Baroness Maddock
Main Page: Baroness Maddock (Liberal Democrat - Life peer)Energy Bill [HL]
Baroness Maddock Excerpts
Baroness Maddock
Baroness Maddock
I shall speak also to Amendments 71 to 75, 77 to 79 and 84, and the comments I make will also be pertinent to Amendments 81 to 83, which are in the name of the noble Lord, Lord Best; they also have my name to them. When I saw this Bill, I was delighted to see that the private rented sector was to be included. As time has gone on, I am not quite so delighted with how far we have got on the private rented sector. What I aimed to do in Committee and reiterate here is to have greater certainty about what sort of regulation we are going to have and when it might come in, and to bring the timetable forward.
The amendments bring forward to 2020 the Government’s measures for local authorities to issue notices to landlords requiring relevant energy efficiency improvements, and make it a duty rather than a power. They remove its conditionality on the outcome of the review in Clause 36. Landlords receiving a notice from a local authority will be required to improve that property at least to a minimum energy efficiency level of EPC band E, and this level will be increased before 2020. The maximum penalty for non-compliance is increased to £10,000 per tenancy, and local authorities are given the option to carry out the improvements themselves and then impose a charge to recover the costs. From 2016, a minimum energy efficiency standard is introduced whereby it becomes an offence to let or market a domestic private rented property which falls below EPC band E—that means those in F and G—until it is improved to band E, and the minimum standard must be raised again before 2020. A fine of £10,000 can be imposed for marketing or letting a property which does not meet the minimum standard.
There has been a lot of discussion about this. Some landlords, the British Property Federation and the RLA have produced briefings that claim that lots of properties would be taken off the market. Given the situation in the housing sector at the moment, I think that is highly unlikely. The latest edition of Landlord & Buy-to-Let Magazine states:
“Landlords are faced with excellent levels of tenant demand, strong pricing power … and improving buy-to-let mortgage conditions and are looking towards 2011 with confidence”,
so I think that is one thing that can be knocked on its head.
It is important to look at the details surrounding this sector. According to the Government’s figures, properties rented from a landlord or a letting agency are most likely to be the worst insulated, and 42 per cent of tenants in the coldest rented homes are unable to afford to heat them properly and are defined as being in fuel poverty. New research by the Energy Saving Trust reported today shows that the average cost of improving the coldest rented homes is £2,535 and that 30 per cent could be improved for less than £900 through rather cheaper measures such as loft and cavity wall insulation. Only 5 per cent would cost more than £7,500. A poll by Friends of the Earth found that tenants renting from a landlord or through a letting agency faced the worst during the freezing snowy weather this winter, with half saying that they were uncomfortably cold in their home and a third turning off their heating because they were concerned that they could not pay the bill.
There are 754,000 F and G-rated—that is, below E —private rented properties in Britain. They could all be improved for less than £2 million. The average cost would be about £2,500. The annual fuel bill reduction would be something like £370 million and the average fuel bill reduction could be a little under £500.
The annual report by the Chief Medical Officer, Sir Liam Donaldson, for 2009, which was published in March last year, showed that people living in poorly heated housing live in great danger. Old, badly insulated properties offer significantly less protection against the risk of cold than more modern buildings. The annual cost to the NHS of treating winter-related disease due to cold in private housing is £859 million, although that is all private housing, not just the private rented sector.
This issue has been around for a long time. There is an issue about when and when not to regulate but, as I said in Committee, we are looking at the worst of rented properties. Most would not cost a lot to bring up to a proper level. A large percentage of people living in those properties are in fuel poverty, and this is one case when I really think we need to bring in some sort of regulation. We have been talking about trying to improve them for years, but nothing has happened.
My final point is that many people living in these properties are being paid for by taxpayers, who are paying huge amounts of housing benefit. Given where we are at the moment, I do not think we can go on doing that much longer. All the time I have been in Parliament, I have been trying to make sure that we have fewer people living in cold homes in the winter and fewer excess winter deaths. Even if the Minister cannot do anything today, I hope that he will promise that by the end of the passage of the Bill we will have more certainty that we are really going to do something about the private rented sector. I beg to move.
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, the noble Baroness has told some shocking tales. Funnily enough, I do feel that I stayed in one of those properties in my younger days. It was not at all comfortable, and I have a feeling that one of my sons, who is a student, is staying in such a property at the moment. It is a terrible tale and the whole idea of the Green Deal is to remove this from the equation. But let us stand back for a moment and work out what the Green Deal is. It is about giving people the opportunity to drive energy-efficiency endeavours into their homes, and to reduce the cost of electricity and thus to have all the ongoing effects that that may have in their lives. However, the Green Deal is not a prescriptive document, one that determines that “You, you and you should have this, this and this”, but rather it is to encourage and provide the facilities by which people can take advantage of situations.
