Examination of Witnesses (Questions 280-299)
RT HON
YVETTE COOPER
MP, MR BOB
LEDSOME, JOAN
RUDDOCK MP AND
MRS JACKIE
JANES
11 DECEMBER 2007
Q280 Mr Olner: Would you make that
mandatory?
Yvette Cooper: I do not think
that is our intention at the moment. However, we are looking,
as I have said, at the framework around information and incentives
at this stage. It will be mandatory for the private rented sector
and for social housing. We have the CERT money and we think there
is an awful lot of difference you can make. Joan has the figures
on the number of homes we expect to reach through the CERT alone
being very substantial over the next three years.
Q281 Mr Olner: Could I ask you to
explain the operation of this to me. Let us say I live in a relatively
old property and I request an Energy Performance Certificate,
(a) who will do that for me, and (b) if I get the certificate
and it is saying it is in a lower band, will that be an automatic
gateway to getting a grant to put it right?
Yvette Cooper: Currently your
best way of getting an Energy Performance Certificate would probably
be to ring up an estate agent and find out who they are using
because you would get a domestic energy assessor to do that—and
obviously we would expect access to them to be much more widespread
once we have got the private rented sector and social housing
programmes later in the year. Once you get your Energy Performance
Certificate that would then be automatically available to the
Green Homes Service. If you have an F or a G rated home, the Green
Homes Service would then be able to contact you and say, "Do
you know you are entitled to £200 to get loft insulation?"
or "£150 to put in a new boiler" or whatever incentives
there are available in your area. That would then give you the
information both on your home but also what you could get done
and what help you could get done. The next step in this process
is to try to make it much easier for people to get the contractors
and the services done. It is that kind of hassle factor—"Okay,
now you've found out what it is you need to have done, how are
you going to find a contractor to put it in?"—that
we see the Green Homes Service moving towards, being the one-stop
shop that can help you, that will make it much simpler once you
have your EPC to get through the whole process.
Q282 Mr Olner: When we took evidence
earlier from the Chartered Institute of Housing they suggested—this
is their analogy, not mine—that EPCs should in effect be
the equivalent for houses of MOTs for cars. When asked the question
how long would the MOT be in use for? they declined to answer.
In an ever-changing world, what is a good grade now may become
a bad grade later on. Do you have any thoughts at all as to how
you do upgrade the standards, which will be better in the future?
Yvette Cooper: For those homes
that are being bought and sold, that is effectively what the EPC
becomes, because you have to have one in place before you sell
your home and that then effectively becomes an MOT rating or an
energy efficiency rating.
Q283 Chair: It does not make the
house uninhabitable, whereas if you do not get an MOT you cannot
put the car on the road.
Yvette Cooper: That is true. Given
our housing supply issues, I think it would not be a great recommendation
to us to say that we should suddenly stop the huge number of homes
we desperately need being lived in at the moment. But we do want
the incentives to improve them. That is why we started with the
F and G rating targeting. There is also the scheme for landlords
as well. The potential from next October, when it goes live in
the private rented sector, is to link this with the energy scheme
for landlords, LESA, in terms of also being able to target private
sector landlords with poorly rated homes and to be able to make
sure they are aware of the additional resources, the additional
tax relief effectively, that they can get in order to improve
the premises as well.
Q284 Mr Olner: I think Emily asked
a very valid question about building inspectors and the availability
of them. Is there really the availability of suppliers and installers?
Is there not a chronic shortage of them? You mentioned a one-stop
shop and the difficulty that residents have in finding proper
people to do the work. Can you be as assured as you can be that
you have enough people out there with the experience to be able
to retrofit these houses?
Yvette Cooper: The energy companies
are doing a lot of this already. That is what they do through
the Energy Efficiency Commitment. It is part of their regulatory
framework that they are required to do this and they have expanded
services to do so.
Joan Ruddock: That is the way
in which we have, as a nation, acquired skilled people to do it.
We have put an obligation on energy supply companies: they have
had to get the work done, they have had to train the people or
find the people who could do the task. In some cases it has been
a slow process and in some areas it has been difficult but there
is expertise building up. We have doubled already the commitment
we put on these companies, between the original programme and
then the second programme which is just about to come to an end.
We are doubling again the commitment they have to make in terms
of providing energy efficiency advice and help to households,
so we are constantly driving up the number of people who are able
to do this work. The speed at which we are moving, the money we
are putting in and the obligations we are making are all the result
of intense consultations involving industry itself, so we will
move at the pace that is manageable. There could be a ceiling
but I think things are going in the right direction.
