Clause 39 - Review of energy efficiency in the private rented sector: England and Wales

Energy Bill [Lords] – in a Public Bill Committee at 10:45 am on 14th June 2011.

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Question proposed, That the clause stand part of the Bill.

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

With this it will be convenient to discuss the following:

Amendment 29, in clause 40, page 25, leave out subsection (1).

Amendment 30, in clause 40, page 25, line 41, leave out ‘may make regulations’ and insert

‘shall make regulations to come into force no later than 1 April 2016 setting a minimum energy efficiency level for domestic PR properties and’.

Amendment 123, in clause 40, page 26, line 38, leave out ‘2015’ and insert ‘2014’.

Government amendments 126, 145 and 150.

New clause 24—Domestic minimum standard regulations—

‘(1) The Secretary of State shall make regulations for the purpose of securing that—

(a) a landlord of a domestic PR property, or

(b) the appointed agent of a landlord of a domestic PR property which falls below a minimum standard of energy efficiency (as demonstrated by the energy performance certificate) as is provided for by the regulations shall not let or market to let the property until such time as the landlord can demonstrate that the property meets the minimum standard for a domestic PR property.

(2) Regulations under this section are referred to in this Chapter as “domestic minimum standard regulations”.

(3) For the purposes of domestic minimum standard regulations—

“energy performance certificate” has the meaning given by the Energy Performance Regulations;

“landlord”, “local authority” and “appointed agent” have the meanings given by the regulations; and

“minimum energy efficiency standard” means Band E or above expressed in accordance with Regulation 11(1)(a) of the Energy Performance Regulations or above (or any higher level set in accordance with subsection (5));

(4) The Secretary of State may by order amend the definition of “energy performance certificate” in subsection (3).

(5) The Secretary of State shall, no later than 31 December 2019, amend the regulations to raise the minimum energy efficiency standard.

(6) Domestic minimum standard regulations shall come into force no later than 1 January 2016.’.

New clause 25—Further provision about domestic minimum standard regulations: England and Wales

‘(1) Domestic minimum standard regulations may in particular include provisions about—

(a) exemptions from any requirement imposed by or under the regulations;

(b) the making of an order by the Secretary of State to suspend the regulations for periods not exceeding one calendar year within any local authority area provided the Secretary of State—

(i) is satisfied in respect of every calendar year suspension of the regulations that there is evidence that the regulations have resulted in a significant shortage in the supply of domestic PR property in that local authority area; and

(ii) publishes the order and the reasons it was made and the evidence on which it was based.

(2) Provision falling within subsection (1)(a) includes, in particular, provision about exemptions relating to any necessary permissions or consents.’.

New clause 26—Sanctions for the purposes of domestic minimum standard regulations: England and Wales—

‘(1) Domestic minimum standard regulations shall include in particular provisions for the purpose of securing compliance with requirements imposed on landlords by or under the regulations including granting powers to local authorities to carry out relevant energy efficiency works to domestic PR properties under the regulations and recover the costs from the landlord.

(2) Provision falling within subsection (1) includes, in particular, provision—

(a) for a local authority to enforce any requirement imposed by or under the regulations;

(b) about the sanctions for non-compliance with a requirement imposed by or under the regulations;

(c) about the sanctions for the provision of false information in connection with such a requirement, including in cases falling within paragraph (b) or (c), the imposition of a civil penalty by a local authority.

(3) The regulations will make provision for a civil penalty not exceeding £5,000 to be imposed on any person who markets or lets a domestic PR property which does not meet the minimum standard regulations on or after 1 January 2016.

(4) The regulations must also include provision for a right of appeal to a court or tribunal against the imposition of the civil penalty.

(5) Provision falling within subsection (4) includes, in particular, provision—

(a) as to the jurisdiction of the court or tribunal to which an appeal may be made;

(b) as to the grounds on which an appeal may be made;

(c) as to the procedure for making an appeal (including any fee which may be payable);

(d) suspending the imposition of the penalty, pending determination of the appeal;

(e) as to the powers of the court or tribunal to which an appeal is made;

(f) as to how any sum payable in pursuance of a decision of the court or tribunal is to be recoverable.

(6) The provision referred to in sub-paragraph (5)(e) includes provision conferring on the court or tribunal to which an appeal is made power—

(a) to confirm the penalty;

(b) to withdraw the penalty;

(c) to vary the amount of the penalty;

(d) to award costs.

(7) If the Secretary of State considers it appropriate for the purpose of, or in consequence of, any provision falling within sub-paragraph (5)(a), (c), (e) or (f), domestic minimum standard regulations may revoke or amend any subordinate legislation in so far as the subordinate legislation extends to England and Wales.

(8) In this section “subordinate legislation” has the meaning given in section 21(1) of the Interpretation Act 1978.’.

Government new clause 32—Domestic energy efficiency regulations: England and Wales.

Government new clause 33—Further provision about domestic energy efficiency regulations.

New clause 41—Minimum energy efficiency standards—

‘(1) The Secretary of State shall make regulations for the purpose of securing that—

(a) a landlord of a domestic PR property, or

(b) the appointed agent of a landlord of a domestic PR property which falls below a specified minimum standard of energy efficiency (as demonstrated by the energy performance certificate) shall not let or market to let the property until such time as the landlord can demonstrate that the property meets the specified minimum standard for a domestic PR property.

(2) For the purposes of domestic minimum standard regulations—

“energy performance certificate” has the meaning given by the Energy Performance Regulations;

“landlord”, “local authority” and “appointed agent” have the meanings given by the regulations; and

(3) Specified minimum energy efficiency standards shall be applied as follows—

(a) properties with an energy rating of Band F or lower shall not be let or marketed for let from 1 January 2015;

(b) properties with an energy rating of Band E or lower shall not be let or marketed for let from 1 January 2016;

(c) properties with an energy rating of Band D or lower shall not be let or marketed for let from 1 January 2019;

(d) properties with an energy rating of Band C or lower shall not be let or marketed for let from 1 January 2022;

(4) The Secretary of State must prepare and publish a plan for achieving the principle purpose set out in paragraph (a)—

(a) from 2030, all properties let or marketed for let must have an energy rating of Band A.’.

This New Clause outlines a timetable for progressively improving the energy efficiency of homes in the private rented sector up to 2022, and requires the Secretary of State to set out a plan for ensuring that by 2030, only the most energy efficient properties can be rented .

This is obviously a large group of amendments that covers a wide range of issues. I am keen to ensure that all hon. Members who wish to speak have the opportunity to do so, and that all issues are thoroughly ventilated, so Members may range widely in debate on this group. If hon. Members wish to take part in the debate, I shall be relaxed about how widely they roam in their speeches.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Further to the announcement made by the Secretary of State on Second Reading, I am pleased to introduce this suite of Government amendments, which seeks to introduce a minimum energy efficiency standard in the domestic rented sector.

We have listened carefully to the parliamentary debate during the passage of the Bill so far, and have taken the views of stakeholders, including Friends of the Earth and the National Association of Citizens Advice Bureaux, on board. People are concerned that requiring a review before deciding whether to regulate the sector would create too much uncertainty. Landlords would not be able to plan effectively for energy efficiency work and regulation might not go ahead. We have responded to those concerns with a measure to introduce a minimum energy efficiency standard for domestic private rented property, which sends a clear message that energy efficiency must improve. We are moving to a much firmer legislative position.

Under amendments 126 and 145, and with clauses 39 to 41 no longer standing part of the Bill, our regulations will no longer be conditional on a review, and the Secretary of State will have a duty make the regulations. As a result, landlords will know what is required of them and when, and tenants will be provided with  assurance that cold, draughty rental properties will be a thing of the past. New clauses 32 and 33 introduce provisions for a minimum standard to come into force no later than 1 April 2018. That standard, which will be set at band E, will ensure that approximately 682,000 homes will have to be improved.

