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I thank my hon. Friend; I am talking about my right hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). He set companies the challenge of building a £60,000 house that would meet
eco-standards. A German company was able to do it by making all the parts of the house in a factory and putting them together on site. Apparently, that is called an MMU. I do not know what MMU stands for. [Interruption.] I think the first letter stands for modular and the last for unit.
Of course, the suggestion is that prices will drop as demand increases. As we have mentioned, an energy-efficient house works out rather cheaper in the long term. The Government are now encouraging that modern method of construction, or MMCan MMU must be a modern method unitwhich they think can achieve a step-change in the construction industry. That method involves prefabricating houses in factories. The potential benefits are faster construction, fewer defects and reductions in energy use and wasteor so it is claimed. Hon. Members may be aware of the old prefabs that were put up after the second world war to meet the housing crisis; they were far from doing any of those desirable things.
Chris Mole: A business in my constituency used to engage in the off-site fabrication of housing components, which could have high specifications for thermal insulation, acoustic insulation and all the other desirable features to which my hon. Friend has referred. It lacked the drive from the registered social landlord sector to get the business that it needed to sustain its activity on a long-term basis, and it has unfortunately had to consolidate its activities into the constituency of my hon. Friend the Member for Livingston (Mr. Devine).
Mr. Dismore: My hon. Friend has made an important point, and clause 1 can provide the answer. If we can get the right scale of development in the first place, the cost will come down and the proposition will become more attractive. Clause 1 addresses the requirements set by local authorities. If a local authority were to say to a registered social landlord, We want you to build these new houses in a mixed development working with a commercial house builder, which is the trend these days, the volume of orders to the company mentioned by my hon. Friend would increase and the price would decrease. The Parliamentary Office of Science and Technology has pointed out that as the technology and the ability to produce such things develop, so costs will come down and the proposition will become more appealing.
Stephen Pound: I was initially reluctant to intervene on my hon. Friend because, following an earlier intervention, I have received a number of messages pointing out that the anti-flash hoods worn by young matelots in the Royal Navy did not contain asbestosthey contained some other foul chemical that was incredibly scratchy and very unpleasant, but it was not asbestos. Is my hon. Friend seriously suggesting that off-site fabrication is the solution to energy inefficiency? We have been here before, and we have had industrial building systems methods and a range of off-site fabrication methods, but unless we consider the totality of construction and energy efficiency at the production, construction and occupation phases, we will not address the issues raised by global warming, climate change and energy inefficiency.
Mr. Dismore: My hon. Friend is right. As I have said, one must be sceptical about prefabricationit may have a new name, such as MMU or MMC, but ultimately it is prefabrication. The question is whether it will produce quality homes. I have mentioned the prefabs that were erected immediately after the second world war. As a young boy, I had a friend who lived in one, and they were not nice houses or substantial constructions. Many of the blocks erected in the 1960s were built from prefabricated units, and we currently face the problem of knocking them down and starting again.
The question is whether standards of prefabrication have significantly improved to enable such houses to be built effectively. I did not see the £60,000 house that the German company put together, so I do not know whether it had lasting qualities, but some new houses that are built on sitewe all have such private sector developments in our constituencieshave all sorts of construction problems. I have received all kinds of complaints about houses that were built by companies that are household names. In those cases, even though the quality of the construction is covered by the house builders guarantee, the construction is not as good as it should be. There is a general question about standardsultimately, you pays your money and you takes your choice. If we can use that mechanism to produce affordable, energy-efficient, high-quality houses, it must be welcome. However, that is a big if, and my hon. Friend was right to raise that point.
While MMC is less expensive than traditional methods, some house builders have suggested that the costs are 7 to 10 per cent. higher. Such construction methods may well enable properties to be built more quickly than would otherwise be the case through standardisation, and if we are going to try significantly to increase housing supply, they may provide one of the answers. The building regulations set minimum performance standards, which may well be a way of resolving the issue.
Chris Mole: I warn my hon. Friend that the residents of Inverness road in my constituency would caution him against a general criticism of post-war prefabricated buildings, because they are very fond of their homes. My point in raising the work of the business formerly in my constituency was that the kind of standards to which it was workingparticularly given its use of computer-aided design and manufacturedeliver exactly the gains in production quality and speed that he is speaking about.
