‘(e) a condition that the plan includes a term enabling the provision of individual or community-based incentives to take up the Green Deal.’.
Amendment 32 aims to provide a mechanism that encourages both individuals and communities to take up the green deal, and to probe the Government on what incentives they intend to bring forward. We have heard a lot about incentives. They have been referred to a number of times by the Government. The Chancellor, in his Budget speech, said:
“Our green deal to reduce energy bills for homes will be introduced next year. I can confirm that we will act to incentivise and encourage its take-up.”—[Official Report, 23 March 2011; Vol. 525, c. 959.]
“We will continue to consider new incentives and levers to drive the programme forward as the market develops and we reach towards that very ambitious level of retrofitting 14 million homes by 2020 and 26 million homes by 2030.”—[Official Report, 10 May 2011; Vol. 527, c. 1130.]
We have discussed the issue a number of times. We know that that equates to 4,464 homes a day. We can discuss the amendment in light of the debate that we have just had on the previous amendment about the interest rate. We know that when the interest rate in Germany was at 2.65%—it is subsidised by the German Government—the take-up in Germany was only 100,000 homes a year. That is still 100,000 homes, but it is nowhere near the Government’s ambition for the green deal. No detail of the incentives or levers to drive demand has been announced. We would like to flush out the Government’s plans for incentives, if any, and highlight our party’s continuing commitment to both individual and community incentives.
Back in November, there was an article in The Times that suggested that householders are being encouraged to take up the green deal through incentives paid for by energy suppliers, as part of the new energy company obligation. The article speculated that for green deal customers, that could include the chance to win a holiday, a discount on council tax, and a cash voucher or a rebate on energy bills. The Times also stated that the Secretary of State may consider making changes to the stamp duty system if those incentives do not encourage enough people to take out a green deal. He said that if those incentives proved insufficient to attract many home owners, the Government would consider introducing a tilt in stamp duty. Stamp duty could be reduced by 1%, or approximately £2,000 for the average home, for those who insulated to a high standard within a set period after purchasing a home.
Many other organisations have highlighted the need for incentives. In January, the Chartered Institute of Environmental Health expressed concern about the decision to phase out Warm Front grants and replace them with the green deal. It said that it
“had yet to be convinced” that the green deal would have a sufficiently wide-scale effect to reach the most needy in society, rather than just those people with difficulties with heating costs.
The CBI also expressed concern that the policy could become a lame duck if people are not encouraged to take it up. I know from my conversations with the CBI yesterday, and from its sixth climate change policy tracker, which was released yesterday, that UK investor confidence in the green sector remains low, and that ensuring effective incentives to stimulate the scale of green deal demand that the Government expect is absolutely crucial. The Federation of Master Builders also set out its disappointment at the lack of additional incentives announced in the Budget to create more demand in the market. I could go on. There is a very long list of organisations that have added their voice to the concerns. It includes the UK Green Building Council, Consumer Focus, Sustain, Friends of the Earth and the think-tank E3G.
Several organisations wrote to the Chancellor on 15 February to ask him to announce what measures there would be in the March Budget to incentivise people to take up the green deal. They included the WWF, Marks and Spencer, B&Q, the Federation of Master Builders, the UK Green Building Council, Green Alliance, Greenpeace, Friends of the Earth, the Great British Refurb, EG3 and Transform UK.
We heard the announcement in the Budget that there would be incentives, but yet again there was no further detail on what they might be. We know what trade bodies and businesses think about the possibility of incentives, but what do the public think? They like the idea of the Government’s new green deal but, according to research carried out by the Great British Refurb campaign, they only expect to take it up if the Government are willing to offer significant financial incentives, such as a stamp duty rebates, council tax refunds and low interest rates.
While 56% of the public liked the pay-as-you-save scheme, that number could increase with financial incentives. A one-off council tax rebate is a real motivator; 49% of people are likely to take up the green deal if the Government offered a £500 council tax rebate. Changes to stamp duty are also popular, with the public considering it to be a fantastic incentive. British Gas has brought forward its own version of the green deal, and has carried out research into how effective it has been. It suggests that the scheme has had full appeal, but that additional nudges will be needed to drive the market. It put £30 million on to its balance sheet to test how the green deal would work, and that is happening throughout the country. It is pushing carrots such as council tax and stamp duty rebates and is supporting sticks, including proposals to regulate minimal rental standards.
