Clause 6 - Consents and redress etc

Energy Bill [Lords] – in a Public Bill Committee at 2:45 pm on 9th June 2011.

Alert me about debates like this

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test 2:45 pm, 9th June 2011

I beg to move amendment 114, in clause 6, page 7, line 24, at end insert—

‘(c) the landlord’s consent to Green Deal improvements is unreasonably withheld;

(d) the bill payer’s consent to Green Deal improvements is unreasonably withheld.’.

The Minister will have in front of him a note relating to this clause, as he has for other clauses. It will be in his ring binder, and it will be headed “Resist”. My powers of clairvoyance would not be overly strained to say that there will be a note below that, which will say, “This particular amendment is superfluous, because in clause 43(2) it states that a landlord should not unreasonably refuse a request mentioned in subsection (3) and so block the implementation of a green deal programme.”

I will now lose the thin sliver of an audience that I had for my previous remarks by referring to the architecture of the Bill. Clause 43(2), while preventing the unreasonable refusal by a landlord of a tenant’s request for the green deal programme, does so in the context of tenants’ energy efficiency improvements regulations, which relate to the relationship between a landlord and a tenant and what rights the tenant has to ensure that the landlord does not unreasonably refuse that request. The fact of the matter is that the role of landlords extends considerably beyond the relationship between a landlord and a tenant,  as is related in clause 43(2). Another subsection of that clause defines the purpose of the tenant-landlord relationship within those regulations.

A landlord can have a landlord. A landlord can be the landlord of a leasehold block of flats, for example, which in turn has a landlord responsible for the ground rent and to whom the landlord of the block of flats will pay a ground rent. That landlord can, conceivably, unreasonably refuse a green deal programme on the basis that that person is the freeholder of the land on which the block of flats stands. There may be reasons why that landlord could so refuse.

To have the clause within the overall framework regulations, which we all agree should be in place, requiring that a landlord’s consent to green deal improvements should not be unreasonably withheld, would cover the tenants’ landlord regulations and catch the whole question of who is the landlord, rather than the more limited question of who is the landlord that relates to an immediate tenant’s request. It would be advisable to include that provision in the overall framework rather than in the more particular tenant-landlord framework. The amendment would not weaken the sub-framework, because it would over-ride them both.

Similarly, the amendment relates to the bill payer’s consent to green deal improvements being unreasonably withheld, which is important from the other point of view. For example, registered social landlords have a substantial role in leasing blocks of flats to tenants. Such landlords might propose to undertake a programme of green deal improvements, or a general agreement to do so might be made between them and the tenants. Although the green deal programmes would be individual to tenants, the permission to make those improvements would not be, because they would, to some extent, be collective improvements. For example, insulation might be recommended for the whole block and all the tenants would benefit from it, but they would all have to agree to allow it to go ahead. If a single tenant unreasonably said, “No, I don’t agree,” it is likely that the entire programme would fall to the ground—the tenant would, effectively, have held it to ransom.

That may seem a far-fetched view of the likelihood of people attempting to impede improvements that would benefit them and everyone else in their blocks. However, I have experience—as, I am sure, have other hon. Members—of attempting to provide benefits for people living in blocks. In my own constituency, I tried to install security measures for the tenants of a particular block and I failed to do so because of one tenant.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I have had experience of enfranchisement, when groups of tenants gang together and buy out their landlord—privately, in general. If that happens in a large block of flats or on an estate, contact might be lost with tenants, because the homes may be held by a trust, for example, and it might become incredibly difficult to get hold of them. We should also be aware of that situation, and perhaps the Minister can find some way to capture it so that individual tenants cannot block improvements purely by their absence.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

The hon. Lady makes an important point. Indeed, in many circumstances, leaseholders of a particular block have collectively bought out the original  landlord. They are the landlord collectively, and they are the leaseholders and tenants of the block in relation to their own landlord holding. In such situations, a person may sub-let, move or die, and it may be difficult to obtain permission as a result. The hon. Lady is right that the matter might be serious for those people who wish to undertake self-help and “green deal” their blocks of flats, of which they are the joint-landlords.

