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The £88.5 million can be used to tackle some of the problems that were identified earlier. Only 351,000— 10 per cent.—of local authority properties in Great Britain meet the full insulation standards. How do we tackle that? The decent homes standard and the money that comes with it is part of the solution. Decent homes standards are set separately from building regulations—indeed, their criteria are slightly higher. Performance criteria include providing a reasonable amount of thermal comfort through effective insulation and efficient heating. There is much further detail. The new clause would enable that requirement to be supported by local authorities through their decent homes grant.
Earlier, I mentioned fuel poverty. Fuel-poor households are defined as those that need to spend more than 10 per cent. of their incomes on adequate heat and lighting. The Parliamentary Office of Science and Technology note on the matter states that some 2 million households are affected by fuel poverty. I suspect that the rising cost of energy means that the position is worsening. Without new clause 1, the Bill might unwittingly contribute to making the position worse. I make the point to presage arguments that I shall present when we consider the next group of new clauses.
Renewable energy, from green sources, is potentially more expensive to the consumer than energy from traditional sources. If we are to start requiring renewable energy in the wider sense as part of new developments in clause 1, the cost of heating homes may increase. We could resolve that through accepting the new clause and requiring better insulation, which counterbalances the potential increase in the cost of green energy. We must do something for the 2 million homes in the UK that are classed are fuel poor. Uptake of cavity wall insulation is low, and the hon. Member for Sevenoaks needs to reflect on the Bill’s potential impact on fuel poverty.
In response to an intervention from my hon. Friend the Member for Battersea, I mentioned home information packs. From 1 June last year, home owners throughout England and Wales are required to provide a home information pack when marketing their homes. It was a somewhat controversial measure, which is not fully in force. However, one of the requirements is to provide an A to G energy efficiency rating, similar to that given to electrical goods, to give buyers an assessment of a property’s likely running costs before they buy it.
We all know that, if we buy a house and get a normal survey, which states that work, such as rewiring, needs to be done, we negotiate with the vendor a reduction in the price to reflect that. The energy efficiency rating element of the home information pack can have the same effect. If one is buying an expensive house with a low energy efficiency rating, one inevitably goes back to the vendor and says, “Look here, your windows are rattling, there’s no loft insulation, the pipes aren’t properly lagged. I’ve got an estimate of what it’s going to cost to put it right and I want a reduction in the sale price to reflect that.” I therefore believe that the energy efficiency rating is probably the most important element of the home information pack, because it is one of the moments in a building’s life—when it changes hands—when something can be done about the energy requirements, especially through insulation.
Martin Linton: Does my hon. Friend agree that an important element in the progress that we make towards insulation standards, and therefore towards dealing with climate change from buildings, is not just the regulations that local authorities can insist on, but the publicity that they can give them? A concomitant of better regulations is publicity that will reach the people—owner-occupiers, in particular—who can benefit from them and take advantage of grants. For a local authority to cut its publicity budget is to take a regressive step, because it is one of the essential weapons in making progress towards better cavity insulation.
Mr. Dismore: My hon. Friend makes an important point. The energy efficiency rating for the home information pack will draw the problem to the attention of the purchaser of the property, but it will not go beyond that. It would be interesting if, for instance, on a street of similar houses, the energy efficiency rating could be made more widely available to the owners of all the houses. If people’s houses were built at the same time, they might have the same construction problems.
Although several hundred people have taken up the Warm Front scheme in my constituency, I am still amazed at how few have taken advantage of what is essentially free money—and not just free money to do the improvements, but free money in the long term, through the reduction of heating bills. Although the people who run the scheme in my patch are good at telling me what is going on, I am not entirely sure that they are doing as much as they could to tell the wider community what is available. That could be done through various means, including pensioners groups, outreach work—
Madam Deputy Speaker: Order. I hope that the hon. Gentleman will not stray too far down that road.
Mr. Dismore: I apologise, Madam Deputy Speaker. My hon. Friend the Member for Battersea set me off. The Warm Front scheme ties in with new clause 1, as an example of how a local authority could, under my proposals, say that it wanted to ensure that a scheme applied to a particular building.
Stephen Pound: Bearing in mind your rigid strictures, Madam Deputy Speaker, I will not give the warm words of praise to that eager partnership that I would have given otherwise. My hon. Friend’s new clause 1 is permissive: he is saying what a local authority may do, not what it shall do, which is implicit in the Bill as drafted. House prices are falling. If one talks to builders such as Mr. Dempsey in my constituency, to whom I talked last week, they will say that in a falling house market, margins are shaved. Even though it goes against the grain of my hon. Friend’s naturally liberal and permissive nature, has he given any thought to whether new clause 1 should be an instruction, rather than a permission?