In April 2009, the Department of Energy and Climate Change conducted research, together with the Energy Saving Trust and Quadrangle Research. It was extremely powerful in showing which incentives work, in terms of energy efficiency uptake through schemes such as the green deal, and which do not. The report noted that one-off, up-front incentives are generally preferred to incentives provided over a period of time. By giving the incentive up-front, it is possible to give up to 30% less and receive the same uptake results. The research also found that council tax rebates were one of the most powerful means of incentivising energy efficiency. Both the council rebate of £250 over three years and a one-off, up-front council rebate of £500 have an uplift of 15%.
We can learn a little more from the experience of British Gas. Since 2004, it has been working with more than 68 local councils to offer householders returns of up to £125, administered via council tax bills, after they have had subsidised cavity wall insulation installed in their homes. According to the research carried out by the Department of Energy and Climate Change, that council tax rebate has proven extremely popular, and demand for it is increasing, and it could lead to an increase in demand of 15%. In Braintree, Essex, 75% of respondents said that the British Gas council tax rebate was at least among the factors that led to their choosing to insulate at the time.
Several voices have been raised about incentives. The energy company E.ON said that for the take-up of the green deal to be sufficient to meet its objectives,
“we believe that there will need to be both market-led and government-led nudges to encourage customers to take up the Green Deal. It will be for individual companies to decide what position they wish to take in this market place and so what additional incentives they might offer to customers to support their own Green Deal proposition. However, we believe that additional government-led incentives will also be required to increase confidence in the Green Deal.”
Written evidence submitted to the Committee from Age UK made some important points about community initiatives under the green deal, which is why we referred in the amendment not only to individual incentives, but community-based incentives. It said:
“we believe there are circumstances where it may be more appropriate for a group of householders to work together—for example to develop a combined heat and power or district heating scheme, or where a group of hard-to-treat homes want to install ground source heat pumps (a task much more efficiently done if a neighbourhood is working together). In addition, people working as a community will tend to help each other, and reinforce each other’s determination to make energy savings. It will be important for the Green Deal to be able to deal with collective initiatives—perhaps where people come together as a co-operative or social enterprise—and that Green Deal finance or funding drawn from the ECO can be accessed by these schemes.”
That is why our amendment seeks to ensure that incentives are applicable to both individuals and communities, if that is relevant.
I have some questions that I am keen for the Minister to address. How exactly does he believe that households, tenants, landlords and owners of commercial properties will be incentivised to take part in the green deal? Does he think that a stamp duty incentive will be needed to mitigate any potential effect on house prices, as E.ON has suggested?
I am keen to know what assessments the Minister has made of the merits of a council tax incentive. Will a carrot or stick method be used, or a combination of both? We heard during a previous sitting that there would be rewards for taking up the green deal, as well as a penalty for not doing so. I am keen to know what that might mean in practice. What will be the rewards and penalties? Can he assure us that any incentive offered will be carbon-neutral? I refer back to TheTimes article suggesting that home owners might get a free flight for their home improvements. I seek reassurance that that will not be allowed, as it would be contrary to the ideals espoused in the green deal. Finally, will the Minister commit to examining possible community-based incentives, as well as individual tax incentives, that will boost community cohesion?
That was a useful outing to remind us all of the importance of incentives. As I keep reminding the Committee, the green deal will be a lot more than simply what is in the Bill. I have no doubt that such an ambitious programme—the most ambitious roll-out of home improvements since the second world war—will require additional incentives. Later in Committee, we will introduce measures on penalties as well as incentives to ensure widespread take-up.
Before the launch of the green deal in the autumn of 2012, we need to set out our programme of incentives. That will give new market participants confidence that the programme of works will take off, that there will be demand, and that it will be worth while for them to make the large-scale, long-term investment that we want by entering this new and exciting market. Incentives will play a role, both for the consumer and as an additional carrot to encourage new entrants.
