Housing and Planning Bill

Debate between Lord Foster of Bath and Baroness Young of Old Scone

Tuesday 8th March 2016 Lords Chamber

[Baroness Young of Old Scone (Lab)]

My Lords, I am very pleased to join the noble Baroness, Lady Parminter, and the noble Lord, Lord Krebs, in adding my name to this amendment. I declare an interest as a member of the Select Committee on National Policy for the Built Environment and, many years ago, as a founder member, with the noble Lord, Lord Krebs, of the adaptation sub-committee of the Committee on Climate Change.

It is rather bizarre. At a time when we are talking about building 1 million new houses by 2020, of which 200,000 will be starter homes and even, allegedly, some will be affordable homes, and we are planning to build at a faster rate than previously and for households that are likely to have lower incomes, George Osborne’s cancellation of the zero-carbon policy, which had wide cross-party and industry support, represents a major missed opportunity. It is a missed opportunity to ensure that new homes make their contribution, as the noble Lord, Lord Krebs, said, to achieving our climate change targets and to ensuring that homes are affordable on an ongoing basis, with reduced fuel bills and protection against fuel poverty.

The zero-carbon homes standard is important for climate change targets: 22% of our total CO₂ emissions come from energy use in homes. It is very practicable. It was agreed originally by a cross-industry task group, based on a balance between costs and benefits. It is becoming an increasingly cost-effective proposition because the supply chain has evolved and the design and construction industry has got the hang of it. The additional costs of a zero-carbon home have halved since 2011 and could well be less than £3,500 per home by 2020. As the noble Lord, Lord Krebs, said, this is small-scale compared with the potential annual savings, which the National House-Building Council and the Zero Carbon Hub calculated would be about £1,200 less for a three-bedroom zero-carbon home than an equivalent three-bedroom Victorian semi.

This is also an amazing volte-face in government policy. In 2013 the Prime Minister launched DECC’s energy-efficiency mission with the following ringing endorsement. I will quote it in full because it was rather splendid. Mr Cameron said:

“I want to tell you why I believe energy efficiency is so important. Yes of course it is a vital part of how we cut carbon emissions and continue to meet the ambitious targets set out in the Climate Change Act … Of course that is important, but my argument today is not just about doing what is right for our planet, but doing what is right for our economy too. Because make no mistake we are in a global race and the countries that succeed in that race, the economies in Europe that will prosper, are those that are the greenest and the most energy efficient”.

He said he wanted the Minister,

“to bring together everything we are doing in one coherent strategy to make Britain the most energy efficient country in Europe”.

However, not very long after that, George Osborne unilaterally removed the zero-carbon buildings provision, despite his Prime Minister’s aspiration, causing a major backlash against the change among industry leaders. In an open letter to the Chancellor, senior leaders from 246 organisations, including the major housebuilders, developers, product manufacturers and energy firms, warned that the policy U-turn had,

“undermined industry confidence in Government”,

and would,

“curtail investment in British innovation and manufacturing”.

We have a real problem here, and this amendment is a splendid opportunity for the Government to graciously backtrack on a wrongheaded decision by the Chancellor. I recognise it is quite difficult, because the Chancellor at the same time pretty well trashed the feed-in tariff, which provided the economic basis for the zero-carbon homes policy, but this nevertheless has to be remedied if we are going to see through this massive push to get 1 million homes built by 2020. They must be affordable, they must make a contribution to tackling climate change and—beyond those two, since noble Lords have already stressed those points—they must support innovation by British business.

[Lord Foster of Bath (LD)]

My Lords, in supporting my noble friend Lady Parminter’s amendment, I echo the words of both the noble Lord, Lord Krebs, and the noble Baroness, Lady Young. The noble Baroness was absolutely right to say that the move towards zero-carbon homes had cross-party support; importantly, it also had cross-industry support.

It is interesting to reflect that the policy was first introduced by Gordon Brown in 2006. When he announced the policy, he said that it would mean that this country would be the first in the world to introduce such a commitment, which would help us to meet in turn our commitments in relation to tackling the real and growing problems of climate change. He understood the policy at that time as meaning that all new houses built from this year, 2016, would generate as much energy on site through renewable energy—wind, solar and so on—as they would use for heating, lighting, ventilation, hot water, cooking and so on.

Over time, as people considered the policy, it was recognised that there would be some occasions when trying to build an individual zero-carbon housing unit would prove very expensive indeed; hence the idea of introducing a mechanism that would allow developers to have an off-setting mechanism—so-called allowable solutions—whereby, if they could not get a particular home completely zero-carbon, they could provide funding or carry out work that would off-set the amount of carbon by other means. For example, that could be through building a combined heat and power unit for a group of housing units, putting solar panels on some existing housing or—although, as the noble Lord, Lord Krebs, said, this can sometimes be very expensive—retrofitting energy efficiency measures to some existing homes.

The policy was developed with all-party support. It was certainly true that when I took over from my noble friend Lord Stunell as the Minister in DCLG, he had been battling to persuade his Conservative colleagues in the department at that time to keep going with the policy. I certainly had some difficulty in doing that, but to be fair, under pressure, they were prepared to stick with it. It even appeared, very clearly, in the Chancellor’s Budget of 2013. I was able to go ahead and strengthen Part L of the building regulations, which as the noble Lord, Lord Krebs, pointed out, increases the energy efficiency requirement on buildings. It was good to hear then that there was support across the industry for the increase being demanded in energy standards for new homes that were being built. John Alker, one of the industry’s spokesmen, said,

“it’s a victory for all those who know that industry can continue to innovate, to improve standards and reduce carbon cost-effectively … it is encouraging to see government remains committed”,

to it.