Green Agenda

Debate between Lord Dixon-Smith and Baroness Smith of Basildon

Thursday 12th January 2012 Lords Chamber

[Baroness Smith of Basildon]

I would like the noble Lord to stop there.

[Lord Dixon-Smith]

Flattery gets you everywhere. I wish to look at this issue of the Government’s green agenda from a slightly different perspective and take a different line across country. I remind the House that we are talking about a great international problem, and there is no future in our finding a solution to our problems if the result is that other countries simply replace what we are doing and carry on in the way that we are at present. This is a problem that in the end every country will face. Third World countries living relatively simply today will have to look at measures such as those that we are examining.

The other point that is worth noting at this stage is that the two biggest carbon dioxide emissions countries in the world, the United States and China, are also the two biggest countries investing in green technologies. Perhaps there is something in that; it is a real and remarkable point. The fact is that every major economy in the world is concerned about this issue.

I am going to begin with an interesting fact. I have obtained some information from the Carbon Dioxide Information Analysis Center at Oak Ridge in Tennessee, in the United States, where a group has plotted graphically the carbon emissions performance of almost all the countries in the world. In the instance of the United Kingdom, that goes back to about 1750. We can all make those comparisons, and it is worth looking at what has happened in the past.

For the purpose of today’s discussion, I wish to tell the House that we have pledged an 80 per cent reduction in our 1990 emissions. That implies that we are going to reduce our emissions to a point that we passed in 1850 when the population of this country was 22 million. That is the breadth and depth of the task that we have set ourselves, and it is a big one. We now have three times the population using five times the amount of energy, and modern society is energy-intensive and will continue to be so.

It is inevitable that our approach to begin with is based on what we can do immediately, because that must be the quick and easy way to start. We have the Climate Change Act and we have set targets. The Climate Change Committee actually reduced the targets —I am sorry; there is a question of whether it is a reduction or an increase—rather, it set a more severe target as soon as it was formed, giving us the 80 per cent figure that we have to go for. However, the question that tends to be asked is, “What do we have to stop in order to solve this problem?”. My concern with that question is that the public at large see that as a negative question, and they do not like negative questions. Somehow we have to turn it around to a positive one: “What do we have to do in order to ensure that we can keep everything going?”. That is a very different approach and one that would be much more acceptable to the general public who on the whole—I say as far as I am capable of experiencing the public’s views—are rather bored by the entire subject and think that it does not really apply to them. At least if we get the long-term implications right, we should begin to make some progress.

The present problem is exacerbated by an approach that appears to treat all carbon dioxide emissions equally. I am not going to say that carbon dioxide emissions are ever beneficial, but some are much more essential to society than others. When we look at the severity of that 2050 target, I suggest to the House that we are simply looking at having emissions by that date that are essential for society—everything else has to be emission-free.

I am going to be a bit daring and suggest some possibilities that are essential. We cannot do much about emissions from agriculture, currently about 8 per cent of total emissions. The food business is an international problem. The emissions largely come from livestock—it is not really an arable sector problem. Food is both essential and the biggest single emitter of the categories that I am going to enunciate.

The smelting industries are essential to society; we cannot do without our metals. Cement manufacture is essential to society; we cannot do without construction. And finally—I nearly used a phrase that I used once before and which got me into trouble—international transport, both aviation and shipping, are now essential to all communities across the world, and we cannot cut those back. We may need to think about treating the emissions from those sectors—other people may wish to add to that list—in a different way from how we treat the generality of emissions. Outside that field, everything has to become zero-emission.

That is a harsh analysis, but we need to be moving in that direction now. We need to start thinking about those distinctions so that we know where we are going, because they define the depth of the problem that we face in trying to make homes and all land-based business and transport zero-emission. We already have a basket of technologies that would make that possible. However, there is a problem: we do not know which of those technologies will in the end be successful in the international field. We are a country that lives by international trade and development going on across the globe. As I have already said, this is an international problem, so that factor is very important.