The prospect of the minimum standard will give landlords a strong incentive to act sooner. They will be able to make the required improvements over the coming years and plan around their tenancy changes. In 2018, the regulations will mop up those few remaining landlords who have yet to change; inaction will not be a viable option. It is important for Committee members to understand that 2018 is not the date on which we expect the process to start, but the date on which the finish line should be crossed.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

Has the Minister carried out an impact assessment of the likely take-up? He has said that by 2018 only a few landlords will be left and we will be mopping up the remaining properties. What impact assessment justifies his view that the vast majority of landlords will take up the standard naturally?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Gentleman’s point is borne out by a range of long-dated regulatory approaches that have proved very effective, not just in the housing sector but across a range of Government policy under the present and previous Administrations. It has been shown that if private individuals or investors are given sufficient notice of a change that will come about by law—if it is made clear in primary legislation and if it is widely disseminated—change happens. I will not list the various relevant measures, but there are plenty of examples from a range of disciplines where that course of action has been effective. We have no reason to believe that it would not be so in the private rented sector.

I do not for a moment suggest that there will not be some recalcitrant landlords who will require the full force of the law to be brought, but most landlords are solid, law-abiding citizens who want to act within the law and want best practice to be driven forward. The measure will have the benefit of creating a level playing field and will not unfairly discriminate against landlords who want to improve their properties. We can have a lot of confidence in the measure.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

Will the Minister say a little more about the 2018 date? I have raised before the anomaly relating to the obligation on the Government to have eradicated fuel poverty by 2016. The date of 2018 in the clause is a strong acknowledgement, first, that the 2016 deadline is gone. More than 5 million people are living in fuel poverty, but an opportunity is being missed to make faster progress. To demonstrate the urgency with which the Government are tackling the problem, it would have been more sensible to align the date in the clause with the 2016 deadline, rather than set it at 2018.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I appreciate the hon. Lady’s point of view, which she puts very well. Ultimately, the date is a matter of judgment and balance. I do not think that we would pretend that there is anything perfect about 2018; there are arguments in favour of setting an earlier date, and I am sure that some would argue for further delay. We have sought to come up with a date by which even  properties with long-term tenancies will have gone through a tenancy cycle and the landlord will have had an opportunity to upgrade and retrofit properties while they are vacant. The most hard-to-treat properties, in particular, will need to be vacant for a while if they are to be upgraded to the necessary standards.

We do not want to put an unnecessary burden on landlords or to risk perverse consequences such as tenancies being shortened against tenants’ wishes, unintended consequences for housing costs, or knocking the availability of housing in the private rented sector. A judgment must be made, and having taken everything into consideration we have landed up at the date of 2018. In 2016, of course, it will be a legal requirement that no landlord will be able to refuse a reasonable request from tenants.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

What might happen if someone has a long-standing tenancy, as I do? I moved into my house in 2002 and have an assured shorthold tenancy, which rolls over; I have been there nine years and may just carry on. I will never vacate that house, but I will certainly want something done about its energy efficiency. I agree with the hon. Member for Brighton, Pavilion that to bring the date forward to 2016 would afford my landlady—particularly since she lives abroad—the opportunity to concentrate on the fact that work needs to be done and the property should be brought up to the standard, perhaps in steps or in response to my request.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change 11:00 am, 14th June 2011

That is a good point. Long-term tenancies will be treated no differently from any other tenancy. Landlords will have to comply with the obligation by 2018 and they will not be in a position to refuse any reasonable request by 2016. I would hope that the hon. Lady’s landlady, whether or not she lives abroad, will look for an opportunity to act sooner.

We are talking about how to deal with those landlords who do not take up the opportunity. We do not anticipate that the majority of landlords will resist; on the contrary, the green deal is a terrific opportunity for landlords to upgrade their properties at no up-front cost to themselves, so there is a benefit. I truly believe that only a very small number of landlords will need to be scooped up by the force of law.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I want to put it on record that my landlady is fantastic. I will raise retaliatory eviction a little later, but I feel strongly that we ought to bring the date forward to 2014 so that people can make the request and properties are brought up to a decent standard much earlier than 2018. We could make a big difference.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I appreciate what the hon. Lady is saying, but there is a balance to be struck. As I have said, 2018 is not the start line; it is the finish line—the point at which we expect it all to have been done and completed. Obviously, we are talking about the retrofit of not only the hon. Lady’s home, but literally millions of properties.

We are talking about new supply chains and the creation of new markets and new technologies. We are talking about bringing down the cost of innovative  interventions so that it makes sense for people in some of the poorest accommodation to wait a little longer, rather than jump in now, because we expect there to be economies of scale and that the price of certain interventions will come down substantially. There will be new ways of heating and lighting, and the costs will take a while to feed through to the housing economy before they become widely available.

With the best will in the world, this is not something that can happen overnight, but by setting a long-stop date we are sending a clear signal that that is when we expect the job to be done. We will blow the whistle and say, “At that point there is no excuse for not having completed every single property.” Those landlords who have not completed by that date will face criminal prosecution—[Hon. Members: “Civil.”]Civil prosecution. I beg the Committee’s pardon—[Interruption.]

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

Order. Could we avoid sedentary interventions? It is confusing for Hansard.

Photo of Steve Brine Steve Brine Conservative, Winchester

Is not the danger that through the green deal we make the worse the enemy of the good? Not all landlords in the private-rented sector are bad landlords—far from it. I have had some very good landlords in my time. With an incentive to better their properties at no cost, landlords will be incentivised to raise the standard of their properties. Is it the Minister’s hope that landlords will grab that opportunity with both hands as soon as it comes?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Absolutely. We must not lose sight of the fact that there are huge incentives, as my hon. Friend says. Landlords will be able to increase the capital value of their properties by increasing the energy efficiency and improving the overall look, feel and fabric. Not only will that be reflected in the capital value, but when there is a rent review I imagine the property will be more valuable because it will be more energy efficient and will have been invested in.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

I take on board what the Minister says, but to come back to my point, in my short time in Parliament the only commercial enterprise that has been the subject of legislation with a deadline was battery farming, and the commercial companies did not meet that deadline. Whether there should be a guillotine or the deadline should be extended was discussed.

The Minister says there is plenty of evidence, but will he firm up what he means by “evidence”? I would like to see some evidence of how progress will be made to 2018 to show that his amendment is justified. Will there be any monitoring and evaluation during that process, or will we arrive, as we did with—

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

Order. Can we have brief interventions and brief questions?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I assure the hon. Gentleman that we take the impact seriously. We are updating the impact assessment, taking into account the potential further toughening-up of the Bill through the new amendment. When that has been done, we will make the updated impact assessment available to him and to other members of the Committee.

Local authorities are of course already obliged to take note of actions taken under the Home Energy Conservation Act 1995. Now that we are determined to breathe life into that legislation, I hope that it will come into its own once again as a useful tool.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

May I take the Minister back to a previous point, which goes away from what he referred to as a matter of judgment and relates to evidence? He talked about a tenancy cycle, and although I am both a landlord and a tenant I have never come across that concept. Is it a number of years that justifies his proposing the 2018 date? What is a tenancy cycle and what evidence does he have to support the duration that he has proposed?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

A number of factors contribute to our arriving at the date of 2018. There have been wide-ranging discussions. As well as the Department of Energy and Climate Change, the Department for Communities and Local Government obviously has a real interest in the matter, and there has been constructive, positive dialogue with colleagues across Government. Although I cannot recall the exact information off the top of my head, I believe the tenancy cycle is simply the average time of the average tenancy—in other words, the average period after which a landlord would expect the property to become free. Most tenancies, I am told, are 12 to 18 months, so by 2018, we expect that 80% to 90% of tenancies will have changed.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

I thank the Minister for that helpful clarification and particularly the information that a large number of tenancies will have changed in 12 to 18 months. A huge proportion will have changed by 2018, but can he tell us what the figures will be for 2016 and 2014?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

No I cannot off the top of my head, but by 2018, 80% to 90% of tenancies will have changed.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

If the Minister cannot give the figure for 2014, perhaps he will elaborate at least on the date of 2016. If by 2016 80%, 85% or 90% of tenancies will have changed hands, that would significantly alter the Committee’s considerations about what the appropriate date might be.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I suggest that the hon. Gentleman does not get too hung up on that single issue. Although it was an important contributing factor, a range of factors informed our views and our discussions with DCLG. We are trying to find a balance between the interests of landlords and supporting the private sector and we want more private accommodation to become available, as well as greater liquidity and investment in the housing sector—an objective I am sure the hon. Gentleman shares. It is therefore important that we do not ride roughshod over the economic interests of landlords, but balance that impact with a strong element of social justice and a clear determination to drive the policy through to a successful conclusion.

