Examination of Witnesses (Questions 20-34)
PROFESSOR ANNE
POWER
12 NOVEMBER 2007
Q20 John Pugh: Just on that, is there
any evidence that that is the case, that when people are actually
looking round for property, a landlord will say, "Actually,
this is a very easy place to heat" and the tenant will believe
that and say, "I will definitely go with that property rather
than the one I was thinking of"?
Professor Power: No, but there
is no reason why you should not have the equivalent of Energy
Performance Certificates for rented property.
Q21 Chair: They are proposed for
October 2008, I think.
Professor Power: It would make
a difference because sometimes people are paying a very large
amount in extra heating and extra Council Tax. The other way in
which it would make a difference would be if the councils, which
are now often running voluntary registration of private landlords,
gave energy certificates to landlords and then Council Tax rebates
to landlords who were more energy efficient. You would have to
have a big incentive for public bodies to cut energy in their
areas. If every council had this 20% goal that the Government
has by 2020, the councils, certainly the urban councils would
have a very big incentive.
Q22 John Pugh: But for some councils,
where they have huge swathes of municipal or ex-municipal housing,
it would be relatively easy to achieve the target. If you have
a very mixed environment, a lot of private, maybe old property,
it would be very hard to hit a target or even to fairly impose
one.
Professor Power: We have imposed
laws on multi-occupation, we have imposed laws on overcrowding,
you are no longer allowed to rent without sanitation. I remember
when we let out our basement and it was closed because the ceiling
was only six foot up instead of six foot three. You can do these
things if you are determined enough.
Q23 John Pugh: Just thinking about
lowering ceilings, we could around this place obviously, and in
the committee rooms put in a nice polystyrene ceiling and save
an awful lot of the fuel costs of this building but there is an
aesthetic trade-off there which most householders accept, but
in terms of the levers that actually move most householders, most
people look at the brochures, look at the figures, recognize intellectually,
I suppose, that they would save a fair amount of money if they
did certain virtuous energy saving things but, at the end of the
day, the returns are not short-term, not very immediate, and the
information they are getting about the savings they are making
is not very immediate.
Professor Power: Most landlords
are a bit longer term than most home owners, most home owners
expect to move in seven years but most landlords do not expect
to sell their property in seven years. Landlords actually have
a better incentive under current regimes than private owners do.
If you could introduce green mortgages for upgrading, then home
owners could have a better incentive, green mortgages being special
funding arrangements in order to fund improvements, and there
is no reason why that would not apply to private landlords as
well.
Q24 John Pugh: So the secret for
home owners is to reduce the initial capital costs given that
the spin-offs, the benefits they will get over the long term may
not be there for them.
Professor Power: Yes, and the
other thing that landlords could do—I have discussed this
with the Housing Corporation—that would make a vast difference
to what housing associations would be willing to do, if a housing
association which owns, say, 10,000 properties upgrades them to
a higher energy efficiency standard at a cost of £10,000
per home, it can borrow that money on the capital market but it
cannot charge the extra rent that the tenants will gain in reduced
heating costs. So at the moment there is no way of landlords,
particularly social landlords, being able—and we raised
this with Yvette Cooper at our recent meeting with her—to
trade rent levels under the current convergence and rent control
system with investing in higher energy efficiency. VAT is one,
but the rent issue is another, and then financial vehicles, the
green mortgage issue is another and then the council rebate is
another.
Q25 Sir Paul Beresford: What was
her response?
Professor Power: "Very interesting
point. We hadn't really thought about it." It is not quite
true but she did think that was an interesting point.
Q26 Chair: Just to pick up something,
you were suggesting the private sector landlords have a slightly
longer view than owner occupiers, yet the private rented sector
is the worst part of housing for energy inefficiency. How do you
explain that?
Professor Power: Because, as one
of your colleagues said, the landlord does not pay the heating
bill and because there is a demand for private renting and because
either the Government picks up the Housing Benefit cost and the
Government does not bother about it or a tenant actually wants
to live there and does not have an alternative so they are willing
to pay it; nobody is pushed into doing it, and certainly private
tenants move very rapidly so they certainly would not have any
incentive to do it.
Q27 John Pugh: Just going back to
the issue of the private and recalcitrant owner, I am somewhat
like that really. I live in a Victorian house that is not particularly
well insulated and I do not go out into the loft to check my lagging
all the time.
Professor Power: You deserve to
be persecuted! Sorry!
Q28 John Pugh: I am quite conscious
when I walk in the room and I see Mrs Pugh with the electric fire
on and things like that what effect that might have on my fuel
bill but the effect is not immediate. You do not immediately get
a letter from the electricity board saying "You have spent
so much today." There is an EDM down in Parliament at the
moment, I think, about real-time metering. What I am suggesting,
and I do not know whether there is a case for this, is does not
a private householder need that sort of immediate feedback about
what the energy saving is doing because the long-term vista may
not be there for them or may be uncertain because they may be
planning on moving?
Professor Power: Smart metering
and immediate, direct metering and room by room metering and all
of that kind of thing does have a dramatic effect apparently on
people's behaviour. When we put in our solar water collector—I
am not trying to pull rank here—my husband used to rush
into the bathroom every evening to see what the reading was. "It
can't be true that you don't get solar gain in winter because
look, we got up to 36 degrees or up to 50 degrees or whatever
today." So being able to see your gain is very important.
