in education.
As for modern languages, which was the point behind the original Question, from which we have deviated quite a long way, the review of the curriculum is an extremely important part of how we address the very serious challenges, some of which we inherited from the previous Government, around the teaching of modern foreign languages. We will announce the review in the new year, and the review will be a proper, thorough and rigorous look at the place of modern foreign languages in the primary and secondary curriculums.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Henley): The Commission's Green Paper, issued last year, provides a compelling case for radical reform of the common fisheries policy. We are calling for fundamental changes that simplify and decentralise fisheries management, enabling those closest to fisheries to plan for the long term and giving fishermen greater incentive to fish sustainably. We are working with other member states, EU institutions and stakeholders to build support for major reform ahead of negotiations next year.
Lord Eden of Winton: My Lords, I thank my noble friend for that encouraging reply. I also congratulate his colleague in the other place, Mr Richard Benyon, for his energetic work in this sector. However, can the Minister explain why, when the facts have been known for decades to all EU Governments, the appallingly wasteful and utterly indefensible practice of discards continues? Did not the European Commission itself many years ago estimate that in some species in some locations as much as 70 per cent of fish mortality was due to discards? How much longer must we wait? Why do we have to go on beyond perhaps 2012 before any effective action is taken to stop this reprehensible plunder of our oceans' resources?
Lord Henley: My Lords, my noble friend is absolutely right. It is a disgrace. However, we are where we are. The common fisheries policy was last reformed in 2002 and I imagine that there are noble Lords opposite who remember with some feeling taking part in that process. We are determined to try and get the policy properly reformed on this occasion-it happens on a 10-year cycle. We are grateful that the Commission now seems to recognise the problems that we face. As for discards, we, and I think the Commission, are determined to reduce this wasteful and horrendous practice. There must be a focus on catches-what is taken from the sea-rather than on landings. By that means we hope we can get rid of discards in their entirety.
Lord Sewel: My Lords, the Minister will recall that your Lordships' European Union Committee has been a strong advocate of the reform of the common fisheries policy and, as part of that reform, the move to local management of fisheries, whereby you get stakeholder involvement. Does he consider that the reform in that direction has suffered a huge and possibly fatal blow, because of the reported and successfully prosecuted illegal landings of huge value-many millions of pounds-that have come to light through the Scottish courts over this summer, as a result of the activities of the Shetland pelagic fleet?
Lord Henley: My Lords, no I do not think that it has suffered a blow. The important thing is that your Lordships' committee, this House, the Government, many member states and the Commission all now believe that reform of the CFP is necessary and desirable. As part of that process, we will push for greater regionalisation in decision-making, as we think that that will lead in the end to a much better process. We are fortunate to have reached a stage where there is slightly more agreement than there has been in the past. We want to build on that.
Lord Hunt of Chesterton: My Lords, does the Minister agree that the data about the state of fishing that were referred to in the supplementary question are much less complete than they should be? The only data on the decline of fisheries available to the pre-legislative scrutiny committee on the marine Bill came from an official of the EU. I am afraid that our colleagues in Defra were extremely reluctant to give us any substantive figures, and even now many of its documents are very weak in this area. Can we be given the facts both from the UK's and the EU's point of view, because that should be an important part of revising this policy?
Lord Pearson of Rannoch: My Lords, is the noble Lord aware that the previous Government admitted that only eight other countries support us in the reform of the CFP and the common agricultural policy? Did not 70 per cent of all the fish that swim in the EU waters used to swim in British waters? Is not
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Lord Henley: My Lords, as my children say to me, I will say to the noble Lord, "Get real". If we simply try to tear up the common fisheries policy, we are not going to get anywhere. We are in the business of negotiating with others in the EU. We are in a happy state of affairs where we have agreement from a lot of other countries as well as from the Commission that reform is necessary and desirable. Therefore, we will go ahead and see what we can achieve.
Lord Greaves: My Lords, is it not extraordinary that the noble Lord, Lord Pearson of Rannoch, believes that fish know where the international boundaries are in the sea? Does the Minister agree with the words of Commissioner Maria Damanaki at the Fisheries Council last week that reform of the policy in future must lie with science-based management?
Lord Brooke of Alverthorpe: What is the Government's position on the selling of fishing quotas? Does the Minister agree that a substantial number of quotas have been sold to foreign fisheries by British fishermen? In the review of the common policy, will the Government take any steps to try to stop this?
To ask Her Majesty's Government whether, in view of the research study by the National Institute of Economic and Social Research, which suggests that caste discrimination and harassment within the meaning of the Equality Act 2010 exists in the United Kingdom, they will bring caste within the list of protected characteristics in that Act.
Baroness Verma: My Lords, we published the National Institute for Economic and Social Research's report on caste discrimination and harassment in Great Britain on 16 December. This is an important report that we will consider carefully before responding. We will of course consider our response in the broader context of the equality strategy, Fairness for All. This sets out a new role for government, moving beyond simply introducing more legislation to promoting equality through transparency and behaviour change.
Lord Avebury: My Lords, does the Minister agree that the research shows that discrimination based on caste does occur within the areas covered by the Act, and that it would be reduced if Section 9(5) of the Act was activated? Will she invite members of the Anti Caste Discrimination Alliance for a discussion on how best to proceed in eradicating this kind of discrimination?
Baroness Verma: My Lords, we have not ruled out legislative responses, but this is a different Government from the one who commissioned the research study. Inevitably, we will consider the report in the context of our own equality strategy, including the enhanced public sector equality duty and our commitment to work with businesses to address the main challenges to equality. The report is a valuable guide. We have included all the people who raised the issue of caste, and the report shows where caste problems exist. However, we need to ensure that our response is reasonable and proportionate, bearing in mind that a lot of people will be affected by it if it is brought into legislation.
Baroness Scotland of Asthal: My Lords, bearing in mind the noble Baroness's deep understanding and commitment to equality, particularly in this area, will she assure us that when she looks at these issues she will take into account the fact that the whole House supported this aspect of the Equality Bill, including those sitting on her Benches, and will she deploy that delicacy of mind that I know she has in persuading her Government that this is a matter on which they should commit to bring in legislation?
Baroness Verma: My Lords, I thank the noble and learned Baroness for her kind words. I think I understand caste probably better than most people in this House, which is why I say to the noble and learned Baroness and to Members around the House that this is an incredibly complex area. Legislating for it would not deal with the issues behind the continuance of this abhorrent practice. Therefore, I ask noble Lords to look at the report, consider it carefully and then decide whether there is a need to take on board Section 9 of the Act.
Lord Harries of Pentregarth: As chair of the All-Party Group on Dalits, perhaps I may say how pleased the Dalit communities-that is, the former untouchables-in this country will be that the discrimination that they experienced and reported to the previous Government over many years has now been shown to be a fact by the report of the National Institute for Social and Economic Research. The Minister mentioned education, as indeed does the report. Does she not agree that it would be a vital instrument in achieving education on this sorry situation if there were very firm legislation in place, as there is in India, prohibiting discrimination in the areas of employment, public education and public goods and services?
Baroness Verma: My Lords, the noble and right reverend Lord raises the question of Dalits and I understand the issue. Even with legislation in place in India, the problem has not been eradicated. It is a question of shifting attitudes within individuals, and I think that the only way of doing that is by ensuring that, if there is discrimination against people on grounds of caste, it is dealt with through the legislation that we have. We need to ensure that the law plays its part in this but, as I said, the report has to be considered fully and I ask the noble and right reverend Lord to give us time to do so.
Lord Lester of Herne Hill: My Lords, I was one of those who, when the previous Government were in power, argued very strongly for dealing with this ancient source of injustice in India and now here. Does the Minister agree with my noble friend Lord Avebury that the report shows that there is unfair discrimination based on caste, or the absence of it? Will she agree, as did the previous Government, to meet the Dalit community's organisations so that they can hear first-hand, as did the previous Government, about the injustices that the present situation is causing?
Baroness Verma: My noble friend will be aware that during the passage of the Equality Bill there were consultations and meetings with people right across the caste system to ensure that both sides of the argument were put. I urge all noble Lords to allow the Government to consider the report carefully. I think that there will be a fair outcome if we see how it impacts on the wider context of legislation in our country.
Baroness Verma: My noble friend is right about education, but I think that education needs to start within the communities in which such discrimination is practised. I understand completely how difficult it is for some communities to raise the question but, unless they deal with it themselves, legislation will not do so.
Baroness Falkner of Margravine: My Lords, does my noble friend accept that it is very worrying to see in the report that caste is seen as providing identity and support and reinforcing community? Does she agree that integration, education and legislation are what are needed and that we do not need to support community cohesion by supporting discrimination?
Baroness Verma: My noble friend is absolutely right. As one who has always supported equality through integration, I think we need to come away from the idea that constantly supporting people to be separate is an easier form of dealing with the problem now. The big picture should be that we can get on with our lives and treat people without having to worry that we will offend them in some way because of one issue or another. The law will not cover every possibility of discrimination, even if we are constantly legislating to bring in more and more groups to protect.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland): My Lords, this Bill will bring energy efficiency into our buildings through the Green Deal, enhance our energy security and encourage investment in the next generation of low-carbon energy. The Bill also proposes to take powers to require the cheapest tariff information on energy bills, to create a new energy company obligation to reduce carbon emissions and to introduce new energy security measures to make sure that sufficient gas is available during an emergency and allow us to monitor the adequacy of our electricity supply.
Some provisions in the Bill extend to Scotland, Wales and Northern Ireland. We have worked closely with the Scottish, Welsh and Northern Ireland Governments in drafting the Bill, and we will continue to work closely with them on implementation by, for example, consulting devolved Ministers on secondary legislation so that we can get delivery across the UK.
The Energy Bill is only part of the picture. The consultation on electricity market reform published last week looks at carbon price support, feed-in tariffs, capacity payments and an emissions performance standard. The market reform will not only give us a stable and predictable market but put us on track to decarbonising the economy.
We need to improve energy efficiency and to reduce carbon emissions from existing buildings as well as build energy-efficient new ones. The Green Deal's financial framework will let people install energy-saving measures to be paid for in instalments via energy bills. This is not a loan, so no individual is at risk of the lender calling in the whole amount. The meter is attached to the property and will stay with the property when the inhabitants change. There will be a golden rule that the instalment payment for the energy-saving measures should not be more than the expected cost savings on an average bill for the duration of the
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The Green Deal offers the private rented sector a real incentive for both landlords and tenants alike. For example, the residential private rented sector has the largest proportion of band G properties of all tenures. In the non-residential sector, just over 60 per cent of properties are rented. Just under 18 per cent of registered non-residential buildings have an EPC rating of between F and G. Landlords will have no upfront capital costs to pay for their improvements. Tenants will repay the costs through their energy bill savings while enjoying lower bills.