We think that we have come out with a satisfactory date. 2016 was put forward by Friends of the Earth and a range of campaigners, so it could be said safely that that was at the most ambitious end of the spectrum.  The fact that we have taken up those points and returned with the date of 2018 is, I think, pretty good going for a Government. The example of 2014 is a bit of a red herring.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

I appreciate those comments; there is a small degree of logic in them, provided that there is something in the meantime. Seven years is an awfully long time, so if the date is going to be put back by two years, there has to be some evaluation and monitoring in the period to justify the date of 2018. What does the Minister intend to do to monitor and evaluate the time frame, so that we do not end up with a car crash in 2018?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am really not clear what the hon. Gentleman thinks would be achieved by such monitoring. There will be monitoring and the Secretary of State will report annually to Parliament on the progress of the green deal, including on the progress we are making in the private rented sector. I do not understand why the Gentleman says that there will not be monitoring and clear analysis of our progress; there demonstrably will be and we have committed to that already, in addition to breathing life into the Home Energy Conservation Act 1995 so there is further grip at the local level.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

I accept the point that the Minister is making, which leads to my next question. If in each year there is not substantive improvement or movement towards his goal, will he review the 2018 date? Is he prepared to be flexible? If the figures for the formative years—2014, 2015 and 2016—do not show the vast tranche of improvements that he says will be done, with only the remnants left for 2018, is he prepared to take action?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Let me correct the hon. Gentleman: it is not a seven-year roll-out. The programme will kick off only at the end of 2012 and we are talking about a date early in 2018. My arithmetic tells me that that is not seven years but just over five. Perhaps if he redoes his calculations, we have already hit his five-year roll-out target. I stress again that the 2018 back-stop is the finish line. We are not waiting five years to start the programme; 2018 is the point at which we expect it to have concluded. I think that a five-year programme is pretty reasonable, and we will work with the sector to encourage take-up.

Of course we will review the programme annually and of course we have the ability to bring in further incentives or to intervene if the market does not develop in the way that we expect. No one has greater investment than we do in the success of the policy and roll-out of the framework, but we start with a great deal more optimism than the hon. Member for Hyndburn has about the potential of this revolutionary new market framework. He is slightly gloomy as well as slightly out with his arithmetic. We are optimistic about the measure’s potential to give landlords the ability to make a transformational change in the housing stock.

Photo of Huw Irranca-Davies Huw Irranca-Davies Shadow Minister (Energy and Climate Change)

The Minister is trying to make a very good fist of his argument and I understand what he is saying. Our difficulty is that there seems to be a break in the logic—I say this as a landlord myself. If the golden rule works, on top of what I have already done, I will invest and I will do that straight away because I will not lose money on it and my house will be warmer and  more attractive to tenants. Why would not other landlords with that optimism, and because it was in their commercial interests to do it, act way before the five years were up? Where is the opposition to the measure from landlords? I do not understand it. Which landlords’ organisations say that they do not want to do this because they do not trust the golden rule?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am delighted that we have the full and hearty support of wealthy Labour landlords. If we have the Labour landlord class on our side, we are obviously taking a step in the right direction, although if we look at the total housing stock, there are a few other landlords to take into consideration. We are talking about a little more than five years, not seven; and we will work to encourage the sector. I entirely agree with the hon. Gentleman, although my experience is rather more theoretical than his ownership-based model. There are clear incentives for landlords to do this. Obviously, he will report back on how his portfolio is faring, and we look forward to hearing about his progress.

We think the measure will provide a clear stimulus. I will not be surprised if we outperform expectations, rather than see curmudgeonly slow progress. If there is not a market response, we will have the opportunity to come back with other incentives. We know the Chancellor is looking to respond in the next Budget—and perhaps subsequent Budgets—with incentives. We wait with bated breath to see what they may be.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells 11:15 am, 14th June 2011

I want to clarify one point. The Minister said that in 2016 tenants can request something. Where there is no tenant and the property is one of the vast number of empty homes that we have, it would be helpful if the Government or local authority could provide a nudging process. Bearing in mind the number of housing problems we have, particularly in my area, it would be useful to get those properties into the mix and have some sort of warning notice issued to landlords perhaps in 2016, maybe by the local authority, or something similar.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Lady makes a good point, and I understand the intention behind it. Of course, it runs up against a fundamental problem. The green deal is basically predicated on a paid-for-through-savings model. If no one is in the property, there are no savings to be made because there is no cost to doing it. It is conceivable that if those properties were really poor they could benefit from the ECO subsidy. However, it would be difficult to frame legislation that pushed the model of the market framework on to properties where there was no money to be saved because there was no energy being expended in the first place. One would need to look at rather different instruments and local authority programmes—I am skiing off-piste here—that would be appropriate for addressing the problem of low-grade vacant properties. I do not think that the matter lies within the scope of the green deal.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I thank the Minister for clarifying that. I feel many properties could be brought back into use. In the context of the green deal, there are a lot of properties that can be made much more energy-efficient much more quickly, which would help generally, and bring them into use. Consumer Focus, which did some work  with Friends of the Earth, said that 37% of private rented sector properties are F or G-rated. They could be improved up to an E grade for less than £1,500, with the average cost of such work being £270. A lot of people will not necessarily apply for an assessment. If an assessment is going to cost £200, they will not want to go through that. It would be helpful if the Minister considered that.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

We will certainly take on board the sensible comments made by my hon. Friend. We have to be mindful that we are discussing a market framework. Other levers are available to local authorities for the improvement of their housing stock.

Our proposals will mean that no landlord will have to pay up front to install the measures. The green deal or ECO will do that for them, with tenants repaying the green deal through their energy bill savings. We recognise that there are other costs on landlords, such as time and hassle, which is why we are committed to ensuring that the benefits of these requirements meet or exceed any overall costs to landlords.

As a result of the new provisions, amendment 150 makes a consequential amendment relating to domestic energy provision. The amendments send a clear signal of our intent to secure improvements to the very worst-performing rental properties in the private sector. I note that amendments 29, 123, new clause 25 and parts of new clause 24 and amendment 30, have now been largely superseded by the Government amendments I have just described. However, they go further in a number of areas. Amendment 30 and new clauses 24 and 26 propose that minimum energy efficiency standards come in earlier—2016 rather than 2018. We have had a good run round the houses on that. The Government amendments are a significant step forward, and they create regulatory certainty. For that reason, we expect that 2018 will be the latest date that landlords take action, not the first. The proposal is about giving landlords adequate time to make the improvements well ahead of the regulations biting.

New clauses 24 and 26 would prevent a landlord’s agent from letting or marketing properties that fall below the minimum standard. I am sympathetic towards the sentiment of those new clauses, which seek to strengthen further regulations in that area. However, that aspect of the new clauses is unnecessary. The requirement prohibiting landlords from letting their properties unless they comply with the minimum energy efficiency standard will bite on landlords and anyone acting as their agent, including letting agents or estate agents. That is absolutely implicit within the Bill, and no letting agent will want to market properties that have not met the requirements. Additionally, new clause 24 would put a named minimum standard in primary legislation and that would make it a duty of the Secretary of State to review and to raise that standard. New clause 41 would provide for increasingly stringent minimum standards with E being the minimum in 2015, rising to B from 2022. It would also make it a duty for the Secretary of State to publish a plan for achieving a minimum standard of A from 2030. That is a very ambitious road map.

While I agree with the sentiments of the new clauses, which seek to ensure the continued improvement of the sector, it is not appropriate to create a legal duty. We are clear that band E should be the minimum standard  from 2018. Beyond that, we have the power to increase the standard through secondary legislation if necessary and if there is clear evidence to do so.

New clause 25 would allow the Secretary of State to suspend regulations in local areas if there was evidence of a negative impact of supply. The new clause is not necessary, as we remain committed to ensuring that there are no overall negative costs on landlords.

Finally, new clause 26 would grant local authorities the right to enter a landlord’s property to carry out improvements and to charge the landlord if they fail to comply with the regulations. That is a strengthened enforcement position, but we need to be careful with such powers. Those powers would engage article 1 of the first protocol of the European convention on human rights, which protects the right to property. I am concerned that the powers are not a proportionate interference with the rights of property owners. Additionally, the Protection of Freedoms Bill will rationalise powers to enter premises, and granting further access here would run contrary to the implementation of that legislation, to which the Government have committed.