What particularly concerns me is that in the short term we can take decisions, partly as a result of this approach, that will actually make it more difficult for us to hit the long-term targets, partly because we shall be committing ourselves to technologies that are expensive and in fact will have to be written off because they do not prove to be internationally competitive. I regret to say that I see no solution to that risk—I wish that there were one—so it is one that we are going to have to take in our development. That means that we should not put too many eggs in one basket. It also means that we should not go too quickly at present. I do not care for the targets for 2020, 2025 or even 2030, unless and until we have totally considered the 2050 target and its implications for society at large. I am satisfied that that can be done. If you supply a house with nothing but emission-free energy, then by definition, Green Deal or no Green Deal, that house is zero-emission. The same applies to every business and, if we can do it, to transport; the technologies exist. We need to take a careful look at the long term, and use that to apply our policies today.

Energy Bill [HL]

Debate between Lord Dixon-Smith and Baroness Smith of Basildon

Monday 24th January 2011 Grand Committee

[Baroness Smith of Basildon]

My Lords, I speak to Amendments 20RA and 20YA, which, in the new groupings list, are in this group. When I spoke to the previous group of amendments I mentioned the scale of the work that needs to be undertaken to improve the energy efficiency of our private rented sector and how many homes are affected. If we look at the information we have got from our own impact assessment report, from fuel poverty groups, from Friends of the Earth and from the Residential Landlords Association, we see that all are agreed that this is an enormous sector with enormous problems. The scale of the work that needs to be undertaken is huge. It is important that we discuss these amendments to ensure that we get it right.

Amendment 20RA seeks to take on board comments made last week on the issue of “shall” and “must”—that the Minister “must” make energy efficiency regulations. As the clause stands, it pushes back any intervention on private rented stock. I am not clear about when the timescale will start. I know when the review will start and how long it will roughly take, but we will not see any regulations in place until 2015. It is difficult to ascertain when the regulations will become effective and when that will come into play. We are talking about beyond the next election—four or five years away—before we see any significant improvements in the private rented stock.

One of my concerns is that that does not create the certainty for those involved to prepare to undertake the necessary work. At this stage, landlords do not know what is required of them. They do not know if and when, or to what level, they might be required to undertake work. In an earlier debate, the Minister talked about giving clarity to the private rented sector, but these regulation-making powers do the exact opposite. They give very little clarity because of the conditionality on them.

If the industry is to meet the needs of the Green Deal, it needs clarity, probably on the scale of the take-up, although I appreciate that that will not be easy at first. The industry will need to know what skills, training and employment will be required. Local authorities will need to know what is required of them. It is so far down the road that that will be very difficult and the conditionality will add to it. It could mean that this will have little impact and the worse properties—that is, the bands F and G-rated properties—being with us for many years to come. I am sure that that is not what the Minister intends. However, the wording of the Bill would have that effect.

There are a number of reasons why we might want to move more quickly. If we continue to have so many F and G-rated properties, the impact will be higher bills for those tenants and health issues. The Chief Medical Officer has estimated that the annual cost to the NHS of winter-related diseases due to cold housing is in the region of £859 million. That is a significant cost to the NHS and the Government.

I take on board the comments of the noble Baroness, Lady Maddock, about minimum energy efficiency standards. I have some sympathy with them. I would be grateful if the Minister would look at this. The costs of improving properties in bands F and G to raise them into band E are well within the Green Deal. That would give the critical mass needed for it to take off; it would give certainty to those involved; and a significant number of people in F and G properties—something like 40 per cent of tenants in these properties are in fuel poverty—could be moved into E-rated properties for less than £5,000 for each property. That is a significant issue.

I am unclear also about how the Minister can make regulations—it would be helpful if he would explain this to me, because I may have missed something—unless he knows what he is aiming for in terms of the kind and level of improvements that need to be made to those properties that are not energy efficient. How does he know that the correct regulations are in place? Owners will need to know what standard their properties must be brought up to. It may be a missed opportunity if we just look at the golden rule, which is arbitrary and will change over time—it is guidance more than anything else—and in two or five years find that those properties are still rated F and G because the work that has been undertaken has not been to the required level.

