§ Order for Second Reading read.9.34 am
§ Mr. John Burnett (Torridge and West Devon)
I beg to move, That the Bill be now read a Second time.
First, I must declare that I am a shareholder in a renewable energy company, but as a trustee only. I wish to put on record the fact that none of the beneficiaries of the trust are related to me, whether directly or by marriage. It is a United Kingdom trust and fully taxable as such.
I am delighted to have the opportunity to bring in a Bill that is long overdue. My Bill would ensure that an idea recommended as far back as 1984 by the then Secretary of State for Energy, Peter Walker, now Lord Walker of Worcester, is actually brought into being. Since that time, the idea of providing energy ratings for homes at the point of sale has enjoyed 14 years of cross-party support. The most recent expression of that support came from the Under-Secretary of State for the Environment, Transport and the Regions, the hon. Member for Wallasey (Angela Eagle), herself. Speaking at the national home energy rating fifth national conference in a speech that was widely reported and well received by the energy efficiency industry, the Minister posed the question:
Is there a viable voluntary approach which would ensure that all mortgage lenders provided tailored, reliable, energy-efficiency advice, along with a rating and estimates of energy cost savings and the likely cost of improvement measures; or, having worked on this for several years to no significant effect, is legislation now the only option?There was also cross-party support for a similar Bill introduced shortly before the last general election in early 1997 by one of my colleagues in another place, Lord Ezra. His attempt to introduce the Bill was given a warm welcome by the Labour Front-Bench spokesman in the Lords, Lord Graham of Edmonton, who described the Bill as "a gift horse". The year before that, in 1996, the current Conservative spokesman for environmental protection, the hon. Member for South Suffolk (Mr. Yeo)—a supporter of my Bill—introduced a very similar 10-minute Bill. That was preceded by not just one but three Select Committee reports calling for a scheme to be introduced along similar lines; those reports were published respectively in 1989, 1991 and 1993.
However, after 14 years of cross-party support, Committee reports, Bills, discussions and hoping, we still do not have, to quote the Minister last year:the tailored reliable energy-efficiency advice, along with a rating".1346 The answer to the Minister's question is clear: we need legislation.
I was conscious of the high level of support for the measure when I decided to introduce this Bill after my good fortune in being drawn sixth in the private Members' ballot. I am especially grateful to the 265 Members of Parliament, drawn from almost all parties represented in the House, who signed my early-day motion supporting the Bill. However, what really persuaded me to adopt the Bill were the benefits, both environmental and economic, that such a measure would bring to home owners.
Energy efficiency is one of those matters that few, if any, oppose. Measures that enable us to enjoy the same levels of comfort, warmth, light and convenience, but which use less of the world's resources, are obviously beneficial. Although burning fossil fuels has led to huge improvements in the level of comfort we all enjoy at home, it has its drawbacks. Climate change is one of the biggest environmental threats facing the world today, and this year the Kyoto conference and the strongest ever El Nĩno effect have raised awareness of the problems we may face still higher.
The burning of fossil fuels has been the main contributor to the level of so-called greenhouse gases, among which carbon dioxide is the major culprit. The most effective way to reduce carbon dioxide emissions is to use less energy; energy-efficiency measures allow us to do that.
Energy efficiency in the home can also have serious health effects. The poor quality of the United Kingdom's housing stock leaves approximately 8 million homes in the UK shivering through the winter. That leads to cold-related illnesses and premature deaths, especially among our elderly and poor. Our winter death rate rises by almost one third compared with the summer rate; by contrast, in countries such as Sweden and Norway, the increase is closer to 10 per cent.
I am not claiming that my Bill will end those problems, but I suggest that it is one of many steps that could be taken that would educate people about the ways to reduce the energy that they use and would lead to an improvement in the energy efficiency of homes in the UK. My Bill is just one small step, and I am pleased to see in the Chamber today the hon. Member for Eltham (Mr. Efford), who will today be introducing another measure in the right direction: the Energy Conservation (Housing) Bill.
Additionally and importantly, I believe that the Government are now endeavouring to negotiate a modification of the sixth VAT directive to reduce the rate of VAT on energy-saving materials. I should be grateful if the Under-Secretary of State would, first, confirm that and, secondly, let the House know the Government's target level for VAT on energy-saving materials.
§ Mr. Peter Bottomley (Worthing, West)
Although the House would wish to see a reduction in VAT on energy-saving materials, will the hon. Gentleman confirm that anyone who wants to delay buying them because of the chance of saving a few per cent. on VAT will probably 1347 lose money and anyone considering making small investments in order to achieve major savings should go ahead as soon as they reasonably can?
§ Mr. Burnett
I am delighted by that intervention. The hon. Gentleman is right: a stitch in time saves nine, and there is more to be gained from taking energy-efficiency measures than from waiting for the VAT reduction.
§ Mr. Gerald Bermingham (St. Helens, South)
Does the hon. Gentleman agree that we should perhaps look again at building regulations, triple glazing and various other cavity insulation features? Those issues are not contained in the hon. Gentleman's Bill, which I welcome, but would also add to energy saving.
§ Mr. Burnett
I am grateful to the hon. Gentleman for drawing the House's attention to the matter. The energy-efficiency benefits of cavity wall insulation should often be drawn to the attention of house buyers through this survey. It is an important point for buyers; it is a particular problem now, as quite a few loft insulations have taken place. One of the great problems at the moment is the deficiency in the cavity wall insulation of British housing.
§ Mr. Alan W. Williams (East Carmarthen and Dinefwr)
On the subject of cavity wall insulation, earlier this morning I read the Library's brief and I was impressed by sections of it showing that the proportion of houses with loft insulation, draught-proofing and double glazing is increasing substantially. Why are only 25 per cent. of homes that could have cavity wall insulation actually fitted with it? Are there fears that it could be a health hazard, or what?
§ Mr. Burnett
I am grateful to the hon. Gentleman for raising that point. I noticed the same point in the document issued by the House of Commons Library on the Bill. The reason why sufficient work has not been done on cavity wall insulation is probably because the subject has not been drawn to people's attention. The object of my Bill is to do just that.
The aim of the Bill is to improve the energy efficiency of Britain's housing stock. It will achieve that aim by providing clear and digestible information to people who are buying a house. If the Bill is passed, house buyers will receive a rating, showing the energy efficiency of their home, and a list of suggestions for cost-effective energy-efficiency improvements. An indication will be provided of the period in which such improvements will pay for themselves by reducing fuel consumption and, therefore, fuel bills.
The idea can be compared to many other existing schemes. While the quoted miles-per-gallon figure is not the only factor that the public consider when buying a new car, it is certainly one to which they pay attention and it is regularly reported in car reviews in newspapers and magazines. It is a legal requirement for cars to be tested for the number of miles per gallon that they can do, and that information is displayed at the point of purchase. That requirement was first introduced in 1983; if such information is required for cars, why not for houses?
1348 Another analogous example is that few people would buy a house without discovering into which council tax band it fell. But, despite the fact that fuel bills can often be greater than council tax bills, we currently receive no information on the likely level of fuel bills.
The signs are that people want to receive such information. A Which? survey in 1991 found that 60 per cent. of people wanted information on heating costs when they bought their homes. More recently, a South Bank university study that considered the wishes of new home buyers suggested an even higher figure. It found that 87 per cent. of people wanted to know the energy rating of their home. That answers the criticism that some have made that people may not want the information.
