Clause
242
Certificates
for new
homes
Question
proposed, That the clause stand part of the
Bill.
Grant
Shapps:
Thank you, Mr. Gale. We can broadly
welcome sustainability certificates, although we will be interested to
see how they work. There is a lot of detail in clause 242 and
subsequent clauses about how these certificates should operate. The
Government should be wary, following their experience of introducing
another kind of certificate in the form of HIPs. I know that
the experience will be a scar borne by the Minister and his right hon.
Friend the Minister for Housing for years to
come.
The certificates do not appear
to have a cost or even an estimated cost attached to it. I imagine that
that is because it would vary widely depending on the kind of
new home. The scope of the sustainability certificate—I do not
want to stray into clause 243—is quite broad. There is a long
list of different areas that it may cover.
I want to pick the Minister up
on clause 242(8) and the unusual drafting language. It says:
“The seller is not
required to comply with a requirement imposed by virtue of this section
if the seller has a reasonable excuse for not complying with the
requirement.”
I
wonder whether the Minister could clarify—I congratulate the
drafters for not writing this in gobbledegook—what a reasonable
excuse would
entail?
Lembit
Öpik:
I share one of the concerns that we have just
heard, and it relates to certificates as a whole. The certificates
represent a comprehensive effort by the Government to enshrine
sustainability considerations in the housing market. It is worth
remembering that the overwhelming majority of property that
will accommodate the British population in 2050 has already been built.
As such, our real challenge is not to ensure that new housing stock is
sustainable, although that of course is important, but to bring
existing stock up to sustainability standards. This can be done at a
high price today, but hopefully at a much lower price in the future. My
worry is whether a certificate will really do what the Government want
it to do.
I am
slightly confused, for example, by the wording of clause 242. It seems
to require compulsion, but also to allow mitigating circumstances. It
makes me believe that those people who have a good story to tell about
their houses will get a sustainability certificate, and the owners of
those houses which leak energy like a sieve will probably not seek such
a certificate.
I have
two questions, therefore, for the Minister. First, how can we be sure
that the sustainability certificates will not be self-selected by those
who want to talk positively about their sustainable house and that
there will be no compulsion for those with less sustainable houses to
come clean about that. Secondly, how confident can we be that these
certificates will make a positive impact, given that the home
information packs have everything apart from solid data behind them to
prove their efficacy for the housing market and for a potential
purchaser?
Mr.
Wright:
This is an important part of the Bill. We have
spent a lot of time in Committee talking about more homes and better
designed homes. This part of the Bill talks about greener homes, and is
absolutely essential to achieve the world-beating ambition that my
right hon. Friend the Minister for Housing has set the industry of
making sure that all homes built after 2016 are zero carbon. It is an
important point. As the hon. Member for Montgomeryshire said, we do
need to address the fact that homes “leak energy”
because—as I have pointed out to the Committee already—27
per cent of all of the UK’s carbon emissions come from domestic
dwellings, and we need to address that.
We need to
look at this in the round, and the measures that we are introducing to
improve the sustainability of new homes will include a major
progressive tightening
of the energy-efficiency standards in building
regulations. This will mean a 25 per cent. improvement against current
standards in 2010, followed by a 44 per cent. improvement in 2013 and
then, in 2016, the zero carbon target that I mentioned earlier will be
introduced. This will
improve the energy efficiency of both the fabric of homes and of the
type of energy supplied. In December last year, we published a new
planning policy statement on climate change. It puts climate change at
the very heart of the planning system by ensuring that new communities
are located and designed in a way that reduces the need for travel and
makes best use of low-carbon and renewable energy. In addition, since
October 2007, a stamp duty land tax exemption for zero carbon homes has
been in place, so that houses can act as an incentive for developers to
build zero carbon homes. We will also shortly introduce new minimum
standards in building regulations to make new homes more
water-efficient.
