Clause 32 - Provision in building regulations for off-site carbon abatement measures

Infrastructure Bill [Lords] – in a Public Bill Committee on 8th January 2015.

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Amendment proposed (this day): 60, in clause 32, page 34, line 23, at end insert

“and shall relate to buildings or developments of any size”—(Roberta Blackman-Woods.)

Question again proposed, That the amendment be made.

Photo of Jimmy Hood Jimmy Hood Labour, Lanark and Hamilton East

I remind the Committee that with this we are discussing amendment 34, in clause 32, page 36, line 5, at end insert—

‘(7) No variation to the requirement of the building regulations in respect of a building‘s contribution to or effect on emissions of carbon dioxide may be made solely by regard to the number of buildings on any particular building site.”

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I found the Minister’s response wholly unconvincing. To recap, we are dealing with a clause which permits allowable solutions. We are all in agreement that allowable solutions in appropriate circumstances are a sensible and necessary part of proceedings. It is a mechanism to allow house builders an exemption from meeting the Government’s revised zero carbon target, which is now broadly code level 5, when that standard cannot reasonably be met on site.

We understand why it is necessary to have the exemption in such circumstances. In those cases, the house builder will have to meet code level 4. The Minister stressed that house builders will not be exempt from meeting a lower standard—it will be a lower standard, but they will still have to meet it. They will have to make an off-site contribution to reduce carbon emissions elsewhere. Thus far, I think we are all in agreement. There will be a quibble about whether it is code level 5 or 6, but let us put that aside and say that, in principle, the allowable solutions mechanism is agreed.

However, the question I put to the Minister, which he failed to answer, was: does the exemption proposed for small sites of 10 or fewer units still satisfy that requirement? In other words, will it still be necessary for the house builder to show that they cannot meet code level 5 reasonably on that site? If the answer is yes and they will get the exemption only if they cannot reasonably meet the standard on site, I have to put it to the Minister that there is no point in having a small site exemption because the exemption applies simply on the fact of whether it is reasonably practicable to deliver the necessary code level—code level 5. If it is not, an exemption should apply whether it is six properties or 15 properties. I see no point in a small site exemption if that principle still pertains.

However, if that principle does not pertain, the Minister is backtracking on what I understood to be the commitment he gave on Second Reading and what he implied again today, which is that this would only apply where it was not reasonably practicable to achieve the higher standard on site. In practice, if a small site exemption will apply irrespective of that, a large builder building six luxury homes would be able to say, “This is a small site with less than 10 units. I therefore only intend to meet code level 4 and I’ll make use of the allowable solutions by making an off-site contribution elsewhere.” That has nothing to do with helping small builders. It is a buckshee gain for large builders and it will open the door to exactly the kind of two-tier problem mentioned by my hon. Friend the Member for City of Durham.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

The right hon. Gentleman might not welcome this clarification, but all new houses will have to be built to code level 4. We have established that now, although I have to say that the earlier remarks from the hon. Member for City of Durham implied that different houses in the same area would be built to different standards. Every new home will have an enhanced energy performance standard compared with now. The exemption we propose is purely from the allowable solutions part of the scheme. Although we have not yet formally announced our response to the consultation, we anticipate that this will be based on a unit-size criterion. In those cases, they would be exempt from that target. They would not be exempt from code 4, but they would be exempt from participating in the allowable solutions scheme.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

In that situation, a large house builder who is building six luxury houses could say, “I don’t intend to meet code level 5, which I would otherwise be required to do. Because of the small size of the site, I’m only going to do code level 4 and I’ll apply for the allowable solutions exemption.”

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I do not want to labour the point, but if I was commissioning a luxury detached house, as the right hon. Gentleman puts it—I am in no position to do so; maybe he is—I would probably have quite stringent home energy efficiency demands. I would probably want them to be over and above those of the three-bedroom house in the centre of the village. Theoretically, he is making a reasonable point; in practice, he probably is not.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I do know quite a bit about the house building industry and price is a major factor. If a large house builder believes he can get better sales or a better margin by not having to comply with code level 5 and by having an arrangement several miles away on a much cheaper site to make an allowable solution contribution, I can see them doing it. The point is that it was justified by the Minister as a measure to help small builders. We have just clearly demonstrated that it is open to anyone, not just small builders.

I put it to the Minister: why is it so difficult to measure the size of a builder? Why is it necessary to use this proxy of “small sites”? If he wanted to do it carefully and thoroughly, he would surely say, “The exemption will apply only on small sites where the builder has a  turnover of less than x million pounds a year.” We can discuss what that figure should be: £30 million, £40 million or £50 million. We would all have different views of an appropriate level. That would be possible; it would not require great bureaucracy. All that the builder would have to do is produce the last set of accounts to demonstrate that turnover was below the threshold. Then people could be satisfied that this measure applied only to small builders.

That is not difficult to do, and I have not heard a single good reason why we should not have that supplementary test to ensure that the purpose for which the Minister has argued is met. As it is, we will have an open-ended loophole that will allow, contrary to what the Minister claims, two-tier standards, with lower standards applying simply because of the size of the site, not because of the nature of the housing or the technical difficulty or otherwise of meeting code level 5. It is wholly unconvincing; it deserves to be reversed. I hope the Government will understand that.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I will make one last intervention, as I am in danger of making a speech in response to the right hon. Gentleman. Consultation has only just finished. It did ask about site size, based on the number of units, and there were questions about square metreage and the size of the builder, which is the point he is making. We have not yet decided what we are going to do. We are minded to use the number of units per site, because not only do we want small builders to come into the market, we also want small difficult sites to be developed. No absolute decision has yet been made. I gave an assurance earlier that we would design the exemption to ensure there was no gaming of the system, and I am sure we would look at square metreage and the size of the building firm as part of that.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I am grateful to the Minister for that. If I may remind him, he said initially that he would design the rules to prevent gaming. He slightly modified that later to “try to” prevent any gaming and justified that—I understand why and how difficult it is to do it —but that implies a degree of doubt. My amendment 34 suggests a very simple solution, which is that an exemption cannot be given solely on the basis of the number of units on site. There would be either the second test of turnover or the application of the principle that it must be shown by the builder that they cannot reasonably meet code level 5 on site, which is what would apply elsewhere.

That would provide a solution that would have all-party support. There would be a sense of doing the right thing for small builders and not opening a loophole in the system. I hope the Government will think again about this. However, in order to give us opportunity to come back to this on Report, I will not press my amendment to a vote.

Amendment, by leave, withdrawn.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

I beg to move amendment 61, in clause 32, page 34, line 23, at end insert—

“(e) carbon abatement offsite must only be considered exceptionally and where homes on site already conform to the code for sustainable homes.”

Photo of Jimmy Hood Jimmy Hood Labour, Lanark and Hamilton East

With this it will be convenient to discuss the following:

Amendment 33, in clause 32, page 34, line 29, at end insert

“and where the requirement cannot reasonably be met on the building site.”

New clause 6—Carbon compliance standard for new homes—

‘(1) The Secretary of State must within six months of the passing of this Act make regulations under section 1(1) of the Building Act 1984 for the purpose of ensuring that all new homes built from 2016 achieve a carbon compliance standard.

