Memorandum submitted by the Construction
Products Association
SUMMARY
— Space and water heating in the existing
housing stock accounts for 19% of UK carbon emissions—equivalent
to 30MtC per annum.
— The existing housing stock is on
average four to five times less energy efficient than housing
built to the current building regulations.
— Many of the investments that householders
need to make to improve the energy efficiency of their homes do
not provide a payback in a time frame that they find attractive.
— If properly marketed, Energy Performance
Certificates can provide a real catalyst for action, but they
need to be a much better signpost to what householders should
do.
— Householders that act on measures
recommended in the EPC within a specific period of time should
receive a refund on some of the Stamp Duty they have paid.
— The Comprehensive Spending Review
should set a clear programme for bringing all social housing up
to the Decent Homes Standard, and beyond that for raising levels
of energy efficiency towards those required by existing building
regulations.
— Government should look at ways that
will increase the rate at which older, lower efficiency central
heating boilers are replaced by high efficiency condensing boilers.
— Government should continue to press
the EU to allow a lower rate off VAT on energy efficient products
used in the DIY market.
— There needs to be a much longer term
programme for support measures aimed at energy efficiency improvements
so that manufacturers and suppliers can make investment decisions
with a greater degree of confidence.
— Government needs to reintroduce some
focused support for the renewables industry.
INTRODUCTION
1. The Construction Products Association
is an umbrella body that represents the manufacturers and suppliers
of construction products and materials. Its membership comprises
the 24 major companies in the industry and 43 sector specific
trade associations representing the full range of products and
solutions that are required to deliver the improvements necessary
to the existing housing stock to address the issues of climate
change. A full list of the Association's membership is at Annex
1 and these members represent more than 85% of the £40 billion
UK construction products industry.
THE SIGNIFICANCE
OF EXISTING
HOUSING COMPARED
TO NEW
BUILD AND
THE DIFFERENT
LEVELS OF
PERFORMANCE EACH
DISPLAY
2. We are currently building around 210,000
new homes and demolishing about 10,000 homes a year in the UK,
and this means we are adding only 0.7% pa to the housing stock.
As a result, nearly 70% of the homes we will be occupying in 2050
have already been built.
3. Dwellings currently account for 27% of
UK carbon emissions (41 MtC pa) and 73% of these emissions derive
from space and water heating which therefore accounts for 19%
of our carbon emissions—equivalent to 30 MtC pa.
4. In terms of energy efficiency, the performance
of the existing housing stock compares very unfavourably with
houses built to the latest requirements of the building regulations.
Nearly 40% of the existing housing stock was built before the
1930s when the industry started building using cavity walls, and
77% was built before 1985 when the building regulations first
set standards for the conservation of fuel and power. New build
housing is on average three to four times more energy efficient
than the existing housing stock.
5. At the same time, consumer expectations
have been growing. In 1970, the average UK house was heated to
an average of 12C, whilst by 2003 this had risen to 18C.
Hot water usage also continues to rise with the average number
of showers and bathrooms per household increasing.
THE RESPECTIVE
ROLES OF
DIFFERENT STAKEHOLDERS
IN PROMOTING
AND DELIVERING
GREATER ENERGY
EFFICIENCY
Residents/homeowners
6. The primary role of residents is to be
as efficient as possible in their use of energy in the home. Whilst
energy use for space and water heating has been falling it has
been increasing for other uses such as for appliances. Energy
efficiency and the use of non-carbon generating sources of energy
needs to be embedded in the culture of all residents and homeowners.
Better information through smart metering has an important part
to play in this.
7. Residents also have to be persuaded to
invest in measures to make their homes more energy efficient.
Few will do this unless they see there is "something in it
for them" and Government policies have to be geared to creating
that feeling. We comment further on this later in the submission.
Landlords
8. Landlords have to be persuaded that there
is value in ensuring the property they own is more energy efficient.
The requirements of the Energy Performance in Buildings Directive
will assist, but they need to have access to easily useable delivery
mechanisms to make the necessary improvements.
Local Government
9. Local Government has a direct responsibility
for a substantial amount of public housing and needs to focus
its resources on improving this not just to the basic "decent
homes" standard, but (where practicable) to levels more in
line with the existing building regulations and beyond. They also
have a role to play in raising the awareness of public sector
housing tenants to the importance of energy efficiency and providing
information to allow them to act accordingly.