Of course, there are also some very good landlords. There is some terrible accommodation, terrible houses and very bad landlords, but there are also some very good ones. So we have to look at this. However, we must start from the standpoint that we are committed, as a Government, to ensuring that the Green Deal works at all levels, and we are committed, as a Government, to ensuring that this drives hard into the private rented sector. But as I have said on a number of occasions, this is a market-driven endeavour where we want to see natural buy-in by all forms of property owners, including landlords, and we expect them to improve their properties to an acceptable standard. We would all love to wave a magic wand and say that the minimum standard should be band E, but the standard of what? We have inherited an energy performance certificate which was designed for people buying and selling houses, not for those relevant to the Green Deal. So until we have redesigned the energy performance certificate to make it fit for purpose within the Green Deal rather than for buying and selling houses tied into the now abandoned HIPs, which as I have told the House on many occasions we are working extremely hard to do, it would be wrong to be prescriptive about that element.
We are starting from the standpoint, which has been excellently portrayed by the noble Lord, Lord Best, of the 1.2 million properties that fit into the category of the private rented sector. The noble Baroness, Lady Smith, rightly pointed out that 150,000 of them are in bands F and G. One would hope that landlords are listening to what the noble Baroness and my noble friend Lady Maddock are saying and will feel compelled to raise these houses up to an acceptable EPC level of band E and above. We want also to ensure that local authorities buy into this, along with all other housing sectors. Further, we have been briefed by ACE and Friends of the Earth, and we are very receptive to their briefings. But we are at an early stage in the passage of the Bill and we are starting to shape it. One of the fundamental timescales that we have established is a review in 2013. If landlords in the private rented sector do not adopt decent standards by 2013, we will be able to establish where the pressure points and the weaknesses lie.
We believe, with the encouragement that the Green Deal gives to property owners, that they will take it up, when the new EPC is produced, to level E and beyond, and this Government are fundamentally committed, as the sponsor of this Green Deal, to ensure that they do. It would be ridiculous for us to think that we have achieved things if we have not driven hard to get the public rented sector out of the F and G bands. There is a lot of work going on to get to this position. We do not want to get to this position until we have thoroughly gone through the process of redesigning the EPC and setting a framework that people can attach themselves to. We have given people the opportunity to use market forces and their best endeavours and best practices to achieve a minimum standard. If we find that they have not taken that up, of course we will come down like a ton of bricks, because it will show that what we have set out to achieve has not succeeded.
Throughout all these debates, which have been extremely well enunciated, and have found great favour with us, we have listened. We are all, after all, singing from the same hymn sheet, in particular on Amendments 69, 70, 76, 84, 89, and 94 to 99, which really deal with the materiality. It would be ridiculous if this did not find favour with us in terms of a form of words. I accept in principle the intention of this. I have listened to what noble Lords have said in Grand Committee, I will warmly consider this element of the amendments, and we will take the view of tabling this as a government amendment as the Bill carries on with its passage. I hope that that will find favour with noble Lords, and will demonstrate that, on the one hand, we have listened and that we all understand the problem that we all face, and, on the other hand, that we understand that, in the timeframe available and with the concept of the Green Deal, we must make an evaluation. Once we have persuaded the market to accept an opportunity, if it does not take it up we must evaluate it in a very short timeframe, which will be the end of 2013. If the market does not respond to that, we will then bring into action a set of standards, which we will help it to maintain. With that, I hope that this finds favour with the noble Lord, Lord Best, and the noble Baronesses, Lady Maddock and Lady Smith, who made excellent speeches, and that they will not press their amendments.
Baroness Maddock
My Lords, perhaps I should say that my glass is half-full at the end of that. I obviously think that this is a really important issue, or I would not have gone on at such length in Committee and here on Report. I take issue with my noble friend. As far as I remember, the energy performance certificates were not there because of what we are doing on buying and selling houses. It was a European piece of legislation, and it got thrown in with the HIPs because it was the best way of dealing with it. At the time, I thought it should be separate, and spoke on that issue. We need to look at it carefully, because the EPCs are part of what we are required to do in signing up to our responsibilities in Europe for reducing carbon emissions.
I will withdraw my amendment, but I look forward to what the Minister has promised. As I say, I feel my glass half-full at the moment. Maybe he will be able to top it up at some point. I beg leave to withdraw the amendment.
Baroness Maddock
My Lords, the noble Lord, Lord Whitty, put down Amendment 153 and I added my name to it, but he is not in his place. I spoke to this amendment at some length in Committee so I will not repeat what I said then.