Q285 Mr Olner: Given that the Government
wants to double the amount of apprenticeships over the next few
years, is there not also an opportunity to put a commitment on
some of these energy companies to train more young people?
Joan Ruddock: I think that is
an idea to be investigated.
Chair: Different department? We will
take it up with that department.
Q286 Anne Main: Using the car analogy,
are you saying that an EPC has to be obtained if a house is being
sold? Where does that leave people selling houses for total renovation
or even demolition?
Yvette Cooper: You still have
to get an Energy Performance Certificate if you are going to be
selling a home.
Q287 Anne Main: Even though it says,
"This place is a draughty old barn" which is going to
be knocked down or totally renovated?
Yvette Cooper: If you are selling
a home for residential purposes then, as part of the Home Information
Pack, you have to have an Energy Performance Certificate in place.
Chair: Presumably that would be at the
lowest possible rating or even at the bottom.
Anne Main: It seems to be rather bureaucratic
for something you can see is falling down.
Emily Thornberry: If it is being knocked
down, it is not being sold for residential purposes, it is being
sold in order to be a development.
Chair: Perhaps we could move on to financial
incentives and VAT.
Q288 Anne Main: Many people do want
to make substantial improvements to older housing stock. You have
touched on some of the incentives, such as the zero stamp duty
for new homes. Are you considering extending that principle to
older housing stock and offering significant financial incentives—such
as council tax reductions or rebates—if you have a greener
home as a result of your improvements?—or even stamp duty
rebates or reductions and so on? I could give you a list: income
tax credits or specific grants that people can access. I would
like to hear your views on some of those slightly more scoping
thoughts.
Yvette Cooper: We will give the
answer you would expect us to give: taxation is obviously a matter
for the Treasury and for the Chancellor and I am sure he will
consider all kinds of proposals as Budget recommendations or submissions.
There has been a reduced VAT rate for refurbishments of homes
that have been empty for two years. People have put forward proposals
that all refurbishments and so on should be at a reduced VAT rate.
The difficulty with that is the deadweight cost. Obviously there
are a lot of refurbishments that already take place and therefore
it would be a hugely expensive thing to introduce if this were
to be done right across the board. There have also been reductions
in VAT in terms of the installation of loft insulation and things
like that, so those sorts of things have already taken place.
Working with the EEC scheme currently, some councils have used
the Energy Efficiency Commitment to fund what effectively they
then present as council tax rebates. Some councils have worked
with British Gas, for example, to do that and we think that is
quite an innovative way of providing the kind of support to households
as well. There are different ways in which you can approach this
but the main financial incentive we provide is through the Energy
Efficiency Commitment (soon to become the CERT scheme), which
is a quite substantial financial incentive for people to introduce,
primarily, insulation. In addition, we have the low carbon building
scheme and the Warm Front programme as well.
Q289 Anne Main: In the interests
of cross-departmental communication—which, I am encouraged
to hear, seems to be going on—are you actively asking for
these schemes to be looked at or considered—things like
stamp duty reductions—on homes that have made significant
improvements?
Yvette Cooper: As, again, you
would expect me to say, taxation decisions are a matter for the
Chancellor in the Budget but of course we have obviously had extensive
analysis on something like the VAT issue, which was why we had
the reduction in VAT for homes that have been empty for more than
two years. That was obviously as a result of a lot of cross-departmental
working. So too was the introduction of the stamp duty relief
for zero carbon new homes as a result of cross-departmental working.
Q290 Anne Main: Do you think you
should reconsider the reduction for homes that have been empty
for two years, for example? In today's climate, where it is unacceptable
to have homes empty for such a long period of time, do you think
you ought to be looking at making that a shorter period of time?
Yvette Cooper: It is getting to
quite difficult perverse incentives. You are balancing different
things here. If you obtained the exemption after a home had been
empty for six months, for example, then there might be an incentive
on people to leave a home empty for six months, and you do not
want that to happen because you want homes occupied as early as
possible. It is about getting the balance of incentives right.
That is why we have gone for the two year figure.
Q291 Chair: Some of the witnesses
have suggested that giving grants to encourage people to install
wind turbines or whatever has disadvantages because you get a
kind of stop-start system which does not give the stability to
manufacturers that is required if we are going to build up our
capacity to deliver these various technologies. Have you done
any analysis of the effectiveness or otherwise of the various
grants regimes?
Yvette Cooper: I think BERR has.
Joan Ruddock: I certainly do not
have any information on this.
Q292 Chair: But you think BERR might
have.