After the Green Deal has been running for a year, there will be a review. If landlords as a whole do not take advantage of the Green Deal, we will not hesitate to enforce it through legislation. The Bill will give us powers to make landlords honour requests from their tenants to make their home energy-efficient where there is finance available through the Green Deal or the ECO. In addition, the worst-performing properties might be targeted through local authority-led action if the review confirms the need.
Complementing the Green Deal, we plan to replace the existing energy company obligations-the carbon emissions reduction target, CERT, and the community energy saving programme, CESP-with a new energy company obligation focusing on driving carbon savings and helping vulnerable energy households. When CESP and CERT expire at the end of 2012, a simpler ECO will work alongside the Green Deal to ensure that the Green Deal works for vulnerable people and supports heating improvements. The Green Deal will also support anyone in hard-to-treat housing.
Pensioner households benefit from a wide range of benefits, including the winter fuel payment of £250 for those up to 79 years old or £400 for those aged 80 or over. The cold weather payment of £25 per week is paid to vulnerable low-income households when the weather is really cold. In addition, we have announced the warm home discount to provide further support for the vulnerable.
The Green Deal will help reduce energy bills for the long term and make our houses more energy-efficient, but there is a wider issue of energy security. Fossil fuels are not infinitely available. Supply diversity and resilience are, of course, critical. Look at the past four winters, including the current one. We have 40 per cent of Europe's wind energy and 11,000 kilometres of coastline at our disposal, but to reap those benefits we must connect wind turbines directly to the grid. The Bill proposes to amend provisions in the Energy Act 2004 and the Electricity Act 1989 to let us do that. The Bill will also help encourage new entrants to this sector and stimulate competition, innovation and the supply chain.
The Bill will also improve our security of gas supply by enabling Ofgem to strengthen commercial incentives on gas market participants to meet their contractual supply obligations during a gas supply emergency. In turn, this will sharpen incentives to avoid a gas supply
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The Bill will also introduce a special administration regime for gas and electricity supply companies similar to that already in place for network and distribution companies. If, for example, a major supplier becomes insolvent, this Bill will ensure that customers continue to be supplied with gas and electricity as cost-effectively as possible until the company in difficulty is rescued or sold or its customers are transferred to other suppliers. This will reduce the risk of financial failure spreading across the energy market, maintain market stability and protect consumers.
To conclude, this Bill will bring energy efficiency to homes and businesses across the UK. For too long now, energy efficiency has been on the back burner, but it will now be at the forefront. The Bill will help protect the most vulnerable from fuel poverty and, importantly, bolster our security of supply. I look forward to hearing noble Lords' advice and comments. I beg to move.
Lord Grantchester: My Lords, we have before us a very long and technical Bill, which is largely concerned with setting up the framework to implement the Green Deal initiative. As we have heard, other key energy policy areas in the Bill relate to, among others, security of energy supplies, access to up-stream petroleum infrastructure, a special administrative regime for energy supply companies, designations under the Continental Shelf Act 1964, licensing for offshore transmission and electricity distribution, the powers of the Coal Authority and repealing measures relating to home energy efficiency.
In the gracious Speech, this Bill was called the energy security and green economy Bill. As a result, we had originally expected to see proposals about the green investment bank and further energy security measures in the Bill. We understand that the policy detail in these areas is yet to be finalised, following the publication of the energy market reform White Paper, and that we can anticipate the Government bringing forward legislation on these areas next year. Does the Minister have any estimated timeframe for the introduction of that second energy Bill?
As my noble friend Lady Smith of Basildon expressed in previous debates and in our response to the energy Statement last Thursday, we on the opposition Benches support the aims of the Bill. We support energy efficiency measures that will help people to reduce their energy use. We all recognise the necessity of security of energy supplies and the challenge to reduce CO2 emissions in domestic properties.
Part 3 on low-carbon generation and Part 4 on the coal industry are not particularly controversial, although there are aspects on which we shall seek clarification. Part 5 repeals the Home Energy Conservation Act, the Private Member's legislation sponsored by the noble Baroness, Lady Maddock. She can be proud of the
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Customers will be able to get up-front money for energy efficiency measures in the form of a loan. The loan is attached to the property and paid back through the energy bill and not the individual. This means that when a person moves, the Green Deal payments do not follow them but stay with the property and are picked up by the next bill payer. It is suggested that the loan amount under the scheme would be up to £6,500. A key part of the proposal is that loans must meet the golden rule, which states that the cost of instalments must not exceed the projected savings on energy bills over the period of time of the finance arrangement. It could be up to 25 years.
Because energy consumers are intended to be the chief beneficiaries and bear the costs and liabilities for repaying Green Deal investments, we need to make sure that any measures are easy to adopt without compromising protection for consumers. We will be asking questions and tabling amendments to provide further protection for consumers. For example, what assurances can the Government give regarding interest rates and will interest be included in the proposed £6,500 cap? How will the Green Deal scheme sit with tenancy law?
We will look at amendments that require clearer disclosure and consent requirements for the benefit of the initial bill payer where the bill payer and the improver are different persons. At the moment, the Bill leaves too much up in the air in this area. The law needs to be clearer about what consumer protections are available and not left to the discretion of individual Ministers who may or may not decide to draft regulations.
The Green Deal proposals need to be seen alongside the Government's proposals in the Public Bodies Bill. As noble Lords may be aware, the Government intend to disband Consumer Focus, the energy consumer watchdog, and move the consumer enforcement functions of the Office of Fair Trading to trading standards. By doing this, the Government are weakening consumer rights to effective advocacy while putting more power in the hands of energy companies.
We support the aims of the Bill but, as mentioned earlier, it is lacking in detail. To this end, we hope that the Minister will be providing sufficient detail in Committee so that the House is able to take a view on how the Green Deal will actually work. For our part, we will spend the necessary time in Committee ensuring that the legislative scheme is well thought through, with the detail possibly becoming part of primary legislation. As I have already expressed, we will want to see consumer protection built into the Bill.
Good-quality consumer information is essential. The results from a recent Ofgem survey show that 70 per cent of energy customers find the number of energy tariffs on offer confusing, and over half of customers are not sure of the potential savings if they switch. On the other hand, independent research suggests
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At this stage, we are not convinced that this process will be simple for consumers to follow, and we will continue to look at the scheme in detail to ensure that it is easily understood. If the Green Deal does not address consumer confidence, it will not work. This is in no one's interests. We want it to work, and we will seek to amend the Bill to ensure this happens.
On a related point, we are concerned that this Bill does not provide adequate protection for those in the greatest fuel poverty. Labour's Warm Front scheme insulated 2 million homes and provided assistance to many more people living in fuel poverty in private sector housing. The Government have announced their intention to phase out Warm Front funding, but there is likely to be a significant gap between the commencement of this Bill and the loss of Warm Front. The money has already run out and there is a waiting list. Warm Front is not just about home improvements but about the bigger question of improving the health of the nation, thus preventing real costs for the NHS and providing real savings. We will be questioning the Government about their intentions to relieve fuel poverty in the interim during one of the coldest winters. Let us remember we had already had snow in November this year, with a forecast that the situation is set to continue.
The Green Deal should work in tandem with the renewable heat initiative, which should help to lower the threshold requirements of positive savings and possibly provide encouragement for further energy efficiency measures above the least costly. To encourage ambitions towards the greatest energy efficiencies through implementing some of the more expensive energy efficiency measures, RHI income could be essential, leading to a reduction in the capital and running costs of any renewable heat installation, as less capacity is required. It would be a win-win situation.
On renewable electricity generating equipment, it is compelling to encourage householders to think of improving the energy efficiency performance of their homes at every opportunity. If the feed-in tariff engages their interest, it would be a wasted opportunity not to have the two policies working together, with once again the income stream assisting with the funding of efficiency measures. Further, if the generating equipment provides excess electricity above the needs of the property, any excess capacity can be exported to the grid. The inclusion of feed-in tariffs and renewable heat incentive technology may allow the golden rule of the Green Deal to work at more ambitious levels. Home owners who are not connected to the gas grid stand to benefit the most from installing renewable heat technologies since they will be protected from volatility in the price of fuel oil.
Among aspects in the administrative regime for energy supply companies, it is critical that the Government should provide certainty so that they can operate with confidence based on the assurance that consistency will be maintained. The electricity market reform consultation launched last Thursday, 16 December, is a critical component if companies are to invest to fill the energy gap. Can the Minister give reassurances today that the playing field will not be subject to constant realignments?
The Bill also provides an excellent opportunity to provide investment certainty in the power section by introducing an enabling power to introduce an emissions performance standard, with a requirement to act within a certain timeframe. Although it is not part of this Bill-yet already promised-we may need to look at this issue in Committee to reduce the delay.
Also not included in the Bill are any provisions in regard to deep geothermal. The Conservative-led Government have cut the previous Administration's provisions for this and the remaining funding is now cut in half, leaving the industry on the sidelines here while it takes off across Europe. The industry needs licensing exploration legislation. Can the Minister give any indication today regarding the timing of any future energy Bill which could provide for this?
In conclusion, we on these Benches offer support to the Bill and will endeavour to provide constructive suggestions to improve the workings of this legislation. We wish it to be as effective as possible, as we look forward to taking the Minister's place in the not-too-distant future during these unusually turbulent times. Happy Christmas, my Lords.
Lord Teverson: My Lords, one of the big issues in which I have been involved over the past 10 years concerns the water industry and the great amount of water leakage through our mains system. Water is a scarce resource and a significant proportion of it never reaches the consumer through the taps because it is dispersed through the ground. It is a great waste and we have made, and continue to make, a considerable investment to stop the leakage.
I see that as an equivalent challenge to the one that we now face in regard to heat and energy saving. Huge amounts of energy leak out into the atmosphere. The energy is not used for its right purpose-which is to keep us warm, to cook with, to manufacture with and all the other things for which it is needed. The Bill gives us an opportunity to plug the gaps in a number of ways. That is why I welcome it. Energy saving is often a less exciting area of energy policy-it is a Cinderella area-because it is not one of the new technologies and does not require billions of pounds of investment in shiny new machines. It is about the boring issue of making what we have work far better.