Chair: I can attest to that. We have
it in my constituency office and we are much more careful with
the kettle these days because it sends the meter through the roof.
Q29 Mr Olner: I have a couple of
cynical questions to start with. This is on the VAT reduction.
I think the advantage of that will be momentary. As soon as it
is off, the prices in general will rise, so you will really be
back where you were before. That is my fear on that. One of the
things I do not think you have mentioned is where there could
be a really good gain on people living in clusters of either owner-occupied
housing or rented housing, not looking just at an isolated property
but looking at a group of properties on a group energy scheme.
I agree basically with smart metering. I actually think we ought
to be putting that in as part of the Building Regulations, particularly
on new build, but some of the smart metering I have looked at
has been the Fiesta of smart metering, Fiesta X of smart metering
and a Fiesta Ghia of smart metering.
Professor Power: I do not drive
a car and I do not own a car so any car analogy is lost on me.
Q30 Mr Olner: The analogy is lost
on you then. If you have three sorts of models, which one do you
say should be used as the norm?
Professor Power: A few things
have come up there. Is it worth me quickly responding? One point
is how you get messages to people as opposed to how you put up
their electricity bill. Dr Pugh's wife needs a really powerful
message on electricity consumption.
Q31 John Pugh: I would agree with
that, yes!
Professor Power: I went to a conference
in Austria called the World Sustainable Energy Conference. It
was a very interesting conference. One of the presentations was
from a Californian professor, from whom I did not expect we would
learn a huge amount on energy efficiency. However, he is the world's
leading expert on how you get people to cut electricity bills
because California, believe it or not, is the world's leading
region on reducing electricity consumption because, basically,
they do not have enough electricity. According to him, pricing
did not work, black-outs did not work and what worked was messaging.
You just drive home again and again you can actually use half
the electricity you are now using if you do this, that and the
other and if your neighbours do it as well and if you all watch
out for each other. We have a very good example of that. Hosepipe
controls in London work. It is bizarre but everybody watches out
for everybody else. "Don't you dare use your hosepipe. I
saw you using your hosepipe." So that is one thing. We have
to get the message over that people can actually make a difference,
and you have to have a plan. California had a plan: we will reduce
electricity consumption by 10% a year by ... They have done it,
apparently, and they are still doing it and it is still going
down, which is extraordinary for one of the most extravagant places
on Earth, apart from Dubai. That was the first thing. The second
thing was the density and clusters, and Lizzie Chatterjee has
been doing some work on district heating within existing areas
and we are hoping to produce some of that evidence and, as soon
as we do, we would be very happy to share it with you.
Q32 Chair: That would be very helpful.
Professor Power: Obviously, there
are complexities because the place is already built but there
are big advantages too in that the people are already there and
the homes are already there and you have a ready little market.
We have had amazing presentations from people working on decentralised
energy, showing that you can make 60% reductions just by having
decentralised energy, even if you do not use terribly efficient
methods of doing it. The third issue is how you impose on landlords
or owners, people like yourselves. Building Regulations are basically
not enforced on existing homes. They used to be in the period
when conversions were the big thing in the Seventies, and now
they are not enforced and that does seem to me a big mistake,
to have a system which you do not enforce. The Swedes enforce,
the Germans enforce, and I do not see why we cannot enforce. I
do not know whether the French do, from what I have heard on their
VAT issue; they seem to be a bit dodgy but you could enforce and
we should enforce.
Q33 Mr Betts: I wonder whether we
could learn a lesson from another major public policy success
of the past, and that is the Clean Air legislation, where we decided
what we wanted to do, we explained to people why we were going
to do it, we told them what they could not do as individuals,
we gave them a grant for what they should be doing, and we were
massively successful. Is it a similar sort of plan that we need
to draw up in this case, with some sticks and restrictions attached
but also some carrots and incentives?
Professor Power: Definitely. People
know what the basic list of six items is that we should include
and if it was turned into a package, and if there was a funding
vehicle and an agency that would handhold the householder, handhold
the builder, handhold the supplier, that seems to be absolutely
key in delivering it.
Q34 Mr Betts: That is very interesting.
The other thing I was going to go on to talk about is advice.
I remember going to Scandinavia looking at combined heat and power
schemes about 20 years ago. I remember that there they had almost
energy advice centres but they were bigger than that. They had
the private sector in, so you could go and buy your boiler, your
insulation material, you could contract with a builder at the
place but you also had energy experts in there advising you at
the same time. I just wonder whether that is something that you
have thought about. People often just do not know where to turn.
Professor Power: Exactly, and
when you turn, you might get the beginnings of advice but there
is nobody paid to handhold you through the process, and that is,
I think, the problem. Somebody needs to help you see it from A
to Z and put the funding package together and get an accredited
builder. Just to give one example, solar water collectors are
very expensive to install because there are a few companies that
have a controlling interest in the installation, and until that
is opened up and it becomes the norm for plumbers to be required
to learn how to put two plugs together in order to have a solar
water collector working, which is basically what you need, we
will be stuck on the cost of installing solar water collectors.
That could definitely help a lot. We probably have the infrastructure
to do it but we just need to shift the incentives so it really
works.
Chair: Thank you very much for starting
us off, Professor Power. It may be that we might have some other
questions we want to ask you in writing afterwards coming out
of your evidence and maybe some of the other evidence we are going
to get this afternoon. Thank you very much indeed.
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