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Energy Bill [Lords]

I will address my remarks to amendments 9 to 12, which I tabled. I will also put those amendments in the context of the other amendments in the group headed ““Energy efficiency””. I will question to what extent the Bill is attached to anything by which it can be measured. What might we mean by the success of the green deal, the energy company obligation or the energy efficiency aspirations of the Bill? As things stand, it is difficult to attach the good ideas, aspirations and programmes in the Bill to any sort of measure. Most importantly, it is difficult to attach them to one of the key measures we currently have, which is the progress we are making in reducing our carbon emissions under the Climate Change Act 2008. That Act asked for certain actions to be undertaken by the Committee on Climate Change. In its progress reports and recommendations on meeting our carbon budgets, the Committee has increasingly involved itself in specific measures that, among other things, are the domain of the Bill, such as targets for the removal of problems relating to non-cavity wall homes through external and internal insulation. Such measures contribute to greater energy efficiency and, as a result, to reducing carbon emissions. My amendments would do something very simple: they would require the Department to assess the cost-benefit relationship between undertaking and investing in energy efficiency measures and undertaking investment in and pursuing energy generation. It will be a good for policy direction if we know the costs and benefits before mounting programmes that could have a substantial impact on either. The fact is that we do not know and no one has done that kind of work within or outside the Department, yet a substantial raft of policies have been launched on that non-understanding, including a number of policies in the Bill. Frankly, that is not a rational way to make policy, and the Department's chief scientist, Dr David MacKay, very much agrees. He said recently:"““I agree that this is a crucial comparison to make, and I would love to see us develop a rational, quantitative approach that incentivises energy saving in the same way that, say, renewables are incentivised.””" Amendments 9, 10, 11 and 12 would require the Minister to assess that and report to the House to inform policy making. Essentially, my proposals are in the same vein as several that we have debated this afternoon. New clauses 1 and 2 would explicitly link the aims of the Bill to the progress made on reducing carbon emissions and to reports from the Committee on Climate Change. The Department would have to provide a clear strategy in its plan for delivery and ensure that the strategy is based clearly on a link with climate change strategy. Similarly, in respect of putting local authorities at the heart of local carbon reduction, a requirement would be placed on the Committee on Climate Change to advise on local area carbon emissions, so that they too are linked. We need to be able to relate the ambition—the overwhelming imperative—to reduce energy use in the residential and small business sector to what we need to achieve by certain dates in terms of improving the energy efficiency of property throughout the UK. That is one of the key areas on which the Bill remains silent. After the end of Warm Front, the carbon emissions reduction targets, the community energy savings programme and various other programmes, the green deal and the energy company obligation are the only shows in town as far as making progress on energy efficiency in homes is concerned. The Bill sets out a number of ways in which the green deal and the ECO can move forward, but it does not set out any means by which to assess their success or appropriateness. That is significant in terms of the proposals in the Bill for the development of the ECO. We are asked to accept that an ECO of perhaps £1 billion a year will get close to achieving the loft insulation, cavity wall insulation, and solid wall insulation tasks that face the country over the next period, which relate to the Committee on Climate Change recommendations. Indeed, my hon. Friend the Member for Brent North (Barry Gardiner) described a number of the scenarios that have been set out and said what we ought to be achieving for the third progress report of the Committee on Climate Change. What is the Government's ambition within the likely terms of the Bill? Will the finance be available to get us anywhere near that ambition? The figures suggest that by the early 2020s, using a combination of green deal, CERT extension and the ECO, we are likely to be almost 5 million properties short on loft insulation, 4.5 million short on cavity-wall insulation and 200,000 short on solid-wall insulation. Those figures assume the Government's low-scenario ambition, and although they decrease if we adopt their high-scenario intention, they still fall substantially short not only of the imperative and ambition, but of the likely finance. The ambition for the ECO appears to be about £1 billion to £2 billion per year, yet clear figures are available on the cap within which that ECO obligation will fall. The £11.8 billion cap for the current spending period was set by the Treasury at the last Budget and includes the renewables obligation, feed-in tariff and warm home discount. According to the Treasury, the ECO is likely to fall within the cap, which means either removing from the cap some of the areas currently funded up to 2015, or increasing the cap to accommodate the ECO. I believe that the Department thought that it had agreed the latter verbally with the Treasury, but it appears that that hope has been dashed—certainly it seems less certain than the Department thought it was a little while ago. We do not know how much funding there will be for the ECO over the next period. We do not know whether the Treasury will place it inside or outside the original cap or inside a larger cap. Significantly, some claimed that the Treasury announced the cap following the referral of the measures in it to the Office for National Statistics and that, because those levies and arrangements, which are similar to the ECO, were declared to be imputed tax-and-spend devices, the ONS considered them to be so. That is not so, however. Only one of those three devices went to the ONS. The Treasury effectively declared that the other two were the sorts of things that the ONS could decide were imputed tax-and-spend devices and so put them within the cap. That does not augur well for the ECO being taken seriously by the Treasury as a necessary and substantial measure for tackling problems with solid-wall insulation and fuel poverty, where people need assistance outside the terms of the green deal owing to their individual circumstances. It is also a bad augury because it appears that the Treasury can declare by fiat what those things should be and, therefore, how they should be limited. The Minister should bite the House's hand off to incorporate these amendments into the Bill, but I suspect that he will not. The amendments relate to targets, to the progress that we need to make on climate change, and to the real cost to the country of tackling the problems of solid-wall insulation and helping people in fuel poverty and those otherwise unable to access the green deal. The Minister would then be able to say to the Treasury, ““It is not good enough to impose a cap because of the requirements of the Bill. Even if there is a cap on these arrangements, other measures will be needed that may contribute towards the success of such targets in the fight to make energy efficiency a much more central part of our approach to the fabric of our property and its energy efficiency.”” New clause 7 tabled by the hon. Member for Brighton, Pavilion sets out, among other things, a number of areas in which one might look for additional funding to augment the energy company obligation in order to reach those targets. We would be able to argue for that if the new clauses and amendments were accepted, strengthening the approach to the overall energy efficiency target that we all know we have to reach. It would be a good idea for the Government to move towards ECO-mortgages for homes with solid-wall insulation, with the interest perhaps paid by ECO capital under a new golden rule that the net effect must be less than the payments. That would greatly expand the effect that ECO would have, over and above the level to which it seems to be limited at present. Unless the Bill contains measures that enable us to see where we are going, what we need to do, and how that relates to the wider issues tackled by, among others, the Committee on Climate Change, I fear that in a few years people will say that the Bill was a good try but it did not get very far, despite the good intentions. Adding backbone to the Bill by making clear what it should achieve and why would make it central to our attempts to tackle climate change, energy efficiency in homes, and our obligation to ensure the best energy efficiency arrangements for the homes of those currently in fuel poverty, to proof them as far as possible against future fuel poverty.