Energy Bill [HL]

Debate between Lord Best and Baroness Maddock

Tuesday 15th March 2011 Lords Chamber

[Baroness Maddock]

My Lords, during the passage of the Bill, I moved several amendments on, and we had long discussions about, the private rented sector. At Report, the Minister said that he agreed in great part with what I was saying and that he hoped to be able to bring forward amendments on the private rented sector going further than they had previously. They have gone a little bit further today. I hope that, as the Bill passes through another place, the Government will be able to take a slightly closer look at the private rented sector.

In the time that we have been discussing the Bill, the most recent English housing survey has been published. It shows that the number of properties in the private rented sector has increased by 1 million in the past 10 years. Such properties now account for 15.6 per cent of England’s housing stock and that number appears to be rising all the time. I remind the Minister, although it will not be his responsibility in the other place of course, that 20 per cent of private rented sector households live in fuel poverty. If we look at the bottom end—at bands F and G, which are the groups that I have spent a lot of time discussing during the passage of the Bill—that rises to 42 per cent. I have said at least twice during the passage of the Bill that, in many cases, we are footing the bill for the rent of these properties through housing benefit.

I thank the Minister for moving a little in my direction and I hope that his colleagues in another place will be able to take a further serious look on these issues.

[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.

Energy Bill [HL]

Debate between Lord Best and Baroness Maddock

Monday 24th January 2011 Grand Committee

[Lord Best]

I am speaking to the two amendments grouped with Amendment 20TA; namely, Amendments 21ZA and 21ZB. Further, I think we will probably be able to embrace a bit of 21ZC.

These two proposed new clauses have been prepared by the Association for the Conservation of Energy, which represents 30 organisations in this field, and Friends of the Earth. They are trying to avoid the pitfalls of the Green Deal, of which I am a tremendous supporter, proving to be a bit of a wet blanket for some parts of the private rented sector. They establish a minimum standard of energy efficiency at band E on the energy performance scale, which we suspect is where the Government are going in any case, for all properties that are let from 2016. To put it in the negative, this would make it illegal to let a property after 2016 if it does not accord with the minimum standard set at band E, which is a pretty modest level but one that affects some 350,000 properties in the private rented sector. As we all know, the private rented sector has a much higher number of properties that are in need of bringing up to new standards.

Let me give the reasons why this might be a good plan. Knowing that this legal obligation will kick in in five years’ time would mean that landlords are likely to gear up now to make sure that their properties meet the standard. Their agents will also know that it is coming, so they can prepare for this as a certainty in the future. This follows the same approach that the Government have already determined for commercial properties, where a minimum standard will apply.

Properties that are rated only F and G are in fact classified as a health hazard, a category 1 risk, under the housing health and safety rating system. Action to enforce that measure, however, has proved to be difficult. Local authorities have other fish to fry, they often do not have enough environmental health officers to go round and there are other priorities. This would address the health hazards of people, often on low incomes and vulnerable, who are prone to hypothermia and winter deaths in these low-energy rated properties. It does not put the onus on the tenant, and indeed it is unrealistic to expect tenants in all cases to be bold enough to go through the hassle of requiring their landlord to do something. We should remember that many tenants have short-term tenancies. They do not have security of tenure and, if they fall out badly with their landlord, the tenancy may not be renewed. It is better if there is a regulation outside of the landlord-tenant relationship to do this.

Landlords, and as I mentioned in 60 per cent of cases their agents, are familiar with the gas safety certificate. The new regime that requires you to meet an energy performance certificate standard is just the same as the gas safety certificate. Landlords have all got used to it. Tedious as it may seem, you have to go through the inspection process and the property has to meet the gas safety requirement. This is a health and safety matter as well, so they would have to meet the energy requirement on that same pattern. This is classified as moving into regulation, but it is fairly light-touch bearing in mind that band E is a pretty low level to reach, and it is five years away, giving plenty of time for people to get there.

It gives local authorities a specific measure and a clear duty. They know where they stand and they can get on with it. These clauses would be a helpful addition to the Bill. They also put on the Secretary of State the duty to take the minimum standard up another notch by 2020, since band E still represents a very basic bottom line.