Photo of Margot James Margot James Conservative, Stourbridge

I wholeheartedly welcome the commitments that the Minister is making to move the standard of rented homes up to band E. According to Consumer Focus, that will lift 150,000 homes out of fuel poverty. While I understand that he cannot guarantee in legislation the mission to further improve the energy rating of rented homes, can the Government at least give an indication that improving the standard of homes beyond band E is their intent?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

That intent certainly lies behind the Government’s programme. Obviously, we want to see how the market holds, how innovation develops and how the opportunity for further interventions unrolls, but it is clearly our ambition to go much beyond that.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

As members of the Committee will see from the notices of amendments, I had suggested a series of changes to new clauses 32 and 33, and I hope that the Minister will consider them even though they have not been formally accepted. I reiterate that when the Government’s new clauses are not published until after the deadline for tabling amendments, that creates difficulties for hon. Members. First, Government new clause 32 stipulates that a landlord may not let a property unless it complies with the minimum standards as set out in the regulations. A property might be marketed to let while still falling below the standards, but a contract could be signed only once the necessary improvements had been made. That might cause confusion and delay in the occupation of a property, and might make the regulations harder to enforce, with the potential for properties to slip through unimproved. I call on the Government to stipulate instead that a property may be marketed to let only once it meets the standards that are set in regulations. That would be easier to enforce and would mean that the potential tenants could take on a property confident in the knowledge that it had already met a minimum energy efficiency standard, rather than relying on the landlord’s commitment to make those improvements in the future.

Secondly, I would like to see it explicitly stated in new clause 32(2) that the improvements that are made to the property must bring it up to above the minimum standards. That might seem over-fastidious, but I am sure that none of us wants to have even the slightest loophole. Currently, the new clause states that the obligation is only to make the improvements that are stipulated in regulations.

Thirdly—I am sure that Members on both sides of the Committee will make this point again and again—I share the disappointment that has already been voiced about the starting date for minimum energy efficiency standards in 2018, which is two days after the statutory date for the eradication of fuel poverty. As we all know, a quarter of tenants in the private rented sector live in fuel poverty, and twice as many private rented properties have the worst energy rating compared with the owner-occupied sector. In my constituency alone, fuel poverty affects more than 5,000 households—around 12% of all homes—and it is unacceptable that so many people will have to wait longer for much-needed improvements to their homes because of the Government’s failure to act quickly enough.

Perhaps to make up for that late start, Government new clause 32 allows for a so-called hard start. Although I welcome the sentiment, I fear how it will be implemented. By stating that letting the property may be defined to include continuing to let the property, the Government are at risk of creating a situation in which people in private rented homes may have to be evicted in order to have those homes improved before the rigid 2018 start date. I would prefer to see an earlier, softer start date, which meant that any property could not be let or re-let if it is below the standards by 2016. I admit that that still creates the risk that a tenant who stays in a property for many years might not have the improvements made—something to which the hon. Member for Wells has referred—but I am disappointed that a tenant’s right to request energy efficiency improvements will now not be introduced until 2016 instead of 2015.

Fourthly, I believe that it is essential to lay out the timetable that should be followed for increasing energy efficiency standards, as was done for built housing. At the very least, I would like to see an addition to the new clause that requires the Secretary of State to review the regulations and increase the minimum standard at regular intervals. Ideally, I would like the Government to lay out now what the increases in the standards will be, as I have done in new clause 41.

Perhaps I may take a few moments now to refer to new clause 41. I have already stressed the importance of tackling fuel poverty and the way in which fuel poverty is absolutely linked to ill health. Reports have shown that there is a 2% cumulative increased risk of heart attacks, for example, with every one degree change in ambient temperature. Colder homes are a killer, and tens of thousands of excess winter deaths in England alone cannot be ignored. That is why it is important to look at the provisions that I have set out in new clause 41, which would mean that by 2015 no band F or G properties could be let or marketed to let; by 2016 no new lets of band E properties would be permitted; and by 2019 the letting of band D properties would be outlawed, followed by band C properties in 2022. Given the amount of work that is needed to ensure that all properties that are let or marketed to let have an energy  rating of band A, I want the Secretary of State to bring forward a plan to achieve that target by 2030. He has explained that he thinks that that is too ambitious and too rigid.

We can argue about the precise dates, but we all want to see a forward plan so that we know what the dates will be. Not only will that provide the reassurance that privately renting tenants need that the poor-quality housing that blights their sector will be weeded out once and for all, it will help landlords as well. We all know that energy efficiency improvements are needed, and the tabling of Government new clauses 32 and 33 is proof of our understanding that such improvements will not be achieved through voluntary action alone. Surely it is better to lay out once and for all what the Government expect from the private rented sector and when they expect it.

Photo of David Anderson David Anderson Opposition Assistant Whip (Commons) 11:30 am, 14th June 2011

Would it not make sense for the landlord to know that he has to get the property to a certain level between now and 2022, so that he will be incentivised to take the view, “I may as well do all that work now and bring the house up to that standard early rather than having to keep going back”?

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I thank the hon. Gentleman for that intervention, which anticipates exactly what I want to say next. The landlord would be aided if he knew exactly what was expected of him over time, so that he does not have a situation where the property is empty while he makes a certain amount of improvements to bring it up to band E only to find out a few years later that he needs to do the same thing all over again to bring it up to band C or D. It is much fairer to the landlord, as well as much better for the tenant, for that plan to be set out in advance, so that we have a forward trajectory for increasing energy efficiency beyond band E into the future.

That dynamic would lead to many properties being improved ahead of the timetable, it would be to the social benefit of tenants and the economic benefit of landlords, and it would have the environmental benefit of reduced emissions. When there is a win-win-win scenario like that on offer, it is hard to imagine what valid reason the Government could possibly have to not follow it.

I will finish with a few points about new clauses 32 and 33. I have spoken before about my concerns over the amount in the Bill that is to be set out in secondary legislation, and the lack of a definition of a minimum standard in primary legislation provides a further example of that. I want to see the Government make firm on their commitment to ban the most energy-inefficient properties by stipulating in the Bill that the minimum standard will preclude bands F and G from being rented. In England, there are 680,000 such properties, so the scale of the need to act is clear.

Finally, the Government have made it clear that they are using new clauses 32 and 33 to replace clauses 39, 40 and 41 in the Bill, as drafted. I have no concern about losing clause 39, as it simply provides for a review of energy efficiency in the private rented sector. I am sure that none of us need that review to tell us that we have a big need for minimum energy efficiency standards. Clauses 40 and 41, however, give the Secretary of State  the power to make regulations, which would, in turn, give local authorities the power to issue notices to landlords to make improvements to their homes. Despite the new minimum standard, those powers remain important as a way of compelling landlords to make improvements when they are needed.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

The hon. Lady makes a good point. Would she take on board the fact that the Minister has made comments about European legislation being preventive, but do things such as the Town and Country Planning Act 1990 allow for works in default to take place on properties? That is an essential tool for local authorities in dealing with absent landlords. One of the particular problems in my constituency with the private rented sector is overseas landlords. How do we deal with recalcitrant landlords, or landlords who do want to participate, be they overseas or here, without local authorities having the power to act on things such as works in default?

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I thank the hon. Gentleman for his intervention. He is absolutely right; we need these powers. We cannot assume that all landlords are as friendly as the hon. Member for Ogmore. Rather than having these clauses removed, we need them to stay in the Bill. The powers for local authorities need to be strengthened to include a power for councils to carry out, through a default mechanism, such works as they have notified the landlord to undertake. That would allow local authorities to deal with the problems that the hon. Member for Hyndburn mentioned: overseas absent landlords who cannot be contacted; landlords who refuse to co-operate and prefer instead to pay a fine—we should not underestimate that some landlords would prefer to pay a fine than work to the Bill; and these long leases, which we have already discussed, where a soft start leaves tenants in poor housing for an unacceptably long period of time.

I will leave my contribution there. I am sorry that it was wide-ranging, but it is difficult to condense comments when there are so many amendments in the group.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

I rise to speak to amendments 29 and 30, which we tabled, as well as to address the Government’s new clauses. The aims of our amendments are, first, to ensure that the introduction of the energy efficiency standard is included from the start of the green deal—the Minister has spoken about that in some depth. Our second aim is for the minimum efficiency level for domestic rented properties to be introduced no later than 1 April 2016.