I understand that through amendment 32, hon. Members seek clarification on clause 5. The clause sets out what must and must not be included in the terms of the green deal plan—the contract between the customer and the green deal provider. The powers are intended to ensure that the customer is adequately protected and provided with sufficient information to make a reasoned choice about whether to enter into the contract. However, green deal providers may wish to incentivise improvers to take up a green deal plan. Indeed, as it is a market-based mechanism, we expect green deal providers to offer a range of innovative incentives, which could include community or individual approaches to encourage customers to take out a green deal and improve their home.
This year’s Budget confirmed the Government’s commitment to act to incentivise and encourage take-up of the green deal. The Department of Energy and Climate Change will work with the Treasury and other Departments to consider possible options. It is worth remembering that in this year’s Budget speech, the Chancellor said:
“I can confirm that we will act to incentivise and encourage its take-up.”—[Official Report, 23 March 2011; Vol. 525, c. 959.]
I had a one-to-one meeting with the Chancellor at lunch time in the Treasury. He is absolutely committed to ensuring the success of the programme. The proper place for the range of measures is in the Chancellor’s Budget, not in the Bill.
I am sure that the Budget before next October will by no means be the last word on the matter. As the market develops, and with the benefit of experience of take-up, rather than simply through forecasts, we can identify parts of the market that are not responding so well. We can try to assist those parts of the community—those families and tenants—that are struggling or are resistant to taking up the green deal. We will need to design the correct instruments to reach out to them with the benefit of real, hard evidence.
The hon. Member for Liverpool, Wavertree, mentioned some such instruments, and I entirely share her analysis. From experience of a number of trial projects that British Gas has run, I am convinced that incentives relating to council tax are very powerful, because people seem to have a disproportionate hatred of paying it, compared with all other taxes; it moves them in ways in which they would not otherwise move. We need to harness that to positive ends.
As the hon. Member for Liverpool, Wavertree, said, we should also consider other incentives that galvanise community action and that are in tune with our localism and big society agendas. From schemes sponsored by British Gas, community schemes and the work that B&Q has done, we know that the biggest incentive always comes from collaborative community action. Real partnership at a local level, more than any individual financial incentive that I have seen, acts as a strong, powerful motivator to get people involved. Often, people are not reluctant, or resistant to such schemes; they simply lack the final motivation to commit and to get round to having the work done. If their neighbours are doing it and if it is going on in their street, village or community, that is often the most powerful tool of all. We must do more work to think of innovative ways to galvanise community action. The process is one of co-creation, and we are genuinely open to new ideas about how it will work on a cost-effective basis.
I am grateful for the Minister’s comments about community-based incentives, because sometimes work can be carried out only when many householders or tenants come together to do it. I sense that he is drawing to a close, so I reiterate a question that I am keen to have answered, which pertains as much to those community-based incentives as to ones based on individuals. The Minister referred to possible penalties for people who do not take up the green deal. What will those penalties be?
We have already announced that in the private rented sector we will oblige landlords to upgrade the houses and flats that they let to a minimum standard. If they do not comply with that by 2018, it will be illegal to let those properties. That clear penalty sends a strong message about our commitment to the measure.
As has been said, behavioural change is also an important element. I am pleased to say that my Department is working extremely closely with the Cabinet Office behavioural insights teams and a number of organisations outside Government to trial the impact of various individual and community-based incentives. However, we will seek to ensure, through regulation of the terms of the plan, that restrictions are placed on offering the improver any incentive, whether cash or otherwise, to minimise the risk of subsequent bill payers being placed at a disadvantage because someone has been over-compensated for taking on the initial, up-front benefit.
I am glad that the Minister has informed the Committee that the behavioural unit is involved, because that will be key to the success of the measure. He is holding negotiations with other Departments, including the Treasury, and I am very impressed that he met the Chancellor at lunch time; the Chancellor never asks me to come along for a drink, and he never rings. Will the Minister share the behavioural analysis unit’s outcomes with members of the Committee and others before we get to the phase of secondary regulation? We all want the incentives to be driven by good evidence and analysis, rather than having departmental silos, and rather than the Treasury perhaps saying, “That is the most brilliant idea, but we are not letting you do it.” Will he share that information as soon as he has it?
I reassure the hon. Gentleman that that work is ongoing. I do not know whether we will be in a position to publish it and share it with the Committee before the end of Committee proceedings, but we will be in a position to publish that information well in advance of any secondary regulations. We will all be able to share our analysis of those conclusions. I hope that the hon. Member for Liverpool, Wavertree, found that explanation reassuring and will consider withdrawing what was probably a probing amendment.