I also welcome the Bill because of the way in which it aims to tackle the scale of the problems involved. That could make a difference. Fourteen million homes need a degree of retro-fitting. Some of that has already taken place and there are a huge number of dwellings out there-a huge target population-that we need to make sure are fit for the future. The issue centres not
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However, a number of areas need greater explanation and perhaps tightening up. Also, in one or two areas, some additions are needed, which I think will be in the grain of what most noble Lords want the Bill to achieve. When I read the Bill through, one key area that did not convince me entirely was the part that relates to the rented sector. As the Minister stated, that sector includes properties that are the worst in terms of energy efficiency. It certainly contains true energy poverty, which is, regrettably, a growing problem in this nation. I am concerned that the Bill-perhaps the Minister can explain this when he sums up-seems to flag up that private landlords can go on hold and will not be put under pressure to do anything until 2015, some five years away. I know that there is some tough language in the Explanatory Notes and other DECC publications. All the same, saying categorically that the sector will not be kicked if it does not move for another five years is not what we want. I think that the date has to be brought forward and that greater pressure needs to be put on landlords to perform. I am delighted that the SME sector is not excluded from the Green Deal. The number of tenanted rather than owned properties is even greater in the business sector, so the Bill is important in that area, too.
As we move through Committee and other stages, I should like some assurances about what I would call conflicts of interest. I have some limited experience in financial services, where the Financial Services Authority is keen on the concept of treating the customer fairly. That is all about preventing mis-selling and making sure that there are no conflicts of interest in the financial supply chain. The structure proposed in the Bill, although the detail is not there yet, poses some risks, as we will have advisers, installers and the people who provide the finance. We know from consumer experience in the financial services sector that this structure can lead to market abuse, to the lack of Chinese walls and to mis-selling. If that starts to happen, households and small businesses will look at the Green Deal less positively than we would want. It is important to get that right. We must ensure that mis-selling does not happen and that households get the right advice, the right finance and the right deal for the long term, so that the money that is transferred between the energy sector and the property sector is used properly.
I want briefly to talk about local authorities; I am sure that my noble friend Lady Maddock will speak about this in more detail. I am disappointed that the role of local authorities does not appear slightly more
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I am also interested in the area-I am sure that other noble Lords will mention it-of what I regard as inverted tariffs. Because of the way in which the market works in this country we have a situation where-certainly with electricity, and I think this applies to gas as well-you pay a much higher rate for the first units of energy used. The rate then goes down as your usage increases. While that is logical in terms of fixed costs and businesses looking to cover those fixed costs, it does not make a lot of sense in terms of energy management at household level. I should like to think that we can reconsider that as well.
As I said, the good thing about the Bill is that it deals with energy efficiency rather than some of the shiny technologies that are out there. However, one thing has been left out that, like the noble Lord, Lord Grantchester, I would like to mention, and that is geothermal. But I would also remind the noble Lord that, in their last energy Bill, the previous Government rejected my amendments on geothermal which would have created a framework in which it could flourish. Nevertheless, I know that the other side of the House has been generally positive about this technology. Under Chapter 3, which covers low-carbon generation, I should like to see a basis for geothermal licensing that allows investment to take place. I shall not try to sell its wares at great length, but geothermal is a renewable technology with a constant rather than intermittent or variable output; it has a small footprint on the ground; it is made up of tested technologies; and the UK has the opportunity to retake the leadership in it.
Baroness Finlay of Llandaff: My Lords, I am sure that the Bill's potential health benefits are obvious. However, I want to address one area where this Bill provides a unique opportunity to avoid a harm occurring, and that relates to carbon monoxide. I express an interest as patron of CO-Awareness, an organisation founded by Lynn Griffiths, who herself was subject to chronic poisoning, and ask the Government to address the installation of audible carbon monoxide alarms as part of the improvements in consumer protection made under the Green Deal.
I should like to tell your Lordships about a woman who came to this country as part of the Kindertransport. She lost all her relatives in the gas chambers, but as a
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What is the size of the problem? It has been estimated that there are 2,500 poisonings from carbon monoxide every year. That estimate comes from the West Midlands fire service. Levels of carbon monoxide in the air of over 60 parts per million can be dangerous. So if you come home in this cold weather, sit by your nice gas fire and think that you are safe, just remember that if you do not have a carbon monoxide alarm and the fire is not properly installed and gas is leaking, you might never wake up.
Classically, the reported groups affected are the young and the very old, who sit by the heating and possibly do not have maintenance. I reviewed the data from the Gas Safety Council for the past 13 years, from 1995 to 2008, covering 503 deaths, and plotted them out. The deaths occurred among people of all ages at a horribly steady rate. Lots of young people die from this cause every year. For 2009-10, there were 59 official incident investigations, involving nine fatalities and 117 casualties from carbon monoxide poisoning. In Wales in the same period, there were seven incidents with two fatalities and 10 casualties. However, if we add in media reports for that year, we see that there were 72 incidents with seven fatalities and 138 casualties. That might seem small, and given that in the previous year there were 56 incidents and 17 fatalities, one might think that the situation was improving, probably because of the use of carbon monoxide alarms. But it is just the tip of the iceberg.
The London Ambulance Trust last year equipped just five crews with carbon monoxide detectors and identified and treated 83 cases of unsuspected poisoning. It means that the headline data may mask a much larger underlying problem, which is that boilers over 20 years old are 20 times more likely to be involved in carbon monoxide leaks and incidents than boilers that are less than 10 years old. Indeed, a review of more than 1,000 adults taken to emergency departments showed that more than 1 per cent had raised levels of carbon monoxide. There was no correlation with heart rate, respiratory rate, mean arterial pressure or oxygen saturation. If it was not looked for, it was not detected.
Hackney Council, undertaking a survey of its properties, found widespread sources of carbon monoxide contamination not only from faulty gas appliances but from faulty wood-burning appliances. In addition, the way in which some groups, particularly ethnic minority groups, cook on gas cookers, whereby they put tin foil over the gas burner so that it does not burn properly and cook directly on it, leads to very high levels of carbon monoxide in their homes. The problem with making those places more energy-efficient and decreasing ventilation is that the levels of carbon monoxide will rise.
Halton Housing Trust, in the Liverpool area, has installed alarms and found that, in most of the cases where the alarm has gone off, it has been because there has been undetected carbon monoxide poisoning, particularly where improvements have gone in alongside the alarms.
GPs do not detect chronic carbon monoxide poisoning because it looks just like all the kinds of winter illness that people have; for example, flu-like symptoms, chest infections, headaches, difficulty concentrating, not sleeping, excessive fatigue, depression, nausea and vomiting and so on. The problem with chronic carbon monoxide poisoning is that people go on to undergo brain changes. They lose a coating over the nerve cells called myelin and get chronic neuropsychiatric symptoms. They do not even know that they have been poisoned, but end up coming into the chronic psychiatric group and exhibiting signs that resemble dementia. Chronic carbon monoxide poisoning is associated also with strokes and heart attacks because it thickens the blood, so that it sludges up in one's blood vessels.
When carbon monoxide kills, it does so quickly, because it disturbs the motor in the cell's mitochondria, leading to death from carbon monoxide poisoning within two or three minutes. Sometimes people become drowsy and die so quickly that it seems that they have not had time even to open a window or door. Administration of oxygen can help, but they die so fast that you cannot do anything.
Which? magazine has estimated that there are 125,000 Gas Safe-accredited gas engineers, but that nearly twice as many non-accredited fitters are carrying out repairs. The main cause of carbon monoxide poisoning is faulty repairs, lack of maintenance and faulty fitting. That is why the Gas Safety Trust is asking for it to be ensured that carbon monoxide alarms are included in the code of practice for improvements being made under the Green Deal in Clause 3(4) and (5) and Clause 7 of the Bill. The decreased ventilation that will go along with reducing energy consumption risks accumulation of carbon monoxide. The older housing stock has old appliances. Their alarms should be hardwired so that there is no problem of batteries running out or of people taking the batteries out to use on other things, such as the kids' games, when there is no spare sitting around.
I ask the Government to take this unique opportunity to improve safety, and not to risk an unintended consequence of energy efficiency. The cost is estimated at £50 for the alarm and its installation, which can be offset in instalments paid over time through energy bills. But the offset of the cost to the NHS and the societal cost of young people dying from carbon monoxide poisoning represents a potential major cost-saving to the nation overall. I hope that the Minister will be able to reassure me that this has been taken seriously.
Lord Jenkin of Roding: My Lords, I am sure that I am not alone in having listened to the noble Baroness with great interest. I am sure that she has a point. I will come at the end of my speech to something that is not in the Bill that I would like to see there, but she made a very powerful point.
Most of my remarks will be about the Green Deal, which is at the heart of the Bill. I warmly support it. It has three major advantages over the processes that have been replaced, CERT and CESP-the carbon emissions reduction targets and so forth. My noble friend described the first advantage in some detail. It is the up-front financing with repayment in bills over a period. That is coupled with the golden rule, which is that the savings must be more than the cost of the measures taken. That is a very important step.
Secondly, the energy company obligation-the ECO-is very much better targeted than the targets for the priority group that existed under CERT. That affected no fewer than 11 million households and companies had to get 40 per cent of their savings from that, whereas the ECO is aimed primarily at the fuel poor and hard-to-heat buildings. That, too, is a great improvement.
Perhaps most significant of all is that the Green Deal abandons the concept of trying to measure carbon savings in individual households in favour of securing the benefit of lower bills and warmer homes. People will respond much more readily to the promise of lower bills and warmer homes than they would to appeals to save the planet by cutting carbon dioxide. That is the most important improvement that we have in the Bill.
I have been very critical in the past both of CERT and of its impact on the administration. The legislation and regulations were hugely complicated and they did not work. If you just look at the latest report on CERT by Ofgem, which publishes the figures, you will see that by November this year it had only achieved 58 per cent of its 2010 targets. Less than two-thirds of that is from insulation and more than a quarter is from lighting. I know that the previous Government ended the suggestion of distributing bulbs, but how many of the bulbs distributed are in fact not used? So here is another improvement.
So far as administration is concerned, I have some sympathy with points that have been made and we will need to make sure as we go through the Bill in Committee that this is really something that consumers can operate properly. My own experience in having my house improved is that the biggest single barrier is household hassle. The process set out in the Bill should in time gain a higher level of public confidence, but here again I agree with my noble friend Lord Teverson: everybody, all the bodies concerned, must join together in promoting the concept of the Green Deal. Local authorities are certainly important, as are a large number of social organisations. This cannot be done by the Government alone. Indeed, they should not even try to do it alone.
Many of the questions that one will have will need to be sorted out in Committee, and I shall not deal with them all. In the mean time, I have four specific concerns. The first concerns the individual initial accredited assessments. That is a very important first key stage in the process. It is not clear to me, nor is it clear to some of those whom I have been consulting, who is supposed to pay for these initial assessments. Let us suppose that an assessment concludes that this was not a case for a Green Deal and that the householder is not qualified for any special help under the energy company
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Ministers have spoken about there being a radical overhaul of the energy performance certificates. Yes, they will be removing the restrictions on access to energy performance data and houses, but what other changes do the Government envisage? Happily, they have abandoned the absurd and unloved HIP process, but it is my understanding that the energy performance certificates will remain an integral part of the Green Deal process. We need to hear a bit more about that, and perhaps we can explore it in Committee.