(2) For the purpose of subsection (1), “carbon compliance standard” means an absolute limit on the predicted emissions of carbon dioxide (and other greenhouse gases expressed as equivalents) per square metre of the internal floor space per year of—

(a) 10 kg in the case of detached houses;

(b) 11 kg in the case of attached houses;

(c) 14 kg in the case of flats.

(3) Any further regulations made by the Secretary of State requiring persons constructing new homes to achieve reductions in carbon dioxide emissions elsewhere than on the site of such homes shall only be applicable in circumstances where the improvements set out in subsection (2) have been achieved.’

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

Amendment 61 would make allowable solutions possible only where homes on site already meet the zero-carbon standard, which is the level of the code for sustainable homes that should be in operation from 2016. I suggest to the Minister that the appropriate level is code level 6, not code level 4. I have tabled an amendment referring specifically to the code for sustainable homes because I want us to discuss the appropriate code level that we should be operating from in 2016.

The amendment would prevent the Government from watering down the requirement to deliver zero-carbon homes from 2016 and reducing the level of carbon abatement compliance required before agreeing that the allowable solutions procedures can kick in. The consultation report, “Next steps to zero carbon homes: Allowable Solutions”, should have the subtitle, “How to get some builders off the hook on delivering zero-carbon homes”, because that will be the effect of the Government’s proposals. Paragraph 2 of the reports states:

“The government is committed to requiring all new homes from 2016 to meet the zero carbon standard.”

That is not true, because, as I have already made clear, the code for sustainable homes requires homes to be delivered at code level 6 in order to be zero-carbon, but the Government are requiring homes to be built only to code level 4. The Minister’s letter of 12 December says:

“I should make it clear that we are not proposing two sets of energy performance standards in the Building Regulations. Our proposals to raise Part 1 of the Building Regulations by around 20% in 2016 is equivalent to the energy requirements of level 4 of the Code for Sustainable Homes.”

What is perhaps more startling is that the Government are dressing up this watering down of standards as setting a challenging new standard for house builders. We know that that is balderdash, because a great many builders are already delivering to code level 4. I am sure that, like me, the Minister goes round a number of building sites and that, like me, he has recently discovered that many new developments are built to code level 4. How do the Government think that establishing compliance with code level 4 by 2016 will somehow deliver zero-carbon homes? It is quite beyond me. It appears that what is really behind these truly awful and backward-looking  proposals is contained in paragraph 4 of the Government’s response to the consultation: they think that anything beyond level 4 cannot be delivered

“without forcing excessive cost and unrealistic levels of ambition onto house builders.”

There we have it in their own words: they have no ambition for really grasping the benefits of a greener future.

Not only do the measures in the Bill represent a significant watering down of the requirement to produce zero-carbon homes by 2016, but to make matters worse the lower standard of compliance will be used to enable allowable solutions—carbon abatement—to take place off site. The Minister has rightly picked up on the fact that the Opposition are not totally against allowable solutions, but the system was devised to enable off-site carbon abatement only where it was not possible, usually because of topographic issues, for it to take place on site. Because of the watering down of the proposals, that is no longer the case.

The Government said:

“It was originally intended that new homes would meet the whole of the zero carbon standard ‘on-site’. However, the government recognises that it would not be cost-effective at this time, affordable or technically feasible to meet the zero carbon homes standard in all cases solely through measures on the dwelling itself, like fabric insulation, energy efficient services, and/or renewable energy generation measures (e.g. solar panels).”

The Government’s rationale for extending the use of allowable solutions is not backed up by the evidence. In fact, the evidence contradicts the Government’s position. The cost of making homes carbon neutral is coming down all the time. At the moment, the cost to meet level 4 or 5 is between £4,000 and £8,000 per property, but estimates suggest that the cost could halve in the next few years.

Technology is improving, and the Government should be supporting our green energy industries. Instead, they are doing the opposite and allowing innovative renewable technologies to be ignored or overlooked in favour of planting a few trees in a field somewhere for carbon abatement. That is what the system allows. It is important that trees are planted somewhere, but it should not happen at the expense of supporting our renewable energy industries. Through the code for sustainable homes, the Government should seek to ensure that renewable energy technologies are fitted to new homes where possible.

The techniques and technologies required to meet a higher-level standard are already being delivered at volume in the market. More than 73,000 new homes have already been built to code level 4. The Government are completely out of touch and behind the times, because a number of schemes that are already in place are delivering to code level 6—there is a good one in Milton Keynes, which I suggest the Minister visits. We want the Government to capture that ambition. Because of the Government’s lack of support for our renewable energy industries, they risk preventing those industries from expanding, developing new markets and contributing to the growth of the UK economy.

Those sentiments were put forcefully to the Government by the UK Green Building Council. The Government are not matching a great many of our councils, which  are demanding that homes in their area are built to code level 4 or, in some cases, higher. The UK Green Building Council said:

“We believe that there is no justification for diluting the previously agreed standard and that it should be restored. By proposing a lower on-site standard the Government is forgoing the huge benefits to the UK economy from supporting a world class green building sector creating growth and exports, from reduced natural gas imports and lower energy bills resulting in higher expendable income.”

The Solar Trade Association also criticised the Government’s report, saying:

“The original Zero Carbon Homes policy put forward in 2006 has been successively watered down in recent years. It is now an extremely complex policy agenda and a poor shadow of its original objective to deliver genuinely zero carbon homes in 2016. Under current proposals, new homes from 2016 will definitely not be zero carbon. At best they will emit only one third less carbon than a home built to 2006 standards.”

My amendment seeks to prevent that watering down.

The Solar Trade Association is worried about the future of its industry, and it is right to be. We should be worried too. The Government should support our solar energy traders, especially as the research and development underpinning the sector is carried out in the United Kingdom and we have pioneered a lot of the technology. The Green Building Council has stated:

“It is difficult to see on what basis the Government has drawn its conclusion that the previously agreed standards are unworkable today. The available evidence indicates it is both technically and commercially workable and no further evidence has been presented by Government.”

The council is also right that the carbon compliance measures are simply too low and lack any real ambition on, or commitment to, tackling climate change. The Government may be blue and yellow, but that does not add up to them being green.

Photo of Jeremy Browne Jeremy Browne Liberal Democrat, Taunton Deane 2:15 pm, 8th January 2015

Thank you, Mr Hood, for giving me the opportunity to speak to new clause 6, which is in my name. It is a pleasure to serve under your chairmanship.

I will make a fairly brief speech. I will not go into detail—others have greater command of that detail than myself—on precisely what level new properties should be at or whether 130 mm of insulation is superior or inferior to 140 mm; I assume it is inferior, but I have no particular insight or expertise on insulation. I will make a wider contribution and hope that Ministers and civil servants will take it on board, not necessarily with a view to accepting the new clause but with a view to thinking along these lines as they formulate laws not only now but in future.

In a way, we have a classic situation here. The Minister is defending what he regards as being a practical position, and members of the Committee are seeking to impose upon him what they might regard as a slightly more purist position than the Government feel able to accommodate. I want to use new clause 6 to hold the Minister’s feet to the carbon-neutral fire, and to urge the Government to be more imaginative than Governments are perhaps sometimes inclined to be.

