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

Lord Teverson Excerpts

Wednesday 16th December 2015 Lords Chamber

[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.

[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.

[Baroness Crawley (Lab)]

My Lords, I support the objections to these regulations so ably raised by my noble friend Lord McKenzie of Luton this evening. I also ask the Minister why no proper consultation was considered necessary.

As president of the Chartered Trading Standards Institute, I know at first hand how this wonderful profession of trading standards officers is now stretched to the limit. They have experienced, as my noble friend has said, an average of 40% cuts in funding over the last five years and up to 80% in some trading standards services up and down the country. In this time of austere cutbacks their duties have not decreased. As well as all their other responsibilities to which my noble friend referred—consumer protection, e-crime, doorstep crime, food standards, animal health and welfare, age-restricted sales, and weights and measures—they are also, as we know, at this time of year especially, Santa’s little helpers when it comes to product safety. For example, trading standards revealed recently that of the 17,000 hoverboards imported from beyond the European Union for Christmas that they have inspected, 15,000 have failed basic safety tests. That is 88%. This is not a service with time on its hands.