Energy Performance of Buildings (England and Wales) (Amendment) (No. 2) Regulations 2015

Lord Harris of Haringey Excerpts

Wednesday 16th December 2015 Lords Chamber

[Lord Teverson (LD)]

My Lords, I cannot get overexcited about this issue. Indeed, as the noble Lord, Lord McKenzie, said, this is an important regulation that has come from Europe, which is about making sure that houses are properly managed in terms of their energy efficiency, which I suspect we all believe is good. Clearly, there should be consultation, if that is possible. My experience of consultation in a lot of these areas is that the Government take little notice of it, but we should have it.

However, I disagree quite strongly that somehow the management of energy performance is less important and has less detriment to people than many of the other areas that trading standards looks at. I remind the House that there are some 20,000 excess winter deaths. This will not solve that, but it is a part of the process of making sure that we do not take the energy efficiency of houses and being able to heat them properly at a reasonable cost for granted. We forget that there is a continuing process of making sure that people understand the costs of energy when they purchase houses or public buildings.

Fuel poverty is one of the major issues in this country that all Governments have failed pretty badly to solve. The numbers have come down slightly recently, but they tend to correlate directly to energy prices.

[Lord Harris of Haringey (Lab)]

Perhaps the noble Lord can explain the relevance of this set of regulations to fuel poverty. I understand that the regulations refer to public buildings rather than to homes.

[Lord Teverson]

The SI certainly relates to public buildings. I will come on to explain why it is important to the trading standards side. But I welcome the noble Lord’s intervention. The regulations are partly about public buildings but I had also felt that they were partly to do with private buildings as well. I am happy to be corrected if I am wrong. This is an area of great importance and one that we need to keep on the agenda. I understand the resourcing issue entirely, but this is an area where trading standards generally needs to be involved and should be happy to be involved, subject to that funding.

What I find shameful is that, when the Government are trying to move forward in areas such as climate change, energy efficiency and other areas, DCLG has moved in the other direction. The vandalism of taking out the zero-carbon homes and the commercial buildings targets for 2019 was one of the most regrettable actions of this Government to date in this area. While I understand that there are issues around this particular statutory instrument, which I do not think are so important, the department has been woeful in its actions in this area since this Government came into power. After the great agreement that we have had in Paris, I very much hope that the department will start to get in line with the rest of the Government’s aspirations and repair some of these areas. I thank the noble Lord for his contribution.

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[Lord Harris of Haringey]

My Lords, I start by declaring my interest as chair of the National Trading Standards Board. None of the projects that it funds is directly engaged in the work involved here. It is important that I put that on the record. Perhaps I sounded critical to the noble Lord, Lord Teverson, but one of my concerns about these regulations is the extent to which they take us anywhere significantly close to the direction of the issues that he highlighted in terms of climate change and energy efficiency. As I understand them, these regulations place an obligation on local authorities to check that public buildings, not private buildings, display a notice that states how energy efficient they are. While I appreciate that that can concentrate minds and makes those running the buildings at least think about what is on the notices, I do not believe that they actually make an enormous amount of difference. But I understand that the Government have these requirements.

I have to say that to a casual observer, you cannot but be impressed by the zeal and enthusiasm with which the party opposite embraces any regulation that emerges from Brussels. On this one in particular, it has gone out of its way to say that it is critically important. Indeed, I am in awe of the enthusiasm with which they are pursuing it because of its connection with climate change. The noble Lord, Lord Lawson, is not in his place, but I know how united the Conservative Party is behind issues that address climate change. But, as I say, the zeal with which it has brought forward these regulations, in such a rushed fashion that there was no opportunity to talk to the people expected to enforce them, seems to be what many people would call absolutely admirable. It must demonstrate the commitment of Her Majesty’s Government, first, to implementing all EU regulations as rapidly as possible, and secondly, to taking this important—albeit infinitesimal—step in the direction of protecting us from climate change.