There is a quote on the wall of Portcullis House, which I think was written there over the Christmas and new year period. I should have taken the sensible step of writing down precisely what it says, but it is words to the effect of, “We shape our buildings and then the buildings  shape us.” It is a quote from Winston Churchill, so it must be right—everything he said seems to meet with widespread approval. The fundamental point is that we hope that the homes we live in are not simply dwellings for the here and now, although obviously they are that, but will be lived in by people for generations, probably centuries, beyond our time on earth, and will shape their communities and lives long after we have gone.

There is an onus on each generation to try to be imaginative about the legacy it leaves to future generations. Sadly, if given an unlimited budget to buy themselves a home, most people in the Committee and in our country as a whole would not choose to buy one that had been built in their lifetime, but would perhaps choose to buy a Georgian home. It seems strange that we have become less good at building desirable homes than people were 100 or 250 years ago. That reflects badly not just on the architects and the culture of our era but on the wider value that we place on our built surroundings.

I agree with the Government that we need more houses and that it is a fundamental social problem that people with reasonable jobs that are reasonably well paid cannot aspire to buy a house of their own in large parts of the country. I do not think, however, that the principal barrier to housing affordability is the amount of excess cladding in the walls. The main barrier is under-supply of housing.

I am not wholly convinced that a permissive and light regulatory regime will lead to much more house building. It might lead to more house building that is short-termist and does not necessarily serve our wider interests, which is what we have seen over recent years. Housing estates have been built on the edges of towns without any amenities at all; people have to drive to buy a pint of milk or a pint of beer, and there is not even a communal building in which they can meet other people in their neighbourhood. When we talk about environmentalism and housing, we are talking not only about the carbon standard of the houses, but about our whole attitude to new development and the circumstances in which people live.

I regard that as relevant because, with new housing, we start with a blank sheet of paper. Our imaginations are tested, no less than they would be if I gave every Committee member a blank sheet of paper and asked them to do something artistic over the next hour. Giving architects or a building company a greenfield site and asking them to do something is a test of their imagination and of our collective imagination, but we are not doing well enough in living up to the challenge, which is what we will be judged on by future generations.

I live, as the Minister does, in a Victorian house, but in my constituency. To adapt to buildings that are—in the case of my home—getting on for 150 years old is of course difficult, but adaptations take place. The ability to improve the carbon emissions of our existing housing stock is inevitably a complicated and expensive process. There are people, such as my next-door neighbours but one, who put solar panelling on a rather sensitive spot on the roof. That might not be ideal for aesthetics, although in my neighbours’ case, they have done it rather skilfully. In lot of houses such panelling does not look attractive bolted on the top.

A more straightforward problem might be that my terrace does not point in the right direction to catch the sun. People starting with a greenfield site can decide in  which direction to face the houses, but those upgrading existing stock do not have that luxury. The direction in which houses point is not an irrelevant consideration, not only for solar panelling but for whether the heating is left on at all at certain times of the year. A marginal decision in April or October, say, might well depend on which direction the house points in and how much sunlight it gets during the day. Such considerations do come into play, and we have the opportunity to think about how to have houses that, in 100 years’ time, will be seen to have stood the test of time.

One of our big tests will be how liveable houses are. I fear that much of the housing stock at the moment is too boxy, with small rooms, making it difficult for families to eat together, for example, although that is a separate issue that I will not expand on now. As we can see from some 1950s and ’60s social housing, there are social consequences to building houses without thinking about how human beings would live in that environment.

There is also the issue of the environmental sustainability of our housing stock. It seems to me that it should be entirely possible to build houses that are orientated in the right direction and that incorporate solar panelling into the initial design of the roof in a way that is much cheaper than retrofitting houses with the same equipment and that is at the same time aesthetically pleasing. The challenge is to build houses with, for example, solar panelling or insulation so that people do not realise it is there until they look at their utility bill and are surprised by how small it is. At the moment, one of the downsides a lot of the retrofitted panelling is that it is all too conspicuous for some people’s tastes.

Photo of John Hayes John Hayes Minister of State (Department for Transport) 2:30 pm, 8th January 2015

It is music to my ears to hear the hon. Gentleman making a deeply conservative case about the relationship between the past, present and future, and the importance of beauty. Is the point that he is making not that all that we build should add to what is already there? All that we build should be tested on the basis of aesthetics as well as ergonomics, and we should no longer make the lazy assumption that the less well-off people are made to live in ugly places. They should not be made to live in ugly places, but should have the chance to live somewhere that is uplifting, fulfilling and beautiful.

Photo of Jeremy Browne Jeremy Browne Liberal Democrat, Taunton Deane

I enjoy discussing beauty with the Minister. It is important; for example, the architecture of London’s skyline is changing, and that is the legacy on which we will be judged by people hundreds of years from now. Whether people think that is good or bad, I leave to them.

People talk about there not being enough house building. That is not how people feel in my constituency; there is a lot of house building in Taunton. Thousands of new houses are being built at the edge of the town. I am broadly supportive of that development. I think that there is no natural size for a town. At any given point a town is either expanding or contracting. If a person thinks that expansion is bad, they should try contraction because that poses even harder problems. However, issues inevitably arise with an expanding town, although it is a measure of success that people want to live there. What worries me is whether we are seizing this opportunity—whether in 100 years’ time people will  want to live in the houses that are being built now, or whether they would still rather live in the Victorian terrace that I live in, which will then be 250 years old. I hope that they would want to live in the house that we are building now, because that would be a sign that my generation did something exceptional, which stood the test of time.

Part of that will not just be whether a house is aesthetically pleasing, but whether it captures the spirit of the time in its ability to be environmentally friendly and carbon-neutral. Instead, we have an entirely perverse situation; we are building houses in my constituency that are of a much better environmental standard than would have been the case 50 or even 10 years ago, but just down the road in parts of the beautiful Somerset countryside, we are covering fields in so-called solar farms. I do not know on what basis they are described as farms, because they are really an industrialisation of the countryside. I am sympathetic to environmental concerns, and some people who share my sympathy have chastised me for not being a greater enthusiast for so-called solar farms. Whenever I visit one, they have massive fences around them and feel like camps to stop people from escaping. There are huge, ugly panels. I am told that they are only there for 25 years, which is quite a long time for people living next to one of them in a beautiful part of the countryside.

It seems perverse to build thousands of houses without limited or no requirement for solar panelling and other environmental measures, and then to desecrate the countryside a mile down the road, when we could have the best of both worlds by having houses with higher environmental standards. That could save the occupants of those houses money, and they would stand the test of time and show that our generation is imaginative and bold. That would save our beautiful countryside for people in future generations, so that they could enjoy walking around without it having been desecrated by those so-called farms.

I will not push the new clause to a vote. It contains various criteria. I pay tribute to my right hon. Friend the Member for Hazel Grove (Sir Andrew Stunell), whose name is also on the new clause and who took the lead in drafting it. One interesting feature of the new clause that Members might want to reflect on is why the criteria are different for detached houses, attached houses and flats. Of course, that is because different types of dwelling have different carbon footprints. That emphasises my point about how we should think at the planning stage about designing houses in such a way that they are pleasing to live in and have a minimised environmental impact.

