Electricity and Gas (Carbon Emissions Reduction) (Amendment) Order 2010

My Lords, this order extends the scheme in both time and scope to promote various energy efficiency measures to be carried out on residential properties, principally insulation measures, designed to reduce domestic users’ consumption of heating fuel. In so far as they have that effect, they will reduce the carbon emissions attributable to the domestic sector. In so far, however, as consumers choose instead to enjoy a greater measure of what the department calls ““thermal comfort””—that is, choose to use the same amount of heating fuel in order to maintain a higher temperature in their homes—it will have no effect on carbon emissions. What effect this will have in the event is apparently to be assessed in a review to be conducted by Ofgem at the end of the scheme in 2013. Even then, though, assessing the effect on carbon consumption of the energy-saving measures adopted under this scheme will largely be a matter of guesswork. Therefore, how will we be able to distinguish the effect of energy-saving measures from the effect of variations in energy prices, of variations of people’s real incomes or even of variations of winter temperatures on the amount of heating fuel that households choose to consume? I will not go deeply into one of the issues that my noble friend took up. I will leave on one side the question of whether it is worth while performing the extraordinary intellectual gymnastics contained in the order’s 77-page impact assessment in order to justify measures that in the best case will provide a reduction amounting to an infinitesimally small fraction of present global carbon emissions. I will instead agree that using fuel more efficiently and promoting that efficient use is inherently a good thing, but still needs to be viewed in the light of its cost. The cost of carrying out measures such as cavity wall insulation is largely to be borne by the supplier—entirely so, in the case of the new super priority group—but in some cases the consumer apparently has an option to contribute. As the impact assessment says on page 61, the share of costs borne by suppliers depends on the householder’s willingness to pay. What happens when the householder does not wish to contribute? Does the supplier then pay all the cost, or do the measures then not get carried out? Will the Minister give us any assessment that his department must have made of the likely take-up rate of consumers of this choice? The suppliers’ costs, of course, are recouped by the additional charges that they can put on customers’ bills, so although giving special treatment to the priority group and the special priority group may help with alleviating fuel poverty, everyone else therefore has to pay a higher price, which, apart from anything, else, will result in additions to the ranks of those in fuel poverty. The impact assessment is frank about this. On page 23, it estimates that, "““for the average UK house, the costs of higher fuel prices on their annual fuel bills would be £46 in 2011 and £61 in 2012””." Those are not negligible increases, although it would be interesting—as my noble friend was trying to learn—to know what the total estimated cost for the measures might be. I could not find it in the impact assessment, although it must have been assessed in order to produce the figures about the effect on individual bills. I realise that it will be based on a pyramid of assumptions, as are all the other figures in the impact assessment, but the Minister should have it. My understanding is that business premises cannot benefit under the scheme. Will the occupants of business premises be exposed to the general increase in fuel bills as a result of the costs being passed on by suppliers, or will suppliers be able to recoup costs only from the bills of domestic consumers? When we debated the previous order in the House a year ago, together with the CESP order—I wonder what has happened to that—I said on that occasion that electricity and gas suppliers should be obliged to state on both domestic and business customers’ bills how much was attributable to each relevant piece of climate change legislation. The then Minister, the noble Lord, Lord Hunt of Kings Heath—I am very pleased that he is here this afternoon—replied: "““I fully understand the point that the noble Lord, Lord Reay, makes about energy bills showing what households are paying towards energy efficiency schemes ... I have no disagreement with him in terms of the principle ... it is very good to have this in the public domain. I agree with the noble Lord that it is very important that this is understood””.—[Official Report, 15/7/09; col. 1239.]" When in opposition, the present Energy Minister, Mr Charles Hendry, is also on record as having expressed very similar sentiments. I see also that my noble friend Lord Vinson has tabled a Written Question on similar lines. I hope that when we next receive an energy Bill, it will include such a provision. If not, I am sure that some of us will seek to amend it so that it does. I have a final question for the Minister. How does this order relate to the Government’s so-called green deal, to which he referred, and to the loans that the green bank was supposed to be making to households to cover the installation of the same sorts of energy efficiency measures that are covered by this order? There seems to be considerable overlap. What would the green deal add to the effects of this order, and why is there a need for it?