Electricity and Gas (Carbon Emissions Reduction) Order 2008

rose to move, as an amendment to the above Motion, at end to insert ““but this House regrets the failure of Her Majesty’s Government to mobilise its sources of information to target the measures to help priority group households in time for the start of the three-year period of the order and the potential severity of the penalties that can be imposed on suppliers by Ofgem for any failure to comply with the 40 per cent obligation imposed by the order; and calls on the Government to withdraw the order””. The noble Lord said: My Lords, I tabled this amendment following what I can only describe as a very unsatisfactory debate in Grand Committee last Tuesday. It was unsatisfactory because although I had given the Minister’s office advance notice of the issues that I wanted to raise, it quickly became clear that his briefing was wholly inadequate to deal with that debate. Indeed, when the noble Lord, Lord Rooker, had to offer profuse apologies for Defra’s failure to deal effectively and swiftly with the issues, I began to feel a bit sorry for him. The issue that concerns me about this order can be simply stated: the order requires energy suppliers—that is, the electricity and gas companies—to secure large reductions in carbon emissions from the household sector, and particularly from vulnerable consumers. The companies have to make sure that 40 per cent of their emission reduction targets are met from the fuel-poor, through households where someone is on any of a specific list of benefits or tax credits, or where someone is aged over 70. The lists are set out in Schedule 2 to the order, and as I am over 70 I should declare an interest. The problem arises because the right to privacy, human rights legislation and data protection legislation prevent energy companies from being told the names and addresses of their customers to whom the 40 per cent obligation applies. Defra has calculated the number of households with listed benefits or tax credits at 8.8 million; and BERR—I am not quite sure why it is involved—has calculated that households with pensioners over 70 will add another 1.4 million. That makes a total of 11.2 million households, so we are dealing with very large numbers. The problem of identifying the number of vulnerable households is not new. The Government have run energy savings schemes for some years under the banner of the Energy Efficiency Commitment. They have imposed similar obligations on companies to secure part of their energy savings by targeting vulnerable households. These are assumed to include many of the fuel-poor. It must by now be clear to the House that imposing these targets on the companies without being free to tell them which of the households they must target creates great difficulties. Indeed, without exception, all the companies and other bodies with which I have spoken have described the problem as extremely difficult. The process is also very expensive. The cost must be added to fuel bills, including those of the fuel-poor, and the procedures that firms must adopt are very wasteful. One local authority has said that it is not at all sure that the system operates for the benefit of the fuel-poor. The companies have tried to build partnerships with local authorities and housing and social services; have tried to work with the voluntary sector; and have aimed their leafleting at postcode areas believed to contain a high proportion of target households. But without names and addresses, it is all very hit and miss. In Committee, I called it ““hide and seek””; on reflection, perhaps a better name would have been ““hunt the thimble””. It is to the great credit of the industry and its partners that I have listed that under the original EEC rules most of the companies have been able to hit their targets. The regulator Ofgem— more about it in a minute—has shown me a chart from 2002 onwards that makes that claim. However, this order makes very big changes. First, the target is no longer on energy saving; it is on emissions reduction, which adds greatly to the complexity. If anyone doubts that, let them read through the Explanatory Memorandum. Secondly, the overall target is doubled for the next three years—over that of the past three years. Thirdly, the cost to customers will be greatly increased. That was made very clear to me by one of the major companies. The industry has been categorical in its comment on the consultation for this order. According to the Explanatory Memorandum, the new priority group target is ““not achievable””. One has to accept that. The industry states that it cannot possibly be met. How has this situation arisen? There are two reasons. First, the industry has been slow to recognise that data-sharing, for which it has consistently asked, is not going to happen. It has been hoping that it will be given the names and addresses of the target customers. However, for the reasons I have outlined—data protection and so forth—that has never been on the cards. The noble Lord, Lord Rooker, made that clear last week in Grand Committee. A much more potent cause is that Defra seems consistently to have refused to admit that identifying the target households is a problem, despite much intensive lobbying on this issue by the industry. In all the 79 pages of the Explanatory Memorandum, the problem of identification is not mentioned. It is not in the summary of the consultation responses on pages 24 and 25; and it is not in the list of barriers described on pages 9 and 10. So until last year, there was no help at all from departments on identifying target customers. However, last year, for the first time, a pilot scheme began. The industry pays for the leaflets with reply coupons and a telephone help number; the Department for Work and Pensions distributes them to named target households with listed benefits. It is then up to the householder to respond. That covers one in 5,000 of the 11.2 million target households. The Minister told us that there is to be a second pilot this year, this time aimed at pension credit claimants covering a further one in 5,000 of the 11.2 million target households. One has to ask: when are we going to get a system that reaches out to the 11.2 million target households? Is this not going to take years? Ofgem has now realised the problem. Last month, paragraph 6.6 of its corporate strategy and plan said this, which is quite significant: "““The challenge remains getting the message across to those who most need the help and ensuring that once identified they can benefit from the full range of help […] This requires a joined-up approach from Government, industry and other agencies””." This is the final sentence: "““It is also dependent on the Government using its sources of information to improve the targeting of the help available””." Noble Lords may recognise that that last sentence forms part of the first part of my amendment, and that I draw on the key words of that paragraph, ““the Government using its sources””. It is far too late. The three-year period of this order starts next April. The 40 per cent target will apply to that three years, starting next April. What have we got to help the industry to deal with this? I draw on the words of the noble Lord, Lord Rooker, because I want to refer to the rest of my amendment. This is what he said in Grand Committee about how this is going to be policed: "““Ofgem will be responsible for the enforcement of each supplier’s obligation. It has the power to impose on a supplier a financial penalty of up to 10 per cent of company turnover if it fails””.—[Official Report, 22/1/08; col. GC 85.]" What have we got? The industry says that the target is unachievable. The Government say that if they fail to achieve the three-year targets they can be fined up to 10 per cent of turnover. That could be many millions of pounds. I have to say that it is a very sad story—a mixture of incompetence and deliberate blindness and delay. In ordinary circumstances I would be tempted to test the opinion of the House, in accordance with the last few words of my amendment. Two things hold me back. First, there is undoubtedly a need to improve the energy efficiency of the household sector as a whole. This order at least makes a serious effort to address that problem. In Grand Committee, the noble Viscount, Lord Brookeborough, from the Cross Benches, demonstrated how much more needs to be done, compared with a country such as Denmark. The noble Lord, Lord Woolmer of Leeds, offered a suggestion that the industry might, "““fund staff employed by the government agencies so that those agencies with the information on fuel poverty could then knock on the doors””.—[Official Report, 22/1/08; col. GC 91]." Secondly, there is an opportunity for the Government to deal with this in the Energy Bill, now in Standing Committee in another place. They could correct the flaws that I have identified in this order. It is not open to Parliament to amend statutory instruments, but Parliament can amend Bills. I look forward to hearing the Government’s response. I beg to move.