10. At the same time local government can
help disseminate information to all householders in their areas
and look at the kind of incentives that they can offer to homeowners
to invest in energy efficiency measures such as a temporary reduction
in Council Tax for those who make significant improvements.
Central Government
11. Central Government must set the policy
framework that brings about a significant reduction in the carbon
emissions from the existing housing stock as part of the overall
UK target for carbon reduction. This will involve a combination
of regulation and financial incentives. Government also needs
to raise awareness of the importance of these issues in a way
that will influence the behaviour of householders and it can set
an example through the importance it attaches to energy efficiency
in public sector buildings such as the accommodation it provides
for the armed forces.
Energy Industry
12. Through the Energy Efficiency Commitment,
and in future the CERT scheme, the energy industry is seen as
a major source of the funding through which householders will
improve the energy efficiency of their dwellings. Also the energy
industry has a renewables obligation. However well the existing
housing stock is insulated, there will always be a residual energy
need from the national grid, and so it is important that as much
of this energy as is economically possible is from non carbon
emitting sources.
Construction industry
13. Although not listed in this part of
the brief for the Inquiry, the construction industry has a major
role to play in improving the existing housing stock to ensure
its impact on climate change is reduced. Product manufacturers
and suppliers need to have available the products and solutions
that will improve the energy efficiency of the existing housing
stock through higher levels of insulation and efficient low and
zero carbon generating forms of energy, whilst contractors need
to ensure that these products and solutions are installed to the
quality required to deliver the performance levels intended.
14. One factor that may well discourage
many householders from investing in these kinds of improvements
is the poor reputation the construction industry has for dealing
with small works of this kind. What the industry needs to develop
is companies that have a reputation in this area for giving a
top class service of value that householders can trust and rely
on.
ENERGY PERFORMANCE
CERTIFICATES AND
THE PROVISION
OF INFORMATION
FOR HOUSEHOLDS
AND PROSPECTIVE
HOUSE BUYERS
15. If the behaviour of households is to
be changed in a way that responds to the challenge of climate
change they need reliable information about the energy performance
of their homes. The Government is committed to supporting the
wider installation of smart meters to provide information to householders,
and whilst this is welcome, it will take time to achieve widespread
coverage. In the meantime, the introduction of Energy Performance
Certificates offers a real opportunity to encourage those moving
to a new home to take action to improve the energy efficiency
of the property they are moving to, although the controversy over
their introduction as part of the HIP package has been unhelpful
in giving them the positive profile that is needed.
16. Nevertheless, if properly marketed,
EPCs could be a real catalyst for action. To achieve this more
effectively, the report that a householder receives needs to be
less bland and provide much more of a signpost for what the individual
householder needs to do to improve the energy efficiency of the
dwelling. It needs to point more clearly to those who can give
independent advice on the issues that have been raised and how
a householder can get in touch with bona fide companies that will
be able to act on the various recommendations that have been made.
17. However, even with timely information
about energy efficiency, the majority of households will still
only act in response to this if they see a direct benefit to them.
Many of the necessary investments to achieve savings have pay
back periods that do not easily persuade householders to make
the necessary investments. There therefore needs to be some kind
of incentive for the householder to act on the findings of the
EPC within a specific period of time from when they receive it.
Those moving home tend to spend money on improvements within the
first 18 months of their move. What the Government needs to do
is to ensure that the investment they make is expanded from largely
cosmetic improvements such as a new kitchen to measures that will
improve the energy efficiency.
18. To achieve this, we would like to see
all householders that act on the recommendations in their EPC
within, say, 12 months of moving into a house receive a % of what
they spend on these recommendations as a refund on the stamp duty
they paid. The refund need not be that large, but it would help
influence priorities in that crucial initial period following
purchase. Such a package of incentives could complement the support
provided by the CERT scheme which could be focused on those properties
which fall below the stamp duty threshold as well as the large
number of houses that are not being bought or sold.
19. Basing Government financial support
on the EPC report will also ensure that householders invest in
those measures which provide the best return in energy efficiency
terms. It will also help demonstrate a longer term commitment
by government to supporting energy efficiency measures and therefore
address one of the concerns of companies in the construction products
industry when it comes to investing in new capacity to provide
the products and solutions needed to deliver these improvements.
