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

With this it will be convenient to discuss the following:

Clauses 206 to 208 stand part.

New clause 41—Energy performance regulations relating to existing premises—

“(1) Within six months of the date on which this Act is passed the Secretary of State must make regulations—

(a) amending the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (S.I. 2015/962) to require that, subject to subsection (2), all tenancies have an energy performance certificate (EPC) of at least Band C by 31 December 2028; and

(b) amending the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019 (S.I. 2019/595) to raise “the cost cap” to £10,000.

(2) Exemptions to subsection (1) apply where—

(a) the occupier of any premises whose permission is needed to carry out works refuses to give such permission;

(b) it is not technically feasible to improve the energy performance of the premises to the level of EPC Band C; and

(c) another exemption specified in the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 has been registered in the PRS Exemptions Register.

(3) Within six months of the date on which this Act is passed the Secretary of State must make regulations—

(a) amending the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (S.I. 2015/962) to enable Local Authorities to give notice to landlords that they wish to inspect a property, requesting permissions from landlords and any tenants in situ at the time to carry out an inspection at an agreed time;

(b) to expand the scope of the current PRS Exemptions Register and redesign it as a property compliance and exemptions database;

(c) to require a post-improvement EPC to be undertaken to demonstrate compliance;

(d) to require a valid EPC be in place at all times while a property is let; and

(e) to raise the maximum total of financial penalties to be imposed by a Local Authority on a landlord of a domestic PRS property in relation to the same breach and for the same property to £30,000 per property and per breach of the PRS Regulations.

(4) The Secretary of State may make regulations to—

(a) enable tenants in the private rented sector to request that energy performance improvements are carried out where a property is in breach of the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015; and

(b) make provision for a compensation mechanism where a tenant is paying higher energy bills as a result of a property not meeting the required standard.”

This new clause requires the Secretary of State to strengthen minimum energy efficiency standards in the private rented sector, expands the compliance regime available to local authorities, and gives the Secretary of State the power to create a compensation mechanism for tenants adversely affected by non-compliance. These measures are derived from the government’s preferred policy option in the 2020 “Improving the energy performance of privately rented homes” consultation.

New clause 42—Review of the “Improving Energy Performance Certificates: action plan”—

“(1) Within 12 months of the date on which this Act is passed, the Secretary of State must conduct a review of the “Improving Energy Performance Certificates: action plan” that sets out how new technologies can improve the energy usage and efficiency of premises.

(2) Such a review must include analysis of the energy efficiency benefits of energy optimisation technologies and bi-directional charging from vehicles to premises.

(3) Where any energy efficiency benefits are identified by this review, the Secretary of State must make provision under section 207(1)(b) for recommendations to be made about the improvement of the energy efficiency and usage of new and existing premises.”

This new clause would oblige the Secretary of State to update its review of the EPC rating system; for this review to consider bi-directional charging; and for the Secretary of State to then use the existing power under section 207 to promote these improvements.

Clause 205 will provide the Secretary of State with the power to make changes to the existing Energy Performance of Buildings (England and Wales) Regulations 2012 to ensure that they are fit for purpose and contribute effectively to improving the energy efficiency of premises. Following the UK’s withdrawal from the European Union, it is necessary to create new primary powers to permit changes to be made to the 2012 regulations, as that power was lost with the repeal of the European Communities Act 1972.

Clause 206 will enable the Secretary of State to make changes to the Energy Performance of Buildings (England and Wales) Regulations in relation to new premises. That includes new premises in the process of being constructed or changed, as well as new premises whose construction or adaption is planned but has yet to be started. The changes will ensure that the anticipated energy usage and energy efficiency of new premises are taken account of.

Clause 207 enables us to ensure that we have an effective enforcement regime underpinning the energy performance of premises policy by amending existing requirements. We will review the current enforcement regime to ensure that there are sufficient enforcement options in place, with a view to improving compliance with the energy performance of premises framework. The existing regime includes civil penalties, and the clause enables us to amend those penalties or provide for new civil penalties by enforcement authorities up to a maximum of £15,000.

