Energy Bill [HL]
Debate between Baroness Smith of Basildon and Lord Best
Lord Best
My Lords, the amendments that I tabled called for a legally binding minimum standard of energy performance by the year 2016, but the Minister has not been able to concede that. I accept that the amendments that he has tabled are a small but helpful step in the right direction, but I want to place on record that I fear that the private rented sector will not do what it should do without a legally binding minimum standard being introduced by the Government for local authorities to implement. Without that, I fear that the Green Deal will not be as effective as it otherwise should be. But it is now for another place to discuss and I am grateful for the modest but important concessions that the Minister has made with these amendments.
Baroness Smith of Basildon
My Lords, I echo the Minister's comments about how the Bill has been conducted. It has been a great example of your Lordships working together to bring forward suggestions. I praise the Government for their efforts to look at the suggestions and amendments and bring forward amendments of their own. I recall at Second Reading the Minister said,
“I will clarify that this is a framework Bill on which there is a lot of work to be done”.—[Official Report, 22/12/10; col. 1151.]
During our deliberations, particularly in Committee and at Report, we have undertaken a lot of that work and brought forward amendments.
I also echo the Minister’s thanks to his officials who have been very co-operative with us. We are grateful for that help and support. I also place on record my thanks to the many organisations that contacted us during the course of the Bill, such as Friends of the Earth, the Association for the Conservation of Energy, the World Wide Fund for Nature and many others. Their work and that of the energy companies have been endless. I have had more e-mails and briefing on this legislation than I have ever had in my entire parliamentary career. It has been very welcome and appreciated and we do not take that support and advice for granted.
Energy Bill [HL]
Debate between Baroness Smith of Basildon and Lord Best
Lord Best
My Lords, Amendments 81, 82 and 83, which stand in my name and were aired in Committee, seek to address the problem that the Green Deal may make very modest inroads into the problems of poor standards of insulation in the private rented sector. The Government’s impact statement for the Bill recognises this problem and there was agreement in Committee on the difficulties of reaching those of the 1.2 million private landlords who own substandard properties.
In anticipation of continuing problems of getting landlords to take action, the Bill proposes giving enforcement powers to local authorities and giving tenants the right to trigger the necessary action. However, the Bill’s measures kick in, as we have discussed in relation to earlier amendments, only after a review has been concluded and the Secretary of State is satisfied that the measures will not deter lettings in the future.
My amendments cut to the chase, making sure that if there is only limited take-up of the Green Deal and if all other ways of securing action by private landlords were to fail, by 2016 it would no longer be legal to let properties with the very worst energy performance. Making the position clear would mean that all landlords and, very importantly, all managing agents—they look after some 60 per cent of private rented properties—know that they have five years to get the substandard premises up to the very modest E rating with 10 years to move them up to the D level.
Perhaps I may advance three reasons why these amendments, very carefully brought together by the Association for the Conservation of Energy and Friends of the Earth with considerable support from Members in another place, would help the Bill’s objectives in this tricky area of the private rented sector. First, setting a minimum standard as a legal requirement for letting greatly increases the chances of success in getting the works done to the more than 740,000 offending properties. The take-up of Warm Front and the CERT scheme has been poor in the PRS, and the misery of cold homes with attendant wasteful carbon emissions seems unlikely to end without the sanctions which a legal requirement for letting would bring.
As well as fixing the ongoing problems of fuel poverty for some 150,000 PRS tenants, the amendments would reduce problems of fuel debt. Citizens Advice tells me that it had more than 100,000 inquiries last year, which was up 33 per cent on the previous year, from people with fuel debts. A minimum energy efficiency standard of band E would save on average £488 for an average outlay of only £2,535, which would be a very fair rate of return. At the same time, according to the Energy Saving Trust’s research for Friends of the Earth, which the noble Baroness, Lady Maddock, has mentioned, these measures would save 1.87 million tonnes of climate-changing carbon dioxide each year, which Friends of the Earth calculates as being equivalent to taking 800,000 cars off the road. I guess that the Minister shares the widespread view that achieving a minimum standard will require sanctions at a later date. These amendments give that process the necessary teeth without the delays and uncertainties inherent in the proposed review and its aftermath.