Mrs Janes: The Low Carbon Buildings
Programme, the main grant programme supporting microgeneration,
is coming to an end. In its place, the Carbon Emission Reduction
Target, which will commence from April next year and run until
March 2011, will provide some incentives for microgeneration under
that framework to encourage the build-up of that industry in more
capacity over the next three years.
Chair: I think this might be an issue
we would wish to explore in writing, to find out whether there
is a body of evidence somewhere in government about this. Could
we turn to Decent Homes.
Q293 Emily Thornberry: Moving on
to Decent Homes, as I understand it there was not a specific thermal
efficiency improvement target in Decent Homes. We have heard evidence
from the Fuel Poverty Advisory Group. They were not particularly
impressed by this and said they felt this was a missed opportunity,
in that making it easier to heat your home more does not necessarily
reduce anyone's fuel bills and does not necessarily reduce carbon
outputs either. Was Decent Homes a missed opportunity to do more
energy efficiency?
Yvette Cooper: If you were setting
the Decent Homes standard now, you would probably do it differently,
but we have the Decent Homes standard in place and it is important
at the moment to get everybody to it. Our figures show that 90%
or 95% of landlords have gone further than the minimum standard
in the Decent Homes standard. For example, in the standard you
can choose between doing loft insulation and cavity wall insulation,
whereas in fact most landlords have been doing both and going
higher than the standard. The Building Research Establishment
did a survey out of the implementation of Decent Homes in the
social sector. It was published in February 2007 and you may want
to have a look at a copy of that. Their survey estimated that
90% were planning to install both cavity wall insulation and loft
insulation in homes with gas or oil programmable heating, and
that by 2010 around 80% of lofts in social rented homes will have
at least 200 mm of insulation. They have taken very seriously
the energy efficiency potential requirements. Those results are
demonstrated in the progress that we have seen. In practice, social
housing energy efficiency, the SAP rating that has come forward
through social housing, is higher now than on average in the private
sector. The increase has been much more substantial as well: 21%
compared to 12%, since 1996, in terms of the improvements that
have taken place. If you also look at the percentage of social
housing and private housing that falls into the extremes of categories,
then social housing is doing much better at being in the top category
than you would expect, given the proportion of social housing
in the stock as a whole, and, equally, is also doing much better
at not being in the worst category. We can send you the figures
which set out those improvements too. That is testimony to the
fact that the Decent Homes programme has had a really substantial
effect, and has not been backed by the fact that the standard
itself was obviously set several years ago before the increased
focus around energy efficiency.
Q294 Emily Thornberry: You said earlier
in your evidence—I am sorry, I only wrote down half of it—that
in the last ten years there had been something like a 50% improvement.
Yvette Cooper: The English House
Condition Survey looked the period from 1996-2005 (so it does
not even take account of the most recent improvements in the Decent
Homes programme) and found a 21% improvement in energy efficiency
in social housing and a 12% increase in efficiency in private
sector housing, which means it is an average of 14% overall. Bob
will clarify if I have those figures wrong because that is from
memory.
Q295 Emily Thornberry: Decent Homes
is not going to be the last word. Presumably there will need to
be a Decent Homes Plus. Will whatever follows Decent Homes focus
more directly on environmental standards and on carbon reduction?
Yvette Cooper: We have not taken
any decisions on what happens post Decent Homes. At this stage
we need to complete the Decent Homes standard and I think we would
conduct the assessment of where we go from there in the context
of the next spending review—because obviously the programme
runs over the course of this spending review—but I think
we would certainly expect to have a much stronger focus around
energy efficiency in terms of where we go from here.
Q296 Anne Main: I would like to take
you back to Smart metering on social housing. Would it now be
something you will be looking at introducing into social housing,
given that you are expecting your private home owner to avail
themselves of the technology? Is this something now, as we move
forward, given the 21% efficiency savings you have just described,
for improving the structure of the property?
Yvette Cooper: We have not put
that into the Decent Homes programme. That is not a requirement
of the Decent Homes programme. As part of the wider work around
Smart metering, it is something we will want to look at as part
of the work that Defra is leading on.
Joan Ruddock: I think things will
change dramatically across government when we have our Climate
Change Act because we will have an independent Climate Change
Committee of experts who will be constantly advising government
and inevitably looking to sectors and trying to see how to drive
down emissions right across the board. Over a period of time,
I think the impact of having a Climate Change Act with a mandatory
emissions cap for the whole nation will inform how every government
ultimately will perform.
