Examination of Witnesses (Questions 47-59)
ENVIRONMENT AGENCY
14 DECEMBER 2005
Q47 Joan Walley: May I welcome you, Sir
John, and Ms Gilder. It is always good for the Select Committee
to have the Environment Agency here. I think it has been quite
useful and helpful too that you were in for our first session
just now. By way of introduction, given that we are just kicking
off on this inquiry, if you have any comments in the light of
what you have just heard or on the general position of the Environment
Agency, we would be very pleased to hear them. Perhaps you would
introduce your colleague as well, Sir John.
Sir John Harman: Thank you very
much, Chairman. I am accompanied by Pam Gilder, who is the Head
of Sustainable Development Policy in the Environment Agency. I
am very grateful for her presence today because, as you can tell
from my voice, I cannot guarantee that it will last out. By way
of a brief introduction because I think it will be the direction
in which members wish to take the questions, first of all, the
Agency's locus in this simply arises from the observation
that the built environment, of which housing is an important part,
has a big environmental impact. I do not need to rehearse the
figures. All of you on the committee know about the carbon impact
of housing, the water impact and so forth. It is a very straightforward
conclusion from that that we would take an interest in three major
features of housing development: first of all, its location for
obvious reasons, which include flood risk; secondly, its standards,
and that was the discussion you were having with Paul just now;
and, thirdly, infrastructure. They all seem to me to be relevant
to you. The only thing in addition I would say is that I listened
with interest to about the first 20 minutes of your previous session
on the code. I would claim to be joint godparent of the code.
If we get on to that, Chairman, all I want to say is that I am
quite happy to answer on my own behalf and on behalf of the code
and the Sustainable Buildings Task Group. You will get perhaps
different answers (though I hope not too different) from the Agency.
My locus with the code is not the same as my locus
with the Agency.
Q48 Joan Walley: Am I right in thinking
that the Environment Agency was not a member of the Senior Steering
Group for the code but that Sir John Harman in a personal capacity
was?
Sir John Harman: No. I co-chaired
the Sustainable Building Task Group report which delivered its
recommendations in May 2004. Since then I have had no formal role
with the code. As a godparent I have watched it very carefully
but I have had no formal role in that. My role with the SBTG was
not on behalf of the Agency. It was in a personal capacity.
Q49 Joan Walley: Just skipping to
the Agency, has the Agency sought to influence the outcome of
the code and where it is at at the moment in any way, or have
you just been witnesses from afar?
Sir John Harman: Not being a member
of the Senior Steering Group, our ability to influence has been
rather from a distance. We have kept in touch with officials from
time to time but it has been more of a distant relationship. The
Agency, of course, is quite keen to ensure that there is a satisfactory
code, for obvious reasons.
Q50 Mr Caton: Now that your godchild
has gone out for consultation and in the light of the reasons
that you have just heard WWF give for its resignation from the
Senior Steering Group, what chance do you think there is that
the code will make any real beneficial impact?
Sir John Harman: I think we have
to be very optimistic. It certainly should make an impact. I go
back, if you will permit me, to the original report which I took
the precaution of bringing with me but I could almost recite it,
I believe. The recommendations were not just for a code, and it
is important to recognise that and I think we can talk about the
code to the exclusion of the other parts of the recommendations
which were a substantial increase in the regulatory base for housing
performance; they were also to provide a structure whereby clients
and developers could do better with a series of incentives and
information measures ("information" sounds a bit woolly)
and the use of the code levels, whatever they are to be called
(and we are now talking stars, are we not, so let us talk stars),
as a means of communicating to the public, to ordinary house purchasers,
what it was they were buying. We were offering the code partly
as a ladder by which clients could show above-regulatory performance
in environmental terms but also as a means of getting public demand
going. One of the difficulties about both regulation and code
is that they are both supply side mechanisms and you really do
need somebody on the demand side to drive demand for better quality
housing in environmental terms. To come back to your question,
yes, I do hope the code can be effective. To be effective it will
need to do what the task group originally required, which was
to start from a good regulatory basis, particularly on energy
and water efficiency, I might say, and to ensure that the advancing
levels of the code signalled advancing levels of efficiency in
energy and water so that you could not, as Paul King was saying
was one of the weaknesses of the present proposal, get perhaps
to level three without having gone beyond the regulatory base
on energy, for instance. It needs to be progressive. Otherwise
how will people know that a three-star is better than a two-star
or a five-star is better than a four-star? If we can get that
kind of progression I do think it will help to drive, together
with regulatory improvements, the sort of vast improvement in
the performance of housing stock that we require.
Q51 Mr Caton: I hear what you say
about regulation, but the fear is that most builders will not
comply with a voluntary code and even those that do will go for
the minimum requirement and not for the higher standard.
Sir John Harman: That is certainly
the fear, and the problem that the task group felt it had to try
and resolve was that clearly you would want in those circumstances
(and I think that is a reasonably good description of the mindset
that the industry has as a whole, although I could find honourable
exceptions) to construct a really demanding regulatory base and
say, "That is how we do business around here and we are all
going to play by those rules", but that in practice you would
never advance a regulatory base to reach for the sky, so to speak.
