Amendment 97

Energy Bill [HL] - Report (2nd Day) – in the House of Lords at 4:45 pm on 17 April 2023.

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Baroness Hayman:

Moved by Baroness Hayman

97: Before Clause 200, insert the following new Clause—“National Warmer Homes and Businesses Action Plan(1) The Secretary of State must, before the end of the period of 6 months beginning with the day on which this Act is passed, publish an action plan entitled the Warmer Homes and Businesses Action Plan, to set out how His Majesty’s Government intends to deliver on—(a) achieving a low-carbon heat target, of 100% of installations of relevant heating appliances and connections to relevant heat networks by 2035,(b) achieving EPC band C by 2035 in all UK homes where practical, cost effective and affordable,(c) achieving EPC band B by 2028 in all non-domestic properties, and(d) introducing the Future Homes Standard for all new builds in England by 2025.(2) The Secretary of State must, in developing the Warmer Homes and Businesses Action Plan, consult the Climate Change Committee and its sub-committee on adaptation.”Member's explanatory statementThis amendment imposes a duty on the Secretary of State to bring forward a plan with timebound proposals for low carbon heat, energy efficient homes and non-domestic properties and higher standards on new homes.

Photo of Baroness Hayman Baroness Hayman Crossbench

My Lords, in moving Amendment 97 I remind the House of my interests as set out in the register. This is truly a cross-party amendment, and I am grateful to the noble Lords, Lord Bourne, Lord Whitty and Lord Foster of Bath, who have added their names to it. The noble Lord, Lord Foster of Bath, has Amendment 98 in this group, and has been fighting the battle on energy efficiency even longer than I have.

I do not need to speak at length on this issue, as I explained the rationale of it in Committee. For any noble Lords who missed that event, I also explained the rationale for amendments to the Social Housing (Regulation) Bill and the Levelling-up and Regeneration Bill. This is an important issue and it goes across many sectors. In the private sector, social housing and owner occupation we have the same problem: our housing stock is old, leaky and draughty—and part of the leaking that goes on is of money. There are also the effects on health and productivity.

There has been no challenge at any time when I have suggested that it is important that we focus on energy efficiency. The analysis that we have a real problem is universally accepted. Indeed, six years ago the Government first set out their own aspiration for as many homes as possible to be EPC band C by 2035. However, I am afraid that, although the aspiration has been there, the achievement has not. Since that aspiration was set out, we have had numerous schemes for home insulation, which in the main have failed. They have been piecemeal and ineffective, and have given no confidence to the industries that we need to deliver those services that there will be long-term investment and that they too can invest and train the workforce necessary to make the inroads we need into the problems.

We have had those sorts of schemes and a string of announcements from Governments. There has been a string of announcements, a string of reannouncements, a string of consultations and, most recently, an announcement that there was a commitment to publish the responses to a previous consultation. What we have not had is the comprehensive, coherent, cohesive plan that would see us able to make real progress in this area.

Everyone else has quoted the Skidmore review so I will too. In that review, Chris Skidmore said that the mission to improve energy efficiency for households

“will not only reduce energy demand and bolster our energy security, but also save consumers money on their bills”.

To that, I add that it will also save taxpayers money because, at the moment, they are subsidising those bills. Good money is literally going up in smoke; we need to stop it now. What we need is a comprehensive, cohesive plan with set times for the achievement of set objectives—something that we have never had.

This is not only my analysis. In its progress review—last month, I think—the National Infrastructure Commission highlighted:

“Government is not on track to deliver its commitments on heat or energy efficiency … A concrete plan for delivering energy efficiency improvements is required, with a particular focus on driving action in homes and facilitating the investment needed”.

We need to take that conclusion very seriously; my amendment seeks to do just that.

I am grateful to the Minister, who found time to discuss these issues with me. He had some concerns about the drafting of the amendment, particularly the words “cost effective”, “practical” and “affordable”. I am trying to make this amendment sensible, cost effective, practical and affordable, but I hope to reassure the Minister that those words were not just plucked out of the air by me. They come from the Government’s own Clean Growth Strategy and were quoted back at me as something that the Government supported by the noble Earl, Lord Howe, in his response to my amendment when we debated it during a debate on the levelling-up Bill.