Let us be clear: nothing is more important for a busy trading standards department than making sure that every public building, not in its area but in a neighbouring area, is displaying the right piece of paper within the public gaze that states how much energy that building is using. I agree that it is an incredibly important thing that local trading standards departments should be doing. If they had the resources to take this on board easily, I might not be concerned, but the reality is that it is not like that. The effect of the regulations is that they are saying to extremely busy, and in many instances very small, trading standards departments that they have to prioritise this requirement on them above all others. As my noble friend Lady Crawley has said, over the past 10, 20, 30, 40 or 50 years, there have been 250 or more pieces of government legislation that are supposed to be enforced by local trading standards.

Local authority trading standards have been cut in budgetary terms by 40%. We do not yet know what the implications will be in the statement to be made tomorrow about local authority finance. We have seen staffing levels reduced by 50%. Yet there are 250 obligations which they are expected to enforce. I was tempted to read them to your Lordships, even at this late hour. There are 29 pages of regulations. If the noble Lord wishes me to do that, I will. It makes exciting reading. But within all this, this is yet another requirement and it has been given particular priority by these regulations. This is virtually the only one of those 250 legal obligations where there is a requirement placed on the local authority to produce an annual report on how it has fulfilled its obligations in respect of that area of activity. It is vital to check that public buildings are displaying these notices. But why is this requirement the one on which a local authority must produce an annual report on the progress it is making as regards implementation?

My first question to the Minister is: what resources are being made available? My noble friend talked about £3 million. How do we know that that £3 million is there, even if that is the figure? If a local authority budget has been cut by 10% or 20%, how do you know that that little bit of money is there? What is there to make sure that the local authority says, “Oh yes, above all else we must prioritise checking that public buildings display a notice because that is far more important than anything else we do”? If the Minister cannot say where this money is coming from, could she tell us which of the other 250 obligations placed on trading standards the Government expect the local trading standards departments not to follow? No doubt her brief will tell us that this is a matter for local decision—that local authorities are autonomous and that they make up their own minds. The reality is that central government, month upon month and year upon year, with these regulations—there are other examples—are placing additional obligations on local authorities to implement them without the resources to do it. So what should they stop doing?

How many civil servants will be employed to scrutinise these annual reports from trading standards authorities? Who will look at them? If the answer is that no one will look at them, what is the point of a regulation which requires that an annual report is produced? If, however, there is going to be a special unit created in the Department for Communities and Local Government to check these reports, what will they do if a local authority, having thought about its budget and all its other priorities—my noble friend Lady Crawley has talked about them—says, “Well, we have done nothing in the previous year and we don’t intend to do anything next year in respect of enforcing this duty”? What will happen to that local authority? If nothing is going to happen, again, what is the point of these regulations?

My noble friend referred to hoverboards. In fact, her data were a week out of date. The flood of unsafe hoverboards into this country is rising. It is not 17,000 that have been checked by trading standards; it is 38,000. Of those, where the tests are back, 32,000 are dangerous or non-compliant. In some cases they are so dangerous that they can cause house fires. That seems to me to be a priority for local trading standards—to try to protect people who plug them in to charge overnight on Christmas Eve with the result that their homes burn down. I want the noble Baroness to tell us why, above all other trading standards duties, this one is picked out and must have an annual report, what the Government will do if it is not implemented and what they expect local authorities to give up if they are to follow the letter of the regulations.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government (Baroness Williams of Trafford) (Con)]

My Lords, I thank all noble Lords who have spoken in the debate on these regulations, and the Secondary Legislation Scrutiny Committee for its report, which has helped to inform it. I understand that the regulations apply to both domestic and public buildings. I thought that I might clear that up at the start.

I will start by addressing the concerns expressed by the Secondary Legislation Scrutiny Committee that the policy-making process relating to these regulations may have been weakened by the lack of consultation. I regret that in the limited time available to take action, my officials did not have the opportunity to carry out more extensive consultation on the regulations. However, they made use of the responses to the previous Government’s consultation on the future of the display energy certificate, or DEC, regime, which sought views on this enforcement regime. They then tested these regulatory proposals in discussion with a number of local weights and measures authorities and officers, based on their experience of implementing the existing duty.