I was attempting to illustrate my point by describing how I tried to install a security system for a block of flats, when one tenant effectively sabotaged the complete process, and did so, in my view, pretty unreasonably. They stood against the benefit of all their neighbours and themselves, not for financial benefit—they simply decided that they did not want the system. We all want the green deal to be as successful as it should be, but it might fail to take place in the substantial area of where registered social landlords—as they solidly think they should—attempt to undertake a process of getting green deal benefits for the tenants in their blocks of flats, either by leading or by acting with partners. Hence, a provision not for a railroad permission to undertake changes, but simply to prevent tenants unreasonably withholding permission would be an important part of the architecture of the Bill.

Therefore, I hope the Minister will flip over the page saying, “Resist”. If he is not able to take on board the entire amendment, will he at least assure me that he will at least look at it? It would substantially strengthen the Bill and increase the likelihood that the green deal works, which would reflect well on how the Bill turns out.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

The amendment is enormously important for all properties in multi-occupancy, such as blocks of flats. I understand that many registered social landlords are pushing strongly for the amendment. It would give them a greater opportunity to deliver the green deal on a block-by-block basis, which might be extended to an estate-by-estate basis. That would also give a sense of momentum. If individuals in surrounding properties see improvements being made, they will be encouraged to take up the green deal, and they would benefit from lower costs through the increased economies of scale for the provider. That would be an important step towards ensuring that the green deal meets its potential by being delivered through an area-based approach. The wording of the amendment is very wide. It is not a blanket approach; it refers to tenants having unreasonable objections.

If anyone has a civil liberties objection, I remind them that we are talking about an enormous security threat. Climate change is a huge threat to our security. When we last faced a major security threat, during the second world war, we did not let people say, “I would rather not put up a black-out curtain, because it spoils my view of the stars.” That is a comparable parallel to make at a time of security threat.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I hope the hon. Lady, in a very good peroration, is not suggesting that we should have air raid wardens going round saying, “Get that energy efficiency measure done”?

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

Not yet. No, I am not suggesting that—just in case the Daily Mail ever looks at Hansard. Seriously, there are parallels to be made with the collective sense of getting something done and of not letting positive measures be stymied because people unreasonably withhold consent.

May I raise the case of a constituent who is a leaseholder in a block of flats in Brighton? She successfully persuaded many other tenants to go ahead with a range of energy efficiency measures, including double glazing, but they ran into the problem that the lease does not allow them to use the service charge for energy improvements unless specifically and explicitly stated as such. Apparently, most leases state that service charges are for the replacement and not the improvement of infrastructure. It would therefore be possible to use the service charge to replace single-glazed, metal window frames, but not to install double glazing.

In parallel with our work today, that issue should be addressed by making an amendment to the Landlord and Tenant Act 1987, for example, which would ensure that there is a wider remit for the service charge. If the service charge could be extended to the provision of reasonable insulation measures to improve the energy efficiency of a flat or block of flats, that would be a useful step towards enabling energy efficiency measures to be spread out across not only detached homes, but the many blocks of flats and estates in our constituencies. I support the amendment, and I hope that the Minister will take seriously the suggestion, which I will follow up with a letter to him, about changing the terms of that piece of legislation on tenants.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change) 3:00 pm, 9th June 2011

This is an important amendment that came up in the Lords. I will return to that in a moment to remind the Minister of the discussions that took place on an amendment that we tabled in the other place, and what the Minister in the other place said in reply.