For those reasons, I hope that these words will not worry the Minister in the way that they did when we had a conversation. If he was still concerned and felt the need to change them at Third Reading, I think we would all be happy to come back and see whether there was a way in which we could accommodate that. Meanwhile, I do not resile from my view that, as a Parliament, we need to say how firmly we believe that the Government have not made enough progress on this issue and that we need a road map to do so urgently.

I beg to move.

Photo of Lord Foster of Bath Lord Foster of Bath Liberal Democrat

My Lords, I am absolutely delighted to support this amendment from the noble Baroness, Lady Hayman, and to speak to my Amendment 98. For those who have not necessarily followed the debate, which has gone on for many years, it is worth pointing out by way of background that the International Energy Agency has repeatedly argued that the best way to tackle the impact of climate change is to reduce our use of energy and that the most cost-effective and environmentally friendly option is to avoid unnecessary consumption. Clearly, the benefits of such an approach are pretty obvious: increased national energy security and reduced carbon emissions, coupled with reduced household energy bills and improved quality of life, not least for those living in old, damp, mouldy homes. There are other benefits too, including, for example, the saving to the NHS in England of £1.4 billion a year—its estimate of the cost of people living in cold homes.

Schemes to deal with this have come and gone. Promises have been made but rarely kept. Existing schemes have been inadequately policed. The Green Deal and the green homes grant schemes came and went. Even the 2019 Conservative Party manifesto promise to invest £9.3 billion of public funding to stimulate energy efficiency up to 2024 appears to have been cut to £6.6 billion, as we see in the document produced in March this year. Measures that are still on the statute book are being inadequately policed, so the assumed impact is not being achieved. For instance, not all properties that should have a display energy certificate do so.

In 2018 we introduced minimum energy-efficiency standards through all properties, whether residential or commercial, that were going to be let, but this was never properly policed. Despite all that, in 2020 the Government raised the standards, but to this day they still have not announced how and when the standards will be implemented or how they will be policed this time. If you look even further back, the Warm Homes and Energy Conservation Act 2000 was designed to eliminate the then 2 million households deemed to be in fuel poverty, but failure to follow it through means that rather than reducing that number, it is now estimated that we have almost 8 million households in fuel poverty.

We have some of the least energy-efficient housing in Europe, with 19 million homes classed as energy inefficient. Yet sadly, in the past year alone, home energy-efficiency activities have plunged by 50%; they are now at their lowest level since 2018. At the end of last year, in his role as chair of the Climate Change Committee, the noble Lord, Lord Deben, whom I am delighted to see in his place, said in a letter to the Chancellor of the Exchequer that reducing energy demand in UK buildings is now the biggest gap in the current Government’s energy policy. The failure to follow through and properly police previous energy-efficiency schemes and promises means that, as we heard from the noble Baroness, Lady Hayman, the industry has lacked the confidence to invest in the research, equipment and training of staff to do the necessary work. As a result, we are now faced with a shortfall of some 200,000 trained staff to do the work needed.

If we are to reverse this situation and give the industry the confidence it now needs to invest, we need a very clear plan of action and legally binding targets set out in legislation. I have made the case on numerous occasions, yet despite their willingness to place a range of other targets into legislation, the Government have steadfastly refused to do so for most of their own energy-efficiency targets. Now, at last, we have an Energy Efficiency Taskforce that I hope will quickly produce the plan of action. Amendment 97 covers this, but it also places a clear timetable on its production and requires its publication. The amendment, together with my Amendment 98, provides for the placing of clear targets for different forms of tenure into legislation.

I hope that the Minister will at long last accept at least the thrust of these amendments, if not the precise words. If he is unwilling to do so, on these Benches we will certainly support the noble Baroness, should she press her amendment to a vote.