Mention has been made of the Warm Front scheme; there is some anxiety that it is due to be phased out. My noble friend made a Written Ministerial Statement on this the other day. Yes, it has run out of money this year, but the existing approvals will continue to be made. The Statement also talked of approving new allocations after April 2011 and described it as a key tool for tackling fuel poverty in England, which has helped more than 2 million households. Yes, there is a consultation, but is it envisaged that the Warm Front scheme will exist alongside the Green Deal process. The noble Baroness, Lady Smith, shakes her head, but it is clearly going to go on for a while to judge from the Minister's Statement. Is the new scheme going to be better at targeting the vulnerable people? Under the energy company obligation, I think that it will be better.
My last point on the Green Deal concerns the issue of who will bear the cost of consumer defaults. The provider of an approved Green Deal plan will advance the money to pay the approved installer; the energy supplier will be notified and will then recover the debt by adding instalments to the customer's energy Bills. That is fine if it all goes according to plan, but if the customer's debt is not allowed to be secured on his property, as is clear under the terms of the Bill, and he defaults, who will bear the cost? Is it the provider whose money has financed the up-front costs, or is it the energy supplier who is trying to collect the instalments? Again, my consultations suggest that there is some considerable concern about this. Clause 15 seems to suggest that the supplier will have to bear the cost. I am not sure that that is fair. All the preliminary assessments and the arrangements for the financing have been done by the provider, and these arrangements are entirely outwith the supplier's knowledge until he is notified what he has to add to the Bill by way of payment in instalments. As I understand it, the Government have power under the bill to deal with that uncertainty, and I hope that my noble friend will give us some assurance on that, because I assure him that there are uncertainties out there in the market.
So far I have spoken about only the Green Deal, but I will mention one other point that arises under the security of energy supplies. Clause 77 gives Ofgem-in
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"For the pressure in the network to be maintained there has to be a balance between gas supply and demand. Gas taken from the network by consumers has to be replaced by gas flowing into the network from producers, gas processing facilities, storage facilities, interconnector pipelines and Liquid Natural Gas (LNG) import facilities".
I draw particular attention to the word "storage". Like the issue raised by the noble Baroness, Lady Finlay, that is not in the Bill. We will need more gas storage to deal with emergencies such as the possible cutting off of a source of supply or the huge gas consumption across the country that we face at the moment. It has been put to me that there needs to be an enhanced public service obligation on gas suppliers so that they can deliver new gas storage facilities, perhaps over the next five to 10 years, to strengthen the UK's future energy security.
One must ask what paragraph 21 of the summary impact assessment means. If you have increased incentive to ensure the supply of gas, does that not necessarily imply some kind of enhanced public service obligation so as to encourage more supplies? I give my noble friend notice that I may table an amendment on this, to make provision for such an enhanced public service obligation. This is not the moment to express all the arguments in favour but it is quite amusing that last night, as I was drafting my speech, my mobile phone buzzed. I picked it up and it was a communication from British Gas, my gas supplier at home in London, which said:
Well, I am not a great expert on the internet, but I tried. I could find no tips. However, it prompts me to ask whether, if the UK had more gas storage, British Gas would have needed to put out that warning. Perhaps it would not need to cut off businesses with interruptible supplies. That message certainly strengthens my determination to persuade the House that Clause 77 needs to be strengthened by promoting new incentives to provide gas storage. In his opening speech, my noble friend referred to sharpening incentives for that. If that does not mean some kind of enhanced obligation on gas suppliers, I am not quite sure what it does mean. Perhaps we will be able to explore that further in Committee.
Lord McFall of Alcluith: My Lords, in contributing to this debate, I will focus on Part 2 of the Bill, which covers energy security, and make passing reference to fuel poverty. These issues, particularly energy security, are ones that I have discussed with a local company, Aggreko, in my home town and its chief executive, Rupert Soames, who, as many know, is the grandson
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I should also like to promote the theme of localism. As I have mentioned, Aggreko started locally. It reached the stage where it was deciding, in the interests of growth, whether it would stay in Dumbarton or move abroad to China or elsewhere. I chair a public-private enterprise company, Strathleven Regeneration Company, which was established on the closure of the JNB bottling plant 12 years ago. We have 120 acres of land, which we are developing for housing and business development. For example, the BBC has come to the site to film the Scottish soap "River City" and a programme with which Members will be more familiar-"The Deep" with Minnie Driver and James Nesbitt. It is a growth area. Aggreko and the Strathleven Regeneration Company got together to decide where Aggreko's next plant would be; we hoped that we could influence it to stay in Dumbarton, which indeed it did. A headline in the Times on Saturday read:
Rupert Soames is very clear about why he stayed in Dumbarton. He said that Dumbarton, not China or elsewhere, was chosen because that is where there are skilled engineers. There is an issue here for manufacturing and localism. We must take this seriously in the debate on energy and energy security.
Energy security was something that the Labour Government came up against very clearly at the beginning of the decade when, with panache, the Prime Minister said that we would not focus on nuclear energy. Two years later, given the instability in Russia and elsewhere, it was decided that we had better have another White Paper, look at the issue of energy security and embrace the nuclear option. That was the right step for us to take. It is hugely important in maintaining provision. I commend to the Minister the speech that Rupert Soames made to the Scottish Parliament on 12 November when he said that, in his travels around the world, he sees the consequences for countries whose energy policies do not work as they intended. He commented:
"Customers come to us when they have run out of power; when they have power cuts for five or six hours a day; when hospitals operate by candlelight; when traffic lights don't work; when sewage works stop".
We should start this debate by saying that energy is vital. We cannot do without it and it is directly relevant to the daily lives of everyone in this country. Therefore, we must continue to think about the long-term future. However, there is a danger that this could distract us from the more pressing, immediate problems. For
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We must also be realistic about how we will reach these targets. We would all like to see new capacity come from renewable energy sources, but given the time and technological constraints I fear that this is not possible. Over the medium term, if we wish to decarbonise energy, we will need to build up nuclear capacity. In the future, as we replace capacity in the UK, there will be huge global demand for power. By 2015, 25 per cent of the world's power stations will be more than 40 years old, so we will need to be strategic about how we attract investment in energy into the UK. One of the key elements that any investor will look at is the stability of the regulatory regime. That means that, rather than making short-term political decisions on energy policy, we must create a long-lasting consensus around a strong system that can create confidence. The target for all of us in this House is to create that confidence for the longer term.
I have already mentioned fuel poverty. The Labour Government tackled child poverty targets admirably; I think that they took more than 600,000 children out of poverty. However, they did not realise the ambitious targets that they had set themselves given the complexity of those targets. One of the themes of the House of Commons Treasury Committee that I chaired, and to which Members on all sides agreed, was to press the Government to ensure that they reached those targets. Poverty, particularly fuel poverty, is something that we cannot allow to go out by the side door. I fear that it will be a casualty of the cuts if we do not keep it well in our sights. Some 500,000 higher rate taxpayers receive the winter fuel allowance. The Government should look at that area if they wish to combat fuel poverty. If the coalition's public spending cuts are to be governed by fairness, that issue has to be embraced, difficult though that may be.
The Minister said that the Green Deal is working for ordinary people. Indeed, between 1996 and 2003, fuel poverty fell by more than 70 per cent, thereby helping more than 4 million people in poorer households with their fuel bills. However, there is a worry about that going forward. Charities have commented on the Warm Front scheme, which helps households with heating and insulation costs. That scheme will not take on any more cases until next April, so there will be a
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We cannot allow that to happen. The Government have to embrace this concept. We cannot leave the Government to their own devices as regards energy security. They have to work with others in this area where examples of decentralisation and localism are all around. Only by doing so can we ensure that we keep the lights on for the long term.
Baroness Maddock: My Lords, before making my comments, I declare two or three interests: I am president of the Micropower Council, a vice-president of National Energy Action-a charity working in the area of fuel poverty-and a vice-president of the Local Government Association.
Few people will have objections to the main aims of the Bill, which are to tackle barriers to investment in energy efficiency, to enhance our energy security and to enable investment in low-carbon energy sources. Of course, there are those who think that we should not be tackling the causes and manifestations of climate change, but what I find difficult to understand is how those who hold that view can believe that we should ignore the fact that we have a world population that is growing ever faster-many of whom are aspiring to higher and higher standards of living-and continue to use the world's resources profligately. I fail to understand that, even if those who hold that view cannot accept the climate change science. Looking at the list of speakers, I am sure that we will hear such views again today.
We all have a responsibility to do what we can to stop the wasteful use of resources, as my noble friend Lord Teverson has mentioned-that is why I and others support the aims of the Bill-but, like other noble Lords who have spoken today, many people want a little more clarity about how the programmes and policies are actually going to roll out. This House will, as usual, scrutinise thoroughly and help to improve the Bill as it goes through its stages, and we have already been inundated with briefings from all sorts of organisations. Many focus on how the Green Deal will work in practice. Most applaud the aims behind the Green Deal, but there are common concerns throughout the briefings. The briefings come from possible providers of finance, environmental groups and those involved in the building trade and all the other work required for installing energy efficiency products. I hope that the Minister will be able to clarify and expand on the proposals-if not at great length today, then as we go through the Bill's stages.
What is it that many people want to know? They want to know how the Green Deal will work in practice, as opposed to theory, and how it will encourage more people to take up energy efficiency measures than
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One briefing in particular that I want to draw to the Minister's attention is a joint statement from the World Wildlife Fund, the Great British Refurb Campaign, the Federation of Master Builders, the Green Alliance, the UK Green Building Council, Marks and Spencer and B&Q. All are concerned and want to be involved with the Green Deal. I shall highlight for the Minister a couple of things from their statement, which says:
"Clarity on the scale of ambition, pace and timings of the programme ... is essential for establishing confidence in the programme, giving business certainty and attracting sufficient large-scale investment".
"Our experience and research suggests that the carbon and financial savings that householders could achieve through the Green Deal will not be sufficient to drive significant participation. Additional government intervention is therefore necessary".
"Outside of the Bill a framework of incentives that support the emissions reduction aim of the scheme should be developed. This should include complementary fiscal incentives and other tools designed with human behaviour in mind, such as variable rates of council tax, stamp duty reductions, and a reduced VAT rate for retrofits through the Green Deal".
