Domestic Premises (Energy Performance) Bill [HL]

Lord Best Excerpts

2nd reading & 2nd reading (Hansard): House of Lords & 2nd reading (Hansard)
Friday 7th February 2020 Lords Chamber

[Lord Best (CB)]

My Lords, I declare my interests as president of the Sustainable Energy Association and in private rented and social housing, as on the register. I will say a word about the Sustainable Energy Association: it has private sector and non-profit members, and it campaigns for policy and practice solutions for securing a low-carbon, energy-efficient future. The SEA’s website is well worth a visit. I pay tribute to its head of parliamentary affairs, Ron Bailey, who is a wonderful advocate for sustainable energy and worked with Sir David Amess, another passionate advocate, to introduce a similar Bill in the other place. I am sorry to report that Ron Bailey was rushed into hospital this week. I send him best wishes for a speedy recovery. Thanks too go to Sam Crichton, who has also been working for two years on this Bill, now brought forward by the noble Lord, Lord Foster of Bath, whom I thank for his excellent speech and for championing this legislation.

I support this significant Bill. Its adoption would turn the Government’s aspirations for the next steps toward a net-zero carbon future into reality. We could move from good intentions and inspiring words to the firm commitments—the essential certainty—needed to harness the energy, investment and innovation of manufacturers, installers, developers, property owners, lenders and investors. I want to add two points to those already covered so well by the noble Lord, Lord Foster.

First, there are the special circumstances of properties in rural areas. These will be in localities where fuel poverty is likely to be a special issue because average incomes are lower, while energy costs are higher, than in the country as a whole. There are 4 million properties off the mains gas grid. Many of these use oil, which not only is expensive but has high price volatility, which makes budgeting difficult, particularly for low-income households. The positive aspect, however, is that a rural setting is likely to be more accessible for solar energy and for ground-source heat pumps. Renewable energy sources may be more expensive but should be easier to tap into than in high-density urban locations; their use will be of greater benefit in these rural communities. So my first point is the need to rural-proof sustainable energy solutions.

Secondly, perhaps I could add some thoughts on the private rented sector, where energy standards are proportionately at their worst levels. The underlying problem is that the upgrading of properties in the private rented sector does not directly benefit the landlord, because more energy-efficient properties seldom generate higher rents. It is true that landlords can expect cost savings from good tenants staying longer, so saving the costs of reletting homes, and from ongoing maintenance bills being lower because they are so often caused by damp and condensation. But persuading private landlords to invest significantly when financial returns are not evident has proved a stumbling block to a series of earlier efforts, including the ill-fated Green Deal.

Currently, and quite properly, private landlords must cover energy-saving costs of up to £3,500, in most circumstances, if properties fall below the EPC—energy performance certificate—band E rating. It will be a big jump to require expenditure of up to £20,000, which may be needed if major works such as external wall insulation are necessary to achieve a band C rating. It is sensible for government to recognise from the outset that enforcing payment from the 2.4 million private landlords, the majority of whom own only one or two properties, will be a difficult and costly task.

As we all know, local authorities are overstretched and under-resourced; enforcement action in the PRS—the private rented sector—is already problematic. It is very different from working with council landlords and housing associations, which manage hundreds or thousands of homes and are fully regulated bodies. I suspect that the necessary co-operation of the private rented sector will be forthcoming only if the Government accept the painful necessity for significant grant-aiding or serious tax concessions for PRS properties. The Bill is flexible on ways and means, and can accommodate such governmental help. Its principles remain absolutely right.

In strongly supporting the Bill, I emphasise, first, the need for rural-proofing of future policy and, secondly, the necessity of engaging with the realities of the most complex sector—the now extensive private rented sector, for which I fear some serious governmental investment will be needed if we are to get things done. However, that investment will be well worth while.