The amendment goes to the heart of many issues, particularly those of consent and situations where improver and bill payer are different people. We have heard many different scenarios from my hon. Friend the hon. Member for Southampton, Test and the hon. Member for Brighton, Pavilion. We know that improvements such as cavity or solid-wall insulation would need to be carried out on a whole block, not an individual residence. We want to avoid the situation where a single household blocks access to warmer homes and reduced bills for all the other households in a block. We also want, in the same breath, to prevent measures from being forced on households, as they will pay for them, albeit through energy savings.

During the debate in Committee in the other place, Lord Marland said that he believed that there was

“adequate provision within this clause for the framework regulations to set out more detail on the issue of consent where the improver and bill payer are different people. It is important that such detail is contained within the framework regulations, as the detailed arrangements may be subject to change as the Green Deal develops. These regulations will be subject to the affirmative procedure. In addition, it is not our intention to force the Green Deal on to any party. It must be allowed to work on a voluntary basis, even where the improver and the bill payer are different people. We are proposing powers under the private rented sector chapter that  would ensure that a landlord does not unreasonably withhold consent to a tenant's request for a Green Deal.”—[Official Report, House of Lords, 19 January 2011; Vol. 724, c. GC91.]

I understand that the Government have tabled amendments today dealing with that specific issue.

I am keen to know what role the Government see for social housing, an issue that arose in the other place. In Committee, Lord Marland rejected our proposals to add a section specifically on social rented housing. He said that the intention of chapters 2 and 3 of the Bill, which I know we will discuss later, is to provide powers to improve the energy efficiency of private rented properties should it be required, but that it is not the Government’s intention to intervene in the same way in the social housing market. Will the Minister address that? Lord Marland also said that the review would consider take-up in the social sector as well as the private rented and non-domestic sectors. If the Minister could address that in his response, I would be most grateful.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

This has been a useful debate. I assure the hon. Members for Southampton, Test and for Brighton, Pavilion that I am extremely sympathetic to the points that they made. The bottom line is that it is a tricky area, because it affects both EU competence and the Human Rights Act, so it is a minefield of human rights and consumer protections. The issue also overlaps with areas that fall under the competency of the Department for Communities and Local Government and the Department for Business, Innovation and Skills. We are treading carefully through it, mindful of the unintended or perverse consequences that might result if we blatantly legislated for it on the face of the Bill, but we are endeavouring to seek a way through.

I assure hon. Members that the sentiment behind amendment 114, which seeks to ensure that regulations could provide for circumstances in which a landlord or bill payer withholds consent to the green deal unreasonably, is a nut that we are determined to crack, and sensible arguments were made in the amendment’s favour. I am pleased to report that there is already provision in the chapter of the Bill on the private rented sector, to which we have yet to come, that will enable us to deal with situations in which a domestic landlord unreasonably refuses a tenant’s request for consent to the green deal.

Regarding the rights of bill payers to say no to the green deal, we need to tread particularly carefully here, because it impacts on consumer rights. There is a key principle that no one should be forced to accept a green deal charge on their energy bill against their wishes, but again we have to reconcile that with a case where an individual might unreasonably hold up the improvement of a large block.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I thank the Minister for his response so far. I remain concerned about the point I raised regarding the landlords of landlords and the extent to which we will catch within clause 43(2) a whole range of people who could put themselves in the position of landlord, and who therefore could unreasonably withhold permission for a green deal programme to go ahead.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

That is a good point. I can reassure the hon. Gentleman that we are looking into that and doing our best to unpick the matter in order to propose  a reasonable solution in secondary legislation. He is absolutely right in saying that that is a further iteration that may not be caught by the Bill.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I would like the Minister to clarify a point. When someone is dealing with a lease, we can use the terminology “landlord” or “landlords”. That would cover everyone, right the way from the freehold head landlord through to the various layers of landlord. Has the Minister had the opportunity to consult some of the larger estates in London, which are different from what we might think of as estates? Grosvenor, Howard de Walden and the Church Commissioners own vast numbers of properties in London and other cities. Has there been any consultation with those sorts of landlord who, if one could get their buy in, could have a massive impact?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Yes. I can reassure my hon. Friend that even in opposition, we began comprehensive discussions with large landlords of that nature and social housing landlords. We have created an informal body within the Department that has been tasked to engage specifically with those stakeholders. We are collaborating with them to try to pick our way through the area to ensure that we get a robust solution that is watertight and does exactly what we seek to do.