Finally, clause 208 provides that the regulations made under part 9 may amend, repeal or revoke provisions made in primary legislation and that this must be done through the affirmative resolution procedure. It also provides that the affirmative resolution procedure will be used if new criminal offences or civil penalties are created. This will ensure that there is parliamentary oversight of the uses of the power. I commend the clauses to the Committee.

Clause 205 is the beginning of the part of the Bill on the energy performance of properties. I must admit that I thought for a moment there was going to be a spectacular U-turn on the previous clause, but I was sadly disappointed when the Minister decided which way he was really going to vote. I fear the same result in respect of this part of the Bill.

Let me speak briefly to our new clauses 41 and 42, which would considerably strengthen the Bill’s provisions on the energy performance of premises. They relate specifically to energy performance regulations for existing premises. Rather like clause 204, which is now not in the Bill but contained previous Government aspirations and claims in respect of outcomes, new clause 41 relates to things the Government have already said about energy performance certificates for properties in the private rented sector, about what should happen in respect of the improvement of properties in that sector to bring them up to an appropriate band, and about the amount specified in legislation that private landlords should spend on getting their properties up to that level before they are exempted from having to make further improvements.

The really important bit in new clause 41 would require the Secretary of State to make regulations

“amending the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (S.I. 2015/962) to require that, subject to subsection (2)”— which contains exemptions—

“all tenancies have an energy performance certificate (EPC) of at least Band C by 31 December 2028”.

The new clause would also require the Secretary of State to make regulations

“amending the Energy Efficiency (Private Rented Property) (England and Wales) (Amendment) Regulations 2019”— which Members will recall introduced a £3,500 cap on the cost to landlords of achieving band E—to raise to £10,000 the amount that should be invested before landlords are exempt.

Those are reasonably ambitious outcomes for the private rented sector, but they were completely presaged by the Government’s previous proposals, which we supported at the time. Specifically, in September 2020 they consulted on improving the energy performance of privately rented homes in England and Wales. The consultation had proposed outcomes at its heart, but—well I never—there has not yet been a Government response. Only three years have gone by. We hope that there may be a response one day fairly soon, so that progress can be made.

The proposed outcome of the consultation—the favoured option at the time—was exactly as set out in subsection (1) of new clause 41: raising the energy performance standard of private rented properties to band C, a phased trajectory to get there by 2028, and a £10,000 average per-property spend under a £10,000 cap. Everything in the new clause is already there in what the Government said they would do in respect of private rented sector energy efficiency. The only difference is that the Government have not actually done anything about it.

I recently looked up the reaction to the proposals, and a number of commentators and advisers are saying, “Well, landlords, you perhaps ought to get yourselves steeled up to the idea that your properties, to be lettable in future years, will have to be band C, and that you may have to spend up to £10,000 to make your properties lettable at that point.” By the way, that seems a relatively small amount to have to spend, bearing in mind that this is essentially a question whether a property is of merchantable quality. In any other area of commerce, if it were not of merchantable quality, it would not be sold. These measures, if implemented, would ensure that properties were merchantable for letting purposes as far as efficiency standards are concerned, and landlords would be required to spend that relatively small amount before they were exempted and to use every endeavour to get their properties up to that point.

In my constituency of Workington, I have some wonderful conservation areas with lovely old stone-built houses. A Labour council will not allow the replacement of single-glazed windows with uPVC double glazing, for example, which we know works well for energy efficiency. Why does the hon. Gentleman think that they would not be of merchantable quality?

If the hon. Member cares to go back to the consultation in 2020, he will see that there are certain exemptions, depending on things such as conservation areas, from getting properties up to the standard that we are discussing provided that other things are in place. I have no particular insight into the workings of the hon. Member’s local authority, but it may be that something like that is at the heart of those concerns.