Clause 242
allows the Government to make regulations to ensure that anybody
building a new home has very clear information on the sustainability of
that new home. This will be in the form of either a sustainability
certificate showing that the home meets higher sustainable standards
than a home that has been built to minimum regulatory standards in
building regulations, or a written statement that the home does not
have a sustainability certificate. These certificates or statements
must be provided free of charge to the home buyer. It is important that
we are making sustainability assessments, and I stress the word
“assessments”, mandatory for all new homes. We are making
the provision of clear, transparent information on sustainability
mandatory and this can include statements of non-assessment, which are
self declarations and do not involve employing an
assessor.
2.45
pm
In
England, it is proposed that the sustainability rating system will be
the code for sustainable homes. This code was introduced in April 2007
and is an assessment and rating system that provides a framework within
which house builders can improve the overall sustainability of
new-build homes. The Code provides a mechanism by which builders can be
recognised for going beyond the building regulations for energy and
other aspects of
sustainability.
The
lack of credible information on the sustainability of new homes is
limiting our efforts to encourage the market to provide more
sustainable homes. Home buyers currently have limited information on
the environmental performance and wider sustainability of new homes. I
strongly believe that this clause will ensure that information is
available on all new homes to allow purchasers to make informed
choices.
Sir
George Young:
As I understand it, this only applies when
the property is sold for the first time. If I buy a property from
somebody who bought it when it was new, do I also get the
sustainability certificate, or has it dropped out of the equation once
the first transaction has been
completed?
Mr.
Wright:
This rating for new homes is a snapshot in time.
The right hon. Gentleman might purchase a new property and make
changes, put a new bathroom
in, or whatever. If he goes on and sells it,
the environmental impact on his home would be captured in the
energy performance certificate as part of the home information
pack.
Sir
George Young:
I may not know whether or not that property
had a sustainability certificate when it was
built.
Mr.
Wright:
I am sorry, I did not quite catch
that.
Sir
George Young:
If I buy the property from somebody who
bought it as new, I may not know whether that property had a
sustainability certificate when it was built or
not.
Mr.
Wright:
I imagine that the rating would be part of the
selling pack. It could be that the house had a code rating 3, for
example.
Can
I clarify one thing? I have been passed inspiration. I want to make
something clear, in case I have misled the Committee. We are not making
assessments mandatory, we are making rating mandatory. There could be a
statement of non-assessment where the property has not been given a
rating. I hope that that is
clear.
Before I go on,
I would like to make a point that links in with the HIPs issue, which I
have debated on many occasions with the right hon. Gentleman.
Information for purchasers of new properties is absolutely vital to
drive up environmental standards. I draw the attention of Members to
fridge ratings. The market moved considerably when easy-to-understand
ratings for fridges and other electrical appliances were provided.
Everyone is very clear about what a fridge rating A means and what a
fridge rating C means and it is rare these days, because the industry
has responded to the system, to see a fridge rating E or whatever. I
think that the market will respond to the fact we are making
sustainability ratings for houses mandatory in a very positive
manner.
Lembit
Öpik:
What I am concerned about—the
Minister’s inspiration has reinforced my concern—is the
schizophrenic nature of this clause. He is saying that every new
property must have a rating, but it is not compulsory to have an
assessment. I do not understand how one can have a rating without an
assessment.
Mr.
Wright:
That would be a zero rating. I will give him an
example. A buyer is choosing between two flats—one with a code
certificate, showing a rating of, say, one, six or five stars; the
other with a statement of non-assessment, which would be a zero star
certificate under the code. That buyer will be able to see—this
is the point that I was making about refrigerators—that they are
choosing between a sustainable home that is more economical to run, and
will reduce their impact on the environment, and a home that was
probably built, as that zero star certificate indicates, to minimum
regulatory standards.
There will be
a big push towards sustainability assessments, because they will enable
that home buyer to make an informed choice and we hope that they will
choose a home that will have a minimum long-term impact on the
environment and—probably more pertinent to them—on their
wallet. There are also benefits from other sustainability improvements
that will be put into the code.