I am glad that the Under-Secretary agrees with me that clear rating combined with energy efficiency advice is important. In her speech at the national home energy rating conference, she made the point with clarity. She asked:How do we know—at a glance—whether a particular home or appliance is energy efficient?She added:Home energy rating informs people how efficient homes are and is the basis of reliable advice tailored to individual homes. Improved energy efficiency across the domestic sector is the end result … I support home energy rating. I support the development of higher standards of delivery of home energy rating and energy efficiency advice services.The Under-Secretary is absolutely right. The information is useful: it is the basis for comparisons between properties and will act as a catalyst towards the installation of energy-efficiency measures. Combined with tailored advice, ratings are an extremely useful tool to persuade people of the benefits of energy efficiency. People do not have to take the advice, but it will highlight the benefits of taking those measures.
I believe that people do want to act on such advice. In 1996, the effect of the work of local energy advice centres was studied by an independent company for the Energy Saving Trust. That research showed that, on average, a visitor to a local energy advice centre went on to save 390 kg of annual carbon dioxide emissions. That figure did not count savings made through changes in behaviour resulting from advice from the local advice centres, so is likely to be an underestimate.
If we assume, therefore, that the 60 per cent. of people who told Which? that they would like such information are as receptive to the advice as those who visit local energy advice centres and go on to take similar steps to improve their homes, we can estimate the environmental benefits that will accrue if the Bill becomes law.
Every year, about 425,000 mortgages are given to people to buy houses that are not newly built. If 60 per cent. of those—225,000 households—were to save an average of 390 kg of carbon dioxide emissions every year, the annual savings would be 0.1 million tonnes of carbon dioxide emissions—a not insignificant figure.
Of course, all this has financial benefits. Recent work by the Energy Saving Trust shows that the average household could save £250 a year on its fuel bills. It is true that not all of that saving would come from changes to the property itself; some would come from purchasing more efficient appliances and light bulbs, but I understand from the trust that the building measures that can be taken 1349 could save an average £175 per household per year. Those are the very measures on which people will receive advice if my Bill becomes law.
§ Mr. Bermingham
There is an obvious point to be explored here. If, in the case of new build, the building regulations are changed to incorporate the proposals that the hon. Gentleman wishes to include in the Bill, the savings on new build would be enormous—we are told that many millions of new houses will be built in the next 10 years—and we would circumvent the problem, if only we started the remedy at the creation.
§ Mr. Burnett
The hon. Gentleman is right. He knows that the building regulations are improved, and the standards increased and heightened, year after year. They are certainly under constant review by the Minister. The higher the standards, the better it is for energy efficiency. However, the Bill especially addresses itself to the huge number—425,000—of older homes that change hands every year.
§ Rev. Martin Smyth (Belfast, South)
I wish to press the hon. Gentleman a little. Although I understand his answer to the hon. Member for St. Helens, South (Mr. Bermingham), at the moment the emphasis of the Bill is on private homes. Surely public housing needs to have the same guidance and direction, obviating the need for much extra work to be done later. I pay tribute to the work that has been done in that regard, in Northern Ireland at least, but much remains to be done, and I wonder whether the guidance that he is seeking in the private sector should not be applicable also to the public sector.
§ Mr. Burnett
I am very grateful to the hon. Gentleman. There is legislation that covers council housing, and I am delighted to see in the Chamber the hon. Member for Eltham, whose Energy Conservation (Housing) Bill, which is due to be debated later today, deals with housing associations and the reports on energy efficiency of houses owned by housing associations.
§ Mr. Peter Bottomley
Following the point made by the hon. Member for Belfast, South (Rev. Martin Smyth), would it not be sensible to amend the Bill, perhaps in Committee, to require a housing association or local authority, offering a home to a new tenant, to provide the information that a lender might provide to a borrower?
§ Mr. Burnett
I am very grateful to the hon. Gentleman for drawing my attention to that point, which we shall consider seriously.
I have described some of the benefits that persuaded me that the Bill should be introduced. As the hon. Member for South Suffolk said when he introduced a similar Bill, the Energy Conservation (Provision of Information) Bill:I cannot imagine what objection there could be to the proposal."—[Official Report, 26 June 1996; Vol. 280, c. 357.]The only possible objections would be that it places too onerous a work load on mortgage lenders or imposes an excessive cost on house buyers, but the simple fact is that it does not. By requiring energy surveys to be carried out only when a property is already being surveyed by the mortgage lender to assess the value and condition of the building, it adds minimally to the work of the surveyor.
1350 It has been calculated that it will take about 10 minutes more to survey a house than at present. It is estimated that that will increase the price of each survey by about £15. My Bill requires mortgage lenders to charge no more than the costs reasonably incurred in providing that information, and the £15 cost is insubstantial.
For the modest additional cost of the energy survey and rating, there can be significant gains. I am glad to be able to report to the House that the industry has accepted that. The Royal Institution of Chartered Surveyors has written to the Association for the Conservation of Energy, which has been working hard with me to get this law passed, to say:We welcome the proposed legislation as a measure to raise the awareness of homeowners to the importance of efficient energy use.The Council of Mortgage Lenders has worked hard to help me formulate these proposals, which will be achieved as effectively as possible, and it has confirmed that it does not oppose the Bill. The CML has confirmed to me that it is happy to support the principle of improving home owners' awareness of the importance of energy efficiency, so it supports the aims of the Bill. The National Association of Estate Agents has confirmed to me its support for the Bill.
The support of those organisations is crucial, as they must implement the Bill, and I am grateful to all of them for working constructively with me and the Bill's supporters to come up with a workable Bill, which achieves what we all agree are sensible aims in improving energy efficiency.
Clause 1 places a duty on mortgage lenders to provide the borrower with information on the energy efficiency of the property that they are buying, together with suggestions on how that can be improved. Such surveys need be carried out only as part of surveys or valuations already required by the mortgage lender, and not on properties less than three years old, which should be subject to higher energy-efficiency standards as the building regulations change from time to time.
Any information provided under clause 1 must be subject to guidance issued by the Secretary of State. Clause 2 sets out guidelines on what should be contained in that guidance. It specifies that the information must include an approved energy rating for the property, a list of suggested energy-efficiency improvements and an indication of the costs, and payback times, of those improvements. That is exactly in line with what the Minister called for at the national home energy rating conference last year—tailored, reliable energy-efficiency advice, along with rating and estimates of energy cost savings and the likely cost of improvement measures.
Clause 3 defines the terms used in the Bill, and it is worth noting that the definitions mean that the Bill will apply only to residential properties.
The most important aspect of clause 4 is the fact that it allows the Government to specify different days for different parts of the Bill to come into force. I understand that surveyors will need to introduce new practices, and perhaps equipment or software, to carry out requirements of the Act, and I certainly do not intend to force on them duties that would be difficult for them to carry out. Although I wish the Bill to be implemented as soon as possible, I recognise the necessity for flexibility on the matter.
1351 I believe that the Bill is useful and workable. As I said at the start of my speech, the voluntary principle has failed. Fourteen years of inaction have shown that there is no viable voluntary approach to deliver the rating and advice that the Minister has called for. Legislation is the only option. I commend those mortgage lenders that, during the past 14 years, have tried various schemes, but, in such a competitive market, until all mortgage lenders are required to carry out such surveys, the few laggards who refuse to provide such a valuable service because they wish to undercut their competitors by a few pounds, will put the more forward-thinking lenders back to their level.