The point is that in general, we would certainly support—and we did at the time—what is set out in the consultation and the Government’s declaration of policy intent. One area where energy efficiency needs to move forward quite rapidly is the private rented sector; after all, that is the housing sector with the worst energy efficiency record. It is just not good enough to stand by the idea that properties in band E, which is a very low energy efficiency band, should be at that level any longer—certainly not in the 2020s, when we are trying to get all the properties that we can up to a standard fit for 2050.

We are trying to ensure a national roll-out of energy efficiency measures so that properties are as efficient as they can be. That way, we will not need to go round and retrofit them again coming up to 2050. We will already have in place the future homes standard and so on, which will ensure that new builds all go that way, so why should private rented properties be such an apparent exception?

Surely, the people running private rented properties have the same duty as the rest of us to ensure that their properties are as energy efficient as possible. I am sure all Members have had people coming to their constituency surgeries to complain about the dreadful conditions in their private rented property and ask how someone can have let that property out to them and apparently got away with the extremely low energy efficiency rating. Constituents have been told, just as I have, that not much can be done about it right now. Properties can be let out by private landlords in that condition, and with present arrangements, only a very small increase in energy efficiency is required to allow landlords to continue to let out properties, while everybody else—we hope—will have sped ahead to get properties really high up the EPC scale. It would be an enormous anomaly, and indeed quite a scandal, if landlords continued to rent out properties with a very low EPC level.

The aim of new clause 41 is to implement measures to ensure that the consultation proposals are put into law. I do not know why the Government have spent so long responding to the consultation. As I said, the market generally thinks that what was consulted on is what will happen, and it is telling landlords to steel up for that. However, as yet, there is no evidence that they will actually have to do that, because no one is doing anything about turning the ambitions into fact.

We are well beyond the second anniversary of the consultation’s closing, with no sign of the Government coming up with a plan to do what they said they wanted to do in the first place. New clause 41 would do the Government a great favour, frankly, by putting the ambition into legislation forthwith and ensuring that everyone gets on with it. In our hearts, that is what we all want to happen, notwithstanding how we might vote today.

New clause 42 would have a slightly more limited but nevertheless important effect. It would ensure that a property’s energy performance certificate—circumstances are changing substantially in this respect—reflects the extent to which it can operate on a two-way basis, exporting electricity as well as importing it.

In the not too distant future, many or most houses will have within their curtilage, or close to it, methods to charge electric vehicles located near their property. That should be the signal for the property to have an EPC rating that reflects the fact that it can be part of an energy generating arrangement. Under proposed schemes, when the homeowner is not using their electric vehicle, the property could use it as a mini power station, exporting electricity for the good of the grid, and for the balancing purposes of the grid, but without detriment to the overall charging arrangements of the vehicle.

At present, such arrangements effectively depresses the potential energy performance certificate outcome of a property. New clause 42 suggests an action plan to improve energy performance certificates, stating:

“Within 12 months of the date on which this is Act is passed, the Secretary of State”— this new clause gives them a nice long time compared with other new clauses—

“must conduct a review…that sets out how new technologies can improve the energy usage and efficiency of premises…Such a review must include analysis of the energy efficiency benefits of energy optimisation technologies and bi-directional charging from vehicles to premises…Where any energy efficiency benefits are identified by this review, the Secretary of State must make provision…for recommendations to be made about the improvement of the energy efficiency and usage of new and existing premises.”

In other words, the Secretary of State must bring into the mainstream new technologies relating to energy performance certificate measures, and bring those EPCs up to date with what we know is now happening with energy efficiency in the housing market. The two-way process is increasingly becoming part of the household energy landscape.

I hope that new clauses 41 and 42 are helpful. Unfortunately, after the previous debate, I do not have any great faith that the Government are about to leap on them and put them into law. At the very least, I hope they highlight the fact that there is a great deal of huff and puff and not much blowing the house down. That was a badly strained metaphor, I know, but it would be a rather good idea if we went a bit further than that and did something about the legislative arrangements that will have to follow when the new ideas for better energy efficiency in homes are put forward.

