---

Energy Bill [Lords]

The Bill is debated under the shadow of the report published this Monday by the independent Committee on Climate Change. The committee has been clear and it is authoritative: in order to achieve our 2050 target of at least 80% carbon reductions, we must adopt a 2025 target of at least 50% emissions reductions. That is the shadow that hangs over the debate today. The Business Secretary has clearly rejected that advice and his Liberal colleague, the Secretary of State for Energy and Climate Change, would, one hopes, wish to accept it. That is the split at the heart of the Government's decision making on where to go with energy policy. This is entitled the Energy Bill, but it is really a financial services Bill drawn up to enable energy supply companies to act as long-term finance providers for energy-efficiency measures with repayment coming from the anticipated savings on future energy bills. I have changed the speech that I brought into the Chamber this afternoon, partly because of the excellent speeches made by my hon. Friend the Member for Southampton, Test (Dr Whitehead) and the hon. Members for Brighton, Pavilion (Caroline Lucas) and for Richmond Park (Zac Goldsmith). I thought they made excellent contributions and addressed very serious points. It was, however, the hon. Member for Northampton South (Mr Binley), with whom I do not normally find myself in considerable agreement, who struck me as injecting a note of realism into the debate. We must consider carefully what the Government expect people in the country to do. It is generally accepted that on both sides of the House we would like the Bill to be effective. We would like to see it achieve its objectives in energy efficiency and energy savings. We all know the McKinsey cost curve and it is clear that it is far better to start at the left hand side and achieve the savings in the negative cost element of the curve before we go up to forestry, carbon capture and storage and so on at €60 per tonne. Of course, we wish the Bill to be successful but we must have a note of realism about the likelihood of people taking on the loans that are on offer. Under the deal, a householder would engage an independent energy assessor to advise on the level of savings that could be made by efficiency improvements. The householder would then take out a loan by entering into a contract with an energy company that paid for a provider—it could be the energy company itself—to fit those energy-saving measures. We know that the energy companies have said that they have serious reservations about the effect that that would have on the rented sector. My hon. Friend the Member for Southampton, Test made some very apposite remarks in relation to that sector. Are we being realistic in expecting citizens to take out loans to make anticipated savings on future bills which are, by their very nature, uncertain? Let us look at DECC's own projections. It has calculated the green deal financial costs as being cheaper than a ““market personal loan””, but they could be as high as 11%. My hon. Friend showed a range of interest rates between 9% and 5% and the differential that one might achieve for those rates, but why would a householder take out a loan at 9% to make the changes when it would be cheaper to put it on their mortgage over 20 or 25 years?