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CRC Energy Efficiency Scheme Order 2010

My Lords, I thank the Minister for introducing these regulations at last. Any scheme aimed at improving energy efficiency and reducing carbon dioxide emissions must be seriously considered and developed. There is a legitimate role for government in providing business with stable, long-term incentives to invest in energy efficiency and carbon reduction. This order has the potential to be a progressive and effective tool in reducing the carbon emissions from UK business. However, serious questions remain over the development and implementation of the scheme. To ensure the success of this programme it is essential that the process be workable and intelligible throughout. The CRC could have been an excellent starting point for a new carbon accountancy scheme, growing out of the inevitable accountancy that the scheme entails. The Government are sticking doggedly to their unambitious timeline for mandatory reporting that we fought so hard against during the passage of the Climate Change Act. Businesses across the UK have voiced concerns at the lengthy and overcomplicated process of consultation and publication that has taken place. There have already been delays to the original timeline of this programme. As the April 2010 launch has remained fixed, there are real concerns that businesses will have too little time to comply now that the regulations have finally been published. Has contact been made with UK businesses to reassure them, or to offer them assistance, guidance and support so that UK business may be best equipped to properly comply in time and with the minimum disruptions possible to their business? We can see that the burden of bureaucracy falls far beyond the companies which qualify in the regulations before us today. Many more companies will have to submit detailed reports to the scheme. While some of this is clearly necessary to ensure that we capture the right players, adding unnecessary bureaucracy and stress to the already challenging task of running a business, particularly in our current climate, is highly undesirable. What steps has the Minister taken to ensure that this reporting is as straightforward and simple as possible? Will he also assure us that the period of uncertainty for businesses waiting to hear about their qualification status is as short as possible? These regulations seem to fall between being sensitive to individual sectors’ very different carbon abatement challenges, and being a simple blanket measure. Some sectors captured by the scheme will have a far greater exposure to its costs than others. DECC estimates additional costs of around 9 per cent on energy bills. While some sectors’ energy bills amounted to up to 65 per cent of their total OpEx costs, for others this is less than 10 per cent. It is clear that this scheme will squeeze some far harder than others. Has the Minister considered the knock-on effects of these to specific sectors of British business? If not, I urge him to do so. There has been a good deal of uncertainty around the inclusion of structured companies. In the last round of consultation the regulations were changed to allow the separate inclusion of certain subsidiaries. Will the Minister explain how the valid and sensible steps to give a level playing field to companies owned through franchise structures and holding companies will not be exploited through restructuring larger firms to avoid involvement in, or fair payments to, the CRC scheme? There has been criticism of this piecemeal approach to considering the specifics of a given sector. We have already heard from my noble friend Lord Attlee—who spoke about it more eloquently than I ever could—about the problems perceived by the UK ports industry. There is very little that I can add to what he has already said. I am sure that the Minister will respond if he can. As I said in the beginning, we enthusiastically support any measures to drive energy efficiency, as do the Liberal Democrats. We welcome this order. We hope to see rapid improvements in the processes and details of their implementation. The Government have struggled with this. I am sure that any Government, whoever happened to be in power at the time, would have struggled with bringing this to the table. It is very big, complicated, new and exciting. The bad boys will look for all the loopholes as they always do. One tries one’s best to write legislation in a way that gives the honest trader a fair crack of the whip. However, it is not easy. We support this as it stands.