Photo of Lord Deben Lord Deben Conservative 5:00, 17 April 2023

My Lords, having been introduced by the noble Lord, I want to try to help the Government. We all know that, first, energy efficiency is the most sensible way of proceeding towards the statutory targets that this Government have supported and this Parliament has voted for. Secondly, we know that every mechanism that we have tried so far has not delivered to the extent that we hoped it would. Thirdly, we know that this is an all-party view; nobody disagrees with it except those who still believe that climate change is not happening. Even if you do not believe in climate change, you must understand the cost of living crisis and, therefore, that doing this is crucial to reduce costs, particularly for those who are least able to bear them. So there is every reason for energy efficiency.

It is therefore not surprising that every adviser of the Government has emphasised this—not just as one among many possibilities but as the most important thing that any Government could do at this time. That is not just the Climate Change Committee but the National Infrastructure Commission and everybody else who has paid any attention at all to this. Yet the Government, in explaining to their supporters why this would not be an acceptable amendment, suggest that somehow or other it would add unnecessarily to the various schemes and programmes that are already in place.

I have to say to the Minister that the Climate Change Committee has looked very carefully at this and it does not actually meet the facts, because none of these other things satisfactorily deals with the reduction of energy use. There is a bit of an argument about how much of a difference you could make but, roughly speaking, if we had real energy efficiency, we could do all the things we are doing at the moment at about half the energy use. This is a hugely important matter.

These particular amendments may well have failings, but that is to remind the Government that they should have brought this forward in the Bill themselves, so that it did not need to be amended. I beg the Minister, whom I hope is in a sympathetic mood, even to statements by me, to take seriously the fact that no one believes that we should not have this amendment or something like it—no one who I can find logically does.

There will be some people who, if it is pressed to a vote, will support the Government because they feel that they must. I am happy to meet any of them and listen to their arguments for not doing this; it will be difficult for those arguments to be effective. I merely ask the Minister to please not put us yet again in the embarrassing position that either we vote against energy efficiency on the side of the Government or we vote against the Government for energy efficiency, which is what every independent adviser advises and which is, I happen to be sure of, actually the view of any Minister who has looked at the facts.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I am glad to follow the noble Lord, Lord Deben; in the way he has spelled it out, it is clear that there is a huge gap in the energy strategy being presented by the Government. You would not believe that from the size of the Bill and the details within it, but the fact is that, unless we have a strand of policy, properly delivered and enforced, that deals with energy efficiency, we are missing the easiest target: to stop households and businesses spending money on energy when relatively simple adjustments to their homes or to the regulations that cover buildings could change that.

I am lost in admiration for the noble Baroness, Lady Hayman, who raises this issue on every piece of legislation going through the House. I am astounded that the Government have not taken it up.

There is something odd about this. More than 20 years ago, I was sitting where the Minister sits, and I was responsible for policies against fuel poverty and for energy efficiency. At the end of the Labour Government, we were doing roughly four times the number of interventions that the Government have done. So when the Minister turns around, as he did in Committee, and says that they are already doing a very substantial amount of stuff—they are doing some stuff; there is a social housing fund for energy efficiency and the ECO scheme, which is not a particularly efficient way of delivering it but does deliver something—at the end of the day, it does not amount to what we were doing 20 years ago. Had we continued doing that for the last 20 years—maybe we would have had to alter it and to update the interventions—then the energy efficiency of our buildings would be substantially greater. The Minister is required to explain to the House why this glaring omission is not in this or any other Bill.

There are relatively simple things you can do which make a dramatic difference, though it is slightly difficult to do it. Why, for example, do regulations on new builds not universally require new-build houses to approximate to a net-zero position? Why, for example, does the planning system tend to favour demolition of buildings, which itself is carbon-releasing and carbon-inefficient, rather than effective retrofitting? Why, in effect, have the schemes that the Government have come forward with in the owner-occupier sector—the green homes grant and the Green Deal—not worked, despite the fact that industry and campaigners have been very much in support of them? The answer is that they have not been made sufficiently attractive and the delivery has not been made sufficiently attractive to businesses—installers and the workforce—to ensure that we have a massive effort on this front.