Not surprisingly, the rest of my comments will refer to Clause 102, "Repeal of measures relating to home energy efficiency", which will repeal the Home Energy Conservation Act 1995, which I sponsored successfully as a Private Member's Bill when I was a Member in another place. I will remind noble Lords briefly what that Act did-or rather does, as it is still in force. HECA requires all UK local authorities with housing responsibilities to prepare an energy conservation report that identifies practical and cost-effective measures likely to result in significant improvements in the energy efficiency of all residential accommodation in their area and to report on progress in implementing the measures. A "significant improvement" was defined as one that produced a 30 per cent improvement in energy efficiency.
HECA was designed to last for 10 to 15 years from April 1996, so I suppose that we are running out of time, but the way in which the Government have approached the repeal of the Act has been distressing. There are four short paragraphs in the notes accompanying the Bill and there is little more than one page from DECC on the reasons for repealing the Act. I understand why the Government want to repeal the Act, but-as the sponsor of HECA, I would say this-I am extremely disappointed at the cursory dismissal of what the Act achieved. I and many others spent a lot of time 15 years ago, when energy conservation was not mainstream, persuading the then Conservative Government to give a fair wind to my Private Member's Bill. I make no bones about the fact that a lot of people helped me-I happened to be the right person in the right place at the right time-although I cared passionately about the issue from having lived in Scandinavia many years before. The clincher for the Government was that they wanted something to say at Rio.
That is not entirely accurate. Even as recently as 2005, the then Environment Minister, the noble Lord, Lord Bach, claimed in your Lordships' House that, in its first eight years, HECA delivered savings of 93.4 terawatt hours of domestic fuel. To put that figure in perspective, that is a larger saving than that attributed to the first phase of the energy efficiency commitment, which was 86.7 terawatt hours and where targets were overshot by 40 per cent. It is important for all the people involved that that is on the record.
A lot happened under HECA. Local authorities did the work-I have already outlined the savings-and set up all sorts of schemes. There was a HECA officers network and there were HECA grants. I chaired the committee administered by the Energy Savings Trust that gave out those grants. I recognise that things move on, but I am deeply disappointed that the Government have been so dismissive of the huge amounts of work that were done and of the successes that happened under HECA.
The Government have made great play of their consultation, on which they state that various bodies are happy to see the Act repealed. However, one of those bodies is the Local Government Association, which has been,
My noble friend Lord Teverson also mentioned the role of local authorities. As we look at the Bill more closely, I hope that the Minister will be able to assure us that local authorities will still be at the heart of trying to deal with energy efficiency in our homes. I can recommend to him, and even pass to him, an excellent article by a friend of mine, Andrew Warren, who is in charge of the Association for the Conservation of Energy, written when the Labour Government were trying to repeal the Act in 2008. The Labour Government came into power soon after the Bill became an Act, although they never used it very much. They did not even bother to collect the figures from local authorities and did nothing to set up a decent reporting system to help local authorities to deal with the issue.
As I said, I believe that a lot of good work was done in the days when energy efficiency was not popular. I support what the Government are trying to do here, but I am absolutely adamant that local authorities need to be involved. I look forward to assurances from my noble friend that he understands my point of view on this.
Lord Best: My Lords, my comments address Chapter 2 of the Bill concerning the private rented sector. I declare my interest as chair of the Private Rented Sector Policy Forum, which brings together representatives of tenants and landlord organisations. I have declared my other interests in the register.
I think that the Green Deal is a really helpful and innovative response to the urgent need for investment in energy-saving measures in the PRS-the private rented sector-and I congratulate the Government on bringing forward these proposals. For years, many of us with an interest in the PRS have worried about fuel poverty among poorer tenants. The sector has the worst record for unfit houses, yet landlords have had little incentive to upgrade the energy efficiency of their properties, as they do not pay the heating bills. Quite a few small-time landlords-and there are more than 1 million private landlords in the UK-have not had the resources to do the necessary work. Some are relatively poor themselves and, because the cost of improvements can seldom be recovered in the rent, they are unlikely to act. Some are heavily mortgaged as buy-to-let investors and cannot take on further debt.
Even in extreme circumstances where the property is so badly insulated and heated that it requires a small fortune to keep it warm, and indeed where it constitutes a health hazard, local authorities have been reluctant to get involved for fear that the landlord will simply withdraw a low-rent property from the rented market. That is a bigger risk than ever at a time when cuts to housing benefit mean that landlords are going to be increasingly reluctant to let to those on lower incomes.
The Green Deal addresses this dilemma. The landlord does not have to pay and, although the cost falls on the tenant, because fuels bill are reduced and costs are spread over many years, the tenant should get a much warmer and more comfortable home for little or no
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The Association for the Conservation of Energy and Friends of the Earth, with some 30 organisations in support, believe that the Bill should go a step further and prohibit the letting of properties that have failed to meet a minimum energy efficiency standard by 2016. That approach is supported by the London Mayor, Boris Johnson, and by the Government's fuel poverty advisory group. The latter favours making it illegal to let a property with an energy performance certificate that rates it as F or G-the bottom of the scale. The British Property Federation, however, speaking for landlords-and a number of landlords spoke at a meeting of the PRS policy forum last week-disagrees. It thinks that compulsion would be counterproductive and states, among other things, that using the energy performance certificates would be a flawed approach. It accepts the Government's own fallback position, if a review one year on shows that landlords are not responding to the opportunities presented by the Green Deal-namely, to empower tenants to require reasonable energy improvements to their homes, with local authorities given new powers to act.
I hope that we can explore the arguments here as Committee progresses. My initial comments cover both carrots and sticks, and are as follows. First, the Green Deal arrangements, as presently proposed, will not work where the cost of the upgrade to the property is so much that the burden of repayment that falls on the tenant, even if spread over 25 years, leads to a much bigger monthly payment on the fuel bill. Indeed, in such circumstances, fuel poverty could be worse than before. For older houses-and 40 per cent of the private rented sector stock was built before 1919-costs could indeed be high. Cavity wall insulation is not possible for those properties, and solid wall insulation can cost more than £10,000 per house. It is hard to fit double glazing economically in listed buildings or properties in conservation areas, where extra planning restrictions apply.
I suggest, therefore, that in those high-cost cases, the benefits of greater energy efficiency in reducing CO2 emissions go beyond the advantages to tenants or, indeed, landlords, and justify for the greater good the public subsidy which, if those properties are ever to be uprated, will be needed. A gap will have to be bridged between the expense it is realistic and fair to expect the tenant to cover and the actual cost of the energy-saving improvements.
Secondly, it seems likely that a lot of landlords will not be minded to do very much about the Green Deal unless pushed quite hard. There will be a role here for managing agents, who look after some 60 per cent of all privately rented properties, and who should be targeted just as much as landlords themselves by the
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It seems unrealistic to expect tenants in poor quality property to be the front line in making negligent landlords, the ones without any excuse for inaction, take up the new opportunities. There is a high turnover in that sector, with lots of young, mobile tenants moving on within a year or so. They are not going to get into the hassles of making their landlord perform.
The Government need to factor in here the impact, especially from 2012 onwards, of those housing benefit cuts. Any tenant in receipt of local housing allowance, or in any danger of their income falling to the point where they may need LHA, cannot afford to fall out with their landlord in any way. They will already be having to request a rent reduction at a time when rents are rising in the face of acute shortages, and it seems improbable that they will risk losing their home by taking action against their landlord to install energy efficiency upgrades to the property. Yet it is at this end of the market that the lowest standards are likely to prevail.
In putting the onus on tenants to propel the Green Deal, if that is not likely to achieve much, it would certainly be worth enhancing the role of local authorities, as the Bill proposes, to step in. However, I am anxious that councils will need resources to play their part. With so many other demands on their financial and human resources, they may be minded to put this low on their list of priorities, unless there are specific incentives to drive this forward. It would certainly seem worth while for government to give itself the powers, used only in prescribed circumstances and with proper exemptions, to ban landlords letting the very worst properties. The threat of action may well be a sufficient stick to prevent the need for intervention. What are the dangers of this driving out some landlords? Clause 40 stops the Secretary of State pursuing changes that could decrease the number of properties available for rent, but I am not sure that it would be such a bad thing if some poor quality rented properties were sold off into owner-occupation where more energetic new owners can take up the opportunities and bring these properties up to standard.
I greatly welcome the Energy Bill's proposals for improving the energy efficiency of privately rented properties, thereby easing the horrors of fuel poverty, excess winter deaths and the miseries of living in cold, damp accommodation. During the Committee stage of the Bill, I hope we may be able to explore some of the changes to the Bill and, as always in your Lordships' House, send it on its way with some helpful improvements.
Lord Lawson of Blaby: My Lords, let me first declare an interest as chairman of the Global Warming Policy Foundation, of which I gave fuller details in this House on 2 November. I must say that I am not the slightest bit surprised that this Bill has the support of the party opposite. It is the most dirigiste legislation the present Government have so far produced.
What I propose to do today is to look at the philosophy and policy that lie behind the Bill, to which the Minister alluded in his opening remarks. It is an area in which I have form, as it were. As the Secretary of State for Energy and Climate Change, my right honourable friend Mr Huhne, wrote in the Daily Telegraph on 16 December:
"So today the Coalition begins a consultation on a reform that would reshape this market more fundamentally than at any time since the 1980s, when the Lawson reforms were the pioneer of Europe's deregulation".
Nor were those reforms simply a matter of energy privatisation, although that was an important part of them. They went much further than that. As Oxford's Professor Dieter Helm has written in his definitive work, Energy, the State, and the Market: British Energy Policy since 1979,
"The current energy market has served us well, but it cannot deliver long-term investment on the scale that we need, nor can it give customers the best deal. Left untouched, it would lock carbon emissions into the system for decades to come".
So there we have it. Pace Mr Huhne the market can certainly deliver adequate investment, provided it is free from arbitrary government impositions and from major uncertainties about future government energy policy. It can undoubtedly give customers the best deal, as it has for more than a quarter of a century. But it is true that it may well lock carbon emissions into the system, to use Mr Huhne's phrase, for decades to come. That is precisely because it is carbon-based energy that now, and for the foreseeable future, gives energy customers, both corporate and individual, the best deal. Indeed, Mr Huhne freely admitted as much when later in his Statement he said:
The purpose of this Bill, or, rather, the policy behind it, is to bring that to an end in an obsession to eliminate United Kingdom carbon emissions. Again I will quote from the Statement for what I promise to be the last time. Mr Huhne said that,
We do indeed face growing demand, although the massive economic burden imposed by the energy policy that lies behind this Bill will certainly damage the economy sufficiently to reduce the growth in demand. We are undoubtedly lumbered with self-imposed unilateral
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The most dramatic technological breakthrough in the world of energy since my time as Secretary of State almost 30 years ago is the very recent development of horizontal drilling and hydraulic fracturing, which together have made the production of gas from shale economic and highly competitive. As a result, the official US Energy Information Administration, for example, announced only last week that America's technically and commercially recoverable shale gas reserves are twice as abundant as they previously thought them to be. Indeed, the United States is already set to overtake Russia-if it has not already done so-as the world's largest gas producer, and this is just the start.
