Energy Bill [HL]

My Lords, this Bill could probably more accurately have been called the energy (miscellaneous provisions) Bill. That is the way the Scottish Office, in pre-devolution days when some of us worked in the Augean stables of Scottish legislation, would lump everything together and put the words ““Misc. Provs.”” after the subject. The Bill is a bit of a dog’s breakfast. It has some important parts and other bits that have been thrown in because it provides an opportunity to do so, and that is quite a legitimate thing. But the breadth of briefing we have already received tends to suggest that it is only the tip of the proverbial iceberg, because many more interested parties will be coming along when we get down to the fine print. The Bill covers a new approach to home insulation with a novel payment arrangement and its consequent legislative changes. It also seeks to address the private rented sector, which the noble Earl, Lord Cathcart, just alluded to. I do not think that the sector will be susceptible to a single silver bullet. It will require a fusillade of other forms of armoury to deal with some of the problems. The Bill also seeks to address the question of security of supply, along with issues related to low-carbon generation. These are some of a number of issues, and this afternoon we have had a discussion about last week’s Green Paper on market reform. That will require legislation of its own at a later date, and it will be interesting to see how it can be accommodated. Before I go further, I declare an interest as the paid chairman of the Nuclear Industry Association. Also, I am the unpaid president of Energy Action Scotland and the vice-president of National Energy Action, its English, Welsh and Northern Irish counterpart, which are fuel poverty charities. I am also doing some consultancy work with the Association of Plumbing and Heating Contractors on matters relating to the low-carbon heating of homes through insulation and the possibility of the kind of work that might come out of the Green Deal. It is fair to say that the largest single part of the legislation relates to the Green Deal. In many respects it could be called paving legislation in that it prepares the way for this, but the noble Baroness, Lady Noakes—in a speech I was surprised to agree with so much—pointed out that unfortunately there is a fantastic lack of detail here. We are being asked to take on an interesting concept that has a number of downsides, which we may be exaggerating through ignorance. However, until such time as that ignorance is corrected it is quite reasonable for us to ask questions about people who have bad credit records, people in rented accommodation, and individuals on prepayment meters, who already face a number of prepayment charges before they actually start consuming any energy. The addition of another charge on them might well be the straw that breaks the camel’s back. That goes for a sizeable proportion, but not all, of those with prepayment meters, because a number of second-home owners have prepayment meters simply for convenience. However, poor and vulnerable households with prepayment meters, often in the private rented sector, face a number of problems. The biggest problem is their inability to pay. They address the issue at times of the year like this by self-disconnecting. They stop paying. I am not sure how we can get round the question of having additional charges on top of the pre-payment arrangements that are already in place if we are going to be faced with variability in our climate and extreme changes of temperature, which could well happen over the 15 to 20 years we envisage for this payback. I do not wish to scaremonger, but we need to know a lot more about the vulnerable groups of poor people who rarely have anything approaching the concept of the economic man or women in their minds. I remember visiting constituents who would, when they could afford it, have an electric oven on, with the door open, in order to try to warm a kitchen that did not have proper central heating or insulation. It was the economics of the madhouse, but it was the only way in which these poor folk could keep themselves and their children warm. Usually this was done with considerable danger to the family because of the open heater. I make this point because at the moment there will be a number of households across the UK who will be trying this make-do-and-mend approach to keeping their house warm. In many respects the Green Deal is fine for the people who open the Sunday Telegraph or the Saturday Guardian in order to find the best way of spending their money on keeping warm—the folk who will go to Sainsbury’s because that is what people from their socioeconomic group do when they go shopping. However, the people who go to Lidl and the low-cost supermarkets will not be the most capable of, or interested in, dealing with such opportunities. It is unfortunate that Warm Zone and Warm Front are being set aside in the way that they are because there is a case for them. There is a division in this House between the left and the right because some of us believe in planning and economies of scale; some of us recognise that individuals are not always the best basis for social amelioration or the improvement of our infrastructure. It makes sense to seek out economies of scale and I am concerned about that. I am also concerned about the electricity company obligations. This is a misnomer because they are consumer obligations paid for by us as consumers. The energy companies merely act as agents and take in money to do a job that we pay for. At the moment, the environmental improvements—which most of us recognise as being necessary—amount to a kind of poll tax to the tune of £80 per household. This and the additional costs of a number of things in the Bill are going to be financed in much the same way and we need far greater reassurance on this. I know that informally the Minister has indicated that he will do his best but we have to continue putting on the record that it is not enough for us to sign blank cheques in the form of secondary legislation, the definition and specifics of which we know little about at present. The social impact will be much greater on the most vulnerable households in our country than on many of us who can afford to pay the extra charges on our electricity and gas bills in order to do our bit to save the planet or set an example to the rest of the world. I make this point not because I want to see the scheme fail—in a number of areas and districts it will be a most attractive proposition—but because it would be wrong for us to assume that it is the only proposition that should be considered. We have also in the Bill to consider the issue of security, particularly of gas supplies. In the last debate in which I spoke on this matter, I think I asked the noble Baroness, Lady Wilcox, to respond to this issue but we never got a real response. What I want to know is this. We are talking in terms of providing incentives. We know that we do not have enough by way of gas storage facilities, but it is surely incumbent on the Government to come to a conclusion on what would be a desirable objective for us to incentivise companies towards. We are not in the same position as France and Germany in terms of gas supply. Although we are net importers, we import on a far smaller scale than many other countries and we do not need the 80 or 90 days’ supply that they have. However, it would be useful if the Government could give an indication of what was needed, so that we could say that this level of incentive would be necessary only until we got to that level of gas reservoir and storage facilities. It is incumbent on the Government to give us some indication of that if we are to set in place a system of incentives or subsidies, call them what you will. As I said, the Bill covers a number of elements and I should like to make one point on behalf of the members of the Nuclear Industry Association. We welcome the Government’s proposals in that section of the Bill. They are modest; in effect, they give legislative effect to the agreements that are arrived at after lengthy consultation with the appropriate parts of the nuclear industry. I put it on the record that the industry is happy with this. Obviously, the fine print will need some scrutiny but, if the agreements that were arrived at can be dealt with in the manner that is anticipated, I do not think that there will be any problem. This Bill contains a number of innovative and imaginative approaches, but let us not forget that for a lot of people the saving of the planet is only a secondary consideration after keeping their homes and their families warm. We cannot afford to forget that. I want to see the planet saved and I am prepared for us to make sacrifices, but I do not think that the Government’s rather simplistic approach is likely to be either effective or socially just.