Home Energy Efficiency: North of England

Alan Whitehead Excerpts

Wednesday 6th July 2022 Westminster Hall

[Dr Alan Whitehead (Southampton, Test) (Lab)]

We have had a good and important debate this afternoon. I congratulate the hon. Member for Darlington (Peter Gibson) on bringing forward the debate and on the exemplary way in which he put forward his case. I largely agree with what he said, particularly his emphasis on conditions in homes in the north of England and the work we need to do on retrofitting. He gave a number of instances of homes in the north of England and their circumstances, particularly the average age of properties, and the fact that it is rather colder up north than it is down south—I say that as the Member for Southampton, Test.

In the north of England, property stock is substantially older than the average for the UK and, as the hon. Member for Darlington mentioned, that older stock is substantially single-skinned properties, which need different forms of treatment from properties with cavity wall insulation. From energy efficiency surveys, it is interesting to see that pre-1930s properties have a median energy efficiency score of 56, according to the report I am looking at, whereas buildings built from 2012 onwards have a median energy efficiency score of over 80. So we have a huge block of properties in the north of England that have very low energy efficiency scores, and it is difficult to do anything about them other than provide whole-house treatment for the amelioration of their problems.

Bearing in mind that issue, we also have a huge gap between the emissions from new build properties and those from existing dwellings. Indeed, the north-east has one of the largest gaps between emissions from new and old properties. In the north-east, there are emissions of just over 1.5 tonnes of carbon dioxide per year from a new property, compared with over twice that amount—3.6 tonnes per year—for existing properties. So there is a huge job to be done, particularly in properties in the north of England, to help us get to our net zero targets and to retrofit properties throughout the country.

The call from the hon. Member for Darlington for much more work to be done on the energy retrofit of properties is important for climate change purposes and for future energy bills. It is estimated that £400 to £500 can be saved from energy bills in an uprated energy-efficient property. It is also important for the comfort and good living that we expect in any household in the country. The problem relating to damp and older properties is not just in his part of the world, but in the north generally. This debate is timely and important, and we must have the retrofit debate in the not too distant future.

I cannot be entirely non-political in this debate, as the hon. Member suggested we should be, although we all agree in this Chamber on what we want to do with retrofitted properties and on why it is important and relevant to climate change, fuel poverty and the welfare of citizens.

[Peter Gibson]

I am pleased to hear the tone of the hon. Gentleman’s speech up to this point. Although the debate is focused on the north and north-east, and on the types of housing stock in my constituency and other northern constituencies, I am sure that the type of housing stock in his own constituency—perhaps he will mention that—would benefit from some of the improvements, even though his constituency is on the south coast.

[Dr Whitehead]

I can assure the hon. Member that I am not approaching this debate as if all the retrofit problems are in the north of England and not in the south. It is a national scandal that homes across the UK have got some of the worst energy efficiency performances of any properties in Europe. On other occasions the Minister has said that it is not such a big problem because of the way in which energy efficiency has increased in our housing overall in the last few years.

However, if we look at all parts of the country, there is a big lag between the energy efficiency, albeit under slightly different circumstances, across the country and the energy efficiency of new properties, so the figures do not quite tell the truth as far as energy efficiency improvement is concerned. Most of that improvement is because newer housing, recently built properties, are so much more energy-efficient than older properties. In fact, as we can see from the collapse of energy efficiency retrofit arrangements after 2012, there has not been a great deal of movement in the energy efficiency of properties in all parts of the country. The north of England faces even worse problems in getting its property up to retrofit standards than other parts of the country.

[Peter Gibson]

All of us in this Chamber have alluded to the scale and size of the problem. Does the hon. Gentleman agree that this is also a really complex problem because of the types of ownership of some of our properties? We are not talking about just one type of ownership. There are private landlords, social housing providers, absentee landlords and private homeowners, which makes the problem particularly complex. As we have so much time remaining in the debate, I would be incredibly grateful to the hon. Gentleman if he could outline some of his suggestions and proposals to tackle the problem.

[Dr Whitehead]

The hon. Member invites me to make a lengthy speech about what my party has in mind for energy retrofit, but also about what my party has in mind for dealing with complex situations in different sectors of the housing market. He rightly says that the question of energy efficiency standards is very different in different tenures of property—social housing, private rented sector and owner-occupied housing—and the solutions that one needs to put forward have to be different for different kinds of tenure. Furthermore, as I am sure the hon. Member has noticed, those tenures are intermixed with each other in most areas, so there are very few parts of the country where there is just one kind of tenure.

