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

Lord McKenzie of Luton Excerpts

Wednesday 16th December 2015 Lords Chamber

Moved by

[Lord McKenzie of Luton]

That this House regrets that, notwithstanding the reasoned opinion from the European Commission, the Energy Performance of Buildings (England and Wales) (Amendment) (No. 2) Regulations 2015 have been introduced without proper consultation and without the additional resources necessary being made available; and calls upon the Government to address the concerns raised by the Chartered Trading Standards Institute and the Association of Chief Trading Standards Officers, particularly concerning the capacity and resources available to local weights and measures authorities to fulfil the additional duties imposed on them under the Regulations (SI 2015/1681).

Relevant document: 11th Report from the Secondary Legislation Scrutiny Committee

[Lord McKenzie of Luton (Lab)]

My Lords, this Motion to Regret is about the introduction of regulations without proper consultation and without taking account of their practical and financial consequences.

The regulations are concerned with the energy performance of buildings and amend the principal regulations, which call for the production of energy performance certificates when buildings are constructed, sold or rented out, and for the display of such certificates in large public buildings. They implement an EU directive which seeks to establish common measures across EU member states to increase the energy efficiency of buildings, reduce their carbon emissions and lessen their impact on climate change. Enforcement of these regulations is the duty of local weights and measures authorities—I shall refer to them as trading standards—which are service departments of local authorities.

The further measures required under these amending regulations are argued by the Government to flow from the Article 258 reasoned opinion from the European Commission and are necessary, it is said, to ensure that the enforcement of the principal regulations is effective and robust. They require enforcement arrangements to be put in place in another area when a local authority is itself under a duty—for example, to display a certificate—and to notify the Secretary of State that it has done so; the collection by trading standards of information covering buildings for which it has enforcement responsibilities, to enable effective enforcement to be planned; and the recording of all enforcement activity, with an annual report to the Secretary of State.

Let me be clear that we are thoroughly supportive of efforts to increase the energy efficiency of buildings, to reduce their carbon emissions and to lessen the impact on climate change. The issue here is the manner in which amending regulations have been introduced, which has denied those working in trading standards the opportunity to point out, in consultation, the ramifications of what is proposed. Indeed, the inadequacy of the consultation is a matter that your Lordships’ Secondary Legislation Scrutiny Committee determined should be brought to the special attention of the House.

It is also about recognising that if these additional responsibilities are imposed on trading standards without additional funding, the inevitable consequence will be to draw effort away from other enforcement activity.

We are grateful to the Chartered Trading Standards Institute and the Association of Chief Trading Standards Officers for their briefing, which I believe has been generally circulated to noble Lords. This sets out matters that they should have had the opportunity to explore in a consultation before these regulations came into being. Fundamentally, the institute and the chief officers reject the notion that this is a minor change to the current situation and explain why it could significantly shift the focus of their efforts, to the detriment of consumers. To understand why this might be the case, one should just reflect on the range of areas for which trading standards has responsibility. The list includes consumer safety, counterfeit goods, product labelling, weights and measures, underage sales, animal welfare and more. They cannot all have the same priority.

This must be seen also in the context of the resources available to trading standards. The institute describes it as a small and financially stretched service which has seen average budget reductions of some 40%, and staff numbers have halved in the last five years. Unless the Minister can tell us otherwise, the DCLG appears to be denying the service extra resources, notwithstanding that these amending regulations, with their reporting requirements, are an extra burden.

As our briefing points out, to date, EPC rates have not been a priority for trading standards, given the assessment that there is a relatively low level of consumer detriment associated with non-compliance. The focus has been on tackling the supply of dangerous counterfeit products or protecting vulnerable residents from scam mail—both of which activities are often linked to higher-level organised crime. So the concern is that, without further resources, the additional requirements to record and report activity under these EPC regulations will inevitably cause activity to switch away from enforcement activity that addresses greater consumer detriment. This cannot be an outcome that the Government should be happy with.