Neither I nor, I think, my right hon. Friend the Member for Hazel Grove is looking to question the good will of the Government. I am an admirer of the Under-Secretary of State for Communities and Local Government, my hon. Friend the Member for Bristol West, and I know that such environmental considerations are at the top of his agenda. All I am really trying to do is to use this opportunity—I know that other members of the Committee are sympathetic to this—to get some details added to the Bill about regulations and the nitty-gritty of the matter. I want to make a wider plea that our generation of politicians leaves a housing stock that reflects the  best of our era and that collectively, including old houses, is of a more environmentally sustainable standard than it would have been otherwise.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

I want to speak briefly in support of amendment 33, which is in my name, but I am pleased to follow the hon. Member for Taunton Deane and I would like to pick up on two issues that he touched on. He will be relieved to know that I will not ask him to explain the scientific basis for the figures set out in subsection (2) of his new clause, because he rightly emphasised that its purpose was not to be too technical but to raise our sights and to aspire to better standards for the future, for the reasons that he set out very well.

I will bring the hon. Gentleman a bit of comfort and hope, because I live in a modern property. I chose to buy a new flat that was part of a development in Greenwich that was initiated about 15 years ago by the previous Government as one of their exemplar millennium communities. I am pleased to say that, in my property, I have not had to use the heating at all in the past 18 months.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

It was a pleasure for me to go through the whole of last winter—[ Interruption. ]

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich

If the hon. Member for Daventry waits a moment, he will get some even better news. I was pleased to have gone through the whole of last winter without having to use the heating at all, and I have not had to turn it on so far this winter. That is not because we have solar or anything like that—I am sure that the hon. Member for Taunton Deane will be pleased to hear that—but because the building was built to high fabric standards. It therefore retains its heat, and the small amount of heat generated by me and my wife, conversing of an evening, is all that is required to keep the property warm.

This is where I will make the hon. Gentleman feel envious: my combined heat and power bill for last year was just over £400. That is the win-win—we are saving carbon and making it easier for people to live economically. That is why we should be doing our utmost to raise energy efficiency standards. I have already made the case pretty forcefully about why we should restrict allowable solutions to sites where it is not realistically possible to achieve the higher standards of code level 5, which is the purpose of my amendment. That is self-evident, and I rest my case on that.

I want to give one further illustration, which picks up on the hon. Gentleman’s point about being more imaginative. A few years ago, when we were beginning to look at the implications of reaching code level 4, anxiety was expressed throughout the house building industry that that would impose unrealistic costs. A small number of house builders, including some of the big ones and some medium-sized ones—Barratt and Stewart Milne are the two whose names I can immediately recall—were involved in an initiative called AIMC4, which meant aim for code level 4. Its objective was to  test whether it was possible to build homes that met those higher standards without any additional cost, compared with what was being delivered at that time, code level 3. The project was successful and it demonstrated the point made by my hon. Friend the Member for City of Durham: that the more the technology is developed and the more the market grows, the more costs come down and so it becomes more economic; but also, good, clever and imaginative design makes it possible to achieve the higher standards without disproportionate cost.

That is the way we should be going. If we want to incentivise the industry, that is the approach we ought to be adopting. The Minister should perhaps be pursuing an AIMC5 initiative now, rather than exemptions that allow companies to resile from meeting the requirements of code level 5. I hope the Government will follow that line.

Photo of Alan Whitehead Alan Whitehead Labour, Southampton, Test

I rise to address both my right hon. Friend’s amendment and the new clause tabled by the hon. Member for Taunton Deane, which get to the heart of the discussion about the real extent to which the moves made in recent years on the code for sustainable homes downgrade the ambition for homes. The hon. Gentleman talked about whether we will leave a legacy of homes that are of the highest energy efficiency and environmental standards and that will stand the test of time, or whether we will continue to do as we unfortunately have done in this country for a number of years, which is build homes that have to be repeatedly revisited to increase their energy efficiency.

We know that is the case from any comparative analysis of the relative energy efficiency of homes across different countries in Europe. Although the average standard assessment procedure rating of homes has generally improved over the past 20 or 30 years, more so in some sectors than in others, we still have some of the least energy efficient properties in Europe. The whole thrust of the green deal and the energy companies obligation was, I think, largely directed at a recognition that we had the enormous task ahead of us of retrofitting the properties that we had, for a long time, not built properly in terms of energy efficiency. I am obviously not blaming Victorian and mediaeval builders for the fact that they were not entirely cognisant of energy efficiency standards in their buildings, but although that information has been available for a number of years, we have systematically built properties that, for various reasons, fell well short of what could have been achieved at the time.

As the Committee on Climate Change has reflected, we have in front of us an enormous task if homes across the country are to come remotely near the sort of level they need to get to by the early to mid-2020s to make a contribution to energy use reduction and energy efficiency in buildings. We probably need to retrofit several million homes across the country, perhaps more than half a million a year over the next period, to get anywhere near catching up with retrofitting the homes that we did not build properly in the first place so that, across the board, they provide a reasonable level of energy efficiency into the next decade.

Essentially, that seemed to be behind much of the code for zero-carbon homes. The central idea of that code was that we should not do that again and we should get it right first time around—that when we build the 20% of homes that will be in addition to the homes that will  remain standing by 2050, those homes will not need revisiting, but will already be in place as very energy efficient homes, and in future decades we will not need another green deal, another ECO or another son or daughter of ECO to start the process of getting those homes up to scratch.

That is why I am particularly concerned about what I see as the recent progressive dilution of the code for sustainable homes in terms of the ambition for building new properties. I am slightly puzzled by the trajectory of the falling off of ambition. I looked up what had been said recently about the code for sustainable homes. One brief report about it in 2011—relatively early in the lifetime of the present Government—said that the Department for Communities and Local Government had set up a committee to ensure that sustainability standards were being met. It then stated that the Communities Minister, when speaking at the Liberal Democrat conference, said that a

“‘compliance’ committee would make sure that ‘when we say zero carbon homes we get zero carbon homes’.”

The Minister added:

“We have to make a really determined push to make sure the standards that we say we build to are actually the standards we build to.”

I could not put it much better myself. The Minister at the time was the right hon. Member for Hazel Grove (Sir Andrew Stunell), one of the authors of new clause 6. Either he wishes to retain those standards that were there and has tabled the new clause to try to ensure that we do—reading the new clause, that seems to be what it substantially aims to do—or he connived, as it were, in a lowering of the standards and has now recanted. There does not seem to be a third explanation.

I welcome the attempt in the new clause to secure the minimum carbon standards in buildings. Of course, those were also the standards proposed by the Zero Carbon Hub, which was a cross-industry task group looking at the whole question of zero-carbon homes in terms of cost, carbon saving and practicality. It concluded that the code was not bust and that those reductions—10 kg of CO2 for detached houses, 11 kg for attached houses and 14 kg for flats—were perfectly attainable and feasible for new builds and, indeed, could be widely welcomed across the industry. As the Zero Carbon Hub itself established, the price of such measures was coming down considerably, so the additional on-cost for new house development was decreasing significantly as a proportion of the total build. A number of the arguments about how this might price developers out of competition as far as housing was concerned did not really stand up.