Mr. Dismore:
My hon. Friend makes an important point. I hope that we will come to costs in the second group of amendments. At the risk of straying beyond new clause 1, may I explain that I had tabled another group of amendments that would have changed the permissive nature into a mandatory nature, but regrettably
Mr. Speaker did not select them for debate. Obviously I would not criticise Mr. Speaker’s selection of amendments, although my hon. Friend may have done so indirectly and unwittingly. A potential problem with my new clause 1, and clause 1, is that if we do not require local authorities to do such things, they might not do them.
Stephen Pound: It is important that I place it on the record—not just for the attention of the House, but because of the ever-present ears of Mr. Speaker—that I meant no such criticism.
Mr. Dismore: I would certainly not question my hon. Friend’s intentions in that respect. He made his intervention unwittingly, perhaps having read today’s selection of amendments, rather than the full list that I tabled earlier in the week. I would not blame him for that, however, because there were quite a few amendments.
I was talking about the importance of home information packs in relation to new clause 1. For the A to G energy efficiency rating,
“Performance is rated in terms of the energy use per square metre of floor area,”
“based on fuel costs and environmental impact”.
The pack will include average costs for heating and lighting, as well as, importantly,
“how to cut costs with energy efficiency measures, such as thicker loft insulation, draft proofing, installation of double glazing, more efficient boilers or even microgeneration”.
That entirely squares with the point that my hon. Friend the Member for Battersea made about information and education.
It will be interesting if a local authority that has decided to go down the new clause 1 route pulls together some samples of home information packs—they are produced by the vendor, so presumably an authority could collect them together from estate agents—to see whether there is a general pattern in its area. That relates to the point that I made to my hon. Friend earlier about different areas having different requirements, because of different types of property configuration. A local authority could go round the estate agents and collect a good sample of HIP energy efficiency ratings, which could then inform the level of the requirement that it would like to impose through new clause 1 for insulation. If one street turned out to have a particular problem, the local authority could do something about it. That would be a good way to proceed.
10.45 am
Chris Mole: I thank my hon. Friend for giving way a third time. He has said a lot about the implications for domestic dwellings and made some good points about the relevance of the home information packs. However, new clause 1 refers also to commercial developments, for which no similar mechanism exists. Does he feel there should be one, and has he considered the wider implications of new clause 1, in imposing what could be considered an additional burden on business?
Mr. Dismore:
My hon. Friend makes an important point. The Bill as drafted makes no distinction between forms of property—it just leaves the question open. Clause 1 as drafted talks about planning policies in
general terms, but does not refer specifically to domestic or commercial properties, which is something of a lacuna. Without wishing to tread on Mr. Speaker’s selection, I should point out that I tabled amendments to draw out that distinction elsewhere in the Bill. If we are going down the route proposed, it is important to make it clear—as my new clause 1 does, but existing clause 1 does not—that we are talking about both domestic and commercial properties.
There is no way that the home information pack could refer to commercial properties—I suppose that it would have to be called a commercial property information pack or something like that.
Stephen Pound: It could be called a CHIP.
Home information packs have been controversial, but their object is to protect the purchaser, to try to reduce the costs of the conveyancing transaction and to speed the process up. The process is different in commercial sales, because people are buying for different reasons and the buildings will be all sorts of different shapes and sizes. With domestic properties, there is Buckingham palace on the one hand and my flat on the other. In between, however, we are talking about a pretty standardised range of properties. A commercial development could mean anything from a shop to a factory or office block. That would make things rather difficult, given the scale of some of those buildings, so I am not sure whether that would be the right route. However, local authorities would be specifically empowered under my new clause 1 to impose insulation requirements on commercial buildings.
I suspect—although I am afraid that I have no evidence for this in the research that I have done for today—that the amount of energy lost through poor insulation in commercial buildings far outweighs that lost in domestic buildings, given their scale and the fact that the workers in them do not necessarily have any incentive to save energy and reduce costs. There may be such incentives for the owners, but not necessarily for those working in the buildings.
It is important that commercial premises should be brought within the ambit of the Bill. When the hon. Member for Sevenoaks responds on new clause 1, perhaps he can say whether clause 1 as drafted is intended to include both commercial and domestic buildings. For the avoidance of doubt, let me explain that I framed my new clause 1 to make it clear that it was so intended.
Stephen Pound: I am surprised at my hon. Friend’s comments, because I would have thought that for commercial premises there would be a considerable financial incentive for the operators of the process or the owners of the building to reduce energy costs. Again, it would be a benign advantage in that insulation also means cost reduction. As with electricity consumption, where people try to reduce the amount they use, so in this case they would wish to reduce the amount of heat generated. Surely that would provide a commercial imperative.
Mr. Dismore: My hon. Friend may have misunderstood what I said, or perhaps I did not express myself clearly enough—
Stephen Pound: Probably the former.