I do not have the cynical view of local government that is being expressed by the two previous speakers. My experience over the years of local government is that it has been very effective in trying to deal with poorly insulated properties in its areas under the Home Energy Conservation Act, which is now going to be removed. I know that my noble friend the Minister is keen for local authorities to be involved in what is going on, but I also support the fact that we do not necessarily give new duties to local authorities. We have a Localism Bill coming that includes a power of general competence. However, it is clear to me that, in spite of all that, local authorities have a major role to play in this.
As I said, I know that the Minister agrees with that. I hope that he can set out some of the roles that he sees for local authorities as the Green Deal is rolled out, and give us some idea about what sort of rewards they might get. I do not mean rewards from the public purse; it is not necessarily from there that they will get rewards for being involved with this. I know that he understands what I am talking about.
I hope that, if not tonight then at some point, he will be able to set this out in a little more detail to reassure us—including local authorities, many of which are asking to be involved. Some of them are actually asking for carbon budgets, which Amendment 100 mentions. I have had a letter, as I am sure have other noble Lords, from a group of local authorities that want to have local carbon budgets. The situation is not anything like as clear-cut as the two previous speakers said.
I hope that my noble friend can go at least some way towards setting out how he sees local authorities being involved. Maybe this is something else where, when the Bill gets to another place, we can be more specific on how local authorities have been involved. Their record on doing things such as rolling out energy efficiency street by street is fantastic. People in local communities trust their local authority more than they trust the people who provide their utilities, so we need to take full account of that. I know that my noble friend understands that, and I look forward to what he has to say.
Lord Teverson
My Lords, I agree with my noble friend Lady Maddock about the involvement of local authorities. I know from conversations with the Minister and other Ministers that this is very much in the Government’s mind. I welcome the fact that, as I hope they will, local authorities will be integrated into the process.
I want to talk about carbon budgets. Reducing carbon, as we talked about with regard to the Climate Change Act, is fundamental, but I just do not think that local carbon budgets are the right instrument to do that. There is huge pressure on local government finance at the moment, so I would agree that because of that—I declare that I am a member of a local authority—local authorities are starting to concentrate on activities where they have statutory obligations. Where they do not, they are having to consider rather more. If there were a more perfect way of doing this, I would like to see some statutory obligation generally in terms of climate change in a broader sense. However, I fundamentally believe that it should then be left to local authorities to decide how they implement and deliver that, and that they should have the powers to do so.
I spent a huge amount of time in this House two or three years ago on the Climate Change Bill. We spent a huge amount of time working out how national budgets could work. We looked at all the difficulties regarding air transportation, imports and exports and—maybe more esoterically, but importantly—whether carbon consumption was more important than carbon production. We looked at the transfers of budgets between years and at all the other sorts of mechanisms that there are. We considered what happens in terms of the EU ETS, transfers of that in or out and how it worked. We gave particular thought to air and shipping.
If you bring that down to local authorities—many parts of the country still have not one tier of local authority but two, so you have to add them up and they will not come to the national budget anyway—you have the issues of transportation, such as motorways being major emitters. The easiest way to mitigate those would be to stop industry coming into your local authority and get it to go the other side of your local authority boundary. If you took this seriously, you would have all sorts of weird incentives whose outcomes would be perverse.
Baroness Maddock
My Lords, I support my noble friend. Some years ago in Southampton we had a geothermal bore which contributed—it is not as hot as we would like—to the district heating scheme. It has been very successful. During the Recess I was in New Zealand. A great part of its energy mix is from geothermal. I suggest that noble Lords look at how it has been dealt with there as a good example of how to use geothermal energy.
Lord Dixon-Smith
I hesitate to speak at this hour, but since we are considering geothermal power, perhaps I may introduce a thought about indirect geothermal power. Such power is waste heat from power stations, which consume enormous amounts of raw energy and turn out enormous amounts of waste heat. Generally speaking, it is completely unused. It is an enormous financial handicap and an enormous energy inefficiency which our whole electricity generating industry has to bear and which, as customers, we all pay for.
While I am all in favour of looking for all geothermal sources of energy, we have these indirect geothermal sources of energy already available to us on the surface but we do nothing about them. It is legitimate to raise the subject in this rather indirect way even at this hour of the night. The same applies to nuclear power stations. One can argue that nuclear power is an indirect form of solar power. That is exactly what it is—solar power is nuclear power but happens to be 95 million miles away, and we enjoy it enormously as a result. If it was much closer, we would not. But we have these other sources of energy, which are indirectly the same source of energy as the noble Lord, Lord Teverson, was talking about. If we are looking at one of them as something that we should use, we really should look at the other.