The Zero Carbon Hub also reflected on the idea that, because of the trajectory of the zero-carbon code, if we diluted the standards we would fall way behind with buildings being built from 2020 onwards. What we find is that the Zero Carbon Hub has effectively been disregarded, that what the previous Communities Minister said quite solidly has effectively been disregarded and that a process is under way of progressively reducing that ambition on what appear to me to be very weak grounds indeed. Although there are circumstances in which a form of allowable solutions might be appropriate, where it is not possible economically to undertake some level of standard improvements on a particular site,  that—as has been agreed across the piece—should always be the smallest exception and should not be used as a vehicle to detract from the overall development of the uprating of the building to code level 5 and potentially above.

For the giveaway in terms of the trajectory, one need look no further than the Cabinet Office briefing on the Queen’s Speech last June, which stated:

“The Zero Carbon Home standard will be set at Level 5 of the Code for Sustainable Homes, but the legislation will allow developers to build to Level 4 as long as they offset through the allowable solutions scheme to achieve Code 5.”

That is, the allowable solutions scheme is a potential widespread offsetting in order to allow for other arrangements, as yet still undefined, to achieve code level 5, but it is certainly not apparent to me and other hon. Members how exactly the widespread use of allowable solutions will actually achieve code 5. It may achieve some interesting bits of retrofit elsewhere. I raised the interesting prospect of developers who are building on sites of less than 10 homes availing themselves of the allowable solutions fund in order to bring up to scratch the homes, which they did not build in the first place because they were not exempted from the allowable solutions to start with.

We end up in an “Alice in Wonderland” world where we claim to go towards zero-carbon homes, but actually go in the opposite direction. In securing the exemptions, we provide ourselves with so many further methods of tripping up that we lose sight entirely of the original aim, as the hon. Member for Taunton Deane appeared to imply.

Putting forward a basic carbon-saving requirement, regardless of the size of the developer, seems to be an important way to get us back on track as far as the code is concerned. Unless the Minister makes some particularly compelling arguments for what appears to be a smart move in the opposite direction on the achievement of zero-carbon homes, I suspect we have today effectively sealed the deal on the removal of an ambition for proper zero-carbon homes over the next period. The Minister might find that acceptable, but I do not. I think we need further measures to get back on track.

There might be other ways to do this. As my right hon. Friend the Member for Greenwich and Woolwich mentioned, there might be other ways in which allowable solutions and exemptions can be determined to make sure we do not fall off track, but it seems to me essential that we keep our noses to the grindstone. I would not be happy to be the Minister who finally made sure that we fell off the cart on the way to the target.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government 2:45 pm, 8th January 2015

We have had a wide-ranging debate. Earlier we heard about my television and fridge, and we have heard about the new home in the constituency of the right hon. Member for Greenwich and Woolwich that has significantly reduced his energy bills. I note he did not disclose how much that new home, built to exacting standards, cost compared with what was generally available in the marketplace. That would probably be interesting. Anyone could pay for a home that is over and above what is required by current building regulations; that is a choice people are able to make. On my visits I have seen exemplary projects, as has the hon. Member for City of Durham. I suggest that that tends to be the nature of visits: one is taken to good examples of far-reaching practice rather than the ordinary and mundane.

We heard an interesting speech from my hon. Friend the Member for Taunton Deane. He seemed to be asking me to be more interventionist. Although we are fairly close on quite a few issues—certainly economics—on social policy and domestic policy he has called me a nanny state liberal. It seems he is now accusing me of being the opposite and in his latter stages he has become the liberal interventionist.

Photo of Jeremy Browne Jeremy Browne Liberal Democrat, Taunton Deane

I do not recall ever calling my hon. Friend anything as crude as that—[ Interruption. ] Oh, he does recall it. I am instinctively a believer in free-market solutions to problems, but the only reason I wonder whether a greater degree of intervention may be appropriate in this case is that the person who is buying the product does not know that they are a customer at the point the product is constructed. To use my example of the 150-year-old house that I live in, the builder could not possibly have anticipated that the customer 150 years later would be me. One could argue there is a threshold that would set a benchmark for developers and may allow them to be imaginative within those confines in a way that normal market rules would not allow.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I certainly remember my hon. Friend calling me a nanny state liberal and all sorts of things with reference to education and health policy. We will leave that to his memoirs that may be more forthcoming than mine, in terms of our career time scales.

My hon. Friend also referred to aesthetics and how houses are built. I do not think he used the phrase “rabbit hutch homes” but that is essentially what he alluded to. Another piece of legislation—the housing standards review—going through Parliament at the moment is also my baby. That is another major reform of the housing market and deals with the issue mentioned by my hon. Friend. It introduces for the first time a national space standard that will apply across the mix of housing stock, not just social homes, where it is currently a standard applied by the Homes and Communities Agency, but houses built for the market. If local authorities choose to adopt that space standard that will be available for them. That deals with the more general point he made.

I now turn to the specifics of the proposed new clause. First, it would not be right to include this in primary legislation. Most of the changes that we have talked about are made in secondary legislation. Changes to building regulations are made through secondary legislation. The proposed new clause proposes putting quite prescriptive matters, including to the number of kilograms of carbon, into primary legislation. It also proposes setting a time limit. That would ignore our requirement to carry out a detailed consultation with the industry once the Bill gets Royal Assent and we decide to proceed. Every time we wanted to change the standard, we would need to amend primary legislation, rather than use the much more flexible method we currently use of altering building regulations by statutory instrument.

We have already said that from 2016 all new homes will be required to achieve a minimum on-site standard equivalent to code sustainable homes energy level 4. Our view is that that is a challenging step forwards, but one that will provide very energy-efficient new homes for consumers as standard right across the country.

As we heard this morning, the Government have already strengthened the energy-efficiency and carbon-emission requirements for new homes twice, in 2010 and 2013. Both those changes were informed by a robust consideration of the evidence, which has, in turn, helped the Government to reach their view on how far we can reasonably expect to go in 2016, with the third ratcheting-up of the standards in a decade—quite a major challenge for the house building industry.

The decision we have taken has balanced the cost to the development industry, particularly to smaller builders, against the wider benefits to society of energy savings and carbon reductions. Achieving that balance has to be one of our primary considerations.

The policy question has always been about more than simply demanding that all new homes meet the highest level of carbon compliance. We also want to know whether it is realistic for the majority of builders to deliver higher standards without unduly affecting site viability or housing delivery. We all agree that we need to build more houses to solve the affordability problem, but we do not need to make building those new houses more difficult than it needs to be for the house building industry.

Code level 4 is already a stretch for the industry, although it is a good standard and one that the industry knows well. The hon. Member for City of Durham mentioned that lots of houses are already being built to code level 4, and they are probably the ones we end up visiting. About 10% of the houses being built at the moment go over and above the existing code, so 90% are being built to code level 3—the current standard regulation.