Stephen Pound: I willingly drag my hon. Friend back from east Yorkshire, although some in the House may wish that he was heading in the opposite direction. In the context of my hon. Friends comments on new clause 8, is there not a fundamental dichotomy at the heart of the Bill? It is almost a case of, Make me good, but not yet. There is no point whatever in having energy-efficient homes if people do not want to live in them or if they cost too much. Prefabs are very popular; Baird avenue in my constituency was built before the war and it is very popular.
Mr. Dismore: I am grateful to my hon. Friend, who has made a good point. Most people would like to live in an energy-efficient house; I would be surprised if anybody did not want to, as fuel bills would ultimately be cheaper, year by year. The problem is the capital cost: people would like the revenue savings, but not the initial capital cost. New clause 8 is getting at whether we can somehow square the circle; subsection (e) is about
the impact on the provision of affordable housing,
Stephen Pound: To follow on from that point, I should say that I am becoming more attracted to the original wording. I drive a car that is propelled by liquefied petroleum gas, but I had to pay a couple of thousand pounds extra for that. I was able to do that, but people who cannot will not get the benefits involved. Is not the more permissive nature of the original wording a method of addressing that problem?
Mr. Dismore: It is not an either/or situation. The fact is that the original wording will stay; new clause 8 is a supplement, not an alternative, to clause 1. Clause 1 sets out what a local authority may require developers to do; new clause 8 says that the local authority, in using its discretion to set the new requirement, ought to bear in mind the coststo the consumer, the house builder and the wider society through the impact of a possible reduction in affordable homesof doing so. We can have both wordings. All I am saying is that local authorities should set the requirement with its eyes open, and in such a way that local people are aware of the consequences. That would ensure democratic accountability.
Earlier, I mentioned the problems of fuel poverty. I will not go through the costs of energy for the consumer in detail again; I simply remind the House that 2 million UK households are in fuel poverty. If the consequence of this policy is that their fuel bills will increase by £20 a weekpotentially by more, given increasing energy coststhat will do nothing to alleviate fuel poverty. It will simply make it worse. We have to take that factor into account. By imposing these new requirements, the hon.
Member for Sevenoaks could reduce the cost of energy to people in fuel poverty, so that is an argument in his favour.
Ultimately, however, we have to consider the impact on housing supply. In my constituency, we have some 13,800 families in desperate need on our waiting listthe fourth highest figure in London. That includes nearly 2,500 families in temporary accommodation looking for transfer. Last year, Barnet, to its shame, provided only 666 new homes, of which only 58 were for rent and eight for intermediate saleonly 10 per cent., the worst record in the whole of London except the City, which is a special case.
Mr. Dismore: I think that very few, if any, is the short answer to that, bearing in mind that under immigration law, as I recall it, most foreign nationals, unless they are in extreme circumstances, are not entitled to social housing.
Last year, only 10 per cent. of new homes in my constituency were affordablethe worst record in London. If we include properties that were brought back into use, which my hon. Friend the Member for Battersea talked about earlier, the figure reduces to only 8 per cent. If the costs of housing development go up dramaticallysay by 40 per cent., as some have suggestedthat could have a significant impact on the ability of the London borough of Barnet to deliver the affordable homes that it has so far shown itself to be unable and/or unwilling to deliver.
I am sure that the hon. Member for Sevenoaks does not want a reduction in affordable housing to be a potential consequence of his Bill. Perhaps he could indicate how much impact he thinks the additional costs on a local authority that would flow from new clause 1 would have on affordable housing. We are trying to achieve two desirable objectsreducing energy consumption or using energy from green sources and, at the same time, doing something about the housing shortage in my constituency, in London, and more generally across the country. He needs to consider the price tag of his Bill for a local authority considering whether to impose requirements that go beyond the national requirements. It is good to do
green things, and his Bill is a good thingwe all agree on that, I hopebut we must look at the other side of the equation. Local authorities would be given these powers and told that they could impose better standardsa good and desirable thingbut they could get carried away by the great achievement of greening their borough and not think what the longer-term consequences might be.