Grant
Shapps:
We are all in agreement about the need to do these
things. At the same time, hon. Members on both sides of the House
recognise the necessity not to make things overly bureaucratic and the
balance may be there in clause 242. However, there is some concern in
the industry. I note that the Home Builders Federation has said that
there is scope for duplication between energy performance certificates
and the sustainability certificate. The federation is concerned about
whether there will be sufficient numbers of assessors to implement the
certificates, although I imagine that that is not a huge problem at
this stage, as the measure will come in over a period of time as new
homes are built. But the National Housing Federation is calling for
a
“sensible integration
of the EPC and the Code rating.”
Again, it is difficult to see how that
could be achieved, given that one is a 1 to 6 rating and the other is
an A to F. It could be confusing to a potential purchaser, who might
have a sustainability rating of 4 but an energy rating of E. How would
they determine which one to
follow?
Mr.
Wright:
I understand the hon. Gentleman’s point,
but the approach in the legislation was developed in close consultation
with the industry. For example, it is possible—and this is
something that we raised in spring and summer—that there would
be a need for a rating of zero, and an assessor would have to go out
and provide a zero-rated assessment on the property. We listened to the
industry, which said that such a requirement would entail a
disproportionate amount of cost and effort, so it was not necessary.
That is why it is possible to have a self-assessed zero certificate,
which reduces costs. Listening to stakeholders and the relevant
industry bodies has paid dividends, as we will see much greater
synthesis of EPCs and the code in future. However, I do not want to
pre-empt anything regarding future-proofing.
It is
important to point out that we listened closely to the industry, which
raised concerns about costs. However, it is very much up for the
initiative, which is a means of achieving our ambitious target of
making sure that we have zero-carbon homes by 2016. We want to make
sure that we make as much progress as possible on improved
sustainability and minimising environmental damage, while addressing
the industry’s very real concerns about
costs.
Mr.
Hurd:
I fully support the emphasis that the Government
have placed on higher energy efficiency standards for new homes.
However, I also back the concerns that my hon. Friend the Member for
Welwyn Hatfield expressed about the clarity of message to the consumer,
who is bombarded with messages on climate change. The psychology of
their reaction to such messages is now at quite a delicate stage. The
Minister spoke about the evolution and integration of the two measures.
Would it not be better to get it right now, and give just one simple
certificate and one simple message to the marketplace about
properties’ sustainability and energy
efficiency?
Mr.
Wright:
In a perfect world, it would be great to be able
to do so, but the certificates assess the sustainability of new build.
That is important, because we cannot compare apples with pears. The
nature of
the code is based predominately on new build, which could be
construction or off-site construction that is later brought to site.
EPCs and such things do not take that into account because they deal
with existing homes. As we move forward and more research is done, we
may be able to achieve greater synthesis. I am sure that the whole
House would accept that. In the meantime, new build and existing
properties must be dealt with separately if we are to address concerns
about how we calculate their impact on the environment. I hope that
that answers the questions of the hon. Members for Ruislip-Northwood,
Welwyn Hatfield, and
Montgomeryshire.
Lembit
Öpik:
It is important to probe the Government on
the measure. I understand what the Minister is saying, but I remain
concerned that the Government have put together something that, in
reality, will be bureaucratic for the general public. Most people do
not buy houses very often, and they already have to deal with the
complexities of the home information packs. Why do the Government not
seek a more user-friendly approach consistent with, for example, the A
to F-rating on white goods? It does not matter how efficient a house
is, it is the absolute energy usage which determines how much carbon it
produces. We do not need to say, “It is a huge house, but it is
efficient”. We simply need to know how much energy it uses in
relative terms. Could the Government consider before the Bill’s
Report stage whether it is possible to simplify the measure, as it
could end up a quagmire?
Mr.
Wright:
I am always happy to consider matters raised by
the hon. Gentleman and other Committee Members. There may be a
communication issue; the code is very clear about the sustainability
rating, which ranges from one to six. One star means that a building
has just achieved code standards, and six stars are the highest
possible rating. People will acknowledge and appreciate the fact that,
as in the star rating for fridges, if they buy a
six-star home they are acquiring cutting-edge technology and an
exemplar in sustainability. “Six stars are the best you can
get” is a very simple message. I accept that there is an issue
communicating that, but we can do
it.