The Bill will force all to catch up, and it will lead to the comprehensive provision of ratings, energy efficiency advice and information to all new home owners. Many hon. Members on both sides of the House have long called for this legislation. I commend the Bill to the House.
§ Mrs. Helen Brinton (Peterborough)
As the hon. Member for Torridge and West Devon (Mr. Burnett) has said, everyone knows the miles per gallon figure for their car, but few actually know the running costs of their homes. I imagine that if thermal photographs were taken of our homes, many of us would be horrified at the amount of heat escaping into the atmosphere, if only because of the amount of money that it wastes.
The Bill would enable people to make an informed calculation, when buying an older property, about how energy efficient it is and, therefore, how costly it will be to run. I understand that it will also enable required improvements to be made as part of a mortgage package, so that the borrower—a home buyer—can pay off such costs on better terms than might otherwise be the case.
Much more important for all of us in the long run, however, is the contribution that the Bill will make to the Government's commitment to counteract the threat of climate change by reducing emissions. This country took the lead at Kyoto last December, and we look forward to further successful negotiations at Bonn and Buenos Aires later this year. Energy efficiency has to play a part in the overall strategy to reduce UK emissions by 20 per cent. on 1990 levels by 2010.
I am proud to be a member of the new Select Committee on Environmental Audit, which is charged with overseeing the greenness of Government Departments and policies.
§ Mr. Bermingham
I am going to be a bore all day until somebody actually agrees with me. Unless we start with new build and new building regulations—which the present and previous Government, I regret to say, have not taken on board—and unless we start increasing regulations to decrease energy loss in new build, we will never get anywhere. We will be for ever patching a torn quilt.
§ Mrs. Brinton
I am grateful for that intervention. My hon. Friend's points are well made and will be taken into consideration.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle)
It might be helpful to my hon. Friend the Member for St. Helens, South (Mr. Bermingham) if I pointed out that the previous Government changed the building regulations in 1995 to increase the level of energy efficiency in new build, and this Government will review those regulations this year. He is getting a bit aerated about a problem that is being dealt with.
§ Mrs. Brinton
I am grateful for that most helpful intervention.
I return to the subject of the new Environmental Audit Committee, which the Deputy Prime Minister said had been appointed to bite his legs if necessary. At last week's meeting—at which both the Secretary of State and the Minister of State gave evidence—we were pleased to welcome the announcement that the Government are to reverse the previous Government's intention to cut the budget of the Energy Saving Trust by £5.5 million in 1998–99. My local paper, the Peterborough Evening Telegraph had a headline which referred to my joy at the news, because this is something for which we in Peterborough have campaigned for some time.
Organisations in my constituency have taken something of a pioneering role in environmental matters. The hon. Member for Torridge and West Devon referred to the importance of energy advice centres. Our energy advice centre in Peterborough—one of 31 such centres in the country—depends partly on the trust for funding, and last year gave free and impartial advice on energy efficiency to its 10,000th customer. That is some achievement. In just over four years, the centre has helped cut Peterborough's fuel bill by £0.5 million—no small figure—and has reduced carbon dioxide emissions by some 55,000 tonnes.
The Peterborough environment city trust has organised a conference for 27 February on energy-efficient homes for the new millennium. I hope to tell the House about that in due course. The trust has nearly completed an energy audit which it describes asthe world's first systematic house by house, business by business audit of an entire city".That is no mean feat, and the trust hopes that it will provide a model for other cities to follow. In 1996–97, a total of 65,023 households consumed 10,320,000 MW hours of energy with a total fuel bill of more than £39 million, releasing 320,000 tonnes of carbon dioxide into the atmosphere.
The Bill would encourage householders to seek the advice available through energy advice centres. It would raise the awareness across the nation of the importance of the Government's environmental aims. I hope that an energy audit of the future would find greatly reduced energy consumption, emissions and costs. I imagine that the fine drafting of the Bill which will be necessary might result in some simplification in the interests of implementing it as quickly and effectively as possible.
I was pleased to hear that the Council of Mortgage Lenders supports the underlying principles of the Bill. The council and its customers can make a contribution to the battle to save energy and begin to reverse the damage that has been done to the world's climate system, with all the consequences that we have begun to understand only in recent years.
§ 10.4 am
§ Mr. David Maclean (Penrith and The Border)
I welcome the Bill, which no one in the House could object to in principle. My only concerns are with the regulations that may be produced by the Secretary of State one day. It has been my experience that the devil is always in the detail.
I wish to apologise to the hon. Member for Torridge and West Devon (Mr. Burnett) and to the Minister because I have to go out around lunchtime and I may not hear the winding-up speeches. I intend to be around if I possibly can.
When I was a Minister at the Ministry of Agriculture, Fisheries and Food, we passed sensible laws on food safety. The only problem was that they had to be interpreted by local environmental health officers, not all of whom interpreted those laws in the spirit in which they were intended. In one case in my constituency, a village hall with a cracked window pane had its kitchen closed down on a strict interpretation by one local environmental health officer of the regulations and the Act of Parliament.
I make that point merely to emphasise that although clause 2 seems eminently sensible—and, no doubt, it is—my concern from my experience in government is that Departments, sensibly, will attempt to cover all eventualities in the regulations. They will wish to ensure that the mortgage society takes as much care as possible to ensure that the householder has all the information he or she needs. I do not expect to see de minimis regulations. Inevitably, bureaucracies—with the best will in the world—will tend to produce regulations and guidance for mortgage lenders which will be more detailed than perhaps the hon. Member for Torridge and West Devon anticipates.
It is some time since I had responsibility in the Department of the Environment, but I seem to remember that there were two organisations involved in giving energy ratings to homes. Perhaps there is only one now, or perhaps they have been consolidated; I do not know. The organisations had different methodologies and, inevitably, different costs were involved.
I subjected my own home to an energy rating by one of those organisations. It did it thoroughly, no doubt to show that it was entirely competent. I was presented with a detailed list of possible improvements, some of which were obvious and simple. There was a large list of items that the energy rating expert considered would improve the energy efficiency of my home. These included cheap, major items such as extra loft insulation and cutting down on draughts under doors.
Further down the list, I saw more expensive items for which the payback was non-existent. That is why it is important that clause 2 refers toan indicative range of costs and an indicative payback time for installing each of the energy efficiency improvements.It will be a daunting task for most householders to determine the most energy-efficient measures to take. The Minister or her officials may have done a survey—Which? also points these things out—and asked people what is the best thing that they can do to insulate their home. Most would say double glazing. However, that would be quite low down the list. Stopping the heat going up through the roof would be the first item, and stopping 1354 it going out through the walls and windows may come third or fourth on the list. If, because of the guidance that the Government issue and the information that the mortgage provider gives to the householder, double glazing appears as the 10th item on the list, the householder may nevertheless rush to have that done, rather than any of the other options.
I shall not labour the point. I merely suggest to the hon. Gentleman and to the Minister that the matter is not as simple as it first appears. Straightforward guidance must be given on the thousands of different types of homes in Britain. The 400,000 older homes that change hands each year are all individual. Even identical homes in a street will have been treated differently over the years. Some will have more draughts than others; some will have greater thermal efficiency. They will all be different. The guidance to the householder must be carefully thought out, but the danger is that it will then become over-elaborate and over-bureaucratic. That is when the costs rise.
I do not have any suggestion for the hon. Gentleman of what could be put into the Bill to control the costs. I can only say from my experience of legislation that when, at least a year ahead of the regulations being produced, we had a guess and a forecast that the additional cost would be £15, you could bet your bottom dollar that it would be nearer £45. Perhaps the hon. Gentleman has better information on what the actual costs will be.
