Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2022

Lord Greenhalgh Excerpts

Wednesday 16th March 2022 Grand Committee

Moved by

[Lord Greenhalgh]

That the Grand Committee do consider the Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2022.

[The Minister of State, Home Office and Department for Levelling Up, Housing & Communities (Lord Greenhalgh) (Con)]

My Lords, I beg to move the regulations. This statutory instrument was laid before the House on Monday 31 January 2022 under paragraph 12(1) of Schedule 7 to the European Union (Withdrawal) Act 2018. It was debated and moved in the Commons Second Delegated Legislation Committee on Tuesday 8 March. Mirroring legislation has been prepared for data registered against properties in Northern Ireland and was considered by the Assembly, also on 8 March. Scotland operates its own energy performance of buildings register and is not covered by this instrument.

This is probably one of the most straightforward statutory instruments that noble Lords will be asked to consider this year. It is almost exactly 12 months ago that I introduced and we last debated a similar measure, and last year the Committee dubbed that SI

“as simple as they come”.—[Official Report, 18/3/21; col. GC 9.]

The instrument relates to the statutory fees that are charged when data is registered for energy performance certificates, display energy certificates and air conditioning inspection reports for properties in England and Wales. Fees are applied to two classes of data registration covering domestic and non-domestic properties. This instrument proposes to reduce fees from £1.64 to £1.50 when data is lodged for domestic premises and from £1.89 to £1.70 for non-domestic premises.

Fees charged for data registrations in England and Wales were last adjusted nearly one year ago. A significant reduction in fees was possible at that time because government had invested in a new, cloud-based digital platform and had moved away from the fixed hardware model, run on concession contracts, that had been in place since 2008. In the last 12 months, contractual costs for building the service have fallen out of the model, which means that we have the opportunity to extend last year’s reductions further.

The new EPB register became operational in September 2020 and has been managed in-house since then. Significantly, it passed the digital service assessment in December 2021 and is the first citizen-facing digital service in my department to be hosted on the GOV.UK platform. It is also one of very few government digital services to publish performance statistics. The register now carries approximately 28 million energy certificates across all types, which includes more than 2 million data lodgements since September 2020, which we are receiving at a rate of around 155,000 each month. Importantly, by managing this cloud-based service in-house, we have delivered efficiencies and reduced the overall burden on public resources.

This instrument builds on the fee reductions we introduced last year. New fee rates set out in this regulation will allow costs of operating the Energy Performance of Buildings Register service to continue to be met. We aim for the register service to be cost neutral, without profiteering, but we do not expect taxpayers to subsidise a loss. Costs of the service, and the fees we propose, have been calculated in line with government policy and tested with stakeholders in the property energy profession.

Officials in my department have engaged with officials from the Treasury, the Department for Business, Energy and Industrial Strategy, the Northern Ireland Executive and the Welsh Government, and all have agreed that, given uncertainty in the property market, recent movements in interest rates and higher inflation, the modest reduction proposed today represents the most practical way to amend fees and ensure that the register is run on as close to a cost-neutral basis as possible.

The small differentiation between fees for domestic and non-domestic lodgements reflects technical differences between the classes of data, but it is now significantly smaller than historically.

The Committee will recall that the United Kingdom aims to bring greenhouse gas emissions to net zero by 2050. Heating and powering buildings currently accounts for 40% of the UK’s total energy usage. We must therefore ensure that buildings are constructed to high standards of energy efficiency.

In December last year, we implemented an uplift to Part L of the building regulations to improve conservation of fuel and power. When it comes into force this summer, new homes and new non-domestic buildings will be expected to deliver 30% and 27% fewer carbon emissions respectively. We are still on track to develop the full technical specification for the future homes strategy and the future building strategy, which we will consult on in 2023.

The Energy Performance of Buildings Register is a key tool in supporting our aspirations for improved energy efficiency. It holds valuable information about the energy performance of buildings. We want homeowners, commercial building owners and occupiers to improve the energy efficiency of their buildings.

Energy certificates improve market information, so that consumers can make informed choices. An energy performance certificate is needed whenever a property is built, sold or let. At a glance, a consumer searching for a new home or for commercial premises can determine how efficient a property might be, while an owner can consider recommendations for how they might improve the energy efficiency of their property.

To conclude, these regulations serve a very specific purpose: to reduce the statutory fees charged when data is registered for domestic and non-domestic energy performance certificates, display energy certificates and air conditioning inspection reports. Over the two classes of fee, reducing domestic data registration fees from £1.64 to £1.50, and non-domestic data registration fees from £1.89 to £1.70, extends the savings that we introduced last year.

Colleagues in Northern Ireland are introducing their own mirroring legislation to ensure coherence between different parts of the United Kingdom that use the same register. This will ensure that fees charged for Northern Ireland data lodgements are in line with those for England and Wales.

I hope colleagues will join me in supporting the draft regulations. I commend them to the Committee.

[The Deputy Chairman of Committees (Lord Russell of Liverpool) (CB)]

I warn noble Lords that there is likely to be a series of Divisions in the Chamber quite soon, so prepare to be interrupted.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I thank noble Lords for a short, sharp and focused debate. It is appreciated. The fees have changed again a year later because there is essentially a dividend around an IT project, as the noble Lord, Lord Teverson, said; we do not want to profiteer or make a profit, but the cost of running the service has gone down. That comes in the form of lower prices for consumers and commercial users. I think I mentioned in my speech why there is a slight difference between non-domestic and domestic rates, as noble Lords will see in Hansard.

In response to the noble Lord, Lord Teverson, I understand that there is an energy company obligation between 2022 and 2026, estimated at £1 billion per year, to enable poorer, more vulnerable households to get more energy efficient. That is a BEIS policy, and I am not an expert on it.

My property interests are declared in the register, as I am sure the noble Lord’s are. It is a difficulty that, the older the property—I own a Queen Anne cottage—the harder it is to hit the net-zero target; there is a real issue around older properties, even if there is real resolve from the homeowner to be carbon neutral over time. That is a point well made. Brains across government are thinking across different departments about how we embrace that challenge. One way is to set standards, and the future homes standard is critical to do that for new build, which is again only a certain proportion of the existing stock. The question then is how we retrofit and deal with the stock we have in this country.

However, I think we are going beyond EPC price ratings, which are essentially good news for the consumer and people who pay these bills. I take the points from noble Lords that it is good to see an IT project working well, being managed in-house and done efficiently. I commend these regulations to the Committee.

Motion agreed.