Although America has been first in the field-a result of a technological breakthrough by the private sector, incidentally, which owes nothing to any government support or technology stimulus-the world is awash with shale, in Canada, Europe, Asia and Australia. We now know that we live in a world in which there will be an abundance of gas far into the foreseeable future and beyond. Because it is spread throughout the world, we no longer need to fear the strategic insecurity of being overdependent on either Russia or the Middle East.
Indeed, in so far as there is an energy security problem in this country, it stems entirely from the Government's obsession of ensuring by means of massive subsidies, combined with growing penalties and restrictions on the use of gas, that we become heavily dependent on wind power. That government-imposed insecurity has three dimensions. First, there is the inherently unreliable nature of wind, which sometimes blows and sometimes does not. Secondly, there is the question of whether it is practically possible to build and install wind turbines on the scale required to meet our energy needs, leaving aside the huge economic and environmental costs of doing so. Thirdly, there is the fact that an indispensable component of wind turbines is neodymium, a rare mineral, which is mined and refined-in a highly polluting way, incidentally-only in China, so we are dependent completely on China.
What are the consequences of the new energy policy which lies behind this Bill, whose essential purpose is substantially to raise the cost of UK energy by turning our back on abundant low-cost gas and relying on higher cost nuclear power and, to an even greater degree, on very much higher cost wind power? There are three consequences, two of them certain and the third quite likely.
The first is that by substantially raising the cost of energy, the policy will do great damage to the economy in general and to manufacturing in particular, at a time when it is clear that our principal competitors overseas have not the slightest intention of following suit. It is indeed curious, to say the least, that a
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The second consequence is that, despite the provisions in the Bill before us today, the massive rise in energy costs, which is the clear purpose of this policy, will lead to a huge increase in fuel poverty at a time when conditions are tough enough as it is for those on low incomes. Those two consequences of this policy are certain.
The third, which is not certain but quite likely, is that the dysfunctional energy policy to which the Government are committed will prove unable to provide sufficient reliable electricity to meet the nation's demand, and the lights will go out. The noble Lord, Lord McFall, warned of that in his intervention earlier in the debate. And all this in the cause of eliminating UK carbon emissions.
Moreover, there is a further irony. Per kilowatt of electricity generated, gas produces only half the carbon emissions of coal, so it is quite possible that by switching from coal to gas, the UK might be able to meet or at least get very close to the 2020 target for emissions reductions enshrined in the Climate Change Act. It would not, of course, make it possible to meet the near total decarbonisation enshrined in the 2050 target, but by 2020, or more likely well before that, it will have become abundantly clear that global decarbonisation is simply not going to happen, and that for this country to persist with a policy of unilateral national decarbonisation will be manifestly absurd and indefensible. Indeed, as we suffer the coldest winter since records began 100 years ago, well before 2020 it might just begin to dawn even on green-obsessed government Ministers that there may not be any case for doing so.
At present, the coalition Government are having to tackle with determination and vigour an unenviable fiscal inheritance in a tough economic climate. I wish them well. But to make that task substantially harder by embracing, for no good reason whatever, the massive self-imposed economic burden embodied in the policy which lies behind this Bill is madness.
Lord Giddens: My Lords, it is almost Christmas and at this time of year one is supposed to be merry, so I thought I might start by telling a joke, at which I hope the Minister might at least be able to giggle. I was looking for a joke on oil and energy. They are not too easy to find, but I did discover one about the BP oil spill, which we discussed last week in your Lordships' House. Scientists have developed a way of running a car on water. The only drawback is that the water has to come from the Gulf of Mexico. Well, I did my best.
I have been impressed by the breadth of welcome given to this Bill, although not from all quarters, of course. It ranges from environmental NGOs to the Committee on Climate Change to energy companies. The Bill builds on the framework laid down by the previous Government, and rightly so.
As I have stressed many times in your Lordships' House, it is very important that there is cross-party consensus on climate change and energy policy. I have crossed swords with the noble Lord, Lord Lawson, on many occasions and I respect what he says. However, it is very important that there is not a polarisation between left and right on this framework of policy and therefore I am happy to support it. We saw with what happened in the United States how disastrous it is if there is a polarisation between left and right around climate change and energy policy.
Unlike the noble Lord, Lord Lawson, I congratulate the Minister, the noble Lord, Lord Marland, on the vigour and determination he has brought to this process. Not least important, the Treasury seems fully on board with the proposals incorporated in the Bill. This situation is reassuring because, again unlike the noble Lord, Lord Lawson, I think we are talking about revolution within the British economy and the broader global economy. The recent report of the Committee on Climate Change, again rightly, recommended that the power sector be virtually wholly decarbonised by 2030, which is a truly radical proposal.
No doubt criticisms can be directed at some aspects of the Green Deal-noble Lords have already done so-and improvements suggested. The Government are right to place a great deal of emphasis on it given the poor quality of the housing stock in the United Kingdom in terms of insulation and heat retention, to which other noble Lords have drawn attention. I am also pleased to see that we are getting closer to realising the Government's stated intention to put a floor price on carbon, with a final decision to be taken, as I understand it, in the Budget in March. The new provisions for enhancing energy security are very welcome, as is the proposal to limit carbon emissions from existing coal-fired power stations by means of an emission performance standard.
I have three questions for the Minister; they do not concentrate solely on the Green Deal but on a number of issues surrounding it. First, have the Government given thought to the implications of Jevons paradox? This is very important. W Stanley Jevons, who was a famous economist, showed that greater energy efficiency leads to higher overall energy consumption; that you get a perverse outcome from increasing energy efficiency. He said:
He deployed a large range of historical evidence to this effect but I shall offer the House a humble and more macroscopic example: when fridges became more efficient, people simply started buying larger fridges and used more energy than before. The most energy efficient country in the world is Japan, but it has a steeply climbing carbon emissions curve.
This is serious for the Bill because it means that the Government must place it in an analysis of the wider economy in terms of its knock-on consequences. I should like to know what thought the Government have given to this because otherwise, even though it
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Secondly, job creation is often mentioned as an important outcome of investment in home insulation, renewable energy and wider energy innovation. However, there is an awful lot of loose talk around this, some of which appears in government documents, I am afraid. Where it is said, for example, that wind power will create so many thousand jobs, what is important is not the jobs that are created by specific technologies or innovations but, because jobs will be lost in the older energy industries, the net new jobs that are created. Have the Government done a calculation of net job outcomes from the innovations in the Bill and the wider innovations that are proposed? Without that, you cannot say that these innovations will create net new employment. Most new technologies tend to reduce the need for labour rather than expand it. This is an important aspect of investment in new energy technologies and I feel that a lot more work must be done on it than I have seen. As I said, many statements on this topic are simply superficial.
Thirdly, as outlined in the Bill, planning and the core role for the state are integral to the Government's proposals. The noble Lord, Lord Lawson, called them "dirigiste" proposals, essentially as a way of dumping on them. I would say the opposite. I think that it is right and proper in energy and climate change, where you are planning for a 20-year or 30-year cycle, to have a plan. Planning is integral to this and the Government are right to say so, but why only here and not in other areas? This comes back to a point made by my noble friend Lord McFall. Energy is one area where there could be a renaissance of British manufacturing, as has been mentioned, but at the moment the situation is that, with most of the technologies involved, we will be dependent on foreign providers: the French for nuclear power, the Germans and the Danes for wind power and the Chinese for solar power. Why, then, do the Government not have an investment-led strategy for linking a renaissance of manufacture to the implications of the energy framework that they have introduced? Quite contrary to what the noble Lord, Lord Lawson, said, one needs an investment strategy with targeted regional planning if one is really going to use energy innovation as a means of helping to promote a renaissance in British manufacturing.
Baroness Parminter: My Lords, I add my welcome to the Bill, which will, if implemented successfully, no doubt help the transition to a low-carbon economy for the UK, deliver much needed green jobs and guarantee energy security, which a number of noble Lords have mentioned. However, there are four areas on which I should like to ask for further clarification and perhaps, as the Bill goes through Committee, for some tightening up.
The first issue, which a number of noble Lords have raised, is delivering on the Government's ambition. As my noble friend Lord Teverson mentioned, the Government have stated on a number of occasions that, by 2020, 14 million homes might benefit from
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The second issue is incentives. I agree with the noble Lord, Lord Jenkin, that, although we may well appeal to people's better nature to introduce energy saving, what is encouraging about the Bill is that the Government have realised that we have to nudge people forward and offer incentives. Like other noble Lords, I should like some reassurance about the level of incentives that are being proposed. WWF has issued research showing that 7 per cent of home owners are keen to take part in measures such as those proposed in the Green Deal when interest rates are 6 per cent or lower, but that that figure reduces substantially if interest rates go up. I would be interested to know whether the Government have done any research into the level at which interest rates for the Green Deal might be set and the impact it might have on possible further incentives, such as those mentioned by my noble friends Lord Teverson and Lady Maddock, to ensure that we reach the essential uptake in this area. I have been interested in these issues for some time, certainly since I was involved in the whole area of planning, including the issue of how one can get community benefits that are targeted rather more towards the individuals within communities. Planning applications for renewable energy sites are an example. If planning applications are approved, you might be able to get discounts for the people in the local area, rather than parks, as the community benefit. I would like to see that area explored rather more fully.
