Energy Bill [HL]

My Lords, Clause 30 allows regulations to be made that set out when and how a bill payer’s liability to make Green Deal repayments can be cancelled or suspended. Amendment 18 would prevent the regulations from making provision for a procedure to be followed for securing such suspension or cancellation of the repayments. Noble Lords have made the point about this being proportionate and not abused. An example of when the bill payer’s liability might be cancelled is where the bill payer had chosen to make full early repayment of the Green Deal finance arrangement. In such an eventuality, there may be a need to include an administration fee. I will turn to why that might be in a minute. As discussed earlier, such a fee would be calculated in line with the rules of the Consumer Credit Act for the domestic Green Deal and in line with the regulations that we propose to set out in secondary legislation for the business Green Deal. This clause also gives us the flexibility to introduce a payment suspension mechanism for the bill payer in appropriate circumstances. The legislation permits an administration fee to be requested for the arrangement of payment suspension. This is essential to balance the needs of the property owner to have flexibility while minimising the loss that the provider of finance might incur. The details of this—for example, when such a fee might be requested and the level of such a fee—will be subject to consultation later this year. Amendment 19 would remove the ability to set out in regulations what should be payable in the event of early repayment of the Green Deal being required, including how any fee should be calculated. The effect of this amendment would be to prevent the regulations setting out the rules on early repayment from being set out in Green Deal plans. The domestic Green Deal is subject to the early repayment rules set out in the Consumer Credit Act, which prevents consumers from being charged unreasonable fees when they repay early. However, business Green Deal providers are not subject to any existing regulations on early repayment fees. This amendment would remove the ability for the Government to set out regulations limiting the fees that can be charged when a business is required to repay the Green Deal early. Early repayment fees are an important protection for the investor providing the finance. They have invested their money expecting a particular rate of return over a particular period. Being able to claim some compensation when an early repayment is made is an important element to keep the cost of finance low. This practice is not uncommon in the mortgage market. However, we do not want Green Deal providers to charge disproportionate fees when early repayment is required, so the ability to set out some rules around this in secondary legislation is important. There is a danger that these amendments could remove that protection, which I think is far from the intention of the mover of the amendment. I hope that noble Lords will be reassured by my explanation and, on that basis, that the noble Lord will withdraw his amendment.