Energy Conservation (Provision of Information) (Hansard, 26 June 1996)

§ Mr. Tim Yeo (South Suffolk)

I beg to move, That leave be given to bring in a Bill to make provision in respect of information to be provided in connection with the energy efficiency of residential buildings. I am delighted to have the chance, rather belatedly, of introducing a measure that will apply in England and Scotland. It will have three effects: first, it will cut the fuel bills paid by home buyers; secondly, it will save, energy and improve the environment; and, thirdly, it will create jobs in the construction industry. Each of these desirable aims will be achieved without using a single penny of taxpayers' money.

The Bill provides for all mortgage lenders—be they building societies, banks or other financial institutions— to require from house purchasers an energy rating survey of the property that they wish to purchase. That is not an onerous requirement. House buyers who require mortgage finance to enable them to purchase a property already normally have to undertake a survey of the condition of the property that they wish to buy. To include in such a survey an assessment of the energy rating of the property will involve little extra work—it is estimated that it will take perhaps an extra 15 or 20 minutes on the part of the surveyor. The additional cost, therefore, to the house purchaser will be of the order of £10, or £20 at the most.

The energy rating takes the form of a standard assessment procedure rating that will give a figure on a scale from one, for the most energy-inefficient properties, to 100, for those properties that are the most energy-efficient. I am glad to say that this system now has the support of the various groups that had previously backed rival and competing methods of analysing the energy efficiency of a property. That period of competition and disagreement has ended, and there is now general support for the SAP rating system.

New homes, for the most part, are built to a high-enough standard to achieve satisfactory levels of energy efficiency. The Bill is therefore targeted at the large stock of second-hand homes, the vast majority of which were built before considerations of energy efficiency were as important as they are today. Last year, about 680,000 second-hand properties changed hands, with three quarters of those transactions being completed with the help of a mortgage. Therefore, the effect of the Bill would be that, each year, about 500,000 second-hand properties would have the benefit of having an energy rating survey carried out.

The owners of those 500,000 properties would be made aware of the potential scope for cutting their fuel bills by a modest investment in energy-saving measures. In many cases, those owners may be made aware of that fact for the first time. Far too few people are aware of how much can be done by quite modest expenditure to save energy, and thus to cut fuel costs. The payback period can be rapid. For example, the cost of insulating a loft or a hot 357 water tank can be recovered in as little as two to three years. Insulating a cavity wall is a rather more expensive exercise, but here too the payback period can be five years or less. The same is true of the purchase costs of a gas condensing boiler.

In those various ways, house buyers can achieve substantial savings over a short period, but the Bill will not merely be of advantage to them. As more and more homes are subject to an energy survey, so the environmental gains will accumulate. Let us make a cautious assumption that perhaps three out of five home buyers—once they were aware of how much they could save by investing in energy-saving measures—will take the rational and self-interested decision to improve their homes in that way. If the number of house transactions remains at its current relatively low level, the reduction in carbon dioxide emissions could reach 270,000 tonnes annually within 10 years. By the middle of the next century, virtually the whole stock of second-hand homes would have received an energy rating. By then, we could expect savings in emissions to have reached 1.5 million tonnes of carbon a year. That would make a substantial contribution to meeting the national target to which Britain is publicly committed.

Finally, let me draw attention to the employment consequences of those measures. Much energy-saving expenditure results in highly labour-intensive work. The immediate and direct consequence of encouraging home buyers to spend money on energy saving would be to increase employment in the construction industry and related sectors.

I cannot imagine what objection there could be to the proposal. The only possible one arises from an entirely proper and understandable concern that Parliament should not impose additional statutory obligations on house buyers, who already face a cumbersome process. However, the measure would achieve benefits that would justify the modest additional legislative hurdle. Even that objection could be overcome if we built a time limit into the measure.

358 Let us suppose that the statutory requirement for an energy rating was to be imposed on lenders for a limited period of, say, five years. I am confident that, at the end of that period, the concept of having information about the energy efficiency of a home would become so widely accepted that it is inconceivable that lenders or borrowers would wish to proceed with a transaction without it. No one would think of buying a house without knowing what council tax band it was in. No estate agent would publish the particulars of a property that they were trying to sell without giving such information. Yet many households spend far more on heating and hot water fuel costs than on council tax. It should be a matter of routine for everyone involved in the transfer of a house, whether the vendor, the purchaser, the estate agent, the lender or the surveyor, to supply energy efficiency information.

I recognise that, under our procedures, the Bill will not pass on to the statute book this Session. I hope that after the ballot for private Members' Bills in the autumn another hon. Member will pick up the issue. Energy efficiency is not a glamorous or politically controversial subject. One of its problems is that it is not sufficiently exciting to attract the attention of many people. However, there are few issues where environmental and economic aims so harmoniously and completely coincide. Rarely are the interests of the individual directly affected and those of the community so entirely at one. It is against that background that I warmly commend the Bill to the House.