Thirdly, I would like to pick up an issue that was mentioned by the noble Lord, Lord Grantchester-redress. The Bill is right to focus on ensuring that it delivers. However, it is not as clear as it might need to be on redress. As we all know, consumer confidence will be critical to ensuring the success of the Bill. The Bill indicates that the Secretary of State can issue a code of practice and regulate the conduct of assessors, producers and, indeed, their installers, but it is much less clear on the process for resolution when things go wrong-when bad advice is given or installations go wrong. The summary document talks about elevation,
That really is not strong enough. If we are to make a success of the scheme, people need to know up front that they will not be passed from pillar to post in such circumstances. As the noble Lord, Lord Grantchester, said, with the abolition of Consumer Focus, the Bill would be immeasurably strengthened if there were a regulator or green energy ombudsman with statutory power so that people know that there is somewhere
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Fourthly and finally, I want to address an issue which I do not think other noble Lords have addressed today-the need to create a level playing field for renewables. The Bill clearly expresses the Government's aim of achieving the co-existence of the UK gas and oil sectors with the renewable energy organisations, but to deliver this parity the Government will have to address one long-standing issue-the possibility of early repeal of Crown Estate leases when an oil or gas bid is received prior to the expiry of the lease. This creates an unacceptable level of risk for investors in offshore development. The Government say that it has not been a problem to date, and indeed Warwick Energy, the company that has recently been responsible for the largest offshore wind farms, has said that it has managed to find a way of working alongside the oil and gas companies. However, I think we need to realise that the offshore projects currently under development are much larger, further offshore and within known oil and gas provinces. If we do not address this issue soon, it will come back and bite us. I know that the Government are looking at that, but I should hope to see as a matter of urgency a protocol that learns from the experiences we have gained through companies such as Warwick Energy that can create a framework for co-existence. Without such a framework there could seem to be a bias in favour of the oil and gas industry.
We also need to find ways of creating early dialogue between the respective companies, despite the fact that much has been achieved in the planning process. I certainly hope that there might be some changes in the granting of consents under the Petroleum Act in order to ensure that there is much earlier dialogue between the renewable industry and the oil and gas industry.
Like the majority of noble Lords, I welcome the Bill. However, I ask the Minister in his summing up to comment first on the possibility of an annual report to ensure that we deliver on the targets that the Government are setting. Will he comment, secondly, on the issue of incentives, which a number of Members have raised? Thirdly, will he address the possibility of a green energy ombudsman? Fourthly and finally, will he comment on further measures for creating a much needed level playing field between the renewable energy and the oil and gas sectors?
Baroness Noakes: My Lords, there is a temptation to see this Bill as one of those worthy Bills addressing climate change which deserves automatic and wholehearted support from all sides of the House. My speech today will not focus on the aims of the Bill or its role in the war on carbon emissions, but I associate myself wholeheartedly with the comments made by my noble friend Lord Lawson of Blaby. Rather, I shall seek to put the Bill in its context as a potentially dangerous example of policy changes being allowed to sleepwalk through Parliament with little or no supporting information. I very much hope that your Lordships' House will not allow this to happen simply on the basis that the ends appear to justify the means.
I shall start with Chapter 4 of Part 1, which enables something that is not named in the Bill-namely, the new energy company obligation. This can in due course be used to oblige energy suppliers to meet the costs of energy efficiency improvements for vulnerable customers and homes that are costly to insulate. We learn this from the Explanatory Notes, not from the Bill, because the clauses in the Bill comprise a long list of new powers which can be used to force the energy companies to do a huge and uncertain range of things in the name of carbon reduction targets and home heating reduction targets.
I will make one preliminary point about the energy company obligation-it applies to virtually the whole of the Government's approach to climate change policies, including last week's announcement on reforming the electricity market: climate change policies have a big price tag. The costs imposed on the energy sector in the name of climate change are borne by consumers, not shareholders or taxpayers. But consumers have never been engaged in an honest debate about whether it is what they want. When consumers wake up to the costly facts of climate change policies, they may well command much less support than the Government are taking for granted.
We have no idea what the energy company obligation could involve in terms of costs, because no scheme has been costed or even worked out. The impact assessments for the Bill say that the costs could be substantial, but the assessments contain not a single figure for the new obligation. Instead, we are told that costings will be produced to support the secondary legislation which will be needed to implement the obligation. And so, with breathtaking arrogance, the Department of Energy and Climate Change is taking powers to impose costly energy company obligations on the energy sector, and hence on consumers, without having the grace to give Parliament any details of the scheme which will be introduced and its costs. Parliament is being invited to write a blank cheque which will inevitably be met by energy consumers, who have no say in this. The only safeguards are the minimal procedures which accompany secondary legislation.
It is quite normal when major enabling powers of this nature are taken by a Government for them to bring drafts of the first statutory instruments in time for them to be considered in Committee. In that way, Parliament satisfies itself about the way in which the powers are intended to be used, and it can consider, for example, whether additional safeguards are required in the Bill.
Can my noble friend the Minister set out the timetable that the Government intend for the implementation of this part of the Bill? Will any aspects of implementation be available for scrutiny by either your Lordships' House or another place before the Bill becomes law? I fear that I know the answer to this question, but it would be good to hear it from the Minister himself. The right approach would be for the House to refuse to pass Chapter 4 without further and better particulars and I hope that the Minister will not be relying on green goodwill to pass these broad and costly powers.
The costs that will flow from the energy company obligation will increase the energy bills of consumers and that, as my noble friend Lord Lawson has already pointed out, will exacerbate the problem of fuel poverty. Before this Bill, the Government's own estimates were that climate change policies could lead to household energy costs in 2020 being one third higher than they would otherwise have been, and this new obligation will increase that further.
The Government usually cite the number of households living in fuel poverty based on 2008 statistics and they have done that again in the regulatory impact assessments. They say that there were 4.5 million, of which 3.3 million relate to England. But the department's own Fuel Poverty Advisory Group in its latest report issued this year estimates that there were 4.6 million people in 2010 in fuel poverty in England alone. If we extrapolate that across the whole of the United Kingdom, we are talking about something like 6.3 million households in fuel poverty now.
The Minister knows that there are statutory targets set by the previous Government to eradicate fuel poverty by 2016. The target was challenging when it was set. It is certainly no easier now given that we are living in a post-recessionary world, with spending cuts and tax rises that I support because they have to deal with the economic mess that our Government inherited. But they will depress household income and will make it likely that fuel poverty will continue to rise.
When we debated climate change last month, I asked the Minister whether the Government stuck by that statutory commitment to eliminate fuel poverty by 2015. I did not get an answer then, but the Minister has another opportunity to answer today. Will the Minister give the Government's estimates for the years running up to 2016 of the numbers that the Government expect to be in fuel poverty? Will he say precisely what impact this Bill is expected to have in that period and how increased energy costs will interact with the energy efficiency measures in the Bill? I hope that he will also cover the important and interesting point made by the noble Lord, Lord Giddens, in relation to the Jevons paradox, if I have that right.
I turn to other aspects of the Bill. I support the aims of the Green Deal, which is an imaginative way of harnessing the desires of many to improve the energy efficiency of their homes. Again, we hit the problem that this Bill does not give sufficient detail to evaluate the scheme for which we are invited to give legislative approval.
The impact assessment gives only illustrative scenarios, which taking the extreme of the high-cost estimate and the low-benefit scenario, indicate such a marginal gain that it might not be worth pursuing. Again, we have to await detailed secondary legislation to find out what will be involved. Again, I ask my noble friend whether he will set out the timetable for bringing before Parliament the detail of the scheme that your Lordships' House will, I hope, be able to consider. Will the timetable allow us to consider it before the Bill completes its passage in both Houses or will we have to wait until secondary legislation appears? The House will know that our conventions in relation
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The Green Deal may well be a very good deal for a consumer who initiates the energy efficiency works and the related finance. I am sure that it will work for many long-term owner-occupiers. But I have very real concerns for the practical difficulties down the line when properties are sold or let, possibly several times in succession before the initial financing is repaid. Will we see properties burdened by Green Deal loans providing a drag on the property market at the bottom end? How will the disclosure arrangements work in practice? How will all of this interact with potential consumer defaults?
I have concerns about the Green Deal and how it will work in practice, but I have even more concerns about the proposals for the private rented sector. I fully appreciate the need for energy efficiency incentives to operate in the rented sector, for the reasons given by other noble Lords today, but we must be wary of driving landlords and properties out of that sector. In today's environment, home ownership is not as easily available and will not be for some time, so the private rented sector will be particularly important. For that reason, I very much support the requirements in Clauses 37 and 50 that any arrangements introduced under the powers in the Bill for the private rented sector must not diminish the stock of private rented housing. But there are many problems and pitfalls for the private rented sector, and the prospect of compulsion fills many in the sector with horror.
As with other areas of the Bill, the clauses set out an enormous range of powers and penalties, but with no indication of how they might be used. Accordingly, the impact assessment ducks out of giving any figures or costs. It is a fair working assumption that if the powers are invoked the costs falling on the private rented sector could be significant. We are told that the way forward on these powers will not be considered until the impact of the Green Deal is evaluated and that these wide-ranging powers will not be brought in for several years-possibly 2015. It is clearly premature to include them in the Bill and we should challenge whether they should be allowed to remain here. When the Government have devised a scheme, consulted on it and costed it, they should return to Parliament with primary legislation to implement it. It is dangerous to parliamentary democracy to leave this kind of scheme to secondary legislation at some uncertain point in future.
This cuddly green bunny of a Bill conceals some of the most unsatisfactory aspects of legislation that we ever had to contend with from the previous Government. There are policies with zero detail and no timetable for the emergence of that detail; there are sweeping powers for the Executive, constrained only by the weak parliamentary safeguard of the affirmative procedure. There are virtually no details of costs or benefits for major parts of the Bill, where there are at best aspirational statements in support of them. I hate to say it to my own party on the Front Bench, but this is no way to govern.
Lord Hunt of Chesterton: My Lords, I welcome this Bill, which builds on the work of the Labour Government, who did many good things, but it needs some important amendments. I am an emeritus professor of climate modelling from University College and vice-president of Globe, which means meeting other legislators around the world. I worked in the CEGB once as a trade union branch secretary; I do not often claim that, but I thought that it might be relevant today. Subsequently, I was chairman of an environmental consultancy company. I am a capitalist, a trade unionist and an environmentalist, but I am not an economist, and I shall make some remarks about economics.
The global climate and the environment are changing faster than ever before in many thousands of years. Much of this is due to human effects. We are seeing this dramatically in the reduction in the amount of ice and of forests, and we are seeing huge variability of temperature and precipitation around the world. The world's climate is a very complex process. I remind noble Lords of a very far-sighted speech made in the House of Lords in 1853 on the importance of studying the Gulf Stream and its effects, which led to the setting up of the Met Office. Some Members of this House are definitely 150 years ahead of the times, while others are about 150 years behind the times, as they cannot understand some of the physics of the 1850s. But that is the variability of this House. The important point is that variability in climate is leading in some parts of the world to really dramatic and dreadful changes in the environment, and the consequences on people.
Europe's climate is in a curious part of the world, which is mild for much of the time but with a small change can become like Labrador, as we have been seeing. In the summer, of course, we sometimes have huge heat-waves from Russia. An interesting point about climate change is that we are likely to have more of this variability in future. Our policies for planning and housing must therefore be comprehensive and imaginative enough to deal with this full range of likely impacts, both cold-which many people have been talking about-and heat.