There are also questions for the Minister to answer. I know that it is not stated in the Bill, and that there is no money resolution, but does she foresee any case where the Government might raise fees or a charge for the guidance or advice that will be given? Does she see a need for those carrying out the energy rating to be licensed or regulated? They may be controlled at present, or the Government may recommend one or two organisations to carry out the energy rating. In that case, there will be a cost to the Department, and there may be a demand to recover the costs of approving the energy rating staff or the costs of providing the guidance. Does the Minister foresee a need to recover those costs, not from the householder, of course, but perhaps from the building societies or those carrying out the energy rating?
I support the broad principle of the Bill. If it can be carried into law so that straightforward, sensible guidance can be issued to mortgage lenders who can then, in the course of survey, produce a simple leaflet or checklist of the key steps that householders could take at an appropriate cost to make their homes energy efficient, and if that can be done for about £15 extra, the hon. Gentleman will have provided a great service to 400,000 new home owners each year. At that rate of turnover, it would presumably be only 10 to 12 years before the bulk of our housing stock would have had an energy rating through the valuation, and householders could take action. I merely caution the hon. Gentleman again that the matter may not be as simple or as cheap as he envisages.
I hope that I shall be present for the Minister's reply to the debate, and I apologise once again if I am not. I assure her that I shall read her remarks carefully in Hansard. After the Committee stage, when more information has come to light on the sort of guidance and regulations that the Government will produce, we shall be in a better position to determine the costs.
1355 The Department of the Environment is now the Department of the Environment, Transport and the Regions. My hon. Friend the Member for Worthing, West (Mr. Bottomley) may boast about how good the Department of Transport was, but I had great respect for the Department of the Environment. I always thought that it was an underrated Department, snobbishly looked down on by other, grander Departments of State, which were not as fast at responding to queries as it was. It is now part of a highly efficient Department, and the staff involved in energy efficiency are dedicated and want to make the greatest impact to help Britain meet its targets.
One of the dangers inherent in the Bill is that the Department may try to do too much and put too big a burden on householders, who may baulk at it. If householders get such a frightening list of things to do, they will not buy the house or they will look at the small print and see that they do not have to follow the recommendations. The list may be binned, or they may warm their homes by putting it on the fire. If the list is kept simple, householders will carry it out. If it is too frightening and too bureaucratic, they will not. That is my final message to the Government and to the hon. Gentleman, as I wish his Bill success.
§ Mr. Gareth R. Thomas (Harrow, West)
I support the Bill and congratulate the hon. Member for Torridge and West Devon (Mr. Burnett) on bringing it before the House. By helping to persuade home owners to reduce their energy consumption and by providing information and generating awareness, the Bill will help the Government to achieve some of their key objectives for the environment and for energy conservation.
The Government's commitment to the environment has been clear, and is reflected, as my hon. Friend the Member for Peterborough (Mrs. Brinton) mentioned, in the setting up of the Environmental Audit Committee, on which I, too, am delighted to serve. The Government have also helped to achieve international agreement for legally binding targets to cut greenhouse gas emissions. My right hon. Friend the Deputy Prime Minister and his team have rightly received considerable praise for their role in securing consensus among the 160 nations represented at Kyoto, many of which entered those negotiations with very different agendas.
Notwithstanding Kyoto, the Government's aim of reducing carbon dioxide emissions by 20 per cent. of their 1990 levels by the year 2010 will be achieved only through a realistic programme of policy measure that encourage alternative energy sources, such as renewables, and encourage less energy to be used through much greater energy efficiency.
Consultations on the sustainable development strategy launched this week and a new UK climate change programme later this year, coupled with work already under way—for example, on the integrated transport strategy—will make important contributions to delivering greater energy efficiency.
Greater domestic energy efficiency has remained an elusive ambition. As the number of households has expanded, energy consumption has continued to rise 1356 substantially—by 30 per cent. from 1970 to 1996. A range of measures to encourage improved energy efficiency among home owners is, therefore, vital.
Many consumers remain unaware of or do not understand the potential benefits that the installation of energy-saving measures can have for reducing their energy consumption and saving often considerable sums. Greater domestic energy efficiency is important not only in environmental terms. It yields savings on fuel bills, reduces maintenance costs and improves comfort, especially for the less well-off.
Initiatives to promote energy efficiency awareness and to educate home owners on its benefits are important. More energy efficiency information will, I believe, be well received by potential home owners. The survey by Which?, to which the hon. Member for Torridge and West Devon referred, found that 60 per cent. of those questioned would have liked information on heating costs when buying their home.
The Government are already undertaking a wide range of measures to facilitate enhanced energy efficiency. The energy efficiency best practice programme is well established and is an important source of advice and support for businesses that want to reduce their energy consumption. In the domestic sector, less well-off consumers are helped to improve the energy efficiency of their homes through the Government's home energy efficiency scheme, which provides, on average, 400,000 grants a year worth a total of £75 million.
As my hon. Friend the Member for East Carmarthen and Dinefwr (Mr. Williams) and the hon. Member for Torridge and West Devon acknowledged, at the end of 1995, only 25 per cent. of homes with cavity walls had insulation. As cavity wall insulation can achieve a reduction of up to 60 per cent. in heat loss through walls, the Government's decision last year to extend the scope of the home energy efficiency scheme to cover a greater range of measures, including cavity wall insulation, is particularly welcome. Also welcome are the plans by my right hon. Friend the Chancellor to reduce VAT on energy-saving measures for the less well-off. That will mean that an extra 40,000 grants may be made under the home energy efficiency scheme alone.
The Energy Saving Trust has many initiatives funded by the Government: for example, a network of excellent energy efficiency advice centres—to which my hon. Friend the Member for Peterborough has already referred—and the energy efficiency campaign, in which I and, I am sure, many hon. Members participated last year. Energy Saving Trust initiatives grant funded by the Government to promote specific energy-saving measures by way of cash-back promotions also raise awareness and challenge consumer inertia.
Energy-efficiency measures in the domestic environment are also encouraged by other Departments. For example, the new deal will offer the welcome option of a place on an environmental task force, carrying out energy-efficiency improvements in the homes of the elderly. The capital receipts initiative, too, offers local authorities the opportunity to facilitate further energy-efficiency initiatives for their tenants.
In the context of Kyoto and the Government's commitment to the 20 per cent. target, the decision by my right hon. Friend the Deputy Prime Minister to reverse the previous Government's intention to cut funding for 1357 the Energy Saving Trust by £5.5 million in the next financial year is further proof of the Government's commitment to environmental and especially energy efficiency aims.
Local authorities can play a particularly important role by encouraging, promoting and delivering more energy-efficient homes. My local authority has a well-established energy efficiency programme, which is particularly effective for council housing in Harrow. Capital resources have been directed at the most energy-inefficient homes, a free energy efficiency helpline has been established and written energy advice is available to tenants. Similarly, a range of initiatives promoting energy efficiency to private home owners is also firmly in place.
Under the Home Energy Conservation Act 1995, local authorities have a duty to prepare an energy conservation report, setting out measures that could improve energy efficiency significantly, in both social housing and private homes in their areas. The Bill could make an important contribution in districts such as Harrow, where there is a high proportion of privately owned homes, alongside the council's efforts to encourage private home owners to implement energy-efficiency measures.