These are two particular instances—in the private rented sector and two-way energy production at properties—but as we have seen the Government have effectively set out targets, ideas and aspirations in a number of other areas, and while they have not necessarily done nothing, they have not done things commensurate with the ambition. This is one case where that certainly happened in the not-too-distant past. I hope that the Committee will accept the new clauses. I appreciate that they will not be voted on until the end of our proceedings, but I hope that when we do so Members, and possibly even the Government, will decide that this is something that they would like to put in the Bill after all, and vote accordingly.

Further to my point of order this morning about declarations of interest, I have spoken to the Commons Registrar who has informed that because I personally make no financial gain from property that my wife owns it does not have to be in the register; however, I have to declare an interest at this moment that my family has a substantial property portfolio. The comments that I am about to make, however, are based on the concerns of landlords, estate agents and letting agents in my constituency.

One of the problems is if we start to over-legislate at this time. The hon. Member for Southampton, Test pointed out that, importantly, the Government are still consulting on the report. We are in danger of focusing purely on the one area of energy efficiency in the private rented sector, and in effect making landlords do things that the owner of a private property does not have to do, with the cost being passed on to tenants. Subsection (3)(a) of new clause 41 would

“enable Local Authorities to give notice to landlords that they wish to inspect a property, requesting permissions from landlords and any tenants in situ at the time to carry out an inspection at an agreed time”.

In other words, that would enable constant inspections and attempts to move forward with insulation.

We have said throughout that we have to take the public with us on this agenda. In some areas, we move too quickly to legislate on something that the Government are consulting on and that has not been properly thought through. Several times, my hon. Friends have intervened to ask where the money is coming from to do such works. At the moment, as I look at the Bill and the £10,000 cap, it is coming from the tenant. At a time when there is a political argument on both sides of the House about how people can get on the housing ladder, increasing their rents even further because the landlord has to do something that people in the private sector do not have to do will not help that cause.

There is no doubt that energy efficiency will reduce the amount of fuel that has to be used to heat a home. That is a scientific fact. We hear that it could save £1,000 a year, but that assumes that everything stays level and that we do not have to put another levy on electricity bills. I remind colleagues that when nuclear power came along, it was said that it would be so cheap to produce that we would not be able to meter it. That turned out to be far from the truth.

Hear, hear.

There you go, praise from the other side.

One of the points made by the hon. Member for Southampton, Test was about getting in and retrofitting now, and not having to do it again in 2050. New clause 42(1) states:

“Within 12 months of the date on which this Act is passed, the Secretary of State must conduct a review of the “Improving Energy Performance Certificates: action plan” that sets out how new technologies can improve the energy usage and efficiency of premises.”

I have no doubt of the intent with which that was written, but it can be interpreted very differently. It could mean that as time goes forward, the regulations will change and those with band C EPCs might now be told to come to a level that was not required at this stage of retrofitting.

One thing that I am hearing from estate agents in my constituency—of course, there is another side to what is going on with rising interest rates—is that landlords are dumping private property and getting out of the market. The hon. Member for Southampton, Test said—I have the exact words—that there was a steel within the industry of people moving towards this because they thought the regulations were coming. What it has actually done is make a lot of people think, “I am not spending £10,000 on this property. I am never going to get an £800 a month increase in rent over a year to pay for it, so I will dump the property.”

The whole point of waiting on a consultation is that we know that Governments can take a long time. The hon. Gentleman, as a reasonable man, will recognise that there have been many buffeting winds since 2020, when the report was produced, and I hope that attention will go back to those issues. I am sure that my hon. Friend the Minister will make the point that the Government have every intention of moving forward on these bills, but to take the report at this stage and bind it into law in the Bill would be, I think, a great problem.