‘(e) a condition is that all fees that may be incurred by the householder or landlord throughout a green deal plan are communicated to the contracting householder or landlord in a clear, transparent and easy to understand format prior to the deal being secured.’.
‘(g) provision requiring the holder of the licence to disclose, via the customer’s energy bill, any Green Deal payments being collected through that bill as well as any arrears which may accumulate through non-payment of Green Deal charges.’.
I will be interested to hear the contribution from the hon. Member for Brighton, Pavilion, because I suspect that through her amendment 106, she is trying to get at a similar point to the one that we are making through amendment 34. I hope that the Minister will be sympathetic. The aim of amendment 34 is to promote greater consumer protection through increased transparency in the assessment process, and to give consumers a much better knowledge of the anticipated expenses of the entire green deal process before they arise.
Green deal assessment should fall within the golden rule standards, as the Minister has already told us, but consumers will still need to be aware of all the costs, when they will incur them, and the timetable for when they will break even. In the green deal, that information is not guaranteed to be disclosed up-front in a comprehensive and comprehensible manner. In our previous discussions that touched on this, we all agreed that there will be full disclosure of all the costs, and that they will appear on the bills, so the amendments are greatly in sympathy with what the Minister has been saying. The hon. Member for Brighton, Pavilion, and I may, between us, have provided the letter of the legislation that he needs to make his commitments tangible.
Let me say why we moved amendment 34. Over the years, we have been bitten when schemes have been passed by Parliament and we have not foreseen the consequences. Take the car insurance industry. The hidden costs of that industry have often been discussed. Some commentators estimate that up to £200 million a year is made through car insurance companies making unannounced changes to inclusions in the basic coverage. I am sure there are Members here who, like me, have suffered from that. Tucked away in the small print, it suddenly turns out that there is an extra cost for things that were taken to be included in the standard package. There is not a direct analogy between that and what we are offering in the green deal, but that is what we are trying to avoid.
It is hard to find a bank that has not been engrossed in scandal over exorbitant overdraft fees and charging customers excessive rates for withdrawing an amount in excess of their account balance. I hesitate even to mention airline providers’ hidden charges, and the fuss that there has been over that, or the airlines’ robust defence that travellers should know better. We moved the amendment in the spirit of what the Minister has already said. We want to make tangible and real in the Bill an overview that says that all charges will be disclosed, so that the customer—whether they are an individual householder or a small business, for whom the issue is as important—will know in advance exactly what they are signing up for.
This may be going back over a point, but I would like clarification on it. I am concerned about assessors being linked to green deal providers, although I understand the Minister’s comments. I am also concerned about the cost of the service, although he has said that that will be on the front of the assessment. As he has mentioned, there may be contractual obligations; it may be that the assessment is free, but there are other commitments down the line. We must have not only the numerical cost, but those contractual obligations on the front of the assessment, particularly at the interface, when the assessor comes through the door.
My hon. Friend makes a good point, which I am sure the Minister has listened to and will address. I will make two other arguments for the amendment. It would allow green deal providers, in certain circumstances, to receive compensation from bill payers if the green deal is paid back earlier than expected. Concerns were raised in the other place that, without such a provision, green deal providers might build extra charges into the scheme and pass them on to consumers to cover that eventuality. In fact, Baroness Smith of Basildon has said that although the Opposition may have concerns about the proposals, we want to look more closely at the detail of how it would work. Will the Minister confirm that the early payback charges will be made clear to consumers early on? Will those set charges be identified in the green deal contract? We are working on the assumption that the charges might be different for each provider that offers competitive finance deals.
In September 2009, Ofgem introduced new conditions to the licences of energy suppliers in the UK to tackle what was seen as the unjustified price differences between various tariffs. Those measures directly addressed the widespread overcharging of certain groups of customers—including the vulnerable ones whom we have talked about—identified by Ofgem during its energy supply probe in 2008. In the light of Ofgem’s experience of the overcharging of vulnerable customers, has the Minister analysed whether there are any lessons to be learned for the green deal? As an example of points that have already been raised, will prepayment customers be charged higher interest rates than those with direct debits? That is a live issue for tackling poverty generally and, in the wider context, we do not want to exacerbate an existing problem.