Positive support for the principles underlying the Bill from the Council of Mortgage Lenders is particularly welcome. It builds on the positive examples of mortgage lenders' encouraging energy efficiency on the part of their customers, to which hon. Members have referred. That could represent a positive step in the campaign to conserve energy through greater energy efficiency. I share the concern expressed by other hon. Members about the need to keep the legislation simple. Consumers need information about what action is possible to improve their future home energy usage, how much it will cost, and how much such measures will save in the future.
I hope that those responsible for the Bill will be careful to ensure that its key clauses remain clearly focused on the provision of information. The Bill could make an important contribution, post-Kyoto, to the Government's delivery of key environmental and, particularly, energy efficiency objectives. I warmly welcome it.
§ Mr. Peter Luff (Mid-Worcestershire)
I apologise to the Minister if I am unable to stay to hear her winding-up speech. I have an important constituency engagement later this afternoon at an old people's home that the Government are threatening with privatisation. I am particularly disappointed as I had hoped to participate in the debate on the Employment (Age Discrimination in Advertisements) Bill.
§ Mr. Luff
My hon. Friend is right, but it is a matter of great concern in my constituency and I am sorry that I cannot be here to speak on that Bill.
I should declare a personal interest in the Bill as I am committed to the cause of energy conservation. When I took a job in London and bought my first home, I insulated the loft as soon as I could afford it. Unfortunately, I chose to do so during the coldest winter for many years, and one day I received a telephone call at work to say that water was pouring from my front door. The insulation in the loft had been much too effective, 1358 the water tank had frozen and my house lay in ruins. It cost many thousands of pounds to put the damage right, but fortunately it was fully insured. I suspect that the energy incurred in repairing my house was considerably greater than the energy I had saved through installing the insulation.
I must sound a sceptical note in the debate, although I certainly do not oppose the Bill. Lord Walker of Worcester is one of my most distinguished constituents and—as the hon. Member for Torridge and West Devon (Mr. Burnett), who introduced the Bill, reminded us—he was one of the first people to take an interest in the subject. I could not, therefore, bring myself to oppose the Bill, but it is important not to make too many claims for it. Like my right hon. Friend the Member for Penrith and The Border (Mr. Maclean), I believe that the Bill requires a Committee stage in order to thrash out the details.
I was a little disappointed to hear the hon. Member for Torridge and West Devon refer to the failure of voluntary action. It is true that progress has been a little disappointing. He echoed the words of the Association for the Conservation of Energy which, in its note to me, said:The result is virtual complete inaction: this is a classic case of the failure of the voluntary approach over a period of 13 years. Legislation now could change what almost everyone agrees is a highly desirable aim that would cost the public purse nothing.I am genuinely grateful to the Minister for her comments. More has been achieved in home energy conservation than some people realise. Much credit is owed to the previous Government in that respect, but credit is also due to this Government for the way in which they have advanced the process. That should be a matter of consensus in the House.
The home energy efficiency scheme, introduced in 1991 and recently improved by the Government, does a great deal in my constituency to make the lives of the elderly, in particular, more comfortable and affordable. About 10 per cent. of Britain's housing stock has already benefited from the scheme, which has introduced practical and sensible measures that make people's lives better and save money. The Home Energy Conservation Act 1995, which was passed in the previous Parliament and originated from a private Member's Bill—I remember speaking in that debate—provides useful additional information in this area.
I was glad to hear the Minister's comments about changes to building regulations and energy ratings, but I was disappointed to hear one of her colleagues disparage the achievements—which are quite considerable. The Building Act 1984 empowers the Secretary of State to make building regulations that have the conservation of fuel and power as one of their three broad aims. National building regulations for insulation were first introduced in 1965—some time ago. The 1994 regulations introduced the most recent improvements, and the Minister has said that there are more to come. The House will welcome that, so long as we can strike a balance between various issues, including the difficulty of condensation and other technical matters.
It is important that the regulations be improved steadily. They already provide for quite comprehensive improvements, including limiting heat loss through the fabric of the building; controlling the operation of the space heating and hot water systems; limiting heat loss from hot water vessels and hot water service pipework; 1359 limiting heat loss from hot water pipes and hot air ducts used for space heating; and installing in buildings artificial lighting systems that are designed and constructed to use no more fuel and power than is reasonable in the circumstances, and making reasonable provision for controlling such systems. That is quite a good list and I pay tribute to all those involved in developing the process.
Credit is also due to those who developed the energy rating system. The Government's standard assessment procedure ranks new houses on a scale from one to 100, with 60 as the pass level. The English house condition survey points to a real problem in this area. The survey of all occupied properties in England found that 3 million homes had an SAP rating of less than 20. There is a real problem and, to that extent, I share the concerns expressed by the hon. Member for Torridge and West Devon.
§ Mr. Peter Bottomley
I am grateful to my hon. Friend for raising that point. Is not it true that many of those 3 million homes are occupied by the very poor or by those who have least choice about their housing? Although I do not wish to overload this Bill, does my hon. Friend agree that the House should consider young people housed in bedsits who must pay £12 per week for heating which, in energy-efficiency terms, is equivalent to the cost of heating a five-bedroom dwelling? Many elderly people are protected tenants in privately rented accommodation that has had virtually nothing spent on it. They are often on income support and they have to pay two or three times as much to be cold as many others pay to be warm. I am not saying that the Bill should address their problems, but my hon. Friend is right to point out the number of homes and people who will not be helped by the Bill and who need help in some other way.
§ Mr. Luff
My hon. Friend has anticipated one of my arguments. Private Members' Bills cannot, of course, incur expenditure for the Government because that is outside their scope. I have a strong suspicion that the true problem that the Bill is designed to address would be best solved by offering increased expenditure and increased grants to precisely the type of people my hon. Friend has described. I am encouraged that the Government are taking that matter seriously because I believe that it is the real route to solving the problem. It would be unfair to say that the Bill is mere window dressing, but it is a modest contribution to the problem that my hon. Friend has highlighted.
§ Angela Eagle
It may help hon. Members to know that the Government have established an interdepartmental committee on fuel poverty and that we are studying precisely how we can target help at the problem the hon. Member for Worthing, West (Mr. Bottomley) has described. We are also reviewing the home energy efficiency scheme. Initial results appear to suggest, as the hon. Member said, that a serious problem in the private rented sector remains unaddressed. We are putting our mind to considering what we can do to achieve results in that sector, where they are most needed.
§ Mr. Luff
I am grateful to the Minister for that information. I am also pleased to note the mood of 1360 consensus that seems to exist in the House—such sentiment is important when considering energy efficiency. I am encouraged by the Minister's remarks. We all agree about the important health implications, particularly with an aging population, of ensuring that energy efficiency is delivered. It is the elderly who are most susceptible although, as my hon. Friend the Member for Worthing, West (Mr. Bottomley) reminded us, the young poor often live in inadequate conditions.
I do not oppose the principles of the Bill, but I have some reservations about its likely contribution to energy efficiency. I also have some concern about its practical effects. The hon. Member for Torridge and West Devon was right to say that the Council of Mortgage Lenders supports the Bill in principle. It has noted, however, that it is important to ensure that it is "practical and workable". In the past, the council has been sceptical about such measures because of their cost implications and because it felt that there was insufficient public interest in energy efficiency. I believe that we can now accept that public interest in energy efficiency has grown, so perhaps concern about public lack of interest no longer exists. I accept, however, that the implementation costs should be considered in Committee.