I agree that consent barriers are an important consideration. In the early days of the green deal, we will be watching closely, once we have got some real-time experience, to see if and how such barriers arise. Ahead of that, my officials are investigating possible solutions that will respect existing consumer rights.

The hon. Member for Brighton, Pavilion raised an important point about service charges and asked whether they can incorporate reasonable efficiency measures as well as like-for-like replacements. That is a good point. Unfortunately, that becomes fundamentally a housing matter, which comes under the competence of the DCLG. However, she has undertaken to write to me. If she does so, I will certainly happily take the matter up on her behalf, or in conjunction with her, with the Minister for Housing and Local Government, my right hon. Friend the Member for Welwyn Hatfield (Grant Shapps), to see whether we can get some forward movement there. Trying to update those practices would be incredibly complementary to the good working of the green deal.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I do not want to trespass in what has been a good debate. Does the Minister at least hope to report back to the Committee before the final stages of the Bill on how those discussions with the DCLG go? That seems to be a way of giving reassurance before we get to the secondary legislation.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am happy to do that, and I will await something from the hon. Member for Brighton, Pavilion.

On the points made by the hon. Member for Liverpool, Wavertree on the private sector and the review of take-up in social housing, we will have an opportunity to discuss our amendments to chapters 2 and 3 later in the Committee, but I can assure her that we are already actively engaging with the sector and have had some real interest from social housing groups in being among the very first to  participate. I have been impressed by the enthusiasm among some of the large social landlords, certainly in economically challenging places where the green deal is seen as not just for the repair of social housing but as a tool of potential economic revitalisation. There is a double benefit there, but there is a lot more that we can do to engage social housing landlords, and I will bring them together to see what more we can do to get not only real action among the usual suspects or the flagship social housing landlords, but a uniform roll-out right across the country.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I want to tease out the Minister’s thoughts a bit further with two questions. Are the existing dispute resolutions between landlord and tenant being explored in his discussions, and factored into a way to resolve the issues? Landlord to tenant is one issue, but the other issue that has been raised is landlord to leaseholder. If a complete block of tenants has signed up, but two recalcitrant leaseholders say, “No way will you touch my property,” how will that be resolved? I cannot see a contractual way of doing it.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I can assure the hon. Gentleman that the dispute resolutions will be covered in the way he suggests. On his second question, we are actively looking at that issue, to try to arrive at a solution. These complex issues do not lend themselves particularly well to simple drafting, but we are determined to crack it. I hope that that gives the hon. Member for Southampton, Test the reassurance he needs to withdraw the amendment.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I think I am about to withdraw my amendment, but could the Minister first expand slightly on the phrase “we hope to crack it”? Does he intend to crack it before Third Reading, does he have a longer-term view, which might come back to us in regulations, or does he not have a timetable for how to crack it but is assuring us that he will?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I think the answer to all three questions is yes. Yes, as we scrutinise the rest of the Bill we will see that there are ways of dealing with the measure, but we will need to address it further in secondary legislation. I do not pretend that we will have the complete answer in secondary legislation. I think that we will need to carefully look at the experience of the green deal roll-out and be prepared to come back and amend secondary legislation to ensure that we have cracked it in reality, because there are these unintended consequences. I will want to see it up and running and operating in real life, so putting it in secondary legislation will make it much easier to come back and tweak it to ensure that we really do crack the nut.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

On the basis that “it will be cracked” one way or another, and that the Minister will surely crack it because he is good at cracking things, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.

Clauses 7 to 15 ordered to stand part of the Bill..