Will green deal interest rates differ in the way I have suggested, as energy prices do? What does the green deal mean for single-fuel customers, and will that be clearly identified up front? Many in our communities who are not only socially but financially excluded do not have bank accounts; at most, they might have a Post Office card account or a very basic account. They might be in hock to lending shops, more and more of which are springing up, or to people who knock on their doors. Will those without bank accounts be able to access the green deal? Issues relating to the ability to access credit already affect not only those without bank accounts, but those on prepayment meters.
I look forward to hearing from the hon. Member for Brighton, Pavilion, because I think we are heading in a similar direction, and I want good answers from the Minister.
I thank the hon. Gentleman, because my amendment seeks to go in the same direction as his. It is about trying to enhance the visibility and transparency of measures, and bills in particular, so that people can see that all charges are properly disclosed.
My amendment goes in a slightly different direction, however, in that one of my concerns is about green deal arrears, the visibility of those arrears on consumers’ bills, and how consumers pay for them. In the previous sitting, the Minister helpfully made clear that the intention is to disaggregate the different components of the bill so that they are visible, albeit that the final amount is one composite sum that the consumer cannot pick from. I understand his argument, and I also clearly understand that there is a balance to be struck when it comes to ensuring that the green deal financing organisations have confidence in the whole process.
However, I remain concerned that under the Bill, a householder who is in legitimate dispute about elements of their green deal package and wishes to withhold funding from that package would not be able to do so. The only way that they could do so, essentially, would be by not paying the bill, but they would then have their energy sources cut off. There is a very real concern about that. It goes against basic principles of consumer protection, in which disconnection is possible as a result of non-payment of the energy costs, not the associated costs. I worry that we are taking a step backwards with the Bill, because we are looking at weaker protection for the consumer.
As I have said, I recognise that a balance must be struck between that issue and giving confidence to the finance providers. At the moment, however, the balance is not sufficiently in favour of the consumer who has a legitimate reason to want to withhold the green deal element of their bill, perhaps because the measures were poorly installed or the assessment was incorrect. At the moment, I see no measure for redress for such consumers.
I hope that the Minister can tell us more of his thoughts on this amendment and the one that we discussed before it, because there are two important principles to consider. One is the overarching principle of disclosure—of ensuring that the charges are very clear. The second is the importance of having some understanding about those consumers who are in arrears and who have legitimate reasons for wishing to withhold at least part of the payment of their bill.
I am grateful to hon. Members for raising these important issues. The amendment seeks to ensure that any fees are clearly and transparently communicated to the consumer. Let me reassure members of the Committee that the Government are absolutely committed to ensuring that the green deal customer is given every necessary piece of information on the green deal charge made by their energy company, including any information about outstanding arrears.
Clause 19 already enables energy supplier licences to be modified so as to require suppliers to provide bill payers with information about their green deal plans. We expect that the green deal charge will be presented as a line item on routine electricity bills, as the hon. Member for Brighton, Pavilion, said so succinctly. We anticipate that green deal arrears will be presented by the electricity supplier in the same manner as electricity supply arrears.
Consumers will also be provided, under the Consumer Credit Act 1974, with an annual statement of credit, detailing all payments made in the preceding year and any arrears. That Act applies to domestic green deal plans in full, bar a few essential amendments. That ensures that there will be robust consumer protection. The Act already regulates the provision of information to consumers entering into credit arrangements.
Furthermore, clause 5 gives the Secretary of State the power, through regulation, to put additional protections into the green deal regime as part of the terms of a green deal plan, if necessary. Through that power, we will seek to ensure that all fees are clearly and transparently communicated to the bill payer and, if appropriate, the landlord.
Through the terms of the green deal plan, clause 5 also ensures that key protections are in place around financing, advice, measures and installation, so the concern that amendment 34 seeks to address is already being addressed. Clause 5 sets out that the improver must agree to the amount and timing of the payments that are to be made, and it ensures that they obtain all the necessary consents required to make green deal improvements. It is important to retain flexibility and consumer choice, which is why subsection (2) prevents the green deal plan from placing restrictions on the ability of the bill payer to change the intervals at which their energy bills are to be paid.