The second proposed new clause here puts some constraints on the requirement to meet a minimum standard over the next five years or face a fine of up to £10,000 if it is ignored. These constraints are that there must be exceptions where the landlord can show that achieving the minimum standard is impractical; it offends against the golden rule. The tenant may refuse to have the works done, although there is still a question mark in my mind following the point made by the noble Earl, Lord Cathcart, as to what happens when there is a group of tenants of which all but one are keen to see energy efficiency measures in their block of flats or converted house, and one tenant refuses. There may be more to be said on that, but where the single tenant of a single property refuses to have the works done or because the changes would reduce the value of the property, these circumstances would be exceptions and the obligation would not apply.

Secondly, there would need to be a duty placed upon the Secretary of State to establish an appeals process to ensure that all was fair and proper. Thirdly, if in a particular local authority area there is evidence that the new requirement is leading to a shortage of rented properties, which frankly is an unlikely event, the Secretary of State could then suspend the minimum standard for that area. This contingency seems better than a blanket suspension across the whole country on the basis that the number of homes to rent had fallen in one or two specific places, as it would target the places where it happens.

These amendments seek to ensure that for the private rented sector the Green Deal is not a damp squib. They make it pretty certain that the very worst properties will be tackled within the next five years. Landlords will know where they stand, and voluntary action over the years ahead seems highly likely. I was pleased to note that the thinking behind these amendments is endorsed by the Government’s fuel poverty advisory group, by the Committee on Climate Change and by the many MPs who signed the Early Day Motion. I was also going to quote the Mayor of London, but the noble Baroness, Lady Smith of Basildon, has already done that for me.

[Baroness Maddock]

My Lords, my name is attached to the amendments to which the noble Lord, Lord Best, has just spoken. I do not intend to say much. It is clear from the amendments I moved earlier that I have a great deal of sympathy for what the noble Lord is saying. Perhaps we can also discuss between the Committee and Report stages whether there is some merit in doing more to encourage the private rented sector and to help local authorities with this work. I support the noble Lord, Lord Best, and I hope the Minister can at least agree to discussions on the detailed proposals that have been put forward.

[Lord Marland]

I am very grateful to the noble Lord, Lord Best, and for the support expressed by my noble friend Lady Maddock. The noble Lord spent a constructive Sunday writing his excellent speech because it has given us a good picture of what is going on in the sector. In many ways I wish he had spoken earlier, because he would have set the scene nicely for some of the debates today, as indeed he did at Second Reading.

Amendments 21ZA and 21ZB would insert two new clauses setting a minimum energy efficiency standard. However, they go further in that they would prevent the renting of properties that do not meet the minimum standard. They would also allow for the Secretary of State to suspend regulations with any local authority area if it is found that regulations are having an adverse effect on supply. Amendment 20TA would also prevent a landlord letting a property if a notice had been served by a local authority but not complied with.

The amendments raise an interesting proposition: that of using a minimum standard to improve performance in the sector and preventing properties that do not meet this new standard from being let. I read them with interest and welcome their intention to create a level playing field in terms of energy efficiency within the sector. However, I cannot accept the proposals for two reasons. First, I reassure the Committee that the provisions as currently drafted in Clause 37 already target the worst performing properties. Secondly, and most important, we will achieve this without setting minimum standards, other than those that have been referenced, which could be viewed as a barrier to new landlords entering the market. We are trying to plot a pragmatic and sensitive course.

Amendment 21ZB would give powers to the Secretary of State to suspend minimum standard regulations in local authority areas where they could be shown to be impacting adversely on the supply of properties available. As I have outlined, it is not our intention to impact on the market; in fact, it is the opposite. We want to create a more attractive rental market for improved properties. The review already creates a safeguard. It will take a very careful look at the impact of potential regulation on the rental market across the country.

I turn to the issue of timing, which we have covered quite frequently. Amendment 21ZA proposes that regulations, if any, be made no later than 1 January 2016. The noble Lord, Lord Best, has already referred to that. I hope that this explains the Government’s position. I am extremely grateful for the very valuable input, but I hope that these amendments will not be pressed.