We should pay tribute to what some mortgage lenders have done voluntarily to help those who have taken on new properties to understand their energy implications. I congratulate the many lenders who promote the work of the Energy Saving Trust. One can give people advice, but will they act on it? We can take a horse to water, but can we make it drink?
A recent housing finance survey revealed that 48 per cent. of respondents would not pay for the cost of an energy-efficiency survey and that 11 per cent. did not want to pay more than £25. That is a modest cost and I accept that it can be afforded by most people. The estimated cost of the improvements that flow from such a survey is about £300—that is the figure suggested by most involved in energy efficiency. That is quite a lot of money for someone who has moved into a new property. Often, they are precisely the people who need to ensure that their house is energy efficient. That is why I believe that grants and practical assistance are more important than forcing people to have an energy-efficiency survey. The survey would not have any value unless the Government took further steps to ensure that action was taken as a result of it.
When I first bought the house in Battersea that had the problems I described earlier, the last thing I could have done was make any improvement that cost £300. I had to live in pretty ropy conditions for several years and my priority was probably a new carpet rather than energy efficiency.
I was grateful to hear what the Minister said about tenants and people in social housing. I am not aware of much research on the likely impact of the Bill on owner-occupiers, but the Joseph Rowntree Foundation published an interesting survey just last month on the effectiveness of energy advice to tenants. It contains some lessons for the Bill. In its summary that report states:Although much information exists in relation to the costs and benefits of capital works to property to improve energy efficiency, little has been done to date on the cost-effectiveness of energy advice as an energy-saving 'tool'. This project, undertaken by BRECSU (the Building Research Institute Energy Conservation Unit), aimed to determine the costs and benefits of providing energy 1361 advice alone to social housing tenants. The research surveyed 100 households before and after energy advice was delivered, and found"—it is an important conclusion—The provision of energy advice alone did not lead directly to savings for the majority of tenants in the group studied. Most were already using their heating systems correctly and, due to financial constraints, used energy very efficiently.The survey revealed the important fact that when someone goes in and helps to explore with a tenant what he can do to improve his home, the situation changes a bit. It reported:One-to-one advice did, however, uncover 'missed' opportunities for capital works to properties. Despite previous publicity for the schemes the advisors found that 28 per cent. of the group were eligible for a Home Energy Efficiency Scheme Grant (for which they subsequently successfully applied).That mechanism has a lot more to offer than the Bill. The Bill is not bad, but I worry whether it will achieve the benefits claimed for it.
The Joseph Rowntree Foundation report also concludedFor low-income households in inefficient homes, energy advice aimed at changing behaviour is no substitute for improvements to the building fabric, for example, cavity wall insulation.Frankly, the House should be more concerned with such improvements than with the Bill.
The Council of Mortgage Lenders has also produced some interesting figures relating to the housing finance survey, which asked whether respondents would be prepared to make improvements to their homes as a result of an energy-efficiency report. It notes thatThirty-two per cent. of respondents said that they would consider such action 'very seriously' and 38 per cent. said they would consider it 'fairly seriously'".Those are not terribly high figures, although I accept that it represents a worthwhile gain. The council also repeats the point that £300 is quite a lot of money for someone who has just moved into a new home and taken out the maximum possible mortgage.
The House must also be concerned about the compliance costs of the Bill on business. I am satisfied that they are small and acceptable, but we must consider them carefully, because they have implications for lenders. The Bill, however, makes provision for lenders to pass those costs on to the borrower. The cost of providing the information relating to energy efficiency is estimated at between £15 and £20. There are other costs that should be taken into account, such as administration, liaising with and arranging training for the panellists.
The average cost to a valuer of conducting a survey could be equivalent to charging for 10 minutes of his time, and he could conduct up to six valuations a day. The Incorporated Society of Valuers and Auctioneers has estimated that the loss of income for a firm of valuers could be £23,300 a year. It is not a cost-free option and we must satisfy ourselves that the proposal will work.
§ Mr. Luff
My hon. Friend will have to take that up with the society; I am not an expert.
As the Council of Mortgage Lenders points out:Whilst lenders are not themselves expert in providing detailed information on how a property's energy efficiency can be improved, 1362 they support the principle of giving borrowers general guidance on how improvements may be achieved, together with an indication of costs and payback times for installing improvements.I do not believe that it has highlighted major worries, but we must be satisfied that the Government have considered them when they outline their approach to the Bill.
I share the concerns expressed by my right hon. Friend the Member for Penrith and The Border about some of the possible practical implications of the Bill. Other issues also need to be explored in Committee. For example, is the provision for the exclusion of new homes—subject to a three-year limit—right? I accept that it is a complete waste of effort to impose the cost of conducting an energy-efficiency survey on homes that have been built according to the new building regulations and therefore fully comply with them. They cannot be significantly improved. Should that time limit be fixed in statute, or should there be some accommodation for houses of four or five years old, which have been built according to those building regulations? Is there a real gain from imposing the cost of the survey on a house aged three years and one day? Would that survey lead to anything being done to improve the energy efficiency of such a house?
Bearing in mind what I have said about the likely action that is taken as a result of such energy-efficiency surveys, should we make the offer of such a survey compulsory? Should we make it compulsory for a mortgage lender to offer it, while not obliging the potential purchaser to take it up? That way, those who take it up would be the most likely to act on its findings. Perhaps targeting those who would take such action is the sensible route for us. Perhaps we should limit that element of compulsion to houses above a certain value, or at least find a mechanism to compensate or subsidise those who buy cheaper houses. We should remember that the extra cost of between £20 and £25 for a survey is quite a lot for someone who has bought a small house at low cost. I am deeply concerned about the large number of people who buy houses with just a valuation survey instead of a full structural survey. It is folly to do that. If the Bill is passed and someone buys a house after having just a valuation survey, the survey might highlight just one physical defect in the property—its energy efficiency—when there could be a lot more wrong with it that would cost a great deal to put right. I worry that by highlighting that one narrow but important aspect, people might be distracted from the more fundamental structural problems that houses can have.
I accept that there are hidden benefits that flow from the Bill, which I do not think the hon. Member for Torridge and West Devon made much of.
§ Mr. Burnett
The hon. Gentleman will be aware that when valuers produce a valuation they inevitably write in it, using clear words, a disclaimer.
§ Mr. Burnett
If they are producing a valuation, they will put in a disclaimer to the effect that they are not producing a structural survey. I cannot see the point that the hon. Gentleman just made.
§ Mr. Luff
I am saying that if an individual buys a house with a valuation survey that identifies £300-worth 1363 of energy-efficiency work that should be done, he may spend that amount only to discover later something much more fundamentally wrong that he cannot afford to correct. I would much rather that people were obliged to have full structural surveys when they make such a commitment.
§ Angela Eagle
The Bill impacts on various areas of the house-buying process. It may be helpful if I tell the House that the Government have launched a review of the house-buying process, in which, I suspect, some of the points that the hon. Gentleman is making about structural surveys, the method of buying houses, and the associated costs, will be looked at closely. The Government are anxious that the Bill should not make the house-buying process more inefficient or slow it up, because it is already too slow.
§ Mr. Luff
I am grateful to the Minister for her intervention, which was helpful and reinforced the concern that I was expressing.
Those who are selling their houses will not want a problem to be identified in the survey. Whenever I sold my houses, I used to go around to see what was wrong and put it right to ensure that I had a quick, clean sale. Sellers might say, "Hang about. Perhaps I ought to make the energy-efficiency improvements now to ensure that the valuation survey will come out completely clean and without any problems at all." That may be the single most beneficial impact of the Bill. That is one of the major reasons why I support it.
