Clause 16 - Sanctions for non-compliance with obligations under sections 12 to 15

Energy Bill [Lords] – in a Public Bill Committee at 3:00 pm on 9th June 2011.

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Question proposed, That the clause stand part of the Bill.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change) 3:15 pm, 9th June 2011

I do not intend to take a great deal of time in discussing clause 16; I just wanted to make a point to the Minister briefly. Clauses 12 to 15 deal with the disclosure of green deal plans, outlining some of the specific details about when a green deal should be disclosed and how that should happen. I want to ask the Minister about the sanctions for non-compliance in relation to disclosure of the green deal plan. I would like him to outline to the Committee what his intentions are, given that clause 16(1) says:

“The Secretary of State may make regulations—

(a) for the purpose of securing compliance”,

and given the fact that there will be sanctions for non-compliance in relation to disclosing the green deal plan, including the imposition of a civil penalty. I am very keen for the Minister to share with the Committee what the intention is in respect of those sanctions, particularly the imposition of a civil penalty, if a green deal plan is not disclosed.

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

The clause enables the Secretary of State to provide for sanctions to ensure that those with obligations to disclose or secure an acknowledgement under clauses 12 and 14, and under regulations made under clauses 13 and 15, meet those obligations. It allows for the following specific provisions: sanctions for non-compliance, including civil penalties; requiring the green deal provider to cancel liability of a bill-payer to pay green deal plan instalments; requiring a green deal provider to refund any payments that have already been made; and requiring those at fault to pay compensation to green deal providers.

We will work with relevant industry stakeholders to develop options about how we achieve these arrangements, and then we will consult before setting them out in regulations. Our aim will be to use existing and well-established systems of sanction and redress where possible, but we need to be confident that the sanctions will be sufficient to deter non-compliance. Further work will be necessary to determine what level of civil penalty will be effective, and the Government will work with stakeholders to ensure that the sanctions are proportionate.

The question has been asked, “Will the sanctions introduce a new criminal offence?” The answer is no. There are already a number of criminal offences and penalties that may be relevant in extreme cases, where someone deliberately attempted to hide a green deal for material gain at somebody else’s expense. However, we anticipate that civil penalties—by which I mean fines—will be most appropriate in most cases, together with the ability to require those who have not met their obligations to pay compensation.

We will work with stakeholders to determine the best approach. Our starting point is that the penalties must be sufficient to deter non-compliance and we will work with industry stakeholders, such as the Law Society and the Royal Institution of Chartered Surveyors, to determine both the mechanism and the level of sanctions that will be required to ensure compliance.

The disclosure and acknowledgement requirements are vital to the effective operation of the green deal, so we need robust and transparent sanctions to ensure compliance with them.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

I thank the Minister for his helpful response because, to date, we have not received details of what will happen in practice. I look forward to exploring matters further when the consultation has taken place and the secondary legislation has been drafted.

Question put and agreed to.

Clause 16 accordingly ordered to stand part of the Bill.