Subsections (2) and (3) ensure that no charge over a person’s property may be taken by way of security and that early repayment cannot be required of the bill payer, except in circumstances to be set out under regulations. Moreover, a bill payer’s liability for maintaining green deal repayments cannot be extended beyond the period for which they are the bill payer at the property. That is absolutely fundamental to the green deal payment mechanism and is part of the new element that makes it so different from similar pay-as-you-save schemes. It really gets to the crux of our new payment mechanism, and ensures that it is not a conventional loan process or a credit-scored advance. That ensures that the bill payer will not be liable to repay all the finance that remains as a charge on the energy bill.
Furthermore, regulations can require terms to be included that would protect bill payers’ interests by providing guarantees in respect of the improvements, as well as by specifying how problems with the improvements are to be dealt with. The clause sets out important protections for consumers and others entering into green deal plans, as well as for green deal participants.
In respect of protecting vulnerable consumers, the green deal is entirely compatible with prepayments. We are extending the full Ofgem framework over the collection of the green deal charge, so I can assure the hon. Member for Ogmore that the bill will be treated as a whole. The protections that apply to vulnerable customers or those with prepayment meters who run into difficulties with their electricity bill will be extended to the green deal. Arrears will be treated in exactly the same way. The bill is completely indivisible in that respect. I trust that I have reassured members of the Committee that we have really made it clear that we need important protections for consumers, as well as for others entering into green deal plans, so I hope that the amendment will be withdrawn.
The Minister has made helpful comments. I was reassured to quite an extent, particularly by his saying that he will use the powers under clause 5 to give such clarity to the consumer. However, that was balanced against his carefully worded argument that he expects and anticipates such matters to be on the bill. I and other members of the Committee demand that they are on the bill. They must be in order to give householders clarity about what is being paid. On that basis, I want to make a suggestion to the hon. Gentleman about which I am happy to take an intervention.
No, I am making a speech—although not one of my full-blown speeches. I will not be here for ages. Further to the Minister’s comments, balanced against the words “expect” and “anticipate”, if I were to write to him reiterating our worries and our real red line that there must be clarity on the bills for customers, both businesses and individual households, perhaps he will write to me in more detail and explain how he intends to turn “expect” and “anticipate” into, a “This will be done” statement, so that no providers will have an opt-out. We do not want them to be able to say that the Minister can expect and anticipate all he wants. Unless he tells them to do it, as we have learnt before with what has happened in the energy and banking sectors, it does not happen. I am looking forward to the Minister intervening.
I am very happy to give the hon. Gentleman the reassurance he seeks. My parliamentary language was such that I was anticipating that such action would take place. It should not be taken for being anything less than an assurance that we will make sure that it does happen. I shall write to him and other members of the Committee to spell matters out in more detail.
I have just lost track of who was the main speaker, but I am sure that someone knows.
I want to press the Minister a little further on arrears. Consumers in financial difficulty might face the situation when they cannot afford to pay back green deal arrears as well as their ongoing green deal charges, fuel arrears and ongoing energy consumption bills. It is an important element of consumer protection that customers cannot be cut off from energy supplies for non-payment of non-energy related charges. Although the hon. Gentleman has helpfully explained that the figure is separated out when it comes to the bill, if consumers are in difficulties in paying it back, it should be possible for them not to be cut off for not paying back the green deal element. I do not think that he deal with that matter in his response.
The hon. Lady has raised an important point. The bills are indivisible. Consumers will not be able to pick out the green deal from their bill, deduct it and send a cheque or a payment to their energy supplier. The corollary is that the same protection for consumers that is afforded by Ofgem in respect of disconnection will be afforded to the whole bill, not only the part that relates to energy—
Ian Lavery rose—
Thank you very much, and thank you for that clarification, Mr Leigh. Will the Minister explain why the bill is indivisible? On the Energy and Climate Change Committee, we sat with the big six and there are absolutely hundreds of thousands of problems with people not understanding bills as they currently are. We really should be learning from that.