I welcome the Minister’s comment that the Government intend to remove the review before introducing the green deal to the rented sector and that there are to be no conditions placed on the introduction of the minimum standard. Under clause 40, the Government intend to bring in a minimum energy efficiency level for domestic properties in 2018. Although that is a welcome move in the right direction, we want this brought forward to 2016, the same year as the eradication of fuel poverty is intended under the Warm Homes and Energy Conservation Act 2000.

The case for a more robust approach to the private rented sector could not be more explicit, and I shall echo some of the statistics referred to by hon. Members earlier. People living in private rented homes are more  than four times more likely to be living in a cold home than people living in social rented homes. The private rented sector has a greater proportion of the most energy-inefficient homes—those in energy performance certificate band G. Such homes are twice as common in the private rented sector as in other sectors. Nearly 10% of properties in the private rented sector are rated as band G, while 18% are in band F; 28% of private rented sector properties are in the lowest two bands for energy efficiency and half the properties in that sector are not considered by the Government to be of a decent standard.

The health consequences of poorly insulated properties are well established. The annual cost to the NHS of winter-related diseases due to cold housing is an incredible £859 million, and it is estimated that 1.3 million children live in F and G-rated properties. A Friends of the Earth-commissioned report on the health impacts of cold housing by Professor Sir Michael Marmot, the director of the International Institute for Society and Health at University college London, found that countries with more energy-efficient housing have fewer excess winter deaths. There is a relationship between excess winter deaths, and low thermal efficiency housing and low indoor temperature. About 40% of the excess winter deaths are attributable to cardiovascular diseases and about 33% of these deaths are attributable to respiratory diseases. There is a strong relationship between cold temperatures, and cardiovascular and respiratory diseases.

Children living in cold homes are more than twice as likely to suffer from a variety of respiratory problems as children living in warm homes, and the mental health of any age group is affected negatively by fuel poverty and cold housing. More than one in four adolescents living in cold housing are at risk of multiple mental health problems compared with one in 20 adolescents who have always lived in warm housing. Cold housing also increases the level of minor illnesses such as colds and flu, and exacerbates existing conditions such as arthritis and rheumatism.

The main findings on the indirect health impacts of cold housing and fuel poverty, and on other social benefits deriving from improved housing, were that cold housing has a negative impact on: children’s educational attainment, emotional well-being and resilience; and dietary opportunities and choices. It also has a negative impact on dexterity and increases the risk of accidents and injuries in the home. Investing in the energy efficiency of housing can help to stimulate the labour market and economy, as well as to create opportunities for skilling up the construction work force. The key conclusion of the report was that improving the energy efficiency of the existing stock is a long-term sustainable way in which to ensure multiple gains, including environmental, health and social gains.

Many groups are very supportive of the minimum efficiency standard, and other members of the Committee will have received letters from them. I have a long list of those organisations, but I shall highlight just a few: Age UK; the Centre for Sustainable Energy; Citizens Advice; Crisis; Consumer Focus; Disability Alliance; the End Fuel Poverty Coalition; Friends of the Earth; Macmillan Cancer Support; the National Childbirth Trust; National Energy Action and the National Pensioners Convention.

I return to the experiences of people living in cold homes. I do not know whether hon. Members saw the BBC documentary “Poor Kids”. I urge anyone who has not seen it to watch it. It is still available on iPlayer—I can see a Member with his iPad now—and it is definitely worth taking an hour to watch it. It raised a number of issues relating to fuel poverty. It was a very difficult documentary to watch, but I think that the issues it raised are the reason why all of us are in this place.

Some of the key points that came out of the programme were that 85% of children living in damp houses suffer from breathing problems; more than 1 million homes in the UK are classified as unfit to live in; and 60% of poor families turn off the heating in the winter to save money. Sam, an 11-year-old featured in the documentary who lives in a private rented sector home, said, “When the gas runs out, the whole house is freezing.” I again urge anyone who has not seen the documentary to watch it.

Energy Saving Trust data show that tenants in the worst homes—those rated F and G—would save on average £488 on their fuel bill if their property were improved to a minimum standard. That would have a significant impact on those homes and those families living in fuel poverty.

I echo the point made by the hon. Member for Wells: Consumer Focus research has found that of the 28% of private rented properties in band F or G, 39% can be improved to band E for less than £1,500, and of the 66% of homes rated E, F or G, one third can be improved to a D rating for less than £1,500 and an additional third can be improved for less than £3,000.

It is important to say that one reason why we are dealing with this point is that the number of households renting privately in England has risen by 1 million since 2005. The number went from 2.4 million in 2005 to 3.4 million in 2010. This is a very significant proportion of our housing stock in the UK, and the number looks set only to expand in the next few years, with demand outstripping supply. With a steady stream of tenants, what reason will private sector landlords have to take their property off the market to improve it without a clear indication of when they will be required to act?

It is worth noting that 179 Members of Parliament from across the political spectrum signed early-day motion 653, calling for the minimum energy-efficiency standard from 2016. That included 34 Liberal Democrat Members and 16 Conservative MPs. People should not have to wait until 2018 for a minimum energy-efficiency standard for the private rented sector to be introduced. Some of the reasons why that is the case have been mentioned, but I will go on to discuss a number of others.

All the benefits for consumers, the climate and the taxpayer will be unacceptably delayed if the introduction of the minimum standard is pushed back to 2018, rather than taking place in 2016, as those 179 MPs have called for. There have been discrepancies over the arithmetic, and there has been talk of seven years and of five years. The point is that seven years on from this year, 2011, is an unnecessarily long time to wait for the introduction of the minimum standard. Such a long lead-in time could reduce what is called the announcement effect, which encourages voluntary action by landlords before a standard comes into force.

Worryingly, the Government have announced a measure that they say is intended to tackle the high rate of fuel poverty in the rented sector but which does not come into force until two years after the date by which they have a legal obligation under the Warm Homes and Energy Conservation Act 2000 to end fuel poverty.

Alongside the legislation, it is essential that landlords have the financial help, greater incentives and information that they need to improve their properties. The green deal will help, but will the Government help further by raising the £1,500 tax break—the landlord’s energy saving allowance—currently available to landlords for energy-efficiency measures, or do the Government plan to provide assistance through another mechanism? Will the Minister answer that question in his response?

Citizens Advice, Friends of the Earth and the Association for the Conservation of Energy state that if a landlord has ignored a local authority demand to install energy-efficiency measures or fails to meet the minimum standard, the local authority should have the choice to carry out the work itself, charging the landlord, as an alternative to simply issuing a fine with the property remaining unimproved. That will also give councils the flexibility to deal with properties where the landlord is based overseas. Will the Minister say whether the Government have given any thought to that very helpful proposal not just to impose a fine, but to require local authorities to make the improvements themselves and pass on that cost to the landlords?

One aspect of the amendments and new clauses relates to whether the minimum standard should be increased over time. Consumer Focus has estimated that setting the minimum standard at energy-efficiency band D would enable 300,000 households to afford to keep their rented homes warm, which they cannot do today. Will the Minister share with the Committee when the Government plan to raise minimum energy-efficiency standards to band D?

There is concern about an unintended consequence of the Government’s proposal, which is the prospect of eviction. Tenants demanding energy efficiency measures from their landlords must be given proper legal protection from eviction. Many tenants will be deterred from making requests to their landlord for fear of being evicted, which is known as retaliatory eviction and is made possible by section 21 of the Housing Act 1988. Work by Citizens Advice and others shows that for many tenants, fear of eviction is a barrier to asking for improvements and maintenance works in rented properties. Under the Housing Act 2004, tenants are protected from retaliatory eviction when the landlord fails to protect their deposit. Will the Minister inform the Committee whether the same principle will be extended to tenants who make energy efficiency requests under the Bill?

Without such a provision, the Government risk encouraging tenants to demand energy efficiency from landlords without having given them protection from the potential consequences. It is worth noting that the Minister for Housing and Local Government, when he was the Opposition housing spokesman, declared his opposition to retaliatory eviction in an interview with Environmental Health News in 2008. He said:

“Retaliatory evictions are completely unacceptable and I throw my weight behind EHN’s campaign...It is absolutely wrong and inappropriate.