I am glad that the Government have established a more effective Energy Efficiency Taskforce, but that task force needs to come up rapidly with a strategy which will address all of these issues and deliver for us a contribution to solving the energy-induced part of the cost of living crisis, and at the same time begin to reduce our dependence on energy use and enhance our contribution towards meeting net zero. It is so obvious that I am astounded, as the noble Lord, Lord Deben is, that the Government have not seized this opportunity.

I hope that, before the Bill finishes its turn in this House, we will see a rectification of that and a real commitment to an energy efficiency strategy which makes sense, is attractive and works.

Photo of Baroness Altmann Baroness Altmann Conservative

My Lords, I support these amendments and the concept of improving energy efficiency. I probably cannot express the rationale for that better than the noble Baroness, Lady Hayman, and my noble friend Lord Deben.

I would like to ask my noble friend the Minister if there are particular issues in the wording of these amendments that the Government have a problem with. Is it the EPC ratings or the six months? If there are such issues, would the Government consider coming back at Third Reading with their own version of what seems, universally across the House and across the country, to be so sensible? Given the Government’s excellent record and excellent intentions in improving the energy performance and net-zero performance of the British economy and our country, would they consider these measures?

Photo of Lord Lennie Lord Lennie Opposition Whip (Lords), Shadow Spokesperson (Energy and Net Zero)

My Lords, these welcome amendments in the names of the noble Baroness, Lady Hayman, and the noble Lord, Lord Foster, are concerned with energy efficiency in homes and non-domestic premises. As the noble Lord, Lord Deben said, the Government have set statutory targets aimed at reducing carbon emissions, achieving net zero and improving energy efficiency in homes.

There is consideration under way in the Minimum Energy Performance of Buildings Bill to move EPC ratings for rental properties from band E to C by 2025. The original plan was to ensure that all tenancies were in that band by 2025, but after much lobbying by landlords and others, DESNZ decided to scrap the 2025 target and now have until 2028 to achieve that target.

I want briefly to set out some facts: energy-efficiency measures are now 20 times lower than under the last Labour Government; the UK has the least energy-efficient homes in Europe; domestic energy-efficiency measures have fallen 95% since 2012; and the Resolution Foundation estimates that 9 million households are paying an extra £170 a year as a result of these failings. So we support these amendments, and should the noble Baroness, Lady Hayman, test the opinion of the House, we will support her in that vote.

Photo of Lord Callanan Lord Callanan Parliamentary Under Secretary of State (Department for Energy Security and Net Zero) 5:15, 17 April 2023

My Lords, this group covers the two amendments concerning the energy performance of existing premises and of new builds.

I will start with Amendment 97, from the noble Baroness, Lady Hayman, and the noble Lords, Lord Foster and Lord Whitty, which would require the Secretary of State to publish a national warmer homes and businesses action plan six months after Royal Assent. That proposed plan looks very similar to and would duplicate the Government’s existing Net Zero Strategy and the Heat and Buildings Strategy—added to, of course, by the Powering Up Britain publications. Therefore, we feel that it is unnecessary.

On minimum energy-efficiency standards for domestic buildings, the Government agree with the ambition of reaching EPC band C by 2035 for as many homes as possible where that is cost effective, and for commercial properties below EPC band B where that is cost effective. On minimum energy-efficiency standards, these ambitions have already been published in various publications, including the Net Zero Growth Plan. The Government have already set out their timeline to deliver the future homes standard by 2025 and we have accelerated work on its full technical specification. We will consult further on that later this year. Regarding the proposal on heat networks, the Bill already outlines our heat network zoning proposals for England, which details where buildings should be connected to heat networks and gives local authorities the power to implement heat network zones.