The hon. Gentleman also commented about constituents who come to us and talk about the energy problems in their homes. I do not know how many colleagues have had constituents come to them with the problems they have had since heat pumps were fitted. A lot of grants are available for heat pumps, so they are out there. If they are not fitted alongside the system being upgraded, they do not work, and I have constituents come to me to say that. The pipe network is not big enough for the pressure; it is simple fluid mechanics. That is another example of a rush into a particular area without the technical back-up. People end up stuck—in this case, it is a council property, and people are stuck on the question of who will repair the system, because the gas-fired boiler cannot be put back in. It is another example of running too fast in a particular direction.

My hon. Friend the Minister has my support in not backing new clauses 41 and 42, because they are acting in haste. That haste could have serious unforeseen circumstances for those using the private rented sector for their accommodation. If we drive more and more landlords out of the business, that sector will decrease and there will be competition for rent because more people will be looking for it. That will come on top of the rent increases caused by doing this retrofitting. The report still needs a lot of careful consideration by the Government before it comes into force.

I am sure that my hon. Friend the Minister will react to some of those comments, but he has my support.

On a point of order, Ms Nokes. I want to seek a little clarification after my right hon. Friend the Member for Elmet and Rothwell declared his interest. I am not planning to speak on the new clause, but before we vote should I make members of the Committee aware of my entry in the Register of Members’ Financial Interests as an owner of a rental property?

I think that via that point of order you have made Members aware of your interests. As Mr Shelbrooke indicated, he sought advice from the registrar of interests and I always find it best to be cautious and over-declare rather than under-declare.

I thank the hon. Member for Southampton, Test and my right hon. Friend the Member for Elmet and Rothwell for their comments on the new clauses. In answer to the question of why we have not produced a full response to the consultation, we are committed to raising standards in the sector in line with our ambition, set out in the clean growth strategy, and we will publish a summary of responses to the consultation on improving standards in the private rental sector this year.

This year?

Yes, this year.

We are continuing to refine the policy design to ensure that the costs and circumstances relating to energy efficiency improvements are fair and proportionate for landlords and tenants, as my right hon. Friend the Member for Elmet and Rothwell pointed out. The economic headwinds that have been buffeting us, and the changing circumstances in the private rented sector in particular, have made it difficult at the minute, but as I said, we will be publishing our response—a summary of responses, anyway—this year.

New clause 41 seeks to require the Secretary of State to make regulations in relation to energy performance in existing rented premises. His Majesty’s Government agree on the need to improve the energy efficiency of buildings to lower energy bills and deliver carbon savings to meet our net zero and fuel poverty targets. Indeed, this is reflected in the Government consultation on proposals to raise the minimum energy efficiency standard for privately rented homes. Under the Energy Act 2011, the Secretary of State already has powers to amend the private rented sector regulations in order to raise the minimum energy efficiency standards and set the dates by which landlords must comply with the new regulations. The new clause would not allow us to reflect the valuable feedback that the Government received from the consultations in the final policy design, which is essential to ensure that the final policy design is fair and proportionate for landlords and tenants. As I have said, the Government have committed to publishing the summary of responses by the end of this year.

Let me turn to new clause 42. In September 2020, we published the energy performance certificate action plan, in order to ensure that consumers can trust energy performance certificates and to make sure that certificates are accurate and reliable. Certain actions are expected to require regulatory change under the new powers to be implemented. The energy performance certificate is designed to rate the energy performance of a building, as considered as an asset that passes from one occupant to another during sale or rental.

As those occupants may or may not possess energy optimisation technologies or an electric vehicle with bi-directional charging capability, it is not currently considered appropriate to assume a benefit from this in the calculated energy performance rating. Including this nascent technology, which relies on consumer behaviours and equipment not integral to the premises, would increase the complexity of the EPC scheme. Bi-directional charging is a promising technology, but it is not yet viable for use in the mass market.

Question put and agreed to.

Clause 205 accordingly ordered to stand part of the Bill.

Clauses 206 to 208 ordered to stand part of the Bill.