I have spoken on a basis of broad consensus so far, but I shall now say something slightly controversial. I believe that the Bill needs a Committee stage to thrash out some of the details that I and my right hon. Friend the Member for Penrith and The Border have mentioned. The Minister seems to agree with that, but will it get it? There does not seem to be much time for private Members' Bills, thanks to the time that the Wild Mammals (Hunting with Dogs) Bill, which would ban fox hunting, is taking. I am concerned that some Labour Members seem to think that global warming is less important than banning fox hunting. That is a matter of some concern to the House.
§ Mr. John Heppell (Nottingham, East)
I am pleased that there is consensus on the Bill. The hon. Member for Torridge and West Devon (Mr. Burnett) seems to have the support of professional organisations and of both sides of the House, mainly because of the one ingredient that needs to be there to ensure that the Bill survives—common sense. It is common sense that we do what the hon. Gentleman suggests in his Bill. We cannot create energy without some environmental impact. Although it is much better to use sustainable forms of energy creation, such as wind power, solar power and so on, even these have some impact on the environment. We can work at trying to improve the methods of creating energy, but in some respects what the Bill is trying to do is much more important: to reduce the amount of energy that we use. It would be difficult for any hon. Member, or anyone outside to fault energy efficiency.
I appeal to the hon. Gentleman not to be talked into, or pressurised into, extending the scope of his Bill. It is modest and practical, but that does mean that it 1364 is negative. It has a certain purpose. It is easy for hon. Members to say that it does not do this or that about building regulations, and so on. Thankfully, my hon. Friend the Minister intervened to point out that that is not what the Bill is about.
The hon. Gentleman should allow the Bill to remain simple. I agree with the right hon. Member for Penrith and The Border (Mr. Maclean) that the Bill could have complications. I get mixed up when we talk about the standard assessment procedure and energy ratings, that it is one to 100, but there are other energy ratings. We have to be careful—because the Bill's main purpose is to pass on information to the general public—that we do not fall into the same trap that people have fallen into in the past by speaking in jargon.
The Bill can survive. My experience of the House is that private Members' Bills are passed because they deal with a specific problem. The more a Bill is extended, the less likely it is to get on the statute book. I want the Bill to succeed. My advice to the hon. Gentleman is to keep the Bill as simple as he possibly can.
Domestic energy accounts for some 30 per cent. of the energy that is consumed. The Bill will affect only a small proportion of domestic energy. It will not, for example, deal with people in council housing or in private, rented accommodation. On energy efficiency, we need to concentrate not on one particular measure but on lots of different measures. That is why I am pleased that almost every time my hon. Friend the Minister has intervened today it has been to announce some new initiative—the interdepartmental fuel poverty committee, or a review of building regulations. This is not an issue which can be dealt with on its own if we are to meet the targets that we set ourselves and on which the Deputy Prime Minister decided at Kyoto.
Just in terms of trying to save energy, the Bill is commendable, but, from my own point of view, that is not its most important aspect. My hon. Friend hon. Friend the Member for Harrow, West (Mr. Thomas) mentioned reduced maintenance and fuel costs. I represent a constituency which has one of the highest levels of poverty in the entire country, and one of the highest levels of unemployment—certainly the highest in the east midlands. If my memory serves me well, my constituency has more unemployed than any Welsh or Scottish constituency, so the idea of a development agency to try to get some of the benefits that Scotland and Wales have had particularly appeals to me.
I like the Bill because it can help tackle poverty. It may not be able to help those who are at the bottom level of poverty, but it will help those on limited incomes who are trying to purchase a house for the first time. It will make people's lives more comfortable and, at the same time, help to take them out of poverty.
I recognise that the Government are already taking action in that respect. Less well-off domestic consumers are assisted by the Government's home energy efficiency scheme, which provides some 400,000 grants a year. I accept what the hon. Member for Mid-Worcestershire (Mr. Luff) said—that the previous Government did a lot of good work in terms of energy efficiency and conservation.
§ Mr. Heppell
Hon. Friends shake their heads, but I think that it is best to acknowledge the fact that 1365 improvements have been made over the years. The previous Government did not move fast enough, and I hope that the new Government will do more. I am particularly pleased about their announcement of a reduction in VAT on energy-saving measures for the less well-off, which is to be provided under Government-funded schemes. It will mean an extra 40,000 grants a year under the home energy-efficiency scheme.
§ Mr. Bermingham
I come from an area that is as poor as, if not poorer than, that of my hon. Friend. Given the deprivation in the housing stock, an extra 40,000 grants a year is a drop in the ocean of need. I intend in due course to press the Minister to increase the amount available to help local authorities to provide the grants that are needed.
§ Mr. Heppell
I partly agree with my hon. Friend. It is easy to say that an initiative is just a drop in the ocean. It would be easy to say that the Bill does not deal with everybody so it is just a drop in the ocean, but all those measures together combine to make a great deal of difference. If my hon. Friend's were one of the 40,000 households that benefited because of the change in VAT on energy-efficiency schemes, he would not think that the measure was just a drop in the ocean.
I am not a purist in terms of the environment and I do not advocate year zero. I recognise that other considerations, besides the environment, must be taken into account, including the economy and especially poverty in society. It could be argued that a reduction in VAT will increase the amount of energy used. While that may be marginally right, if the amount of energy used stops an elderly person dying from hypothermia, it is not wasted energy. I want energy to be used in that way.
§ Angela Eagle
My hon. Friend is making an extremely good point. I hope that he has seen the consultation document launched by my right hon. Friend the Deputy Prime Minister a few days ago, which makes precisely that point. To achieve sustainable development, a mix of economic, environmental and social issues must be at the core of public policy.
§ Mr. Heppell
I thank my hon. Friend for her useful intervention. I have not seen the document yet, but I assure her that I shall read it with interest and study every detail because those issues concern my constituents.
I am pleased that the Government have gone beyond what the previous Government did. It shows that Labour provides value added. The reversal of the cut of £5.5 million to the Energy Saving Trust is particularly welcome. However, the majority of environmental and energy issues cannot be tackled by legislation. Some legislation is needed, but rhetoric at national level needs to be replaced by action locally. I am much more concerned by what happens locally because that is where policies are delivered. Conservative Members spend a great deal of time criticising and ridiculing local government because it is a fairly safe target, given that so few councils are Conservative controlled. Many councils, however, have gone far beyond their statutory responsibilities and have put much time and effort into ensuring that proper energy-efficiency schemes are in place and the worst-off are helped.
A scheme in my constituency is Nottingham Energy Awareness, which is recognised by all councillors and Members of Parliament who represent Nottingham. We 1366 have all been to see projects that it has organised. I shall briefly skim through its aims and objectives, which are to enable fuel-poor households to save energy in their homes by using it more efficiently; to promote energy awareness through the provision of training for community leaders and those such as local authority staff who come into contact with the fuel-poor in their work; to encourage take-up of grant assistance for energy- efficiency improvements, particularly the Government's home energy-efficiency scheme; and to promote the integration of energy efficiency improvements, with maintenance and improvement programmes for the housing stock owned by Nottingham city council and other social housing projects.