Grant
Shapps:
That creates confusion in the consumer’s
mind. The code and the EPC are almost working in opposite ways. Under
the code, six stars are the best result, whereas with an EPC, one wants
to go the other way, towards an A, to be excellent. Is confusion not
built into the
system?
Mr.
Wright:
No, I disagree completely. If hon. Members talked
to any normal people—I do so frequently, although not in the
House—and asked them what an A meant, or what a star meant, they
would know that an A or a six-star rating, as opposed to four, three or
two stars, was a good thing. The hon. Gentleman would accept that that
is the case: it is not confusing, as it taps into the mindset of what
consumers think anyway. When people do GCSEs and A-levels and attain
A-grades, it is considered a good thing, so I do not think that there
is any difficulty with the measure.
Lembit
Öpik:
That was probably a useful exchange, as it
clarified which, in my view, was not clear. If the Minister thinks that
a six-star rating is as clear as an A, why not call it an A? People
would understand it. They have got used to such a rating with white
goods, and it would create a consistent message. However clever I
pretend to be, I am sure that I would be confused if one thing says
“six stars” , which is a lot, and something else says,
“A”, which does not sound like a lot. There is a simple
solution and I hope that the Government make a small housekeeping
change to create consistency in what they are trying to
achieve.
Mr.
Wright:
I am sympathetic to what the hon. Gentleman is
saying, but a six-star rating is higher than an A-rating under the EPC.
However, I concede that an important point has been made, and I will
look at it. The challenge is communicating the difference to consumers,
and making sure that they are fully aware of how the ratings work. May
I emphasise that the central point, which is that consumers tend to
believe that an EPC A-rating is generally a good thing, and that an F
or G-rating is generally a bad thing. As for the ratings for new homes,
one star is not particularly good, and six stars is the best one can
get. In that respect, I do not think there is any confusion, but I
concede that we may need to do further work on consumer behaviour. None
the less, I maintain strongly that the arrangement should
remain.
3
pm
Mr.
Raynsford: May I support the Minister in saying that we
are dealing with a huge spectrum of housing? In the existing housing
stock, a substantial proportion of houses is sadly in poor condition,
and necessary but elementary improvements would only bring them to a
low level in comparison with what has been achieved with new housing.
For the best house builders, achieving code level 6 by 2016 is highly
ambitious.
As for the
timetable, I understand that clause 242 will be introduced at a time of
the Government’s deciding—I cannot see a date in the
Bill. How do the Government intend to plan the introduction of the
provisions to coincide with the ratcheting-up of standards between now
and 2016, and specifically the achievement of code levels 3 and 4? I
imagine that that would be within the time scale that the Government
envisage for implementation, and I would be grateful for guidance on
the timetable.
Mr.
Wright:
We will continue to consider the timetable for
implementation. It is important that we continue to talk to the
industry about the matter to ensure that we hit those targets. The
targets for 2010, 2013 and 2016 were devised in full consultation with
the industry, and the industry is up for them. It has set itself
ambitious targets, and we want to ensure that they are achieved. We
will continue to work closely with the industry to ensure that that is
the case.
Mr.
Raynsford:
Although some of industry leaders are
definitely up for it—there is no question about that, and the
HBF is supportive—some parts of the industry are dragging their
feet. They are not committed, and would be only too happy to have an
opportunity to
renege on the commitments given on their behalf by industry leaders. It
is terribly important that the Government give a clear indication of
the commitment and the time scale for achieving it so as to allow those
who are reluctant little or no opportunity for
backsliding.
Mr.
Wright:
That is an important point. By giving the market
much more certainty over the direction of travel and what we need to
achieve with zero-carbon homes, developers, manufacturers and others
can make the investment decisions necessary for the industry to adapt
to the changing regulatory environment that will result from
improvements to building regulations and other measures. As a result of
the measures in the Bill, particularly chapter 1, the industry can make
those investment decisions now. However, I fully take on board what my
right hon. Friend said about providing certainty.
