Social Housing (Regulation) Bill [HL] - Second Reading

Part of the debate – in the House of Lords at 4:12 pm on 27th June 2022.

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Photo of Baroness Hayman Baroness Hayman Crossbench 4:12 pm, 27th June 2022

My Lords, I declare my interest as co-chair of Peers for the Planet, although I have to say I rather like the “commander-in-chief” designation given to me by the noble Lord, Lord Young of Cookham. I am grateful to him and to the noble Lord, Lord Bourne—very distinguished spear-carriers—for their anticipatory support.

As others have said, the Bill aims to offer renters of social housing a range of new regulatory standards and expectations, the need for which the tragedy of Grenfell and the inquiries that followed so clearly demonstrated. However, on one area of the regulator’s existing remit, that social housing should be of “appropriate quality”—that is, energy efficiency—the Bill is silent, yet the warmth and the heating costs of their homes is of crucial importance to tenants, particularly those who live in what the Minister described as damp, cold and unsafe homes. I shall therefore focus my brief comments on the importance of energy efficiency.

Back in November, even ahead of Russia’s invasion of Ukraine, the International Energy Agency reported that it considered energy efficiency to be the “first fuel”, as it still represents the cleanest and, in most cases, cheapest way to meet our energy needs. It also highlighted that there was no plausible pathway to net-zero emissions without using our energy resources much more efficiently. The strength of these arguments has been redoubled following the 54% increase in the energy price cap in April, with an expected further 65% increase in October and analysts saying say that this is going to go on until at least 2030.

However, progress appears to have stalled on energy efficiency, and this Bill does nothing to remedy that. In the Clean Growth Strategy in 2017, we heard of a planned consultation on how social housing can be upgraded to energy performance certificate, or EPC, band C by 2030 where practical, cost-effective and affordable. Four years later, in October 2021, in the heat and buildings strategy, a long-term regulatory standard to improve social housing was still being considered.

This Bill is intended to facilitate a new, proactive approach to regulating social housing on consumer issues such as safety, transparency and tenant engagement, about which we have heard in this debate. The cost of keeping warm is a key consumer issue, and yet tenants of social housing are still waiting for that regulatory standard. Welcome as the drip-feed of funding for selected improvements has been, along with the Government’s promises to learn from schemes that have failed in the past, 35% of social housing remains rated EPC D or below. Increased support for energy efficiency measures would address all three points of what has been called the “energy trilemma”.

On the first issue, affordability, the Building Back Britain Commission, made up of chief executives from some of the UK’s biggest housing groups, has argued that £200 a year could be saved just by improving a home’s energy performance certificate rating of D to C. That sum is equivalent to the originally announced energy bill discount—but every year, rather than a one-off. The CBI has made similar points, with Tony Danker asking whether we want a new normal of energy efficiency, or of billion-pound bailouts every quarter. The Committee on Climate Change has also shown how the capital investment needed to get to net-zero building will more than pay for itself through savings on fuel, healthcare and other costs.

On sustainability, domestic heating accounts for 21% of UK greenhouse gas emissions. The vast majority of homes still rely on natural gas for heating, meaning that every kilowatt hour of energy saved will help us to meet our commitments under the Paris Agreement and our domestic legally binding net-zero target. Regarding homes heated by electricity, it will help by lowering demand in the coldest months of the year, when our museum-piece coal-fired power stations are most often brought out of retirement for additional capacity.

On security of supply and cost, the same considerations apply. Every unit of energy saved will help us to reduce our dependence on imported gas and, indeed, on North Sea oil and gas, which is in any case traded on the global market and priced accordingly.

There is in fact a fourth point: the impact on employment opportunities and levelling up. The Construction Industry Training Board has estimated that net-zero homes will create more than 200,000 new jobs, and energy efficiency retrofits in particular are expected to provide new jobs as an important part of the green recovery. The building back greener commission has also shown that the homes which stand to gain most from government intervention are in areas designated as needing levelling up.

When will the long-term regulatory standard for social housing be brought forward? Will the Government commit to the same trajectory for social housing as they set out for private renters in the heat and buildings strategy? Of course, addressing energy efficiency in social housing is only one part of a necessary wider national strategy to reduce energy demand, but the Government are even further behind on their commitments on social housing compared to other housing types. This Bill provides a perfect opportunity for the Government to put their outstanding public commitments on a statutory footing, setting out a detailed trajectory for meeting them. I look forward to hearing from the Minister a clear plan and timetable for doing so.