Local weights and measures authorities have been responsible for the enforcement of energy performance of buildings regulations in England and Wales since 2008. These regulatory changes do not change the nature of the existing enforcement responsibility or set central targets for activity, as enforcement priorities are a matter for local determination. They create a new reporting duty and require local measures to resolve a potential conflict-of-interest issue. From their discussions with local enforcement officers, my officials were assured that the additional burdens imposed by this reporting of existing duties would be minimal, as all enforcement activity should already be appropriately recorded locally. They discussed these measures with local trading standards officers and confirmed that this was not a significant burden. They confirmed that enforcement action is already recorded, so one annual report is no burden. It is for local enforcement bodies to determine—

[Lord Harris of Haringey]

Yes, but this is the only one for which there is a requirement to present an annual report to the department. Why?

[Baroness Williams of Trafford]

My Lords, the DCLG will collate and publish a national report. The data will not be challenged in order to provide transparency and national evidence on activity. I am guessing that it is being done because it is an important matter.

It is for local enforcement bodies to determine the nature and extent of the enforcement activity, responding to local priorities and needs. Local weights and measures authorities have the power and discretion to issue penalty notices if necessary, as well as being able to take action to inform, advise and educate. We have ensured that the new reporting requirements are as light-touch as possible to fulfil the purposes of these regulations and provide the transparency that I talked about.

We did not simply spontaneously decide to impose requirements on these authorities, however. As set out in the appendix to the 11th report of the Secondary Legislation Scrutiny Committee, the department received a letter of formal notice in July 2014 from the European Commission relating to UK regulations. The focus of the letter was broader than the scope of these regulatory amendments as it was considering the issue and display of energy certificates in public buildings, although it raised a range of concerns on the adequacy of our enforcement regime. We responded to all the issues raised by the European Commission. We explained the measures we have put in place to allow scrutiny of compliance with the requirements of the Energy Performance of Buildings (England and Wales) Regulations 2012. This included the accessibility of registers on which all of our data are lodged and the amount of information that we put into the public domain.

In various exchanges with the Commission between July 2014 and June 2015, we made it clear that our enforcement regime did not need significant change. Views were sought regarding barriers to enforcement and information in the last Government’s consultation on the future of the display energy regime in early 2015. Local weights and measures authorities have, for the last seven years, had a duty to carry out this work, and appropriate funding has been included in the local government settlement since 2008, when regulations first placed responsibility for enforcement on local weights and measures bodies.

The noble Baroness, Lady Crawley, talked about ring-fencing funding. The settlement provides unring-fenced funding and individual councils can decide what resources they will allocate to each service, depending on the local priorities and needs. We received a range of suggestions on alternative approaches, along with a suggestion that we should ring-fence the funding for this work if it remains a local government responsibility. However, ring-fencing would run directly counter to the long-standing government policy to allow local authorities to determine for themselves how best to use the total pool of resources allocated to them, and cannot be justified in these circumstances.

I believe that these regulations set out the minimum measures necessary to satisfy the UK’s obligations under the directive and to protect England and Wales, and our local authorities, from the possibility of further action. However, that is not to say that they are set in stone.

I regret that we were unable to consult more widely regarding these regulations. However, despite the impression that we have had over a year to address any weaknesses, it was not until we received the Commission’s reasoned opinion in June 2015 that it was clear that further steps were necessary, in particular to address a potential conflict of interest that may arise when a local weights and measures authority is required to enforce against its own parent authority and to put more information into the public domain on enforcement activities.

Once we received the reasoned opinion, we had to act quickly to address any shortcomings. Our focus was to ensure that any further measures we introduced were fit for purpose but as light-touch as possible, and to this end we concentrated on engaging with enforcement officers directly in order to reality-check our thinking. Were we to fail to satisfactorily fulfil the obligations of the directive within the time allocated to us, the likely outcome would be a referral to the European Court of Justice and ultimately the imposition of a multimillion pound fine. Any such fine could potentially fall on local as well as central government.

Going forward, my department will continue to be open to considering the views or proposals of authorities and others based on their experience of implementation. I am also aware of the ongoing review of the functions of local trading standards authorities being led by the Department for Business, Innovation and Skills, and we will consider any relevant recommendations that arise from that.

With that, I hope that the House is assured that we take seriously the representations made to us regarding this enforcement regime. In acting to regulate, we have needed to respond—