The Committee on Climate Change has recommended to the Government that there should be mandatory energy efficiency standards in the private rented sector. I do not often quote the Mayor of London, Boris Johnson, in support of proposals that I am putting forward. He stated:

“I agree that requiring landlords to meet energy efficiency standards when properties are re-let could be an important tool in improving the energy efficiency of the private rented sector in London. How these standards are communicated and enforced would be key to their success”.

There is a lot of sympathy for the view that landlords should know what is expected of them before they start on the process. It will be difficult for them to embark on it if there are no changes to the Bill before it passes into legislation. I am not clear what message that would send to landlords. Will they think, “This may happen later” or, “There will be changes. I should prepare for them now. What can I do?”? The issue is about giving certainty to landlords about whether they need to take action and, if they are to take action, what level of action they should take. The proposals point in the right direction, but are rather weak. If we are to see this critical mass, certainty must be given to those who rent out properties, to those who pay to rent them and to local government.

I will speak briefly to Amendment 20YA. I tabled this as a question to the Minister because I was confused. The amendment refers to Clause 38. I looked for an explanation of what it meant in the Explanatory Notes, which state that,

“the Secretary of State could provide that a landlord is not required … to make improvements if he cannot obtain consent which is required to be given by his freeholder”—

that is understandable—

“or if the property is likely to be worth less as a result of the improvements being installed”.

I cannot envisage what improvements to energy efficiency in the home would make the property worth less. Who would make the judgment that the property is worth less? This could be a get-out clause for the landlord to say, “If I do that, I won't get so much rent in” or, “If I do that, I couldn't sell it”. Will the judgment be made on rental income or the price that the property would fetch if it were sold? It would be helpful if the Minister would give us more information.

[Lord Dixon-Smith]

I feel compelled to intervene because I am not quite sure whether we are going in the direction in which this Bill should be aimed. I go right back to Clause 1(2),

“An energy plan is an arrangement made by the occupier or owner of a property for a person to make energy efficiency improvements to the property”.

The occupier of a property may well be the tenant. We have made a great deal of the efficiency or inefficiency of certain landlords. They do not just occur, sadly, in the private sector; there are good and bad landlords in the public sector. There are good and bad tenants in both sectors. The essence of this scheme, however, was that if the landlord did not want to do something the tenant could. I thought that the essence of the scheme was that it was voluntary but if I listened to my noble friend Lady Maddock correctly, and I am not sure that I did, she seemed to be thinking that perhaps local authorities should be in a position to compel.

I am not sure I agree with that because that is not within the original purpose of the Bill. But maybe I have misunderstood the Bill or maybe I have misunderstood the noble Baroness. I am not sure which; I am becoming rather confused. That is why I am speaking. I thought that this Bill was designed to give the property occupier—if the owner happened to be there, that would be fine and good—the right to take action which is in his own interest. If that is so, it is perfectly true that he would probably have to get the consent of his landlord because almost all tenancy agreements that I have seen say that any alterations to the property must be made with the consent of the landlord. I cannot conceive, as the noble Baroness, Lady Smith of Basildon, has said, that any landlord is ever going to refuse to have this sort of action taken in a property in their ownership. She is absolutely correct to say that action like this must enhance the value of the property one way or another.

That is not the bit that concerns me. It is that we seem to think that we should be giving local authorities powers to compel landlords to take action, but they are landlords themselves very often. I am quite happy that they should be compelled to take action for themselves, but I thought that the essence of the Bill was that this was an arrangement essentially between the consumer of energy and the energy supplier. If that is the case, I am very concerned about these amendments because they seem to imply something else.

I am anxious to see homes having their energy efficiency improved as soon and as rapidly as possible. However, it seems to me that the process suggested, and which I thought lay behind this Bill, would be likely to achieve that faster than any action implying that compulsion might come from somewhere else would be likely to do.