There are two competing thoughts in my mind. One is the desire not to make it over-complicated because the more legislation you pile on the more expensive it is to be a landlord and ultimately the more expensive it is to rent...Then again we need sufficient protections in place to make sure retaliatory evictions do not happen.”

Government new clause 32 will introduce domestic energy efficiency standards from 1 April 2018. It will prevent landlords renting out a property below that level of energy efficiency, as demonstrated by the energy performance certificate, until they have made relevant energy improvements, such as those that can be paid for through the green deal. If clause 40 is removed from the Bill and replaced with new clause 32, the Government will effectively have removed the original mechanism whereby local authorities are required to serve a notice on landlords whose properties are not up to standard.

As originally conceived—and as in amendment 30, which is in my name and the name of my hon. Friend the Member for Ogmore, and in new clause 24 in the name of the hon. Member for Wells—the minimum efficiency standards measures were to deal with recalcitrant landlords who had not already improved their properties through other mechanisms in the Bill. The Government have removed the local authority measures, and right-to-request regulations for tenants have been set back from 2015 to 2016.

As currently conceived by the Government, the Bill will provide for minimum standards in 2018 without any proactive mechanisms to encourage improvements by landlords in the interim. Earlier, the Minister said that 2018 would be the finish line, but there is no explicit means of enforcing that. There is also the risk that tenants will be evicted in the run-up to the introduction of the minimum standard, as there is no provision to allow tenants to remain in F and G properties after 2018.

We have many concerns about what is missing from the Government’s proposal. It does not include letting agents as well as landlords, and it does not include the marketing as well as the letting of a property. If it were an offence to market a below-standard property, that offence would be committed before the property was let to the tenant, rather than only afterwards. The proposal does not make it explicit that the energy efficiency improvements made must bring the property up to the minimum standard.

The proposal also does not make explicit what the minimum standard should be, which is very bizarre. The Minister said earlier that it would be set at E. A press release from the Department of Energy and Climate Change, “Huhne gets Tough on Landlords of Draughty Homes”, stated that under the proposals,

“From April 2018 the government will make it unlawful to rent out a house or business premise which has less than an ‘E’ energy efficiency rating”.

Again, that has not been made explicit.

Under the Government’s proposal, properties cannot continue to be let after the minimum standard comes into force, which means that tenants could be evicted. Our concern is that the provision should stipulate that they cannot be re-let, so that tenants are not thrown out of the properties in which they reside. The amendment does not say that the minimum standard should be  increased. We heard the Minister say just a moment ago that it will be set at E, but that is not made explicit. The amendment is weaker than what is already in the Bill.

Let me talk about the cost of reaching the standard, and why having a minimum standard in 2016, rather than in 2018, will not have a negative impact on supply. To avoid regulation, some landlords’ organisations have wrongly suggested that the necessary energy efficiency measures will be too costly and that some landlords may choose to take their properties off the market. The cost of meeting the minimum standard is less than might be expected and is well within the levels of finance associated with the green deal and ECO, which would mean no up-front costs for landlords, or even finance directly by landlords from their own resources, and no impact on rents or supply.

Furthermore, the standard has a soft start and works with the natural turnover of the rental market. There will be no reason for tenants who are in an F or G-rated property when the standard is introduced, or in the last few months before its introduction, to be removed so that landlords can improve the property, as that does not have to happen until the next time the property is ready to be let to another tenant after 2016. All those factors mean that there is absolutely no risk to housing supply and no reason to delay the introduction of the minimum standard until 2018, which is two years after the Government’s legal obligation to end fuel poverty; it would mean two years’ unnecessary delay to all the benefits for tenants, taxpayers, and the climate, and to the reduced NHS costs that the minimum standard would bring in 2016.

European law will soon require landlords or their agents to show the energy performance certificate of the property to the prospective tenant. It will also require the energy efficiency rating of properties when sold or rented to appear on all commercial advertising and marketing materials. If the offence is simply to let an F or G-rated property but not to market one, enforcement will be a case of retrospective prosecution of landlords after they have signed a contract with a tenant to let the property. That means that the tenant will have signed a contract and could have moved into the property without it having been improved. The local authority will have to track down properties that have been let at F or G.

The advantages of creating an offence of marketing F and G-rated properties are that landlords could be prosecuted before the property is let, rather than us always waiting until a contract has been signed and a new tenant is in situ. Letting agents would be liable for prosecution for marketing and letting, as well as landlords. As there are far fewer letting agents than landlords, enforcement would be much easier. The marketing of an F or G property is easier for an enforcement authority to track than the signing of a contract. Spotting a property marketed with a false energy rating can be easily checked on the national EPC database.

In conclusion, a strong minimum energy efficiency standard for rented homes from 2016 would be a significant advance in the fight against cold homes. However, it would not mean “job done” on fuel poverty. Latest Government figures show that there are 4.5 million households in the UK that cannot afford to heat their homes. We discussed that in depth last week. Millions will continue to live in homes so cold that they make them ill and cost a fortune to heat. That is why it is vital  that as well as ensuring a strong, minimum energy efficiency standard for the private rented sector, the Government include warm home amendments to the Bill to ensure a tangible plan or strategy for the policies. That will see sufficient homes insulated and made energy efficient in order to end fuel poverty and meet our national carbon emission targets.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells 11:45 am, 14th June 2011

I echo many of the concerns. I am happy to hear about the standards set and the dates attached to them. However, I have concerns about properties that may not fall within the green deal, which are a significant part of the property portfolio that might become tenanted properties. We can provoke landlords into making properties energy efficient, so that they might become part of another tenant’s green deal for further upgrading, if necessary, if the changes are not made in one go by the landlord. It would be handy to have the local authority involved, and for it to have the ability to serve notices where there are energy efficiency issues; that is good. I will deal with the retaliatory eviction stuff later. Most of the points that I wished to raise have been covered.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

This has been a thoughtful debate, and I appreciate the frustration of members of the Committee, which is born of their desire to make the change faster and with a greater sense of ambition. That sense of ambition is shared right across the Committee. Ultimately, we are not in a very different place, if we compare the difference between a 2016 end date and a 2018 end date with the previous Government’s lack of progress in meeting their fuel poverty targets. Since 2004, we have been going backwards at a speed of knots, and the numbers of people in fuel poverty have been growing by the million.

The fact that we are now talking about getting to the point where we will upgrade properties and are looking to complete the programme by 2018 is a huge step forward. Five and a half years is not unreasonable, and that is what it will be from the commencement of the programme in autumn 2012 through to the teeth starting to bite as a result of our amendments. I understand why Members would want to move faster, but that underestimates the big leap forward that we have made by putting the provision in the Bill.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I appreciate what the Minister is saying, but the difference between us may also be in how much expectation and optimism we have about how fast landlords will act. Some are very good, but some are certainly not, and I have contact with many of those in my constituency. Will he comment on the Bill’s impact assessment, which predicts that even with the green deal,

“the take up of cost-effective abatement measures will remain relatively low in the private rented market”?

It seems to me that we should be taking that more seriously.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Indeed, that is what we have done, including by listening to representations from the hon. Lady and other members of the Committee. That is why, since that impact assessment was carried out, we have tabled amendments to the Bill. As I indicated earlier, we will update the impact assessment to take account of the new amendments to the Bill once we have completed Committee. That will allow us to reflect  on the greater teeth that we are putting into the regulations. The impact assessment does not take account of the 2018 deadline or 2016 date.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

The impact assessment states:

As of 2007, 33% of fuel poor households lived in homes built before 1919 and 43% of the fuel poor households lived in homes without cavity wall insulation” and hard-to-treat homes. A lot of private landlords have hard-to-treat homes. Would the Minister explain how this will work with hard-to-treat homes, particularly in the private rented sector?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am sorry, but I am not totally clear what point the hon. Gentleman is making.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

The Minister has the ambitious target—he referred to a revolution—of 2018 being the end point, at which all properties are done. In the middle of that, there are hard-to-treat properties. He says that part of the green deal will move through that, and in my constituency there are many pre-1919 properties. Will he explain how the provisions will include hard-to-treat properties? They are, by and large, connected with the private rented sector—not always, but the two tend to go hand in hand.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change 12:00 pm, 14th June 2011

There are two points. First, the energy company obligation will be available to the private rented sector, as it is to the privately owned sector. That will play a huge part with regard to harder-to-treat properties. In the private rented sector, there will be a double focus on hard-to-treat properties and on alleviating fuel poverty. We expect that the ECO will be brought to bear on both of those.