In my constituency, one of the issues is that there is a very high level of houses in multiple occupation and properties that are rented out by private landlords. There is also a substantial student population in my city, so a number of the houses are rented out by private landlords on a quick turnover, and with very little regard for the energy efficiency of those properties in the long term. Although one might say that the general housing arrangements in my city are better for energy efficiency than in some other parts of the country, there are specific issues relating to how energy efficiency might be looked at. One issue is just how bad energy efficiency is in the private rented sector and what measures need to be undertaken to get those houses to a decent level of energy efficiency in order to make them marketable rental properties.

In the past, a specific part of the legislation was on minimum energy efficiency standards. We think that needs to go a lot further by addressing the marketability of homes and the requirement on landlords to get those properties up to a decent energy efficiency level in order to rent them out in the first place. As the hon. Member for Darlington will know, there is legislation in place that requires landlords to bring their properties up to the band E energy efficiency requirement, but that is grossly insufficient for the targets that we need to set on getting the private rented sector up to scratch with energy efficiency.

[Peter Gibson]

I am grateful for the hon. Gentleman’s indulgence in giving way a third time, and for him talking about putting the burden of meeting those property costs on some of our landlords. We have seen examples of landlords being forced to do some of the work that is required to bring their properties up to standard. As a result, they are exiting the market—some people might say that is a good thing—and then selling the properties, which is having a deflationary impact on the value of properties in specific localities. In turn, that compounds the problem of the ratio between the cost and value of the asset and the cost and value of the investment required, which can actually have the opposite effect to the one desired.

--- Later in debate ---

[Dr Whitehead]

The hon. Gentleman is admirably setting out a series of concerns about how we address the process of retrofitting, which we need to think about very carefully. One of the things that concerns me—here I get a bit political—is just how bad the Government’s overall retrofit programme has been over a long period. It is not just about the collapse of schemes from 2012 onwards. In the previous debate, somebody asked what happened in energy during the previous Labour Government. Well, a lot happened: the carbon emissions reduction target, the community energy saving programme and warm home grants.

There has been a real noticeable increase in standard assessment procedure ratings in properties over the years. From about 1990 to 1995-96, the schemes really started working, and they were publicly funded. What happened in 2012 is that the publicly funded schemes were removed, and after that the schemes were entirely market based. The green deal died a death. Recently, the green homes grant was sort of publicly funded, but it also rapidly died a death.

Significantly—I want to emphasise this point, in terms of how we treat retrofit—the only part of the green homes grant that was successful was the part that applied to local authorities. Local authorities were and are able to take some of that grant and do a lot of good work. The hon. Member for Sedgefield (Paul Howell) said that his local authority has done a lot of public work on that, yet the Government systematically set their face against the idea that local authorities can play a substantial leading role in retrofitting.

I suggest—the hon. Member for Darlington and I spoke about this a moment ago—that the case has overwhelmingly been made for retrofit funding. We are saying that there should be a 10-year programme to retrofit 19 million homes of all tenures through a combination of loans, grants and direct local authority schemes, with two million homes retrofitted immediately. That would be a comprehensive programme of retrofitting across the country, with the emphasis on area-based schemes so that local authorities can look at where their areas are worst and at what needs to be done in their particular circumstances, and concentrate resources accordingly on retrofitting with that knowledge and those concerns at the front of their minds. How much better would that be than the sorts of schemes we have had over the years? In this case, energy companies have been asked to go around and pick out individual properties to do up to a greater or lesser extent.

[Paul Howell]

I declare an interest: I am a private landlord. Does the hon. Gentleman agree that, in terms of segmenting the approach and trying to make sure it is right, we need a different approach when considering the economics of the north, for landlords and owners, in contrast to the high-value property areas of the country, to ensure that we focus on absentee landlords and people who are not doing the right thing? In parts of the north they almost walk away because the value of the property is so low. We need to ensure that does not result in the properties becoming derelict. Rather, they should either be resold or go back into the rental market properly.

[Dr Whitehead]

I agree with the hon. Member that we need to ensure that we tailor our programmes, not just to the particular areas of the country but to the particular resources that we will need in order to deal with the arrangements in different parts of the country. Labour’s programme would not only allow that to happen, but ensure that, right across the country, we were not applying a one-size-fits-all arrangement and we were allowing local authorities in particular to tailor their programmes. We can imagine the equivalent of the old housing improvement areas or general improvement areas being applied in the form of energy efficiency improvement areas in various local authority areas. They would be chosen by those local authorities, and would be able to concentrate on different tenures in the way that the hon. Gentleman outlined. The difference is like night and day between what Labour is proposing at the moment and what the Government—albeit they have spent some money on retrofitting—continue to try to do.

I just want to take a few more minutes, because I appreciate that we will in the end run out of time—even though we have more time than we thought—and I want to give the Minister ample time to reply to the debate. I would like him to address his thoughts to three particular questions.