GOVERNMENT EFFORTS
TO REDUCE
CARBON EMISSIONS
FROM EXISTING
HOUSING STOCK
IN PUBLIC
AND PRIVATE
OWNERSHIP, AND
OTHER RELATED
PROGRAMMES INCLUDING
DECENT HOMES
20. Information from the English House Condition
Survey consistently shows that the single most important reason
why a house fails to meet the Decent Homes standard is a lack
of effective insulation or efficient heating required to meet
the thermal comfort criteria, with 4.4 million or 75% of non-decent
homes failing to meet this criteria.
21. The Government drive to bring all public
housing up to a Decent Standard by 2010 has helped cut the number
of homes in the social sector failing the thermal comfort criterion
from two million to 850,000. However, it is disappointing that
the Government has acknowledged that it will not know meet its
target and that some 140,000 of these homes will still not meet
the Decent Homes Standard in 2010. The 2007 Comprehensive Spending
Review needs to set a clear target for removing the backlog of
non-decent homes, and commit to a longer term programme for raising
still further the energy efficiency of all social housing in this
country.
22. Government's efforts to reduce carbon
emissions from existing housing in private ownership have been
fragmented and dependent on a combination of regulation and financial
incentives provided through the EEC on the energy suppliers. Building
Regulations have been introduced requiring higher standards for
retrofitting of windows and boilers, but these only impact when
people choose to change these elements of their homes, and in
the case of the requirement that (with a few exemptions) all new
boilers should be condensing boilers, the higher initial cost
has actually deterred people from changing their boilers.
23. Although the introduction of new regulations
in 2005 market effectively changed the market overnight and nearly
90% of new boilers are now the higher efficiency condensing boilers,
the total number of new boilers sold during 2005 actually fell
7%. Whilst there has subsequently been a recovery in sales over
the last 18 months, this is largely attributable to an increase
in the number of new homes being constructed and the Government's
social housing refurbishment programme. Confirmation that these
new regulations have deterred people from installing new condensing
boilers has come from the boiler manufacturers who say that they
have been inundated with requests for spare parts for old boilers,
indicating that householders are patching and mending old inefficient
boilers rather than installing the more efficient, but more expensive,
condensing boilers.
24. Government seems content that its policy
has been successful because it has delivered the significant shift
in percentage terms towards higher efficiency condensing boilers.
It should, however have sought to raise both the standards and
numbers of boilers installed. Some form of modest incentive to
encourage people to change boilers over a certain age would have
created a "win win" situation. Increasing the rate of
replacement by just a sixth from 1.2 million boilers to 1.35 million
a year over the next five years would provide an additional carbon
saving of 450,000tCe from the existing housing stock.
25. Government has also sought to incentivise
the installation of professionally-installed energy efficient
products by reducing the rate of VAT to 5%. This lower VAT rate
does not apply to all energy saving products that could be used
in the home and does not extend to purchases for DIY. Many householders
are, for example, quite capable of installing loft insulation
themselves and yet they are paying the full rate of VAT on a product
Government must surely want to encourage them to purchase. We
therefore believe that the Government should reduce the rate of
VAT on key energy efficient products, irrespective of how they
are installed. We recognise that this requires agreement at EU
level and support the Government's efforts to secure the necessary
reform of the VAT Directive.
TECHNOLOGIES AVAILABLE
TO REDUCE
EMISSIONS AND
THE GOVERNMENT'S
ROLE IN
FACILITATING RELEVANT
FURTHER TECHNOLOGICAL
DEVELOPMENT
26. Most of the technologies needed to deliver
significant reductions in carbon emissions from the existing housing
stock are fairly basic tried and tested solutions such as cavity
wall and loft insulation and internal and external solid wall
insulation. The products are therefore already available. What
the construction products industry needs, however, is a stable
long term policy framework so that the manufacturers can invest
in the capacity needed to supply the products, and installers
can commit to training their workforce in order to apply the solutions.
This is the one thing that the EEC programme has failed to do.
27. Taking as an example the impact on the
companies manufacturing the products needed to fill the estimated
8 million homes that still have unfilled wall cavities. The table
below provides information on the level of cavity wall installations
undertaken as part of the EEC II programme and the estimates going
forward.
| Calendar Year |
Number of cavities filled |
| 2005 | 362,029 |
| 2006 | 444,767 |
| 2007 | * |
| 2008/2010 | 900,000 pa (est)
|
* Outcome for 2007 is dependent on whether any arrangement is
introduced to allow CERT arrangements to commence before the end
of 2007. Without this the number for 2007 is likely to be of the
order of 300,000.