On top of all those major commitments, as has been referenced in the debate, we recently launched the Energy Efficiency Taskforce, of which I have the honour to be co-chairman, to deliver our ambition to reduce the UK’s final energy consumption from buildings and industry by 15% by 2030. So there is no difference in ambition from the Government on energy efficiency. I agree with many of the points made on how important energy efficiency is, and we are progressing work to increase it across a whole range of sectors, as I have outlined.

In addition to all that, in the Statement on powering up Britain, which was made just before the Easter Recess and will be repeated here on Wednesday evening, we announced a further insulation scheme—the Great British insulation scheme—to deliver £1 billion in additional investment by March 2026 in energy-efficiency upgrades in some of the least efficient homes, including those in the so-called able-to-pay sector. Furthermore, we announced that we will extend the boiler upgrade scheme until 2028, supporting both domestic and small non-domestic buildings, building on the existing £450 million-worth of funding already committed between 2022 and 2025 to provide the signal that people have been asking for that the scheme will last in the longer term. All of that will help us to reach our ambition of phasing out all new installations of natural gas boilers by 2035, but before we can proceed to legislate for that we must provide effective cheap alternatives; otherwise, the population will, in my view, react badly to being compelled to do that.

I turn next to Amendment 98, tabled by the noble Lords, Lord Foster, Lord Lennie and Lord Whitty, and the noble Baroness, Lady Hayman, with contributions from my noble friend Lady Altmann. I would also like to thank the noble Lord for his important work as chairman of the committee. This amendment would require all privately rented homes to have a minimum energy performance certificate—EPC—rating of band C by December 2028, subject to specified exemptions. The amendments would also require non-domestic privately rented properties to meet EPC B by December 2028.

Again, the Government agree with the principle of increasing the ambition for minimum energy-efficiency standards to help reduce energy bills for tenants and to deliver carbon savings to meet our net-zero and achieve our fuel poverty targets. That was reflected in the Government’s consultation, which has been referred to, on proposals to raise the minimum energy-efficiency standard for privately rented homes to EPC C for new tenancies from 1 April 2025 and for all tenancies by 1 April 2028. We are currently considering the results of that consultation, but, as I have said in the House before, it is not an easy policy to progress. There are already shortages of rented accommodation in many parts of the country, and it is certainly not my ambition to further increase those shortages, so we will have to be careful how we proceed in that legislation. The Government also consulted on a minimum energy-efficiency standard for non-domestic privately rented buildings of EPC C by 2027, and EPC B by 2030.

Under the Energy Act 2011, the Secretary of State already has the necessary powers to amend the PRS regulations to raise the minimum energy-efficiency standards and set the dates by which landlords must comply with the new energy standards. As I explained in Committee, the amendment would not allow us to reflect the immense amount of valuable feedback that we received from the consultation in the final policy design that we are currently working on. This will be essential to ensure that it is fair and proportionate for tenants, of course, but also for landlords themselves. As I said at the time, we intend to publish the summary of responses to this consultation later in the year, as confirmed in the powering up Britain Statement.

I hope that I have been able to reassure noble Lords as to our ambitions in this area. We want to see the same policy outcomes as do many in this House and we are already working on many of these areas. I hope that my reassurances will enable the noble Baroness to withdraw her amendment.

Photo of Baroness Hayman Baroness Hayman Crossbench

My Lords, I am grateful to everyone who has spoken on this important issue. The Minister said, in essence, that there is no difference between the Government and my amendment. If that is so, it will not be such a big deal for them to accept it. However, the truth of the matter is that this amendment would mandate action in this area, and in a specific timeframe. I am sad to say that the Government have a credibility problem in this area with their own ambitions, objectives and restatements of policy. I have been very much supported from all Benches—I am particularly grateful to the noble Lord, Lord Deben—and I wish to test the opinion of the House.

Ayes 227, Noes 194.

Division number 1 Energy Bill [HL] - Report (2nd Day) — Amendment 97

Aye: 225 Members of the House of Lords

No: 192 Members of the House of Lords

Aye: A-Z by last name


No: A-Z by last name


Amendment 97 agreed.

Amendment 98 not moved.

Clause 212: Appeals