My Lords, I want to make a very similar point relating to Clause 61 but also to Chapter 4 as a whole. We raised with the Minister previously the question of the amount of legislation that will need to be resolved through secondary legislation. There are 52 separate items in this Bill that would be dealt with through secondary legislation. I have had difficulty in understanding in detail what the ECO proposals really mean and how they will operate. It is a serious matter when it is difficult for noble Lords to assess the impact of the operation and the amount of money that will be involved for consumers as well as providers, because so little information can be provided in the legislation. It is all to be done by secondary legislation.
It might have helped the issue to be resolved if there had been a purpose clause at the beginning of this chapter, not dissimilar to the one that I proposed at the beginning of the Bill. Such a clause could set out what this chapter is seeking to do and the purpose of the energy company obligations. Without it, it is very difficult to assess the proposals put forward in the different clauses. Therefore, I have some specific questions for the Minister, although he may not be able to answer them, because the answers have not yet been compiled.
The noble Lord will recall that possibly at Second Reading but certainly in the meetings that he has been generous enough to have with noble Lords prior to and throughout the passage of the Bill, I have raised with him the concern that the noble Baroness, Lady Noakes, has also spoken about—the need to have drafts of statutory instruments before us when we are considering these matters. Seeing the detail of where the Government intend to go would help to inform our discussions; otherwise, they are held in something of a vacuum. I certainly find it difficult to discuss the detail of the clauses.
Perhaps I may raise some specific questions to which the Minister may be able to respond. One question with which I struggle is whether the ECO is effectively and appropriately linked with the Green Deal. Without that link, I am not sure that the ECO can deliver, which is why I mentioned the purpose clause at the beginning. Like the noble Baroness, Lady Noakes, at times I find the impact assessment difficult to read, and it is probably best not to try reading it during a late-night sitting of this House. The impact assessment states: "““The domestic sector has the potential to play a big role in meeting the UK’s carbon budgets by delivering cost-effective emission reductions. Under Green Deal there is a range of policies aimed at helping households install cost effective energy efficiency measures. However there are a range of market failures (positive externalities) and barriers (e.g. consumer inertia) that are likely to continue to restrict households from undertaking cost-effective abatement measures””."
It goes on to set out the difficulties, saying that, "““it is necessary to gain the powers to intervene to ensure that energy and thermal efficiency programmes are focussed on delivering measures in vulnerable and hard to treat houses””."
Because the purpose of the obligation and how it underpins the Green Deal are not defined, the provisions in the Bill for the energy companies do not state how these measures are intended to be delivered or how those most vulnerable households will be assisted. There is a lack of clarity about how this will work, and I am sure that the Government could do more to assist the Committee in bringing forward some information regarding it.
The impact assessment, a weighty document, says directly that the ECO underpins the Green Deal, but then does not give any detail of how it will do so or where the obligation will be linked to the deal’s purposes and objectives. The lack of clarity around that is of concern.
There are other issues, and it would be helpful if the Minister could respond. How much money is going to be available with the ECO? Greg Barker has said it would be around £1 billion, but there is no information about how that could be allocated regarding the balance of the hard-to-treat properties versus the fuel poor. A lot of those homes that are hard to treat will also be the homes of people who are fuel poor, so I am not clear on how the balance will work out and how any assessment will be made of which properties should be treated.
It is also an effective consumer levy; the consumer is going to pay. The noble Baroness, Lady Noakes, referred to this. If you had read through the Bill without reading the impact assessment, that would not be obvious. None of the clauses before us make it clear that the consumer is going to pay for this. That is an issue. How much will it be? Will there be a standard levy on all consumers or will it be disproportionate because those who are on the lowest incomes or the fuel poor will be paying the same as others? That information is important.
In a sense, the obligation replaces CERT and CESP, which are funded in the same way as the ECO is. The difference is that while CERT and CESP are in place, we also have the limited Warm Front to help those fuel-poor households. The ECO has to replace not only the former but the latter.
For the past 30 years there have been Treasury-funded measures for energy efficiency schemes for the fuel poor. They are going; they are no more. The whole emphasis of the costs is going to be placed, in the case of the energy company obligation, on the consumer. There has to be far more information about the implications for the consumer and what the costs of that will be.
The other issue is community schemes. Under CESP there were community schemes, and they have worked pretty well. I am not clear if it is intended that they should be replicated in the new scheme, the ECO. It would be helpful to know if the ECO can be used to defray the costs of measures in hard-to-treat properties where they cannot abide by the golden rule. I do not know if the Minister heard that or if anyone else is able to pick up that point. If the golden rule, which is quite arbitrary anyway, cannot be fulfilled under the Green Deal, will the ECO be able to pick that up for poorer households?
The first part of Clause 66, which refers to new Clause 103B of the Utilities Act 2000, states: "““The Secretary of State may by notice require a person within subsection (3) to provide the Secretary of State with specified information … for the purpose of enabling the Secretary of State””—"
and then there are a number of areas to be decided on. What is not in there, and this seems to be an omission, is that the Secretary of State is not asking for information on any assessment of the cost effectiveness, value for money or targeting priority groups. That may be somewhere else in the Bill or hidden away in the impact assessment—perhaps, despite my quite heroic efforts, I have not yet found it—but if the Minister could say how those matters will be judged, it would be helpful.
My final point—I am sure the Minister is very grateful—is on Clause 67. This clause is similar to provisions in the Public Bodies Bill, about which the noble Baroness, Lady Noakes, raised concerns. I have tabled an amendment to that Bill about the transfer of the functions of the Gas and Electricity Markets Authority, which was established by primary legislation —by statute. Here we have a power that allows the Secretary of State to make changes through secondary legislation. We do not know what those changes are and I am not sure what their purpose is. I raise the same concerns that I will raise on the Public Bodies Bill. The Minister is contorting himself as I am speaking. They are the same concerns about making such substantial changes by secondary legislation to organisations established by primary legislation. It would be helpful if the Minister could assist on those points. At the moment we have grave concerns about this chapter as a whole.
Energy Bill [HL]
Proceeding contribution from
Baroness Smith of Basildon
(Labour)
in the House of Lords on Wednesday, 26 January 2011.
It occurred during Debate on bills
and
Committee proceeding on Energy Bill [HL].
Type
Proceeding contribution
Reference
724 c239-41GC 
Session
2010-12
Chamber / Committee
House of Lords Grand Committee
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2023-12-15 20:49:24 +0000
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