28. The unpredictability of demand and the short forward
programme is a total nightmare for manufacturers and suppliers.
On the figures above, demand for product in 2007 is likely to
be 30% down in 2007 compared with 2006, but then in 2008 it will
have to triple for a period of three years, but with no certainty
that demand will remain at that level beyond the end of the current
CERT programme in April 2011. The result is that in times of famine
production capacity stands idle with all the overhead costs that
are then incurred. At the same time, future investment decisions
cannot be made with confidence against a programme that is only
committed for the three years to 2011 when the payback time for
the investment in an additional furnace is typically eight to
ten years. Expansion therefore needs to consider prospects for
the industry through to the end of the middle of the next decade
and have some confidence about the consistency of the demand for
the products that they manufacture. Companies are used to taking
risks, but the uncertainties created by the short term nature
of Government policy which has the ability to turn the tap on
and off overnight are not ones that companies find easy to factor
in to their calculations.
29. This short term nature of policies also affects research
and development. Companies only invest today's profits into tomorrow's
products if they believe that will increase tomorrow's profits
compared to not investing those profits in research. If the market
for tomorrow's products is unclear then research and development
decisions will be more difficult.
30. One of the other problems has been a lack of support
for the "D" in R and D. The UK has a good record in
basic research but not such a good record compared to other countries
in bringing the research to market through new goods and services.
Part of this is due to a lack of support for the development phase
compared to other countries, including the near to market phase.
Long term support such as California's 10 year $3 billion PV programme
(One Million Roofs) is crucial to bringing technologies to mass
market. The UK has probably had more programmes than anyone else,
which is part of the problem. There is a lack of confidence in
the value and length of programmes. The recent history of Clear
Skies and Low Carbon Buildings Programme is typical, with the
significant changes in grant support.
31. Government's hopes that the CERT programme would
provide consistent support to micro-renewables is misplaced as
CERT encourages the lowest cost options for carbon savings to
be taken first. This will result in an early peak for cavity filling
followed by a peak later on for micro-renewables, a situation
that is unsatisfactory for both industries. Given that the Low
Carbon Building Programme is being replaced by provisions in CERT,
this delay is sending the wrong messages to the industry about
the Government's interest in the development of renewables. Whilst
renewables are not necessarily the main focus for the initial
means of improving the existing housing stock, there are opportunities
to install these with some benefit on more modern housing. Given
the impact that the way the CERT funding arrangements will have
on support for renewables, the Government needs to re-consider
the need for a specific funding stream to support the development
of this important, but still embryonic industry.
32. Amongst other research (albeit not related directly
to technology) that the Construction Products Association is involved
in and which the Committee should be aware of is a three-year
project funded by the BERR programme Meeting the Challenge of
Zero Emission Enterprise. Through consultations, reviews and case
studies this project will identify criteria and develop decision-making
tools for implementing low emission housing refurbishment in the
public and private sectors. Led by BRE, other partners in the
project include architects, engineers, housing associations, developers,
energy charities and government agencies.
THE COSTS
ASSOCIATED WITH
REDUCING CARBON
EMISSIONS FROM
EXISTING HOUSING
33. The current approach is to look primarily to the
energy providers through the EEC programme and in future CERT,
to support existing home owners in improving the energy efficiency
of their properties. Government input is in upgrading of public
sector housing stock, the funding it provides for the Energy Savings
Trust, the support to help raise people out of fuel poverty, and
the tax it foregoes by reducing VAT on certain energy efficient
products.
34. Clearly private sector homeowners and private landlords
must be expected to make an input to the cost of upgrading their
properties as they stand to benefit financially from this, but
the problem cannot be left entirely to them as the payback period
on a number of the investments needed is not sufficient to justify
(in many of their minds) them making the investment. That is why
we believe that Government has to intervene more to incentivise
the right kind of investment, not necessarily to ensure there
is a pay back in economic terms, but more to provide that catalyst
for action by private householders and landlords.
35. In the case of those on low incomes in fuel poverty,
Government has to recognise that the decisions it makes on this
are part of a quite legitimate social policy, but not necessarily
one to do with addressing the issues surrounding climate change.