Some leading house builders have undertaken a project with Innovate UK. The right hon. Member for Greenwich and Woolwich mentioned the AIMC4 project, which aims to explore how the code level 4 standard can be achieved cost-effectively. That learning is now being disseminated through the house building industry. AIMC4 has shown that it is now possible to build to that level consistently, but there are still technological hurdles to overcome.

Although there is some evidence about code level 4, there is comparatively little about how to build at a consistent level above it. There are pockets of activity, and it sounds as though the right hon. Gentleman has benefited from one in his constituency. However, there are not yet enough to demonstrate to Government that the technical challenges involved in delivering the highest levels of carbon compliance can be replicated cost-effectively across the whole house building industry from 2016. I am sure, however, that that will come in due course, at which point the Government would consider the new evidence carefully.

One point made repeatedly in arguing against the Government’s carefully constructed position is that the cost of building a zero-carbon home is falling. We do not dispute that—indeed, it is good news, as is the news that the cost of renewables is falling, and that may well come up when my colleague, the Under-Secretary of State for Energy and Climate Change, the hon. Member for Hastings and Rye, takes over. However, we are still talking about extra costs of the order of £1,000 per unit, which we need to take into account in building growth and carbon abatement ambitions.

Zero Carbon Hub has been mentioned several times. It published a report in July 2014—indeed, I spoke about it at one of the organisation’s events. The report shows that new homes currently being built do not always achieve the energy performance we are promising. We are all—at least on this side of the Table—politicians, and I am sure that when we pass a law we assume we have somehow pulled a lever and that everyone will do exactly as we expect on every site all around the country, and that compliance with the regulations and the law will be at 100%. Of course, we know that is not actually the case.

Zero Carbon Hub’s report found that homes that are currently being built are not necessarily all being built to the standard they are designed to be built to. That is obviously a concern, because if developers are not able to meet current building regulation requirements, what point would there be in raising the bar even further beyond what is currently achievable on a uniform scale? The Government are working with industry on the outcomes of the hub’s work, and we will consider the recommendations alongside the regulation needed to raise homes to the standard consistent with code level 4. Our view is that those challenges can be addressed, but there is a risk of increasing the performance issues if we go beyond code level 4 at this time for every new home.

Finally, a national requirement to build homes to code level 4 will ensure that homes are achieving energy efficiency standards that are towards the top end of what is practically and cost-effectively achievable at present. Those homes will use the highest-performance windows—I gave the example of triple-glazed windows earlier. That partially addresses the points raised by my hon. Friend the Member for Taunton Deane. We will do as much as possible on site to improve the energy efficiency of new homes with the most up-to-date boilers and the thickest insulation, reducing fuel bills as a result. Those homes will be among the most energy efficient in the world.

The hon. Member for Southampton, Test, said that rather than going towards zero-carbon homes, we are going in the opposite direction. On the contrary, the trajectory I described at the outset of our discussion on clause 32 this morning shows that, compared with the baseline of 2006, when the code for sustainable homes kicked in—that is what we are measuring ourselves against—we will have a 44% uplift. Significant progress has already been made and will continue to be made if the provisions come into effect.

The changes that we have already introduced strengthen the requirements by some 30% compared with 2006, helping to save home owners, on average, £200 on their fuel bills, compared with those in new homes built before 2010. The changes will strengthen the requirements, on average, by a further 20%. To put that in more meaningful financial language, zero-carbon homes will be built to code 4 standards across the country, without any exemptions, from 2016. We anticipate that those homes will have energy bills of £650, compared with £1,350 for homes not built to those standards. Home energy bills will be £700 lower, which all our constituents will regard as a major energy saving for their new home.

Regrettably, not enough thought has been given to the practicalities of amendments 61 and 33, and particularly the uncertainty and costs for house builders and the potential disruption and delays to house building in this  country. The proposals would mean that a house builder and the local building control authority have to agree a reasonable on-site energy performance level on a case-by-case basis before any development could commence. That would potentially lead precisely to what the hon. Member for City of Durham says she does not want: requirements and practices differing from building to building, and from site to site, in different parts of the country.

The house building industry needs to know the technical requirements and costs it will face so it can plan for the future, particularly when making long-term investments in land. Manufacturers and suppliers need to know what construction products will be required. Certainty is the one key thing that the industry has repeatedly asked of the Government. The various stakeholders, be they house builders or others in the field, have made that clear to me during my 18 months in post. They want certainty from the Government about where we are going. We are proceeding with zero-carbon homes—that was finally cleared up in the Queen’s Speech—and we are providing certainty on the levels that we are setting.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 3:00 pm, 8th January 2015

Let me remind the Minister of what he said on Second Reading:

“Those energy efficiency measures should be done on site where possible, but off site where not. There could be practical reasons why those energy efficiency measures could not be introduced on site. That is why it is necessary to provide for a scheme of allowable solutions.”—[Official Report, 8 December 2014; Vol. 589, c. 741.]

That is exactly the effect of amendment 33. Will he please say why he regards it as impractical?

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

What I have said is consistent with what I said on Second Reading and in many external speaking engagements. We want a further uplift on the 2006 baseline, and we are achieving that. We want that uplift to be uniform and without exemption across the country. Getting to code level 4 for every new home will achieve that.

We wish to go further and have more low-carbon technologies coming on to the market. I totally refute the shadow Minister’s remark that allowable solutions would be an opportunity to plant a lot of trees. Let me cut that tree down straight away—a Gladstonian practice to counterbalance the Disraelian Minister who is normally sitting to my left, my right hon. Friend the Member for South Holland and The Deepings. We will come on to allowable solutions when we debate the next group of amendments, but a whole range of opportunities will come from them. That is the direction in which we are going.

In the building regulations, we have to set specific performance standards. We provide that guidance in the approved documents. We agree that it is important to get the fabric right first, so our most recent changes to building regulations have encouraged a fabric-first approach. However, regulatory standards need to be proportionate, realistic and achievable.

There will be a further chance for industry and environmental groups to work with Government as we fine tune the detail of setting regulations at code level 4. There will be a detailed technical consultation that will need to consider what that means for delivering a range of new home types, from high-rise flats to detached  houses. We will listen carefully to the responses and publish another detailed impact assessment; that is consistent with the approach undertaken when we last tightened the regulations. Having heard those remarks, I hope that hon. Members will not seek to press their amendments.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

I tabled amendment 61 partly to test the Government’s ambition to deliver genuinely zero-carbon homes by 2016. Sadly, the Minister has confirmed my anxiety that they have extremely low ambitions, not only on zero-carbon homes but on reducing energy bills substantially, as was outlined by my right hon. Friend the Member for Greenwich and Woolwich.

I do not always agree with the hon. Member for Taunton Deane, but he made a number of valuable points about the need for better-quality homes, including the point that those homes need to be genuinely zero carbon. It is a great pity that the Minister of State, Department for Transport, the right hon. Member for South Holland and The Deepings is not in his place, because again I agree with him that we should be building places that are beautiful. Given those comments, I am surprised that he and his colleagues did not back new clause 13, which sought to update the new towns legislation to get not only garden cities, but garden cities based on updated principles that pay attention to place-making and a good-quality environment.