The Minister will also be aware of the BIS-led review into trading standards, which is exploring whether trading standards is the most appropriate mechanism for delivering some of its enforcement responsibilities and how its enforcement burden might be lightened. It seems a little odd, therefore, that these regulations take us in the opposite direction. The institute asserts that the enforcement of EPC regulations anyway has little relevance to the rest of the trading standards remit—a view supported by the LGA.

Noble Lords will be aware that the Secondary Legislation Scrutiny Committee was unconvinced that the EU processes, involving a letter of formal notice of infringement in July 2014 and the reasoned opinion in June 2015 with a two-month deadline, precluded some consultation, particularly with those who will be most affected by the new regulations.

Perhaps I can finish with a question to the Minister. Does she accept that, without further resources, these regulations will divert some of trading standards’ efforts away from vital consumer protection, in particular its combating of the proliferation of scams that prey on the most vulnerable in our society? I beg to move.

[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.

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[Baroness Williams of Trafford]

I can let the noble Baroness know that in writing because I do not know when that will be.

In acting to regulate, we have needed to respond to a tight deadline, but at the same time we have made every effort to avoid placing unnecessary burdens. This House has been greatly assisted by everything that has been said during this debate. I hope that the noble Lord, Lord McKenzie, will feel able not to press the Motion.

[Lord McKenzie of Luton]

My Lords, I thank all noble Lords who have contributed to this short but very well-informed debate. On the proposition that there was limited time to consult, the letter of 2014 would at least have given some fairly clear indication to the Government that something was going to have to be addressed. Even taking June 2015 as the date when that opinion came through, we believe that there was time to consult and it would have been to the Government’s advantage to have done so.

As for who these things apply to, my understanding is that it is necessary to produce energy performance certificates when all buildings are constructed, sold, or rented out, but that displaying such certificates is necessary for large public buildings. It seems to be at odds with the professionals’ view that these regulations will force them to change their priorities. Is the Minister entirely dismissive of that view? This is a profession that received praise from my noble friend Lady Crawley. It has been doing this thing for a long time; it is extremely knowledgeable. Why would it advance the proposition that this will change its priorities and what it will do if that were not the truth? Does the Minister think that they are misguided or misled? Why is that proposition rejected?

[Baroness Williams of Trafford]

My Lords, I would not accuse the profession in any way of being misguided. As I say, we are open to taking further representations as time goes on.

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[Lord McKenzie of Luton]

That is a very helpful reply. I think that the representations were to the effect that, if the profession is going to do this without extra resources, it will switch priorities. If the Minister says that its existing priorities will be preserved—if that is what it thinks is right with extra resources—then I think there will have been real purpose, or additional purpose, to this debate.

My noble friend Lord Harris spoke with passion and great knowledge on this issue and had some very relevant questions. He pointed to the 250 areas where trading standards have responsibility at the moment, asking what they should stop doing, in the Minister’s view, if they are to take on these extra responsibilities. I refer the Minister to some of the debates that we have had on welfare reform and the issue that what gets counted, measured and reported is what has the focus of the Government, and local government, which is absolutely right. That feature will mean that there is going to be a change of emphasis. My noble friend Lady Crawley said that the focus on product safety, particularly at present, is absolutely right—a point supported by my noble friend Lord Harris. We know that the LGA does not support the current structure of EPCs being dealt with through trading standards.

The noble Lord, Lord Teverson, could not get overexcited about all these things, although my noble friend Lord Harris tried to encourage him to become so. This is not about denying the need to make sure that our buildings are energy efficient; we do all that we can to make sure that that happens. Again, as my noble friend said, what the regulations propose in terms of contributing to that is pretty small but, even with that, we are not denying the opportunity for them to be properly enforced. We are saying that, if they are to be properly enforced without skewing the other priorities of trading standards, resourcing is needed to achieve that.

We have had a good run through this. The clock is ticking but I am minded to test the view of the House on this.