By applying technical guidance
in the code, people will have a better idea of how to attain improved
energy efficiency. The provisions underline our serious intent to make
zero-carbon performance a building regulation requirement from 2016.
The clause allows regulations to be made to ensure that a
sustainability certificate or a statement of non-assessment is given to
everyone who buys a new home, whether off plan, or after the home is
completed or newly constructed. People given an interim certificate
when buying off plan will be guaranteed a final post-construction
certificate confirming that what was designed was indeed
built.
The Homes and
Communities Agency will continue the commitment of the Housing
Corporation and English Partnerships to build homes to code level 3.
Houses built to that code will be 25 per cent. more energy-efficient
than those required under the 2006 building regulations. A typical flat
built to those standards will reduce carbon emissions by 450 kg a year.
I believe that I said on Second Reading that that is equivalent to
emissions over 1,500 miles from an average motor
vehicle.
On
devolved functions, the Minister for Environment, Sustainability and
Housing in the Welsh Assembly Government, recently announced the
adoption of the code for sustainable homes for Assembly
Government-funded social housing, although the level has yet to be
determined. Regulations to introduce a certification scheme for Wales
will be the subject of consultation when the Bill is introduced. The
hon. Member for Welwyn Hatfield made a good point about clause 242(8),
which refers to “reasonable excuse”. His argument was
well reasoned, but it is impossible to foresee every possible
circumstance in which a duty holder might be prevented from fulfilling
the duty to provide a sustainability certificate or a statement to the
effect that there is no certificate. Any excuse offered to an enforcing
authority during a review of a penalty charge notice, or on appeal
following confirmation of a notice after such a review, is to be judged
objectively, in view of what is reasonable in the individual
circumstances and given the background to the case. I am sorry that I
cannot provide the further clarification that the hon. Gentleman
desires, but I hope that I have reassured
him.
Grant
Shapps:
The Minister has done so, and I thank him for his
explanation. I commend the draftsmen on the very sensible and clear
language in the Bill.
However, I remain slightly confused about how clause 242(8)
works in conjunction with subsections (1)(a) and (1)(b). Subsection (8)
states:
“The
seller is not required to comply with a requirement imposed by virtue
of this section if the seller has a reasonable excuse for not
complying”.
Does that
mean that they do not have to comply with the requirement in subsection
(1)(a) to produce a sustainability certificate, or with the requirement
in subsection (1)(b) to provide a written statement saying that a
certificate does not need to be produced? I cannot see why somebody
would not at least carry out the requirement under subsection (1)(b).
There seems to be a contradiction in the
Bill.
Mr.
Wright:
I think that I followed the hon.
Gentleman’s argument, and I suggest that it is an either/or
situation. The seller is required to provide either a sustainability
certificate or a written statement to that effect. Subsection (8) deals
with non-compliance conditions, and it is either the sustainability
certificate or the written statement that need not be supplied.
However, I understand the logic of the hon. Gentleman’s argument
about why a seller would not provide a written statement, which returns
to the point about “reasonable excuse” that he made
earlier.
Grant
Shapps:
So effectively a seller could comply either with
subsection (1)(a) or with subsection (1)(b). If they failed to comply
with either of those provisions, they would simply need to comply with
subsection (8), in which case they would comply with subsection (1)(b)
in the process. That seems a circular procedure. Have I understood it
correctly?
Mr.
Wright:
No, I suggest that the hon. Gentleman has not. The
onus is clearly on the seller to provide the certificate, or a written
statement to that effect. If they do not do so, they must provide a
reasonable excuse. That will be tested, perhaps by the enforcing
authority or through the courts. I hope that that answers the hon.
Gentleman’s question. It seems clear in my mind, but I apologise
to him if I have not articulated it correctly or well enough for him.
However, I hope that it provides him with
reassurance.
Question
accordingly agreed
to.
Clause 242
ordered to stand part of the
Bill.
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