Mr. Dismore: Probably the latter. I entirely agree with my hon. Friend’s point. The problem is that for huge buildings that may also be old—perhaps dating from the 1930s or 1940s—the cost of insulation, reflecting the scale of the buildings, may be astronomical. My hon. Friend may well be right about making energy savings, but my point related to those working in the building, who have no personal incentive to carry this out. The building owners and the commercial company operating within the building certainly would have an incentive, which is why the new clause gives local authorities the power to make requirements for better insulation in respect of commercial as well as domestic buildings. I wanted to spell it out that I was talking about not only homes but both sides of the equation. That is why I framed new clause 1 as I did—precisely to answer my hon. Friend’s point and to ensure that commercial buildings are covered as well.
When I looked at the website of my own local authority, Barnet council, I found that it was rather thin on this aspect. It says that the Home Energy Conservation Act 1995
“places a duty on local authorities to improve the level of energy efficiency in all of their houses by 30 per cent. over 10 years. Since then, energy action areas have been introduced in Barnet to help improve the energy efficiency in the borough’s housing in line with the Act”.
I suspect that most of that is being provided for through the decent homes grants from the Government. I am afraid that Barnet’s local authority does not have a very good record or reputation for attributing where resources come from.
The most important aspect here is regeneration, which has been attempted in respect of three big housing estates in my constituency. The regeneration has been talked about for seven years, but very little has been done. Even if the work on one estate were to start tomorrow, it would probably take, including those seven years, 25 years to complete, yet these homes are woefully energy-inefficient. Bearing in mind the large number of properties on the estates requiring regeneration, I suspect that Barnet council will not meet this particular target.
The building regulations, which we have already discussed, are relevant, as is the standard assessment procedure for the energy rating of dwellings. In Barnet, the national home energy rating is relevant and a minimum standard of eight will be sought. As regards the standard assessment procedure, a minimum rating of 81 or a B rating will be required for new homes. Why it is a B rating, I do not know. Perhaps it is a matter of Barnet doing a bit of backsliding.
To conclude my remarks on this group of amending provisions, I hope that I have set out why I believe insulation is an important part of the equation when we are thinking about local authorities having new powers to deal with energy issues and climate change. We all want measures to be taken to reduce the impact of climate change. The Bill goes a long way towards achieving that, but I think that the hon. Member for Sevenoaks left half the equation out. I hope that my new clause will find favour with him and with the Government. We can then move forward with an improved Bill that deals with both sides of the coin.
Mr. Michael Fallon (Sevenoaks) (Con): It might help if I set out my view of the amending provisions. I am very grateful to the hon. Member for Hendon (Mr. Dismore) for tabling the amendment and new clause and setting out the reasoning so fully that there can be no misapprehension by the House of the strength of the case behind them. Equally, however, I would not want the House to labour on with the apprehension that the amending provisions actually strengthen the Bill in the way that he suggests. I shall explain more fully.
The hon. Gentleman must be right that we need to balance the production side of the legislation in encouraging microgeneration with the energy efficiency side in ensuring that, once generated, energy is used as efficiently as possible. By encouraging more energy efficiency, we should be reducing the amount of energy—micro or macro—that needs to be generated. He is therefore right to ask us to look again at the balance between the production and the efficiency side of the equation.
If we look specifically at amendment No. 11, we find that the insulation standards that the hon. Gentleman wants included in the Bill—it is right that they should be—are already included in it under the energy efficiency standards. The national policies for energy efficiency standards are dealt with under clause 1(7)(c) and the energy efficiency standards with which local authorities can require compliance are dealt with under clause 1(1)(c), so we do not need an additional sub-paragraph (d) to specify insulation standards as a national policy when they are already included in the energy efficiency standards promoted nationally, which must be complied with locally. If insulation standards were not included, I would certainly want to include them, but they are already covered, so the amendment does not strengthen the Bill in the way that he suggests.
On new clause 1, let me first give the hon. Gentleman an assurance on the specific point he raised about the definition of development. It is in the nature of private Members’ Bills that we try to get the drafting as taut as possible so that Bills are limited and restricted in their purpose, but I assure him that the references to “development” throughout clause 1 include all development—domestic and commercial—so we do not need to break it down as he does in new clause 1 and distinguish between the two.
Indeed, I gently suggest that making that distinction might weaken the Bill because some developments are neither residential nor commercial—public facilities, for example. The drafting for domestic and commercial instances would add a further lacuna—a term that the hon. Gentleman used—to the Bill. Let me reiterate my assurance that the Bill covers all development—residential, commercial or whatever.
Stephen Pound: That same point occurred to me as I wondered where football stadiums would fit into the Bill. Would the hon. Gentleman consider making his clause 1 even more explicit, perhaps by including a term such as “all”, or is he entirely comfortable with the current drafting? It worries me that some people, often ex-employees of local authorities, spend an enormous amount of time finding their way around planning regulations and planning policy statements, so would it not be worth being more specific?
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