The hon. Members who contributed to the debate all made valuable points. I hope that the Minister will reflect on some of the detailed points about the workings of allowable solutions made by my right hon. Friend the Member for Greenwich and Woolwich. My hon. Friend the Member for Southampton, Test, made really important points about why the Government are allowing code level 4 with allowable solutions. To us that seems a backward step.

It was interesting that the Minister had to ask questions about the cost of delivering homes to code levels 4, 5 and 6. I suggest that he should persuade his Department to update the information in the document “Cost of building housing to the code for sustainable homes standard: updated cost review”. The most recent copy I was able to find was published in 2011. It would be extremely helpful if that could be updated, as it would elucidate some of our discussions about whether measures are affordable.

The last point that I wanted to make was to do with what the Minister said about cost affecting the viability of sites. We do not actually know that, however, because we do not have any information. It would have been helpful if he and his colleagues had backed our amendment that sought to make viability testing and the information it was based on more publicly available. I am not convinced by the Minister’s comments and am disappointed by the low level of ambition, but I will let him ponder; I am sure that we will revisit the issues. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire 3:15 pm, 8th January 2015

I beg to move amendment 66, in clause 32, page 34, line 34, after “things”, insert “within the built environment”.

Photo of Jimmy Hood Jimmy Hood Labour, Lanark and Hamilton East

With this it will be convenient to discuss the following:

Amendment 63, in clause 32, page 35, line 2, leave out “Secretary of State” and insert “a local planning authority”.

Amendment 64, in clause 32, page 35, line 5, at end insert—

“(d) provisions within sub-paragraph (3)(a) should be carried out within an area determined by the local planning authority, where the opportunity exists to do so.”

Amendment 65, in clause 32, page 35, line 30, at end insert—

“to be determined by the local planning authority”.

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire

It is a pleasure to serve under your chairmanship, Mr Hood. Thank you for the kind attention that you paid to my point of order just before midday on behalf of all of us. I will speak briefly. The amendments are probing, as I think the Minister is aware. For the record, I also live in a new property, in Bedfordshire.

Some years ago, when I held the post of Opposition spokesman on local government, I suggested that at least 25% of all new build should carry solar panels as part of the building regulations. Even 15 years ago, it was clear what was happening. Accordingly, I am pleased to see the sort of progress that has been made, and I want to encourage the Government on the way in which they are heading towards carbon neutrality.

The amendments are in part inspired by the Mayor of London, and by concerns expressed on Second Reading by my hon. Friend the Member for Bromley and Chislehurst (Robert Neill). Those concerns, as the Committee will hear, are about the apparent effect on any planning authority in the south of England where developers might take the opportunity to offset their obligations in a part of the country where costs are lower; that goes against the Bill’s intention that relief be provided in the area in which the development takes place.

Under the Bill, developers will be able to offset reductions in carbon emissions from new developments in the manner of their choosing; there is little restriction on the type of measures carried out or their geographical location. In addition, the price cap set for carbon under the fund delivery route may be set at a level that could preclude carbon-saving measures from being carried out in London and other cities.

There have been similar unintended consequences for London from the energy companies obligation scheme, which led to the capital receiving far less in funding, proportionately, than it should have. Companies have understandably chosen to target their spending in areas where they would get the best return on their money. For example, despite having a 13% share of national housing, in the first year of the energy companies obligation, London received only 6.4% of spending. That lets down those in fuel poverty in the capital who might otherwise have been helped.

The Greater London authority has estimated that London will generate up to £90 per tonne of carbon each year once the allowable solutions system is fully implemented—about 21% of the total raised. Without additional safeguards to ensure that those funds remain in the capital, London would in effect be funding carbon-abatement activity throughout the rest of the UK without seeing any benefit, which is unacceptable for a region that has 277,000 households urgently in need of the assistance that allowable solutions can bring.

The amendments are therefore intended to ensure that London receives its fair share from the allowable solutions regime. The amendments are worded to give local planning authorities the opportunity to have the scheme operating within their own area, rather than necessarily going beyond it. There is a recognition that not every scheme in itself will be able to provide the opportunity for offset, but at least keeping it within the planning development area will mean that a local community can see the benefits of the scheme and prevent, in particular in the south of England where housing costs are greater, more diversion to areas outside, which would undermine the intention of the Bill and not benefit the local community in which building development was taking place. I would be grateful if the Minister will give his view on the amendments, which are designed to be probing and to ensure that the needs of the community in which development is taking place are recognised. I look forward to hearing what he has to say.

Photo of Brooks Newmark Brooks Newmark Conservative, Braintree

I will not make a long speech. I just want to make a point in support because the amendment is also in my name. I emphasise the point made by my right hon. Friend the Member for North East Bedfordshire that it is important that we support the principle of localism when it comes to carbon pricing. I am sure that the Minister will agree that it is important that local authorities have ownership of any allowable solutions fund to ensure that they invest in a balanced portfolio of carbon savings measures to benefit local areas, the local community and the local people.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

The debate was rather briefer than I anticipated. The amendments raise important issues about the role of local authorities and communities in delivering allowable solutions, as well as what kind of carbon abatement measures can be included in allowable solutions—certainly more than trees, as I said to the shadow Minister earlier. I will deal with the local authority issue. I agree that local authorities should be involved. Many are already thinking about how they can contribute to allowable solutions. There are certainly considerations that we have given careful thought to during previous consultations on allowable solutions. The problem with the amendments as they are drafted—in effect, prescribing that allowable solutions should be delivered locally—is that many of the opportunities that we see for cost-effective allowable solutions will be lost.

There was strong support in the consultation that we undertook in 2013, including from local authorities, for a national framework for allowable solutions—a menu of options within a national framework. Under one of the options, it will certainly be open to local authorities to participate in allowable solutions by working with house builders to introduce carbon abatement projects in the local area. The guiding principle of the allowable solutions scheme is freedom of choice for house builders in how they meet their obligations.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

I have a great deal of sympathy with the amendments. Is the Minister confirming that it would be possible for a builder to meet the allowable solutions requirements by planting trees in the opposite end of the country? Yes or no?

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

The whole point of the clause is to introduce the concept of allowable solutions. Once we have the concept established, which is a new concept in  terms of building regulations, we will design a scheme and consult on it. As the hon. Lady has requested, I will give out the examples that I or other colleagues have outlined on the record in speeches or in writing of the sorts of things that we anticipate as allowable solutions; they do not include trees. It would be low-carbon local energy infrastructure, such as district heating schemes, and retrofitting of low-carbon technologies in existing buildings. That is where most of the improvement needs to be made. We are talking about what we do to new homes constructed after 2016. We all know that we need to retrofit our existing housing stock, whether it is my Victorian home or that of my hon. Friend the Member for Taunton Deane, or the Georgian home of the right hon. Member for South Holland and The Deepings. That is where the problem is.

A huge opportunity exists here to augment the green deal to retrofit older homes. That may not be primarily in the district where new housing is taking place. That is one reason why there needs to be a national scheme. The distribution of our housing stock is not uniform. Off the top of my head—I hope this does make officials flinch, so I will not look at them—we could compare Milton Keynes and Bath. Fairly obviously, in Bath, which is a world heritage site where there are many listed buildings, there is a huge need to retrofit the housing stock sympathetically.