Secondly, landlords and their agents are well used to complying with statutory requirements. The simplest comparison here is the duty to obtain a gas safety certificate. Obtaining an energy performance certificate with a rating of E or above is just as straightforward and, since few landlords would deliberately flout the law, can be expected very quickly to become a normal part of the letting process. I emphasise my point that managing agents are important in this regard. Few agents wish to bother their landlords with suggestions for extra spending or give themselves more work. But virtually all agents, as responsible corporate entities that are much easier to reach than individual landlords, will make sure action is taken if it is a legal requirement.
As the Bill is drafted, no action will be required of the landlord or the tenant until such time as the review has been concluded, powers have been granted to local authorities, and local authorities have taken decisions to act and given the requisite notice, et cetera. The reality is that this leisurely timescale, which stretches past the next general election with no certainty of its outcome, means that all those who are not minded to take these matters seriously will simply sit on their hands.
Thirdly, the proposed arrangements, assuming the necessary powers are granted in 2014 or 2015 to local authorities and tenants, rely on either or both of those parties taking the necessary action. Local authorities may already have the power to act against landlords who let the very coldest homes because these properties are likely to fail the test set out in the housing health and safety rating system. Yet despite these existing powers, local authorities, which have a lot of other priorities to handle, are not exercising them. Recalcitrant landlords can be fairly confident that few local authorities will chase after them if and when extra powers are granted to those local authorities.
Meanwhile, the fallback of expecting tenants to take matters into their own hands seems even less likely to achieve results. A very high proportion of tenants stay little more than a year in their rented property while, with the loss of security of tenure since 1988, all will recognise the high risk of not seeing their tenancy renewed or even of receiving a couple of months’ notice to quit if the landlord sees them as acting against his or her interests. How much better would be the legal protection given by these amendments to the tenant, and how much simpler, cheaper and more effective for local authorities, if they need only to ask for the necessary certificate in the knowledge that if it is not available the landlord is not permitted to let the property.
I suggest that in achieving what the Government wish—a minimum standard, even if it is at a low level in the next five years, with clarity and certainty for landlords and tenants, and ease of administration for local authorities—these amendments, which are so strongly supported by the wide membership of the Association for the Conservation of Energy and Friends of the Earth, do the job to good effect at less cost to the public purse.
I should add that Amendment 82 provides for exemptions for meeting the minimum standards, while Amendment 83 gives local authorities the powers to do the works themselves if landlords fail to take action or face fines. I am sure that these consequential amendments could be improved by the Minister’s department.
Perhaps I may say a few words about the exemptions from the legal requirement in Amendment 81 to give reassurance to landlords who are anxious about meeting a statutory minimum level of energy performance. It would be sensible for local authorities to have discretion to exempt properties in several circumstances; namely, listed buildings and properties in conservation areas, and national parks where there are special planning requirements affecting the interior or the exterior of the properties.
In relation to the debate on excluding properties where the tenant wishes to refuse consent for the Green Deal, an exception might be made here for regulated tenancies where a tenant does not wish to be disturbed. There are 100,000 regulated tenancies out of more than 3 million private sector tenancies. These tenancies have been in place since at least 1988. Unlike shorthold tenancies used in the rest of the PRS where the average length of stay is 14 months, a regulated tenancy has been going for 22 years or more. Because the occupiers have security of tenure, they are unlikely to move. Although these tenants would be well advised to accept the upgrading to their properties necessary to meet the minimum energy performance standards by 2016, I can see the case for respecting their right to veto any works to their home if they cannot face the upset.
I hope that the Minister, who has made so many excellent changes to the Bill so far, will see the sense of these amendments and take them away with a promise perhaps to bring back something similar at Third Reading.
