Energy Bill [HL]

Debate between Baroness Maddock and Baroness Parminter

Monday 24th January 2011 Grand Committee

[Baroness Maddock]

I rise to move Amendment 20E, as set out in the Marshalled List, and I will speak to Amendments 20F, 20G, 20H, 20J and 20K.

As we are starting on the chapter of the Bill that refers to the private rented sector, let me make a few general comments before speaking to the amendments. I welcome the fact that, for the first time, the Government are making a serious attempt to deal with energy efficiency in the private sector. The issue has dogged the housing world for a number of years, so I really welcome the Government’s proposals.

In making a few general points about the situation in the private sector, I also want to mention fuel poverty. In many cases, not only is private rented accommodation the worst maintained part of our housing stock, but it contains a large number of vulnerable households and those living in fuel poverty. The sector accounts for 14.2 per cent of the housing stock—a little over 3 million homes in England—and has a disproportionately high number of homes with the worst energy performance ratings compared with other sectors. According to the Government’s fuel poverty advisory group, 19 per cent of private tenants live in fuel poverty. According to the Chief Medical Officer, the annual cost to the National Health Service of winter-related diseases due to living in cold homes is something like £859 million.

Historically, landlords have had little incentive to improve their properties because the tenants rather than the landlords pay the fuel bills. A substantial coalition of bodies outside this House has now called on the Government to introduce a legal minimum standard of energy efficiency for rented homes and to make it an offence to let a property that does not meet the standard until it has been improved. I put on record that those organisations include: Age UK, Consumer Focus, Citizens Advice, Crisis, the National Childbirth Trust and Macmillan Cancer Support as well as councils up and down the country.

There has already been much discussion about the issue in another place, where an Early Day Motion has been signed by 147 Members of Parliament from across the political spectrum. The Government’s fuel poverty advisory group strongly supports the proposal—noble Lords might like to look at its annual report for 2009 rather than have me read it out here. Further, the Committee on Climate Change has called for mandatory energy efficiency standards to be set for the private rented sector.

The Government’s recognition that special attention needs to be paid to the poor condition of private rented properties is very much in line with views held outside Parliament and among civil society. The Energy Bill contains provisions that could, if taken up, give the Government powers to improve rented homes. My series of amendments aims to strengthen the Bill by introducing minimum standards that both landlords and tenants could both understand and plan for the introduction of.

Let me give a bit of detail about the minimum standard and its influence on fuel poverty. In December, Consumer Focus published a report setting out an impact assessment of Friends of the Earth’s minimum energy standard proposals. In terms of the measures required and their costs, two scenarios were investigated: one was to meet a minimum band E standard by 2015; the other was the impact of raising the minimum standard to band D by 2020. Raising the minimum energy performance certificate to band E for private rented homes would remove 150,000 households in the private rented sector from fuel poverty—25 per cent of households in private rented accommodation are currently living in fuel poverty. Raising the EPC for such homes to band D by 2020 would remove a little over 300,000 households from fuel poverty, which represents 50 per cent of those currently living in fuel poverty in the private rented sector.

The cost of doing that would not be as high as some people might think. A study has found that the cost of meeting the minimum standard would be low and would be well within the levels of finance associated with the Green Deal. In many cases, the cost would be low enough to be easily financed directly by the landlord, with no impact on rents. Some 40 per cent of F-rated and G-rated properties could be improved to EPC band E for less than £1,500, at an average cost of £270 per property. Of those properties in bands E, F and G, two thirds could be improved all the way up to band D for less than £3,000 per property. That is consistent with some work done by the Energy Saving Trust, which concurred that most F and G-rated properties could be improved to band E for less than £3,000. The Energy Saving Trust also said that 60 per cent of F and G-rated private rented properties could be brought up to band E for less than £5,000.

I turn to my amendments to Clause 35. As drafted, Clause 35 limits the categories of domestic short-term lettings that will come within the provisions of Chapter 2 to those categories of tenants that are expressly included within the provisions of the Rent Act 1977 and to assured short-hold tenancies under the Housing Act 1988. Undoubtedly, that captures the bulk of short-term lettings, but it certainly does not capture all forms of dwelling that are owner-occupied. Therefore, the purpose of my amendments is to expand the tenancies and dwellings included in this clause. Amendments 20E to 20J in my name would apply in particular to agricultural workers, whose tenancies have for some time been treated slightly differently from those of other tenants in landlord and tenant legislation.

Historically, many agricultural workers have occupied self-contained accommodation owned by their employers, often at very low rent. The Rent Act 1977 did not apply to tenants who were occupying buildings at no rent or very low rent. Instead, the bulk of agricultural workers are covered by the provisions of the Rent (Agriculture) Act 1976, which offers security of tenure to people occupying buildings at nil or low rent providing that they work in full-time agriculture. In 1989, the provisions of the Housing Act 1988 replaced the provisions of the Rent Act 1977, but again no specific provision was made for agricultural tenants. Living in rural Northumberland, I am very much aware of this issue, and I hope that the Minister will look on this matter favourably.

Amendment 20K—the last of my amendments in this group—would expand the categories of domestic occupiers to include those tenancies currently excluded by Schedule 1 to the Housing Act 1988 and also some houses in multiple occupation. The amendment would also allow the Secretary of State to include other definitions, should that be desirable at some point in the future.

The complication with the tenancies that have been left out is that the Government have used the Rent Act 1977 and the Housing Act 1988 to define a domestic PR property. However, in neither of those statutes was the building the central point. The Rent Act had two main purposes: to establish a fair rent structure and to seek to provide security of tenure for tenants while striking a balance between security and the needs of the landlord. The Housing Act 1988 similarly dealt with security of tenure. A long list of forms of occupation of dwellings were excluded from the Housing Act 1988 because it was considered inappropriate for tenants to have more security than they already had. However, this means that many properties that are actually dwellings will be left out of this Bill. I hope that that explains to the Minister why I think that this is important and that we look a little further at doing that. I beg to move.

[Baroness Parminter]

I support my noble friend Lady Maddock in her amendments, which seek to extend the reach of the Bill to those who live under short-term residential leases. While the Bill will ensure that the majority of those in the private rented sector will benefit from the Green Deal, about 1.5 million properties with long residential leases are outside the scope of this Bill. Many of those leases require the permission of the landlords for home energy improvements. In some cases, there may be an absolute prohibition on such improvements. I am aware of a leaseholder who is looking to make a home energy improvement of fitting a new gas boiler, but because that requires an external flue he is unable to get his landlord’s consent.

I accept that there are issues around long residential leases. I am also very much aware—and I am grateful—that the department is aware of those issues, but I hope that the department might use the period of the proposed review of the private rented sector to look closely at the issue of long residential leases and at how we might extend the Green Deal to the 1.5 million people who at present have long residential leases and are currently excluded from the benefits of the Green Deal.