The hon. Gentleman misunderstands me. When I said “indivisible”, I meant the figure at the bottom line at the point of payment. I am not saying that it should not be far more transparent. I am working at the moment on the matter and have met the hon. Member for Liverpool, Wavertree at the Department to establish a new, clearer way in which to present customer information on bills that meets our aspiration for clarity and simplicity, but at the same time gives the level of detail that a consumer has the right to expect from an energy supplier.
The hon. Member for Brighton, Pavilion asked whether consumers can stop paying if they have a legitimate complaint about the quality of work. That is a slightly different point, nevertheless it is equally important. We have a specific redress framework to cover exactly those circumstances so there will be a formal process whereby people can take up with the official body their complaints about installations, which will have the power either to strike off the payments or the green deal accreditation of the individuals who undertook the work in the home if it were not redressed satisfactorily.
We are considering whether the consumer should be allowed to stop paying in certain circumstances or whether they could be reimbursed in a different way. However, we will set out such matters in more detail under licences and regulations. We shall certainly take on board the hon. Lady’s worries, and there will be further opportunities for her to look at matters in more detail.
I know that I bombarded the Minister with questions, for which I apologise, but there was one point to which he did not respond. Will those without bank accounts be able to access the green deal?
Yes, certainly. As I have said, there is absolutely no reason why they cannot access the green deal. Those people with pre-payment meters can access it. There is no class of customer who currently pays an energy bill who will not be able to access the green deal. That is one of the green deal’s greatest strengths and it was specifically designed that way to be a universal programme that is available to all, and that is progressive and fair in the way that it can be accessed.
With that, I urge hon. Members to withdraw this amendment.
I was confused myself about who was speaking and who was not speaking, so I apologise for putting my hand up at the wrong time to indicate that I wanted to speak.
I want to come back to the issue of pre-payment metres, which keeps being mentioned. It is a huge issue. The statistics about pre-payment meters and the associated difficulties show that these will not only be hard to treat homes—more than likely, they will be hard to treat—but the customers in those homes will be hard to reach too. I am concerned about how the mechanism will work and I do not think that the Minister has provided as much detail about it as he could. I am sure that he has thought it through and I would like him to provide more detail about it.
Of those people with pre-payment meters, only 19% are owner-occupiers, 35% are in the private rented sector and 46% are with registered social landlords. I want to give the Committee some other statistics about pre-payment meters, to put their use in context. At the moment, 51% of people on pre-payment meters have an income of less than £13,500. In addition, 62% of people with pre-payment meters are on means-tested benefits, including disability benefits. So we are talking about the most vulnerable people and if the green deal is to be a success we must reach them—
Order. There is no mention of pre-payment meters or payment meters in the amendments, so perhaps the hon. Gentleman will get back to the amendments.
The use of pre-payment meters is an important issue that needs to be discussed, because so many people are affected by pre-payment meters. I do not want to go back over the points that I have just made. However, I want to refer to subsection (2)(a)(i), which deals with
“the payments in instalments and the interval at which, and period for which, they are payable”.
On pre-payment meters, arranging payments in instalments will be exceedingly difficult. National Energy Action has highlighted its deep concerns about how financially disadvantaged households might have to limit their energy consumption artificially and prioritise green deal payments before credit is applied to the meter. That is an important issue.
The problem is that the green deal is set up for instalments, whereas pre-payment meters operate on an “as and when” basis. So we have two systems and the Bill does not seem to accommodate the fact that people on pre-payment meters cannot meet the instalments. Subsection (2)(d) says:
“a term providing that the green deal plan does not prevent the bill payer from changing the intervals at which energy bills are to be paid.”
Clearly, with pre-payment meters consumers will break that, because those consumers pay as and when they use energy.
It is not only NEA that has expressed concerns about pre-payment meters. Consumer Focus, the National Association of Citizens Advice Bureaux and Ofgem have also expressed their concerns about the build-up of green deal arrears on pre-payment cards. Those repayments cannot be calculated if they are in arrears in accordance with an ability to pay, because there are technological limitations on pre-payment meters, of course. They can only be paid by a lump sum when credit is added to the card. That will be deducted from the amount of energy that they will be able to apply to the meter.
There are real issues about disconnections and credit. I hope that the Minister will try to resolve this issue. There is an answer, but one of the issues I am not satisfied with is that the primary legislation to disconnect will be amended to allow people with pre-payment meters to be cut off, simply for not paying their green deal portion.