Q297 Chair: Could I ask about the
Carbon Emissions Reduction Target, which is replacing the Energy
Efficiency Commitment in April, and it follows on from the debate
about Decent Homes. What discussions have you been having with
the energy suppliers on adopting a more holistic, whole-house
attitude to energy efficiency rather than the piecemeal approach
which has been occurring thus far?
Joan Ruddock: We have and we do
but I think a number of things will condition how the energy suppliers
behave. They have an overall commitment that we impose upon them
and they can choose how they reach that and how they make it.
As I said in answer to one of the earlier questions, while there
are still many cavities that need to be filled, while there are
many lofts that need to be insulated and so on, they are not going
to look at putting into every home everything that might be possible
in terms of energy efficiency but at putting in what are the most
cost-effective measures and doing them to scale. We believe that
makes sense. We think, for example, that by 2020 we would expect
all cavity walls and lofts to be insulated, so as we move forward
they will have to look at doing some of the more difficult and
some of the more expensive things. Because we are constantly ratcheting
up, and we are already, as I have said, consulting about how we
move beyond 2011, they will have to do more things and take a
different approach as time passes. While there is still basic
work to be done, clearly they will do it and we want them to do
it.
Q298 Chair: One of the issues raised
with us about EPCs, for example, and about houses at the point
of sale, is that both sellers and buyers are more likely to undertake
works at the point of sale than when they are living in it. At
the lowest level, your loft is going to be empty anyway, so stuffing
in some insulation is less of a hassle. If energy suppliers are
encouraged at that point to do a lot of work, you might be more
likely to get it done.
Yvette Cooper: I specifically
met with the energy suppliers exactly to discuss that issue and
what more they could do directly to target—because they
would get new customers as well, they would have new accounts
being signed up so there is a trigger point, effectively, for
them to act on. The general view is that targeting sellers is
probably not very effective because people are thinking about
cosmetic improvements to their home and they are not really thinking
about the loft insulation. Over time, depending on the impact
that the Energy Performance Certificates have and the attitudes
of buyers to what is in an Energy Performance Certificate, that
might change, but, initially, the best impact is to target buyers
or new buyers once they have bought their homes. That is why we
want to do this in two ways: firstly, the Green Homes Service
will be targeting new buyers with: "This is what you could
get through the CERT scheme" and then putting people in touch
with energy suppliers through the CERT scheme, but, secondly,
we want to encourage suppliers themselves, when they are setting
up a new account, to target people in terms of energy advice and
efficiency improvements and so on at that point. They have all
said that they were keen to do that and to look at ways they could
link their targeting and marketing, for example, with the Energy
Performance Certificate information and approach as well.
Q299 Chair: I would like to return
to this issue of fuel poverty reduction as well as energy efficiency.
A feeling that again has come through from some evidence is that
having both the fuel poverty objective within CERT as well as
the Energy Efficient Commitment is getting in the way, one with
the other, and that, for example, people may be getting some work
done on EEC or CERT and then another bit of work done on either
Warm Front or Decent Homes. Is there a reconsideration of the
way in which those different objectives interlink at the moment?
Yvette Cooper: The point about
having the Green Homes Service for the spring is to try to pull
all of these programmes together. They do target slightly different
groups and for different purposes. The Decent Homes programme
is very much about social housing; the Warm Front programme targets
those who are in private sector housing. Of course there will
be overlaps and there will be different times when they need to
work together, but, if you only had one you would miss out groups
of people who would need to benefit from the others as well.
Joan Ruddock: On CERT (the Energy
Efficiency Commitment as it has been) the costs to the companies
are thrown back onto the consumer ultimately. All consumers theoretically
ought to have the potential benefit of being within that scheme.
That needs to be run in the way it is run and it needs to be done
comprehensively by the energy supply companies. Warm Front itself
is specifically about equity. The biggest programme has been on
central heating, so that people get into their homes something
very fundamental—and they are the people who, if it were
not for that scheme, undoubtedly would not be able to afford it.
They do have different strategic purposes, however, because of
the way in which the benefits of the Warm Front programme are
delivered, there are of course carbon benefits and energy efficiency
benefits as well. As Yvette Cooper has said, it is through the
Green Homes Service that we will be best able to bring home and
to enable people to work together. Indeed, we have very recently
established a special fund, the Community Energy Efficiency Fund,
that has been directed to bring together these two programmes
in areas of greatest need, where you have the lowest number of
low income households and the greatest deprivation. There are
50 projects already across the country, which the Government has
specifically targeted as places where bringing these programmes
together will create the greatest efficiencies and the greatest
gains.
| 