Secondly—this is partly a response to the points raised by the hon. Member for Brighton, Pavilion—we are creating regulatory certainty, which is a big departure from the initial reading of the Bill. We are creating a clear back-stop date of 2018, and the resource to improve the housing stock will be combined with that clear back-stop date and a clear entitlement from 2016.

If landlords have not undertaken improvements, their tenants will be able to request them from 2016. That is only three and a half years after the mechanism begins and the roll-out of the green deal starts. If that does not mop up everything, landlords will have to undertake those measures, whether or not their tenants have requested them. We are not only willing the end; with the ECO, we are making the means available by which the measure can be achieved.

Graham Jones rose—

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

May I move on? I am aware that there is a lot to get through on this suite of amendments. The hon. Member for Brighton, Pavilion, asked why we were removing clauses 40 and 41. We have been advised that keeping them will result in duplication. We expect that local authorities will enforce the minimum standard without issuing notices. The bottom line is that we have created the regulatory certainty that will underpin our response. She wants to go faster and further, sooner. I understand where she is coming from, but we have to make a framework that works for everyone.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

If local authorities will not have the opportunity to present those notices, what other mechanism will they have recourse to, to deal with landlords who do not bring their properties up to standard?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I will come on to that. I will take the hon. Lady through my response to the points that she raised. First, her overall point is that our amendments are somehow weaker, which is absolutely not the case. We entirely reject that. Our amendments are tough, but they are also proportionate. It would be entirely wrong to suggest that we will not act, but we want to future-proof the Bill and to be able to act quickly.

We are unleashing huge investment in our housing stock, which means not only that different products, technologies and interventions will come down in price, but that there will be a significant step change or leap forward in the products available on the market. We do not want to start prejudging, before the market has even got going on that scale, the sorts of decisions that the Secretary of State should be making in the second half of this decade on the level of ambition, and on what is practical, economical, affordable and realistic, as well as ambitious. In the Bill, we are leaving the Secretary of State and successive Secretaries of State significant elbow-room to maintain that level of ambition as the market develops.

Will we remove local authority measures? Yes, but local authorities will still enforce minimum standards. However, we are looking for a much more streamlined approach with no need for clunky notices.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

To probe some of the technical details, the Minister said that local authorities will be involved with F and G-rated homes. How will the measure work with the housing health and safety rating system, which works up to standard assessment procedure rating 38? The measure works up to rating 35 for F properties; how will that align with local authority enforcement and the housing health and safety rating system?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Gentleman makes an important point on SAP ratings. Later in our proceedings, we will discuss display energy certificates and specific types of ratings. I hope to have some more detailed technical information then, because I cannot give him the level of technical response that he wants on SAPs. On the wider point on enforcement, local authorities will be able to prohibit landlords from bringing their properties to market; they can track that through the energy performance certificate database.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

It might benefit the Committee if the Minister said who had access to the database. Will it be local authorities only? What about data sharing and consumer rights?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

All local authorities will have access to the EPC database. That will be a critical tool in ensuring effective enforcement that is uniform across the country, so that draughty, poorly heated homes that do not meet the efficiency standards are taken off the property market.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

May I press the Minister and make my point clearer? The internet search engine, rightmove, has a huge portfolio of rented properties. I do not want  to advertise it, but it is the No. 1 site, I believe, and it would benefit from having access to the database. Will it be entitled to that information, which would empower consumers?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I do not know whether that was an advertorial contribution. I know that we have a property oligarch in Committee; perhaps we have an internet mogul, too. There are issues about data protection. At present, we intend local authorities to have access to that information; I shall seek advice to clarify whether it would be freely available and the reasons behind that. I am happy to write to the hon. Member for Hyndburn and share with the Committee the possible restrictions on sharing of information.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

May I mention NetMovers, which is based in my constituency and is the fourth largest operator? It has expressed an interest in the proposal, and I hope that the Minister will consider it. Perhaps he will elaborate in future on consumer rights.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I am happy to take on board that matter, which I had not considered before. If NetMovers wishes to make particular representations, we will be happy to consider them. The hon. Member for Liverpool, Wavertree, referred to our plans to raise the minimum energy threshold to band D. We are not clear that E will be the minimum from 2018, but through the Bill, the Secretary of State has the power to increase the standard if and when further evidence comes to light.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

Does the Minister agree that it is fairer to landlords, as I said earlier, to know the trajectory over a period of 10 years or more, so that they know when they have to get to the next level? Otherwise, they spend a lot of money, time and bureaucracy getting to band E, without knowing when they are next going to be required to do something. That is cumbersome for them and undermining of the overall direction of the legislation.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I have sympathy with what the hon. Lady says. With the new mechanism, we are trying to create long-term certainty and a clear trajectory for landlords. We have given that regulatory certainty with the 2018 date. As I have said on numerous occasions, this is two-decade programme. We will certainly wish to go beyond E. The problem is that we cannot prescribe now, before the market has even begun, the types and costs of the interventions in 2018 and 2020, let alone imagine those that might come on to the market that have not yet been conceived.

We first need to see the green deal market up and running; we need to see the investment; we need to see the new entrants into the market. I hope that fairly on, we will be able to give the market a long-sighted view of where we are trying to reach, but it would be wrong to anticipate all of those things before the market has begun.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

Would clearer targets not drive the market and innovation of which the Minister talks? That is precisely what would encourage the private  sector to bring to market cost-effective ways of meeting the targets, rather than a limp-wristed way of looking forward with unclear targets and no incentive to do it.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Lady is right; I am glad she shares my faith in long-dated targets. We do have a target; since Second Reading, we have brought forward an amendment that will set the E rating for 2018. That is a change—a move forward that is going to drive innovation and economies of scale. Once the legislation is in force we will have an early opportunity to review. The Secretary of State will be accountable to Parliament, to report on progress of the green deal every year. That is integral to the legislation.

We are not going to leave the market in the dark. We are not going to wait until 2018 to announce our next step forward. It is implicit in our approach that we will work collaboratively with industry, stakeholders and landlord groups, so that there is a long-term vision. We cannot, as much as we would like, see that far ahead at the moment. I have no doubt that once the green deal is up and running, the Secretary of State will at an early stage come forward with ideas of where we should move on to in the 2020s. It could even be before then, if there is a step change in technology and cost.

Underpinning all this is the golden rule. The legislation does not simply will an end; the ends are provided in the means of the golden rule, the pay-as-you-save mechanism and the additional support available from ECO. We cannot divorce the practical response and the means from the ambition of the Bill. If we start to stretch the distance between what is practical and capable of delivery and what we are requiring landlords to install, we could end up with legislation such as that on fuel poverty, where we legislate for something that cannot be reached. The Fuel Poverty Bill 2008-09, mentioned earlier by the hon. Member for Liverpool, Wavertree, has been on the statute book for years, yet we are going backwards. As a result, it is totally discredited legislation in the eyes of many, because it bears no relation to reality. There is that judgment—and I accept it is a judgment—of what should be ambition and what is credible.

Caroline Lucas rose—

Graham Jones rose—

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

I am sure that the hon. Member for Brighton, Pavilion would make the same point: is the Minister saying to landlords that in future years there is a reasonable chance that the minimum standard will move beyond F and G, to include E as being excluded from the rental market around 2020, and that landlords can expect an improvement beyond 2018 of the demands on the minimum energy efficiency within the property?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Yes, that is exactly what I am saying. What we will not be doing is springing any surprises, or anything that imposes an unreasonable burden on landlords. Clearly we cannot bind future Parliaments or Secretaries of State—but it is anticipated that the minimum standard  will evolve over time. As the cost of the technologies and interventions comes down, we shall expect the Secretary of State to be able to raise the level of ambition, keeping it within the golden rule, and keeping things affordable within ECO.