Baroness Smith of Basildon
My Lords, the Minister will be aware of the strength of feeling on this issue from the debates we have had in Committee and from the two powerful speeches we have had this evening.
I speak not only to my Amendment 70, but also to the amendments in the group. They seek to achieve the same ends but by slightly different means. Their ambition is the same: to improve substantially the quality of the private rented sector in terms of energy efficiency. There is broad agreement on the aim; the differences are about how we best achieve that.
We should address the real concerns of the impact on those people who live in homes that are not energy efficient. In Committee we looked at the wider impact of cold homes. We spoke of the impact on those with homes rated in bands F and G. It is worth noting again, as mentioned by the noble Baroness, Lady Maddock, that the Chief Medical Officer has estimated that the annual cost to the NHS of winter-related illnesses is more than £850 million. It is huge; it is absolutely massive. That is not just across the private rented sector; but some of the worst homes, some of the least energy-efficient homes, are in the private rented sector.
I want to say something about the impact that has on the individual. None of us in your Lordships’ House tonight lives in a private rented home that is rated band F or band G. Neither would we want to. If we did, we should be paying an extra 50 per cent in fuel bills to heat our homes to the same level as a band E rated property. If those properties rated F and G were brought up to band E standard, the difference would be between £500 and £800 for the bill payers. It can make a massive difference.
The energy scale goes from band A to band G. Band G is the worst for private rented homes. If we raise that standard to band E, it would take about 150,000 private rented households out of fuel poverty. That is 150,000 families with children and older people—25 per cent of all private rented households—who are currently in fuel poverty. Forty per cent of F and G rated properties can meet the standard for less than £1,500 per property. The average cost is about £270 per property. Sixty per cent of F or G rated private rented properties could meet this standard for less than £5,000. The amounts we are talking about, which would make a massive difference, are not great. I believe we can do this. Landlords with poor-performing property should be given help and advice about how to meet the standard and there should be a substantial increase to the landlords’ energy saving allowance.
I do not think that the wider public know what we are talking about when we talk about F and G rated property being brought up to E standard. It becomes a jargon. I asked Friends of the Earth and ACE to give me some case studies of what it means to people. What is the difference? What is the impact on people living in these properties? These people gave Friends of the Earth permission to publish their stories on condition that they only gave their names and the general location of where they lived. Susan from Abergavenny said:
“My 11 year-old daughter and I are currently moving out of a rented house. The house is freezing cold, with no draught proofing and draughty sash windows with huge visible gaps in the window frames. During the recent cold weather, ice formed on the inside of the window each morning. On Christmas Day, I was able to write ‘Happy Christmas Ellie!’ on it. Despite asking my landlady to help on this issue, she said it was our concern to keep the house warm.
We spend enormous amounts on heating but are never warm”.
This is repeated over and over again. Kristie from Pinner lives in a one-bedroom flat on her own. She says that her heating bills are 12 per cent of her monthly income. She says:
“I have told my landlord about this and asked for a better heating system, but he said it’s too expensive”.
Jennifer from Nottingham says:
“This winter has been unbearable in the house, no matter how long we put the heating on for the house remains freezing. I visited my doctor at home over Christmas with a cough that I’ve had for over 3 months now. He said that the house has probably given me a lung sensitivity and I am now on an inhaler to try to help it”.
These are real people suffering day in and day out. Environmental health officers, GPs and a midwife all tell the same story.
There are some glimmers of hope. Jenny from Norwich tells us:
“As an elderly landlady with a single small property rented out, I put my tenant’s warmth and health as high as my own. Two years ago they had an up-to-date boiler installed and this year, during other renovations, the attic insulation was increased to current standards and the gas fire replaced. If, as someone living on a smallish pension, I can afford to do this, then so can more regular landlords”.
I shall not continue with these stories, but I am sure noble Lords would find them as emotive and as heart-breaking as I do.
