Energy Bill [HL]

My Lords, I welcome the noble Lord, Lord Davies of Oldham, who seems to be indispensable to the Labour Party at the moment—two Questions and then running in here and doing this. I congratulate him on the energy and commitment that he shows to this great House. I just warn him of the words of the noble Lord, Lord Winston, who said that statistically, out of the Members of your Lordships’ House, 140 would die from a heart attack. All of us clutched our chests at that time. Seriously, I welcome him and thank him for leading from the opposition Benches. I send the noble Baroness, Lady Smith of Basildon, our good wishes as she sees her medical experts. I hope that we will welcome her back next week. I also thank all those noble Lords who are here, as usual, making their very good and committed contributions. I say just for reference that the noble Lord, Lord O’Neill, and I rarely disagree on things, as he always makes very valuable remarks for us to listen to. I do not want us to be under any illusion on that front. Some valuable points have been raised and I shall try to pick them up as we go through. Clause 4 is central to the Green Deal. It sets out key conditions that must be met before a Green Deal plan can be taken out on the property. In so doing, it defines the circumstances in which the Green Deal can be offered to the customer, which is fundamental. Subsections (2) and (3) require that an accredited Green Deal assessor has assessed the property in accordance with standards. To comment on the remark made by the noble Lord, Lord Oxburgh, if an assessor has failed, he has clearly failed the assessor regulation; all the usual consumer protections are in place and the householder would be entitled to use another assessor, as people would be able to in anything. To pick up on what the noble Lord, Lord Whitty, said, standards are completely fundamental, as we have said on several occasions. I worry—as he does, rightly—about the bad publicity that might ensue if we do not do this properly. That is why the noble Lord’s valuable comments are correct. In many cases, we envisage the Green Deal provider employing or contracting the assessor. The assessor would identify the potential for energy savings using the standardised methodology. This assessment will be used by the provider as the basis of an offer of Green Deal finance. Subsections (4) and (5) require that an accredited Green Deal provider—the body seeking to contract for the work—should give the customer an estimate of the savings on the energy bills that are likely to result from the proposed energy efficiency improvements and over what period these are likely to accrue. The Green Deal provider is required to base these estimates on a standardised methodology to be set out in regulations, thereby ensuring consistency and rigour in the process. Subsection (8) requires that, in offering the service, the provider meets conditions, set out in regulations, regarding the relationship between the estimated total cost of the repayments and the estimated savings potential of the improvements. In short, we will use the regulations to create a golden rule that providers will not be able to tie customers into a Green Deal repayment schedule where the costs outstrip the likely savings. As an aside, I pick up on the point raised by the noble Lord, Lord O’Neill of Clackmannan, about this being an ideal deal, which I think is a nice phrase to use in terms of the range of options. Clearly, this is a market-driven deal. It is up to the market to provide the opportunities for customers and the range of competitiveness within the market. The Government would be wrong, in my view, to overregulate the ability to put competitive terms into the market, thereby choosing on customers’ behalf, as the noble Lord said, whether to have it all done at the same time, either because they may not be able to afford that, or because they may not be able to get it competitively priced, or because they may be waiting for prices to come down. We must allow the consumer to make the choice, but we must ensure that the choice that he makes is regulated with proper standards. The golden rule sits at the heart of the Green Deal and is a key protection mechanism. Satisfying the golden rule at the outset will protect bill payers and enable the charge to transfer automatically from one bill payer to the next. The golden rule will take account of the total cost of the Green Deal package, including the cost of finance, labour and products. With this in mind, we expect households to be able to install measures worth up to £10,000. I hope that that responds to the concern expressed by the noble Lord, Lord Dixon-Smith, in that area. Turning now to Amendments 10A and 11, I thank noble Lords for their concern that assessment is carried out in a standardised manner and provides the consumer with details of these measures that qualify for the Green Deal, as I referenced earlier. The initial advice and assessment provided by the Green Deal assessor will act as the pathway to the Green Deal and, as such, it is absolutely essential that it is robust enough to meet the needs of the customer and of the Green Deal process. Clause 3 currently requires that a qualifying assessment is carried out in accordance with any requirements set out in the framework regulations, while Clause 4 makes it clear that it must be produced by an accredited Green Deal assessor. In addition, Clause 4 sets out that the assessor should make recommendations for improvements of the property and enables further detail to be set out in secondary legislation. I want noble Lords to take that last sentence on board. Furthermore, only certain measures will be eligible for Green Deal finance. These powers will be used to ensure that only measures that are appropriate for a property will be recommended for Green Deal finance and that no bias is shown towards a particular Green Deal provider. Amendment 10A also proposes to enable assessors to identify energy efficiency measures that sit outside the Green Deal. The Bill already contains powers at subsections (7) and (9) of Clause 3 that can be used to provide for this. The detailed requirements for this standardised assessment will be set out in more detail in secondary legislation, but I hope that noble Lords are reassured by the nature of the current clauses and the intention to set out a standard assessment methodology for all Green Deal assessments that I have just described. I hope that my explanation provides noble Lords with sufficient reassurance that their amendments are not required.