Electricity and Gas (Community Energy Saving Programme) Order 2009

My Lords, this has been an extremely interesting debate, particularly as it follows our discussion on the White Paper today. I preferred the noble Baroness’s initial assessment of the orders to her later revision. I shall come on to light bulbs in a moment in answer to the noble Lord, Lord Patten, whom it is delightful to see here, recalling our days a few years ago in Oxford City Council chambers. The noble Baroness referred at the end of her speech to her party’s proposed loan guarantee of £6,500 per household. I am slightly puzzled by it, because, by my reckoning, the implication of its being a loan guarantee is that a Conservative Government would be guaranteeing what could be up to £200 billion of loan. I am confused because I had understood that the Conservative Party was concerned about both personal debt and national debt. I am not quite sure how the two mix together. It is clear, as was pointed out earlier today, that we have many households where energy-saving provisions will be expensive, which is why we announced in the White Paper proposals to try out schemes which recognise that, in order for householders to be willing to pay or to take out loans, there has to be a realistic possibility of there being a payback provision over a reasonable time. That is the key to unlocking the door of many of those homes where the cost of the various energy-saving devices that can be taken is very high. As I said earlier today, it is one of the biggest issues that we need to crack. The noble Lord, Lord Teverson, was of course right to raise the more general and fundamental issue of energy saving. In a sense, I have just answered that point. I have no doubt that what we are proposing in CESP and CERT is part of a cohesive approach. Although the noble Lord may be disappointed by the numbers covered, it is none the less an important contribution. However, I also accept, as I have already said, that there are many homes where the costs will be considerably higher than could be covered under these programmes, and it is vital that we tackle that. The transition to a low-carbon Britain will not be able to be successful unless we can really tackle the requirement for energy saving in homes. The noble Lord was right to raise fuel poverty among tenants. He will know that it is not always easy to deliver support to the private rented sector given the condition of that sector and the motivation of some private-sector landlords. CESP should be able to make some difference. In particular, the community-partnership approach with local authorities and the incentive for companies to tackle all homes in an area should, we hope, reach the sometimes-difficult-to-reach consumers. After Oxford, I moved to Birmingham and was a local authority councillor there for a time. One of the most imaginative schemes that I have seen was called "enveloping", which was concerned not with energy but with the inner-city parts of Birmingham. A whole street, whether it comprised owner occupation or private landlords, would be refurbished outside and in. It was an outstandingly successful approach. It was of course expensive as well, but it saved the inner city. In a sense, this is what we need in relation to energy saving as well. The numbers involved in CESP are significant and they are a start. We shall see how it works and I hope that, if it is successful, we can begin to build on it. The noble Lord raised North Sea gas. The example that he raised also involves a street-by-street approach and is consistent with enveloping as I have described. He was right to raise it in that sense. When I saw that the noble Lord, Lord Reay, was here tonight, I thought that he would intervene and did not expect him to support the Government’s policies in this direction. In that sense, I was not disappointed. He was right to raise the cost of these measures and of what might be described as other climate change measures, how that pans out in bills and what the consumer will have to pay. The figures that he referred to were right, but these costs are one-off, and the benefits will be ongoing for the life of the measures. I say to the noble Lord, Lord Patten, that these costs are built into the figures generally in the White Paper. Let us return to costs—a point was raised about the particular problems of the fuel-poor and the impact on them of the measures. We do not have any choice in this matter. It is not a choice between high-cost, low-carbon energy and low-cost, high-carbon energy. We are set on a course to mitigate climate change to 2 degrees centigrade. We have to move to a low-carbon economy and are committed to doing so. That has certain implications in relation to cost. I know that noble Lords disagree with the Government’s assessment of the overall cost. Taking account of all existing climate change policies and those that we announced today, we reckoned in the White Paper that the cost would by 2020 be about 8 per cent higher, or £92 per household. I know that some commentators think that it is higher, but the Government are confident of their own figures, which take account of energy-saving estimates as well—in other words, it is a net cost—but that is not unreasonable since we are committed to a large programme of energy-saving measures. At the end of the day, I pray in aid the noble Lord, Lord Stern, in this regard, whose clear advice to the Government was that delaying action would in the end cost much more than taking action now. I accept that, in making decisions which will have an impact on the prices paid by consumers, there is a strong obligation on the Government to make sure that this is done in the most cost-effective way and in a fair way, and I accept the noble Lord’s comments about the particular challenge of the fuel-poor at the moment because of the rise in prices. We had been very successful in reducing the numbers of fuel poor, but in recent years the cost of energy has unfortunately led to an increase. We are ever mindful of the need to ensure that tariffs are fair and that we have regard to the consequence for the fuel poor. That is why today we announced mandatory powers in relation to the social tariff, building on the already successful voluntary scheme exercised by the companies.