In a new town, where a lot of the housing stock has been built in more recent times to more demanding environmental standards, where new house building takes place after 2016 there will simply not be the same need for local offsetting measures. The aim of the allowable solutions scheme is an overall drop in carbon emissions across the country. To that extent, it does not matter whether it happens in Milton Keynes, Bath, Croydon or Surrey. It just matters that it happens.

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire

I happen to live next door to Milton Keynes. That is also irrelevant as far as my hon. Friend is concerned. I want to pick up on the important point made by the hon. Member for City of Durham. We have all come across situations in which lists or schedules are produced and people ask, “Are only the measures on the list allowed, or is the list indicative?” Again, we are dealing with people who are very smart at ensuring they get the best bang for their buck. A developer’s best bang for their buck may not be in the best interests of all the rest of us. Is the Minister saying that the solution that might be offered by some, to which the hon. Lady referred, is not to be allowed, or might possibly be allowed, unless the list can be made more prescriptive?

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

The allowable solutions scheme is clearly not yet finalised, because we do not have the primary legislation in place to allow the concept to be worked up. A lot of thinking and discussion has taken place. I can reassure my right hon. Friend and will try to reassure the hon. Member for City of Durham again that in all the discussions that I have had, trees have never been mentioned, but district heating schemes, retrofitting, low-energy street lighting and electric car-charging points have been possible examples of allowable solutions. I am particularly keen that those things happen, as are other Departments. I have never heard trees mentioned.

Photo of Brooks Newmark Brooks Newmark Conservative, Braintree

I do not want to hammer home the point raised by my right hon. Friend the Member for North East Bedfordshire. The concern that he, I and, I believe, the Mayor of London have is that the built-up areas will not benefit from any measures to reduce carbon emissions because developers are very smart people. They will do what needs to be done in the cheaper areas that are on the edge of towns and suburbs. One may find that the city centres go without the benefit of offsetting. That is my concern, which is why I believe a more localist approach is better.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I am not at all unsympathetic to what the hon. Gentleman says. The details of the allowable solutions scheme have not yet been fully worked up. I am sure that when they are published there will be lots of discussions such as this. There are huge opportunities for the low-carbon sector that is developing in the economy. There will be a local opportunity as well. The overall objective is to reduce carbon emissions across the country.

I am a localist and would love everything to happen in Bristol and for Bristol to have control over many things. I am sure that the hon. Gentleman would want that to be the case in Essex and Braintree. However, we have to recognise that reducing carbon emissions is a national imperative as well as something in which everyone locally quite rightly wants to show that they have played their part. I am certainly mindful that local authorities can have a role in this. House builders themselves—certainly a major builder has said this to me—would probably want to be associated with local improvement schemes. We will hear all that once we have got clause 32 in the Bill—once we have got Royal Assent—and we go forward and design the scheme.

Photo of Nick Raynsford Nick Raynsford Labour, Greenwich and Woolwich 3:30 pm, 8th January 2015

We hear what the Minister says. Will he advise the Committee whether, when he is framing the detailed arrangements, any legal obstacle could prevent the implementation of the proposal of the right hon. Member for North East Bedfordshire to link the area in which the allowable solution income is generated with the area where the benefit is derived? Is there any reason why that should not be done?

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I cannot think of any legal objection to what is being proposed, but perhaps we will come back to that shortly. The problem with local funds, which is what is being envisaged here, is that there simply might not be enough allowable solutions measures available locally—to go back to my Milton Keynes example—so funds will not be invested to best effect. Amendment 64 recognises the problem, but if local funds become the default option, which is what is called for, opportunities may be lost for large-scale strategic investments, which, as well as being more cost-effective could lead to greater levels of carbon savings, which is what we are trying to achieve.

We want to ensure a competitive marketplace for allowable solutions so that the house building industry and other people can innovate and come up with allowable solutions to drive down the price and obtain the best value.

Photo of Roberta Blackman-Woods Roberta Blackman-Woods Shadow Minister (Communities and Local Government)

Would that include a scheme in Durham being offset by a solar farm in Taunton Deane?

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I opened this door myself by comparing Bath to Milton Keynes. I am loth to get into lots of discussions about what might be offset by house building in Durham and somewhere else. [ Interruption. ] I am told the answer is yes, which is probably not very helpful.

House builders will be able to contribute to a variety of allowable solutions. Whether it is photovoltaic panels on roofs or solar farms, which my hon. Friend the Member for Taunton Deane does not want to see; whether it is the retrofitting of Georgian houses in Bath, or in Durham for that matter; or whether it is low-energy lights—there was a question about Essex in oral questions recently—there will be an opportunity for the benefit of allowable solutions to be felt in all different parts of the country.

Photo of Jeremy Browne Jeremy Browne Liberal Democrat, Taunton Deane

Obviously, the example that was given provoked a constituency response from me, but the point made by the hon. Member for City of Durham does raise a wider issue, which is whether developers will be able to put more and more solar panels in parts of the country where land prices are lower and the demand for housing may be lower, and they are far away from the sensitive eyes of people who want to buy more expensive houses in parts of the country where offsetting is not located. Durham may not be a particularly good example, but, apart from the sun perhaps shining more strongly in the south of England than in the north of England, there is a danger that there will be some out of sight, out of mind places that will get all of the ugly solar farms, while the more high-value housing areas of the country will be spared the downsides and will get only the upsides. That may not be agreeable to many people.

Photo of Stephen Williams Stephen Williams The Parliamentary Under-Secretary of State for Communities and Local Government

I will respond to my hon. Friend by simply saying that there is a challenge that his colleagues—while they are still his colleagues—in Taunton and the rest of Somerset will have to rise to. They will have to put forward allowable solutions examples and schemes that they want to see in Somerset that are of the right quality aesthetically in his constituency and will attract investment from the various national allowable solutions schemes. The scheme will also need to provide certainty and consistency for house builders. That is why we think the best way forward for a fund option is for it to be a national fund with a national price, which, as I have said, will no doubt be spent around the country in different ways.

Amendment 66 would restrict off-site carbon abatement measures covered by the scheme to those in the built environment. Most measures have come from the built environment, but we think that the amendment would limit opportunities for innovation. We are already aware of interesting proposals outside the build environment, which the amendment would prevent from even being considered. For instance—I have already mentioned this as an example of an allowable solution that I want to see—electrical vehicle charging points could not proceed as an allowable solution scheme if the amendment, tightly drafted as it is, were accepted.

Seventy-four per cent. of respondents to the consultation did not support focusing on particular measures, and there was consensus that being too prescriptive would stifle innovation. We will of course work closely with local authorities and industry after the Bill is passed, as we put into place the supporting guidance and measures necessary to deliver the national scheme of allowable solutions in support of zero-carbon homes from 2016.

I hope that I have given the Committee enough reassurance and that the amendment will be withdrawn.

Photo of Alistair Burt Alistair Burt Conservative, North East Bedfordshire

I thank the Minister for his response, and for dealing with the comments that have been made. We have shown that there is some interest, and an issue to be dealt with to protect the intention of the Bill, but, in view of what he has said about the probing amendments, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 32 ordered to stand part of the Bill.