The global emissions of greenhouse gases that are causing much of this change are increasing despite the wish and aim to reduce them. China's greenhouse gas emissions are increasing by a factor of two by 2050, although China is becoming considerably more efficient. If it were not, those emissions might increase by a factor of three, as noble colleagues have mentioned. The International Energy Agency recently commented that emissions around the world are expected to have a three or four-degree temperature rise, which was implicitly endorsed at Cancun.
Nevertheless, unless the countries of the world have a policy of reducing emissions, we could get into even worse situations. The UK's contribution is therefore important. The UK's plan to reduce its total emissions by 80 per cent by 2050 was ambitious, and I agree a little with the noble Lord, Lord Lawson: if other countries are not making anything like that reduction, we might need to look at that in this period. However, we currently have a goal and we should stick to it.
The Bill is welcome because it provides measures not only for energy, which I will come back to, but for conservation through housing. I did not mention that I was once a city councillor in Cambridge in the early 1970s. I went to a conference in Germany, where I saw houses. Whether they were the erste, zweite or dritte classes of Sozialwohnungen, they all had much better insulation and windows than anything in Britain. Why do we have such poor housing in Britain? The economists and the Treasury did not allow local authorities to build the kind of houses that they were building in Germany. I hope that the Treasury has changed its entire heart through the Bill and will finally allow British people to have decently insulated houses. It is because of this Treasury-driven lack of insulation that we have the illness and problems we have now. That was not a very clever piece of foresight for the National Health Service.
Under the Bill, we will have a system in which you can examine houses with advice and assessors. They can look at the insulation and the heating system. It is important that the heating and insulation must also be related to the ventilation. We have had some discussions about this. I ask the Minister whether the funding will also enable houses to have more modern and appropriate window ventilation. The ventilation must of course be suitable for very hot conditions.
A particularly difficult point is that a large quantity of our public housing is on flood plains. Flood plains are of course cheap areas in which to build houses. Some are on coasts, where they have driving rain. Flooding is a great difficulty. In Bracknell, where the Met Office used to be, council houses were flooded every two to three years. Of course, this has a devastating effect if you have insulation in the walls. I was talking to my son-in-law this morning, who knows these things, and I gather that there are special ways of insulating houses with tiny balls rather than insulation material. That way, if there is flooding, it does not devastate the insulation system. These are the kinds of things that the Government must consider. They will need very good assessors to do that.
The Green Deal will not work unless we have extremely good and high-level training. We need centres of information all around the country. We discussed this again in a pre-meeting that the Minister kindly arranged. This must happen through local colleges of technology and community colleges so that people can be trained and get information from there. This will be the centre in which this essentially domestic revolution develops.
I have mentioned social housing, which is one very good way of introducing energy efficiency through district heating. I spoke to the Greater London Authority yesterday. It has a system of what it calls low-carbon district heating, in which there are considerable economies. You can also use other technologies. For example, heat pumps could be used for such purposes. One of the reasons why power companies have found it difficult to work with the planning and local authorities on these matters is that, if they install a combined power and heating or cooling system in housing, this will not be guaranteed over periods of 20 or 30 years. Some element of the Bill should meet that objective.
The Bill goes on to deal with the question of nuclear waste. Further to the boasting-if that is not an unparliamentary word to use in this House-of the noble Lord, Lord Lawson, we may have had a policy since the 1980s but, as a result of it and as others have said, we do not have a leading nuclear industry, a leading wind industry or some other things. During this period we did not make the investments that we needed to. The Government are now taking forward nuclear, and the conversion of the Secretary of State in this direction is a welcome development in current British politics. One of the important points is that decommissioning is part of this policy.
I was in China in early November. China is now thinking about sourcing its nuclear-if you can imagine it-from sea water. The Japanese now have a system of producing uranium from sea water at $200 a kilo, compared to $80 a kilo from mining, which may be revolutionary. However, even if you do that, you will still have waste. Therefore, in China there are also very advanced systems of thinking about hybrid methods of fusion and fission to deal with the waste. In 20 years the technology will certainly change in China, which is an important part of looking forward. We should not freeze in legislation a particular technology.
Finally, in Part 4 of the Bill there is a point that was not made in the Minister's introduction. This is a Bill to empower and, we hope, use more effectively the knowledge and know-how of the Coal Authority. As far as I am aware, the Coal Authority has considerable land holdings, some of which I have seen near Stoke. Some of these are on hilly terrain, which could be well used for wind energy. I am pleased that the Bill includes the idea that the authority will become more innovative in using its resources. In the Netherlands, one of the most progressive and important parts of the economy is the company Dutch State Mines, which has done exactly the same sort of thing. It used to own the old mining areas and has turned into a world-leading company. Maybe that will be one of the interesting developments from the Bill.
We shall see. Why should it work? After all, we have had-and for the time being, at least, still have-CERT, CESP and Warm Front, yet we still seem to need the Green Deal. It is highly complex, requiring enormous new administrative effort, with advisers and installers to be accredited on a nationwide basis; Green Deal providers to be licensed by the Office of Fair Trading under the Consumer Credit Act and regulated by Ofgem; and the electricity suppliers also to be involved. There are four different categories of participant to be supervised, although some big energy companies may aspire to combine several of those functions, which could bring its own problems, as the noble Lord, Lord Teverson, said earlier.
One problem that has been found with schemes such as this in the past is that installers charge more for work done under the scheme than they do for the
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The impulse behind the Bill is, presumably, the prospect of higher fuel prices, but here the greatest threat comes from government policies. Oil prices are indeed very likely at some point to spike upwards but oil plays only a small part overall in domestic heating, most home boilers being gas-fired. The outlook for gas prices and gas availability is very different. As my noble friend Lord Lawson of Blaby has explained, new technological breakthroughs made by the oil and gas industry in the United States, which, incidentally, were quite unforeseen, and not, unlike carbon capture and storage, counted by Governments as chickens before they hatched, have opened a new vista of plentiful gas on what has been described as a planetary scale. Even Lancashire might be going to make an important contribution to United Kingdom supplies. Nor is the prospect a very distant one. As my noble friend said, the United States is already in the process of overtaking Russia as the world's largest producer of natural gas. But, as I say, the greatest threat to energy prices, of course, comes from government policies.
The Government's obsession with renewable energy, and their determination to deliver vast subsidies to wind power in particular, promises us ever-rising fuel bills, on some calculations to double their current level, far into the future, pushing ever-more households into fuel poverty, and sending ever-more of our industry overseas. What can be the point of hoping to save on gas imports, as the Government state they aim to do on page 7 of the Green Deal summary, if the result of our choosing to have more expensive energy is that we have to import more goods instead?
Last week, I spotted a small crack in the liberal consensus. A discrete editorial on Friday in the Financial Times gave its opinion that the target of getting 30 per cent of our electricity from renewables was unnecessary as well as expensive and should be dropped; nuclear and renewables should be allowed to compete on level terms with no additional subsidy in the form of either ROCs or the feed-in tariff for renewables; and that the goal of policy should be European Union treaty change. I entirely agree with that view so far as it goes.
I appreciated very much the speech of the noble Lord, Lord McFall, with his call for realism in the
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We have seen several Governments recently cutting back drastically on their renewable energy subsidies. That is the route that I would like us to follow, relieving pressure on households and industry, and giving economic growth a chance. For goodness' sake, let us start to do that before it is too late.
Lord Judd: My Lords, on listening to this interesting debate, one of the things that I am sad about is that we do not give a higher priority to conservation. We seem to take it as given that we will continue to be a society that expects the easy availability of energy. It is in education, to which my noble friend Lord Hunt referred, that it is crucial to give priority also to conservation and preparing the professionals, not least those in engineering, to make a success of conservation.
Urgency has been underlined by the Chief Medical Officer. He has put on record his view that people living in poorly heated housing are in greater danger. All badly insulated properties, he has stated, offer significantly less protection against the risks of cold than more modern and warmer dwellings. People living in privately rented homes are more than four times more likely to be living in a cold home than people living in socially rented homes. As we have been reminded, the private-rented sector has a greater proportion of the most energy-inefficient homes-those in energy performance certificate band G. There are twice as many in that sector than in other sectors. It is absolutely essential to drive up, without delay, standards of energy efficiency in the private-rented sector. If the Bill convincingly meets this priority, it is obviously to be welcomed, but its proposals will need to be carefully scrutinised to be certain of their speedy effectiveness.
The Government are right to recognise that the days of our highly liberal energy market-one of the most liberal in the world-are numbered. However, my anxiety is that the Bill's proposals do not go far enough and will at best ensure a slow incremental improvement. The issue is far more immediate than that. How will it be in the interest of a handful of dominant energy companies and their shareholders radically to change the existing order? Surely an increase in the energy efficiency of buildings will undermine a company's sales and profits. The real challenge is to cut energy demand.
"So what's the answer? We need regulated obligations on the scale of the transition from town gas to natural gas. Tendering for
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At this point, I declare an interest as president of Friends of the Lake District and as a vice-president of the Campaign for National Parks. The Government are, in my view, to be commended for having resolved the issue of local authorities not being able to sell electricity that they generate from renewable sources by making a change, through secondary legislation, to Section 11(3) of the Local Government (Miscellaneous Provisions) Act 1976. Local authorities can now generate electricity from renewable energy and sell it. However, national park authorities and the Broads Authority, although part of the local government framework, are not covered by Section 11 of the 1976 Act and therefore did not benefit from the legislative change. Their understanding is that they still cannot generate or sell such electricity. Will the noble Lord reassure us that this will be put right? Could this not be covered by a new clause in Part 3 of the Bill, after Clause 99? The objective of putting the national parks and the Broads Authority alongside the rest of local government could be achieved by amending Section 11 of the 1976 Act.
The national park authorities are working hard with partners and local communities to address climate change. One aspect of this is providing leadership on low-carbon innovation in national park communities while reducing greenhouse gas emissions from their own activities. An important part of this can be the installation of renewable energy measures, for example through photovoltaic roof panels on NPA buildings or small-scale hydroelectric schemes in NPA grounds. However, as is the case for other local authorities, being able to receive financial assistance for projects will often be critical to getting renewable energy measures installed.
National parks are strategic environmental assets. They are indispensable to the health, and to the spiritual and psychological well-being, of the nation. They provide many public goods and generate vital revenue for regional economies. The Government's ambition to deliver a more sustainable and secure energy supply presents a number of challenges for them. It is clear that the future national energy portfolio will comprise a mix of sources of generation, and that some of these could have a significant impact on national parks. The Government's decision to remove Kirksanton and Braystones from their list of preferred sites for proposed
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