There will always be the possibility of people out-performing
the regulatory base. If it was so demanding that it brought everybody
to BedZED standards, for instance, would it ever be practical
to have it as a regulatory base? What we wanted to do, therefore,
whatever regulatory base one set, was to fight against this idea
that okay, that is what we will all do, by providing first of
all some measurements and then some incentives—and that
is the key part—by which people would be incentivised to
go further. The most powerful incentive, of course, is what your
client wants and if your client is the public sector, fine; the
public sector can be tasked to set a standard which is above the
regulatory floor. If your client is the private house buyer then
you need something in the market which will incentivise that person,
whether they think it is a good quality house because it has got
three stars or because there is some small fiscal incentive in
order to move the market that way. The members of our task group
as a whole believed that, given the right signals, the industry
could move so that a substantial proportion of it could perform
above the regulatory floor. One of the issues in that is that
there is a perception that to do so is costly and the market will
not accept that additional cost. There are only two answers to
that. One is to provide the market with the information that can
make sure that buyers are properly balancing the short term capital
premium against the long term savings they will make. The second
is to ensure that by volume, economies of scale, I suppose, the
industry could deliver these additional requirements at the lowest
possible cost, and our assessment was that this was not going
to be a king's ransom.
Q52 Mr Caton: So is there any difference
between the lower level proposed for the code and existing building
regulations?
Sir John Harman: The task group
envisaged the code taking off above the regulatory floor, so you
had the regulatory floor and the first rung of the code was above
it.
Q53 Joan Walley: That was not contested
by our previous witness, was it?
Sir John Harman: I think it is
a question of semantics, to be honest. If you have a five-stage
programme, of which stage one is the regulatory floor, providing
everybody understands that one star is the regulatory floor and
they are not sold it as something else then I do not think it
matters much. What matters is that you have a structure where
you can move forward and that has to be progressive, as I have
said. I have no particular axe to grind about making one star
equal to the regulation providing that we realise that there are
no no-star buildings.
Q54 Mr Caton: Continuing with comparisons,
which is more demanding: the highest level set out in the code
or the Building Research Establishment's EcoHomes?
Sir John Harman: At the moment
the way the code is set out you cannot tell. I cannot tell from
the consultation paper. I am sorry; I had the page open when Paul
was talking and I have closed it again, but it makes it clear
somewhere in the consultation paper that the question of what
will define the levels appears to be still out for full consultation.
Certainly that is what I am hoping because as it presently stands
it would not satisfy the requirements I mentioned a moment ago
about progressivity. We would certainly need a code where you
could identify a level that was approximately equal to current
EcoHomes "Very Good" for the very point that Paul King
made, because you need to have a level that you can peg public
clients to and it must not be worse than the present commitment
of English Partnerships and the Housing Corporation to go for
EcoHomes "Very Good". Where do I think the top of the
code will get? I really cannot tell until the end of the consultation,
but I would be very keen to ensure that it was stretching. We
were talking about points. I am looking at the consultation paper
and you need 80% of the points to get to the top level. That would
be EcoHomes "Excellent", I think, under any circumstances.
Again, I am not answering for the Environment Agency here but
the task group wanted to cut out the difficulties of creating
a new system by using the existing BRE aim, so I am happy with
that, and in so doing what we ended up with was something which
would give the same sort of reliable measurements of performance
as EcoHomes gives but do it on a scale which would be far greater.
In answer to an earlier question, Paul said he could not tell
you, and neither can I, how many homes are now being built to
EcoHomes standards of any sort, but 18 months ago when we completed
this work it was 5,000. That is not enough.
Q55 Mr Caton: In your submission
you talk about the need for local government to extend the code
standards to private homes but you indicate that you are not sure
how the Government intends to do this. Have you raised this issue
with Government?
Sir John Harman: We have in our
own evidence on a number of things. Pam may be able to give you
more detail but yes, we have. An issue which I do not think has
yet been resolved in the private housing market, as I have already
mentioned, is how you get incentives, perhaps through labelling.
Another way that has been demonstrated in, for instance, Merton
is to make (and they will not use the code; there was no code
to use) an equivalent request part of a planning specification.
There has been a lot of debate about whether this is appropriate
use of the planning system. It is my view and the Agency's view
that it can be and that it ought to be, that we should not be
forcing local authorities to use the code in all circumstances
but it should be available for them to say, "These are the
standards we require in borough X and we will use our planning
powers to help achieve them". The code then would give them
a measure, a standard, if you like, which would enable that to
be an easier thing to do. This is very much a question on which
I have a view but no more than that. I have no particular lever
on that one.
Q56 Joan Walley: Can I press you
on that point? I understand entirely about local authorities being
free to do whatever is in the best interests of their locality
but is there not a danger of reinventing the wheel so that for
every planning decision that has been taken a huge amount of work
is going to have to be done to incorporate or embed this basic
floor level of standards into every single development that is
coming about? We have got a tradition of planning guidance, in
whatever guise it is adopted. Surely we should be setting a minimum
standard?
Sir John Harman: I agree with
you: we should be using it to set standards. One of the purposes
of all this was not to create yet another measurement for the
building industry to get confused over. It was to displace the
possibility of burgeoning different standards coming up and to
have a nationally uniform standard, if you like, which the industry—and
I include in that the planning industry—could use and we
would all know what we were talking about. We have not got such
a tool because we have not got a code yet. We have got proposals.
Q57 Joan Walley: But there is agreement
that the code should be the highest possible standard?
Sir John Harman: The code should
certainly get you to the highest possible standard. Five stars
should get you to the highest possible standard.
Q58 Mr Caton: Many of the memoranda
we have received agree with your own submission that the Government
needs to put in place fiscal measures to reward and encourage
better environmental design. Have you seen any evidence that the
Treasury is prepared to go down this route?
Sir John Harman: Very little.
Q59 Mr Caton: Is there anything in
the Pre-Budget Report that leads you to feel encouraged?
Sir John Harman: On the fiscal
side? No, not particularly. There are other things, yes, but not
on the fiscal side.
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