One of the only schemes that is doing any serious work on retrofitting at the moment is ECO—the energy company obligation. The ECO scheme is now in its fourth iteration; ECO4 was supposed to come onstream in April this year, and the hon. Member for Darlington asked, “Where is ECO?” There is an answer in the press release for the Energy Security Bill that appeared on my desk today. That press release states:

“The current ECO4 scheme came into force in June 2022 and will run until March 2026.”

That is just not true. No ECO4 scheme is in operation at the moment, because the regulations have not yet been sorted out as far as this House is concerned; we still have to discuss them and put them into being. Today, I was at a lunch where an energy management and building company guy sitting next to me was bemoaning the fact that the people there could not just get on with ECO4 because they just do not know what is going to happen with the regulations.

Therefore my first question to the Minister is this. When will that happen so that we really can get under way with ECO4? Why has he put it in the Energy Security Bill that ECO4 has already started when it has not? Can he get it started as soon as possible so that the people I have been talking to recently can actually have some security about the future arrangements for retrofit? We obviously consider that the uprating for ECO4 that has already taken place, from £750 million to £1 billion, is welcome but not enough. Certainly we would want to see that programme substantially increased in size at a very early stage in order to get this retrofit programme going as quickly as possible.

The second question is this. Why is there nothing in the Energy Security Bill—as far as I can see—that takes us beyond the level of ECO4? Certain things in the Bill suggest some amendments to ECO4, but there is nothing to take us beyond that particular scheme in the way that has been described today in this Chamber. I do not know whether the Minister—because I suspect that the Energy Security Bill is a Bill in progress even as it is published—will want to bring forward amendments, during the passage of the Bill, that allow those further things to take place, but I will be interested to know this afternoon whether that is under serious consideration.

As I think every Member present this afternoon has said, this is a pressing problem that needs to be sorted out as quickly as possible, and on the widest scale that is compatible with our net zero commitment and the duty we have towards our citizens’ style of living, energy bills and expectations of what their housing will look like in future years. Pushing forward on that is something we in this Chamber are completely united on, and I look forward to hearing the Minister’s response to that unity of purpose.

--- Later in debate ---

[Greg Hands]

I fundamentally disagree. Solar has done incredibly well in this country. We have a big capacity in solar—I think around 14 GW. Our ambition is to grow that to 70 GW. Part of that is thanks to the VAT reduction that we saw this year. I do not remember the hon. Lady supporting that VAT reduction on solar panels. The Government are taking active measures to increase and support solar energy.

On energy efficiency, when we took office in 2010, just 14% of properties in England were rated “energy efficient”. That has risen to 46%, which in 12 years is an incredible increase. However, that shows that 54% of our properties are still not sufficiently energy efficient, so we still have work to do, but we can only do it by making investment. The last Labour Government said there was no money left. Perhaps if they spent a little more on energy efficiency in those 13 years, we would not have been in a position where only 10% of homes were rated A to C when we took power.

My hon. Friend the Member for Darlington asked when the new energy company obligation scheme will begin. I think the shadow Minister, the hon. Member for Southampton, Test (Dr Whitehead), also raised that same point. A three-month interim delivery phase was introduced between 1 April to 30 June 2022 under the previous scheme rules to enable delivery to continue subject to some measure limitations. Obligated suppliers may choose to deliver under the new scheme rules backdated to April 2022, when the underpinning legislation was put in place. We are pleased to announce that we laid the draft Electricity and Gas (Energy Company Obligation) Order 2022 before Parliament on 22 June. We expect the regulations to be made and come into force in July.

My hon. Friend the Member for Darlington also asked about energy advice. Our simple energy advice service, launched in 2018 in response to the Government-commissioned “Each Home Counts” review, provides homeowners with impartial and tailored advice on how to cut their energy bills and make their homes greener. The service has been accessed by over a million users.

[Dr Whitehead]

rose—

[Greg Hands]

I will make some progress and respond to the points made in the debate. My hon. Friend the Member for Darlington and the hon. Member for Weaver Vale (Mike Amesbury) raised the really important point of skills. I chair the newly established green jobs delivery group with Michael Lewis, CEO of E.ON UK. In 2021 the Government invested £6 million in a BEIS skills training competition, resulting in 7,000 more training places for heat pumps and insulation. The hon. Member for Weaver Vale also commended an event about skills attended by Andy Burnham and Andy Street. It is good to see constructive cross-party work. I only wish that the Mayor of London would follow such a constructive approach to cross-party work, as the Mayors for Manchester and Birmingham often do.

The hon. Member for Stockport (Navendu Mishra) asked about using legitimate builders, not cowboys. All insulations under Government schemes, including ECO, the social housing decarbonisation fund, the home upgrade grant and the local authority delivery scheme, must be completed by TrustMark-registered businesses, adhering to the latest requisite standards. These requirements are based on the recommendation of the “Each House Counts” review, an independent review of consumer protections and standards.