It seems that there are two or three key issues before us today with the amendments. One is the regulations to improve energy efficiency in the private rented sector. We had lengthy debates on this in Committee. The general view was that we needed action on this as soon as possible. I have no objection to any review being undertaken of energy efficiency in the private rented sector, but there is no justification to use this as a delay for bringing in regulations.
Energy Bill [HL]
Debate between Baroness Smith of Basildon and Lord Best(13 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text
Baroness Smith of Basildon
I thank the Committee. This is a probing amendment to look at the powers of local authorities regarding sanctions and the non-letting of properties where landlords have failed to make the required energy efficiency improvements. Clearly, landlords need to be given a reasonable length of time to comply, and that must be built into the notice. We should look at this in the light of later clauses.
Imposing a fine on a landlord who has failed to comply is not always the best way to proceed. If a landlord is fined for not complying with energy efficiency improvements, he has to recoup the money he has been fined and the energy efficiency of the property will not be improved. The council could seek to undertake the work and put a charge on the landlord through the Green Deal, through rent or by other means. It seems to me that where a landlord does not comply, it is necessary to make a range of compliance tools available to local authorities, giving them a number of options to take up depending on the circumstances. I am rather reluctant to follow the line of fining landlords or seeking to remove properties from letting as the first course of action. Every case has to be looked at on its merits.
As I have said, this is a probing amendment to look at what the Minister envisages in this regard. What kind of tools does he consider could be made available to local authorities to ensure that energy efficiency measures are implemented within a reasonable and appropriate timescale? I beg to move.
Lord Best
I am not sure that the new clauses I have proposed to come before Clause 40 fit terribly well at this point, but since they have been grouped with Amendment 20TA, perhaps I may now speak to them. I have a feeling that may well be familiar to noble Lords. I might have wasted my Sunday preparing a lengthy speech because the debate up to this point has already covered much of what these proposed new clauses seek to address. The point of them is to add a few more teeth to the regulatory process and to try to ensure that the difficulties in the private rented sector that we have been discussing are dealt with by reaching all landlords.
I ought to add a point that has not yet arisen. It is often necessary to reach the agents of private landlords. Some 60 per cent of homes in the private rented sector are managed by managing and letting agents rather than directly by landlords themselves. I declare an interest as chairman of the council of the Property Ombudsman that receives the complaints about managing agents. Although I can assure you that most agents do a very good job, there needs to be some protection against lazy agents who do not get round to doing the things that they ought to do on behalf of their landlords and on behalf of the tenants who live in those properties.
Lord Best
My Lords, I will address the point that the Government are very keen for there to be no barrier to the entry of new landlords into the market. It is improbable that people will enter at the level of the worst properties in the worst conditions. The buy-to-let market has become an extraordinary phenomenon. More than 1 million properties have been acquired on a buy-to-let basis. The typical profile of these properties is that they cost around £100,000 to £110,000, are brand new and are in a block of flats built by a housebuilder. The energy rating for these properties is pretty good. One would not be setting a big barrier if one prevented the entry into the market of landlords who buy the most rubbishy properties on the market. It might be a good idea if they were required, before they let them, to bring them up at least to band E as a basic level. With those provisos, we live to debate this another day.
Baroness Smith of Basildon
I am grateful for the Minister's comments, but I am not sure that he answered any of the points that I raised. I am still seeking guidance from him about the non-letting of a property where a landlord has failed to make the required energy efficiency improvements. I think that the Minister was referring to Clause 37(2)(c) when he said that the legislation provided that regulation should apply first to the worst performing energy efficiency homes. It defines a property in this category as one that,
“falls below such level of energy efficiency … as is provided for by the regulations”.
The Minister has not made it clear, and we do not yet know, what that level will be, although there has been a lot of guidance to the Committee that it should not be below band E. What happens when the landlord does not meet that standard? At what level would the local authority be able to tell the landlord not to re-let the property? That was the point that I was probing and that the Minister has not yet answered.