It is perfectly legitimate to help old and low income households
to afford the installation of central heating, but it is wrong
to suggest that this is in any way part of a policy to tackle
climate change.
CONCLUSIONS
36. Senior Government figures continually remind us that
climate change is the largest single threat that mankind has to
face and yet there seems to be concern that a number of measures
that are proposed by industry to encourage householders to make
their houses more energy efficient will carry some "dead
weight" and therefore cannot be supported. This approach
does not seem to be consistent with the importance that we are
being encouraged to give to this issue by the statements of our
senior politicians.
37. There is great frustration in many parts of the construction
products industry from companies and sectors which have a major
part to play in improving the energy efficiency of the existing
housing stock, that the Government is not setting a framework
that will encourage them to invest in the capacity that is needed
to meet the carbon reduction targets that are set or deliver the
products and solutions that will allow this to be done effectively
and efficiently. We would very much like the opportunity, together
with some of the major companies, within our membership to develop
a number of the key themes in this Written Evidence when the Committee
comes to taking Oral Evidence later in the year.
Annex 1
CONSTRUCTION PRODUCTS ASSOCIATION MEMBERSHIP 2007
Major Companies
| Aggregate Industries | Baxi
| BSS |
| Caradon | Castle Cement |
CEMEX |
| Corus | CRH | Etex
|
| Grafton Group | Hanson |
Jeld-Wen Group |
| Kingspan Group | Knauf |
Lafarge |
| Marshalls | Pilkington |
Saint-Gobain |
| SIG | Tarmac | Travis Perkins
|
| Wavin | Wolseley UK | Worcester Bosch
|
Affiliates
| ACO Technologies | Decra Roofing Systems
| Dow Chemical Products |
| ICI Paints | Intatec | Kee Klamp Ltd
|
| Simpson Strong-Tie | Yorkshire Building Services
| |
Associates
| British Board of Agrement | The Building Centre
| Building Research Establishment (BRE) |
| BuildStore | The Cavity Insulation Guarantee
| CMP Information |
| Emap Construct | HSS Hire Group
| Pinsent Masons |
| RIBA Enterprises | TRADA |
Unimer, United Merchants |
Trade Association Members
| Association of Interior Specialists | Association of Specialist Fire Protection
|
| Bathroom Manufacturers Association | British Electrical and Allied Manufacturers Association
|
| Brick Development Association | British Aggregate Association
|
| British Cement Association | British Ceramic Confederation
|
| British Fire Protection Systems Association
| British Non Ferrous Metals Federation |
| British Plastics Federation | British Rigid Urethane Foam Manufacturers Association
|
| British Precast Concrete Federation
— Architectural Cladding Association
— Autoclaved Aerated Concrete Products Association
— Box Culvert Association
— Concrete Block Association
— Concrete Pipeline Systems Association
— Concrete Sleeper Manufacturers Association
— Concrete Tile Manufacturers Association
— Precast Concrete Paving and Kerb Association
— Precast Flooring Federation
— Pre-stressed Concrete Association
— Structural Precast Association
|
| British Woodworking Federation | Builders Merchants Federation
|
| Cementitious Slag Makers Association | Clay Pipe Development Association
|
| Clay Roof Tile | Contract Flooring Association
|
| Council for Aluminium in Building | Door & Hardware Federation
|
| Engineered Panels in Construction | European Phenolic Foam Association
|
| Eurisol-UK | Flat Glass Manufacturers Association
|
| Flat Roofing Alliance | Glass & Glazing Federation
|
| Guild of Architectural Ironmongers | Gypsum Products Development Association
|
| Hemp Lime CPA | Lead Sheet Association
|
| Metal Cladding & Roofing Manufacturers Association
| National Association of Rooflight Manufacturers
|
| Quarry Products Association
— Agricultural Lime Association
— Asphalt Products Group
— British Lime Association
— British Marine Aggregates Producers' Association
— British Ready-Mix Concrete Association
— Mortar Industry Association
— Silica and Moulding Sands Association
|
| Single Ply Roofing Association | Society of British Water and Wastewater Industries
|
| Society of British Gas Industries | Steel Lintel Manufacturers Association
|
| Timber Trade Federation | UK Steel Association
|
| UK Timber Frame Association | Waterheater Manufacturers Association
|
| Wood Panel Industries Federation |
|
| 