We would not expect suddenly to change the 2018 proposition, but I dare say that we will get to a point, once the green deal mechanism gets under way, where there will be a rolling horizon that will tie into the natural cycle. What we shall not do is change the playing field for people who are updating their properties.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I apologise for coming back, but I did not want it to stand unchallenged that somehow the problem with the 2016 fuel poverty eradication date was in the date, rather than in the appalling lack of political will that has been shown for many years, leading to failure to achieve by that date. It was not a problem of the date, but of the political will.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Yes, that is absolutely right, but there is no point in inserting a date if there are not the means to deliver by it. There is a balance, in which we judge the ambition to achieve an aim and the resources and the technical feasibility of delivering the aim. We are not perfect but I think we have a pretty good balance here—improving the Bill, bringing forward the 2018 date and, having listened to representations, setting at 2016 the date when no reasonable representations can be declined, which is a key thing.

As to other points that were raised, I have mentioned where we see the trajectory, in response to the hon. Member for Liverpool, Wavertree. Landlord allowances are really a matter for Her Majesty’s Treasury and do not fall within the remit of the Bill.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

Will the Minister make representations to the Treasury to encourage it at least to maintain the current level of tax allowance given to landlords to make energy efficiency improvements, and perhaps look at extending the allowance further into the future?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I was about to assure the hon. Lady that we are very engaged with the Treasury and that we have productive discussions on those matters, but we must defer to the Treasury, particularly on that.

We believe that a large proportion of the Opposition amendments have been largely superseded by Government amendments. We propose to remove clauses 39, 40 and 41, relating to the review and current provisions for domestic energy efficiency regulations, and replace them with a domestic energy efficiency standard. However, the provisions go further. As to the date, we are creating certainty. We need to give landlords time to prepare. We cannot bring the date further forward than proposed, as in new clause 24, but we think that the amendments we have tabled will create an even more robust framework, and deliver the regulatory certainty that will drive—

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I can feel that the Minister is beginning to wind up. I may have missed it—apologies if I did—but will he at least consider the thrust of my words, and those of the hon. Member for Liverpool, Wavertree, about including “marketed for let”, rather than just “let”? If we inserted the words “marketed to let”, there  would be greater certainty for the tenant right from the start, rather than having to wait until the property is actually let.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Is the hon. Lady referring to new clauses 24 and 26, which would prevent an agent or landlord from letting or marketing such properties?

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I might be. I thought that I was referring to an amendment of mine to new clause 32 that was not selected. Whether or not such a provision is also in the clauses that the Minister just mentioned, which it is probably is, it is driving at the same thing.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

Government new clauses 32 and 33 introduce provisions for a minimum standard to come in no later than 2018. Landlords will not be permitted to let properties, and it is implicit that that also affects letting agents. I tested this myself, because, while we have strong legal advice that letting agents being covered is implicit in the Bill, I appreciate the hon. Lady’s point. She is—I think—referring to new clause 24, which would prevent an agent of a landlord from letting or marketing properties that fall below the minimum standard. That aspect is unnecessary. The requirement prohibiting landlords from letting a property unless it complies with the minimum energy efficiency standard will bite on landlords and anyone acting as their agent, including a letting agent. That is implicit in the Bill, and, given that, no letting agent will want to market properties that do not meet the requirement.

Without making promises, I am happy to revisit the wording with parliamentary counsel before consideration on Report. I cannot make any promises, but—is it the clause of my hon. Friend the Member for Wells?

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

Yes, it is my clause. I am particularly concerned about the business of appointing agents. I have not raised it separately, because it has been covered well before. At the risk of repeating what everyone else has said, I must say that I have concerns about any form of agency, because so many people are caught by tacit agency, such as those who let university accommodation. We need to ensure that we capture anyone who is responsible for marketing a property in any slight way.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I do not want to mislead my hon. Friend or the hon. Member for Brighton, Pavilion into thinking that I will accept their amendment, but I am happy to look at the matter, because I have already been looking at it myself. This morning, I was talking to Government lawyers about it, because it is already implicit in the Bill. There is an argument that such an amendment would be unnecessary and that we would get into the technicality of parliamentary draftsmanship, but I share my hon. Friend’s concerns. We will look again at the wording before Report to ensure that we are absolutely certain about what will be contained in the Bill. I am happy to meet my hon. Friend and the hon. Member for Brighton, Pavilion to discuss that.

Photo of Caroline Lucas Caroline Lucas Leader of the Green Party

I thank the Minister for that guarantee. We would prefer to see the provision explicit in the Bill, but we can hopefully carry on that discussion with the Minister.

Part of the confusion as to where the provision appears in the amendments is that I was also referring to my amendment to new clause 32, which, although it was not selected, I did speak to a little. One point, which was repeated by the hon. Member for Liverpool, Wavertree, was about the wording and the inclusion of “marketing to let”. I am sorry to keep returning to it, but this is about whether measures should be in place when a property is let or when it is marketed to let. If the latter, that ensures that tenants have that greater degree of confidence. In fact, the issue that I was raising at the point at which I raised it was not the one we have just discussed—important though that was. It was also about the marketing to let issue.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

I appreciate the subtle difference. We believe that that issue is covered in the Bill and, potentially, in other legislation already on the statute book. However, I appreciate the point that the hon. Member for Brighton, Pavilion is driving at with her amendments, and if she does not press them to a vote, I will take time to go through them more carefully to consider whether it is necessary to make the legislation more explicit before Report.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I look forward to meeting the Minister to discuss this matter further. Will he also consider what he can do to give teeth to the provisions? On new clause 26, I mentioned the possibility of having a fine or similar attached. I appreciate that that may come up in other legislation, but it is important that there be teeth, so there is a financial incentive for people not to act in this way.

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

That is exactly the sort of detail that would be covered by secondary legislation, because obviously, if we were to have another Labour Government, with roaring inflation, we might find that we need a mechanism in place to increase the fine. Specific numbers are not the sort of detail that one would expect to include in the framework legislation.

Photo of Tessa Munt Tessa Munt Liberal Democrat, Wells

I absolutely appreciate that point, and I hope that what I am hearing is that the Minister is open to the idea of some sort of financial incentive through fines. I look forward to seeing that, and I appreciate that he recognises that that needs to happen in secondary legislation.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

There are two points that the Minister has not yet responded to. One was the helpful suggestion by Citizens Advice, Friends of the Earth, and the Association for the Conservation of Energy about what to do with landlords, particularly if they are based overseas, who do not respond to demands by local authorities. It was suggested that energy efficiency improvements could be made by the local authority, and that the landlord could then be charged.

My other point was about provisions in the Housing Act 2004 to ensure that retaliatory eviction does not occur for people whose deposit has not been protected. Are the Minister and his Department looking to extend that same protection for tenants who reasonably request energy efficiency measures?

Photo of Gregory Barker Gregory Barker The Minister of State, Department of Energy and Climate Change

The hon. Lady makes some sensible points, but we will come on to them later in more specific clauses and amendments, both in relation to retaliatory action and overseas landlords.

With that, I urge the Committee to accept the Government’s amendments and new clauses, which give further teeth to the Bill, and in light of my reassurances, I hope they will feel able to withdraw their amendments.

Question put and negatived.

Clause 39 accordingly disagreed to.

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

Does the hon. Member for Liverpool, Wavertree wish to announce now that she wishes to move her amendments formally later?

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

For a point of clarification, under that clause we discussed some amendments that relate to later clauses, but we have not had an opportunity to discuss whether we are withdrawing them. Should that happen now? I thought we only voted on them under later clauses.

Photo of Edward Leigh Edward Leigh Chair, Public Accounts Commission, Chair, Public Accounts Commission

They can be dealt with later, as I understand it, in the right part of the Bill. However, if the hon. Lady wishes to move them formally later, she might intimate now that that is her wish. That would give her the opportunity to come back to them. She does not need to do that later, but this is a good opportunity to make it clear now.

Photo of Luciana Berger Luciana Berger Shadow Minister (Energy and Climate Change)

We will seek to move amendment 30 later, on the basis that the Minister said in one of his responses—I do not have the quote in front of me—that we need the means to reach our fuel poverty targets. We strongly believe that bringing down the minimum efficiency standard to 2016 would ensure that we meet our fuel poverty targets by 2016. That should not be an excuse to ignore the fuel poverty targets. We should be doing everything in our power to ensure that we meet those targets. Come the next clause, we will seek to move that amendment.