New clause 9 suggests that when a local authority decides to exercise its discretion there should be maximum consultation. I hope that the hon. Member for Sevenoaks will not object to new clause 9 when he responds. If we are in the era of consultative government, it is essential that people who will be affected by decisions are consulted about the consequences of those decisions. First, we need to consult local businesses and house builders, because they will be directly affected if they are expected to meet higher standards. Residents associations and social housing providers also ought to be consulted, for the reasons we have already discussed. Residents associations should be consulted if a new development is to go ahead, so that we can get the consumers point of view on whether they are prepared to pay an extra £20 a year to have their energy provided from green sources.
Social housing providers should be consulted because of the impact not only on their tenants but on their ability to meet housing needs, so before any decisions are made to exercise discretion, it is essential that the hon. Gentleman accept that, at the very least, appropriate consultation should take place. There is no need to go beyond the list that I have set out, and I am prepared to consider other suggestions. I do think, however, that new clause 9 provides for the minimum that should be required of a local authority in setting out its policies.
I hope that when the hon. Gentleman comes to reply in what has been a short but, I hope, illuminating debate, he will reflect on some of what I have said, such as the need to consider the extent of microgeneration in the local authority areawe had a difficult discussion about locality and what it meansand take into account the availability of local supplies of such energy. There are also difficulties about the definition of locality in clause 1, the costs involved, the impact on housing, and the essential fact that people must be consulted if additional obligations are to be imposed on them.
We are talking about a group of new clauses, and it might be useful if I addressed the issue of cost. The hon. Gentleman is quite right: costs are an important part of the move towards alternative energies, and high costs are one of the reasons why that move has been so slow. I want to say several things about costs. First, as the hon. Member for Ealing, North (Stephen Pound) reminded us, the Bill is permissive. It does not instruct any council to do anything, so a council concerned that the costs, for example, of requiring microgeneration in its area are too expensive because of the features of that area does not have to use the scope of the Bill. It is permissive, and does not impose costs on a local authority that does not want such costs imposed on it.
Secondly, I took care to consult the London borough of Merton, which pioneered the Merton-style rule, and I received assurances as to what the impact was. I would not be promoting the Bill if I thought that it discouraged the amount of affordable housing provided borough by borough or district by district. Merton reassured me about that, and indeed, it has gone further. It has found no developer in the past four years who had any difficulty in complying with the requirements. I hope that that reassures the hon. Member for Hendon on the issue of cost.
Just as the hon. Gentleman has asked me to reflect on cost, I ask him to reflect on another cost matter. Many alternative technologieswind turbines, solar panels and so onare relatively expensive. All new homes have to be zero carbon by 2016only eight years away. Unless we get going and do more locally as well as centrally, the supply chainthe micro-industrywill not be able to gear up and reduce the costs that derive from greater economies of scale. I hope that he will reflect on the fact that passing such a Bill will reduce overall costs because more councils will follow Mertons lead and the Governments PPS, and eventually the industry will tool up and costs will come down.
New clause 8 deals with viability. The Bill provides that whatever a local authority does, it must be consistent with national policies. I am sure that the Minister will confirm that it is Government policy and part of the climate change planning policy statement that local authorities must consider viability. That is therefore one of the national policies to which they must have regard under the measure.
shall take into account
in new clause 8 because it could weaken the Bill. A developer who appealed against a micro-energy requirement that a council was trying to impose on him because he wanted to bring in all the energy from pylons could argue that it had not taken the cost sufficiently into account.
Let me deal with new clause 3. Local authorities must already have regard to several statutory requirements on microgeneration. The Climate Change and Sustainability Act 2006 requires councils to have regard to the energy measures report, which the Government produce and revise from time to time. The new clause would therefore simply add an overlapping statutory requirement, which we do not need.
New clause 7 would require local authorities to take account of the availability of microgeneration in their area. The climate change planning policy statement already requires that. Councils have to understand local feasibility and the potential for renewables and low-carbon technologies in their developments. Again, the wording,
shall take into account
slightly waters down the Bills point. I want to permit local authorities to impose a requirement of up to 10 per cent. of energyor whatever ceiling they have set. New clause 7 would not strengthen the Bill.
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