The targets that the organisation has set are energy efficiency improvements; improved management of energy use within the home; reduced fuel bills, easing financial pressure on the household; reducing cold-related health problems; increased comfort in the home; and environmental improvements through cutting emissions of CO2 and other pollutants. The project's principal activities are the provision of advice on all aspects of energy efficiency through home visits or telephone calls; presentations to community organisations, attendance at exhibitions and working with local media; basic energy awareness training courses for community leaders and local authority staff; promotion of grants and assistance to help them; and energy surveys and audits in the home.
Those activities have been ongoing since 1995, so I admit that some were funded and helped by the previous Government, but it was mainly the local authority's input, and the voluntary sector that worked with the schemes, that kept them going.
I note what the hon. Member for Torridge and West Devon said in his opening speech when he congratulated Lord Ezra on introducing a similar Bill in the 1996–97 Session. When I talked to Lord Ezra just yesterday he promised that he would watch our proceedings on the screen today to see the Bill's progress. He is certainly rooting for the Bill in the hope that it gets through.
Lord Ezra also discussed with me a project that he is helping to set up in Nottingham called the Nottingham Energy Partnership. It is a private-public partnership, which will bring together various organisations in Nottingham—the public, private and voluntary sectors, and residents—to improve energy efficiency. It was agreed by the council last November, but is expected to be launched publicly in the spring. Its aim is to analyse energy flows and usage profiles. A preliminary "energy balance" has already been undertaken and details will be given at the launch. Hon. Members may remember that Nottingham did some thermal photography of the whole city to try to establish where the worst places were for energy loss. The project aims to identify ways in which economies could be made in energy use. It also aims to pay particular regard to job creation opportunities, so it involves the economy, as well as the social side, because it also contributes to the anti-poverty initiative. Finally, it aims to bring enhanced environmental benefits as well.
That seems to be an example of the type of local partnership that is needed to try to change the way in which the general public, business and industry think about energy. I had a word with the Deputy Prime Minister yesterday and asked him whether he would be willing to come, possibly with Lord Ezra, to the launch of the project, which I am certain will have significant effects for the people of Nottingham. My right hon. Friend 1367 told me that if his diary permitted he would like to do that, because the project fits in with the sort of initiative that he wants to see advanced.
I congratulate the hon. Member for Torridge and West Devon on introducing the initiative. To some, it may seem a modest initiative of little consequence, but the 400,000 households that it will affect will not see it in that way. The Bill is a practical measure which can help people to make their lives better while improving the environment. I welcome it, and will support it at every opportunity.
§ 11.1 am
§ Mr. Andrew Stunell (Hazel Grove)
On behalf of the Liberal Democrats, I tell the House we support the Bill—a "warm welcome" would be the appropriate phrase to use. I intended to say something about the savings that it could bring about, but what I had to say was very similar to what the hon. Member for Harrow, West (Mr. Thomas) said about savings from improving the energy efficiency of our housing stock; we certainly have one of the worst levels of efficiency in Europe.
Instead, I shall comment on a couple of points that have arisen from the debate about what the priorities should be for energy-efficiency measures. At the moment, the commercial market tries to persuade home owners that double or triple glazing and fancy plastic doors represent the way forward, but professionals know that roof and wall insulation, plus draught exclusion and improvements to the efficiency of heating schemes, are far more important. One of the benefits of the Bill will be to bring before the 400,000 purchasers of property genuinely efficient and effective ways of spending money to improve the energy efficiency of their homes.
When my hon. Friend the Member for Torridge and West Devon (Mr. Burnett) introduced his Bill, he said that people who buy a car expect to be told how many miles per gallon it will do, and that when we read a review of a car's performance we expect to see that information, yet when we buy a house, whose running costs are also important, it does not occur to anybody that information about them would be useful or valuable.
We should give credit to the development of building regulations and the energy efficiency rules as they apply to new-build houses. The introduction of standard assessment procedures—SAP—is to be welcomed, and its recent extension to housing in Scotland is highly desirable and commendable.
I draw particular attention to clause 2(2)(a)(iii), which requires houses going through the process envisaged by the Bill to have an energy rating. That will not only be useful to the immediate purchaser; it will be of long-term benefit to the housing market.
At the moment, estate agents say, "It's got two bathrooms en-suite, a double garage and a nicely made garden," and so on. In future, the agent should add the fact that the house has an SAP rating of 63, 71, or whatever. An SAP rating should be a marketable quality in any home; it could certainly be rather more useful than being told whether the master bedroom has built-in cupboards. I speak as somebody whose household has recently been purchasing and selling houses like hot cakes, and the complete absence of information about energy performance is noticeable.
1368 I understand that the right hon. Member for Penrith and The Border (Mr. Maclean) and the hon. Member for Mid-Worcestershire (Mr. Luff) cannot stay for this part of the debate, but I would still like to comment on what they said. They both asked whether unreasonable costs and difficulties would be imposed by the Bill.
There is one possible zone in which costs might be said to arise—costs to the Government, and to the Department of the Environment, Transport and the Regions in particular. That Department, in its previous incarnation, has been responsible for masterminding the development of building regulations for many years, and it is well versed in the requirements. The drawing up of the guidelines that will be a fundamental part of the assessment process is not a complicated or costly procedure. It is a matter of looking at the current rules and regulations and seeing how they can best be adapted for retro-fitting to property that has already been built.
§ Mr. John McWilliam (Blaydon)
Is the hon. Gentleman aware that the existing building regulations are subject to great criticism, not only by building professionals but by those who are interested in the structure, durability and safety of buildings, and that the application of the existing building regulations is extremely uneven and depends on how good and how well qualified the people who do the inspection are? It is a bit worrying if we are relying on the existing building regulations.
§ Mr. Stunell
I thank the hon. Gentleman for that intervention. Lots of things in this world are a bit worrying. The question is how we can make the present situation better in an incremental way, and I believe that the Bill will do that.
In a former existence, I spent 13 years working with the building regulations and was responsible for supplying the Department of the Environment with advice about them.
§ Mr. Bermingham
Does the hon. Gentleman not agree that the building inspectors are the key? The quality varies so much from one area to another, and until we get some uniformity in the way in which people inspect we will never get uniformity in the way in which the regulations are adhered to.
§ Mr. Stunell
The hon. Gentleman makes a valuable point, but this is not a debate about how effective building regulations are and whether the inspection procedure is good or bad. As I said, I have spent 13 years watching building inspectors do their job, and I know that there is some variety. None the less, we are talking about some fairly basic and simple measures, such as cavity wall and roof insulation. Fortunately, those can be checked very simply.
The Bill does not impose a duty of inspection; it imposes a duty to have a survey done and make the results available to the purchaser. We could have a useful debate about the development of the building regulations another time.
§ Dr. Brian Iddon (Bolton, South-East)
I am sorry to intervene so soon after two previous interventions, but, as a past chairman of housing who has taken great care to 1369 improve the energy efficiency of public stock, I know that if people fit very tight window frames and doors and take other measures such as fitting draught stripper, the air change in a room can fall to a dangerous level. I fully approve of the Bill and the measures that it recommends, but if we are to persuade people to take those measures, they should be warned that if they are doing it themselves they must consider air change and fit vents. If the job is done professionally, of course that will happen, but I am concerned that the do-it-yourself merchants may fail to recognise the requirement.
§ Mr. Stunell
Some sound points are being made. Much will depend on the quality of the advice given by surveyors. When they produce their reports recommending certain measures and specifying the pay-back period, they will also have to bear in mind possible serious side effects.
Insulation is not the only factor. We must also consider the way in which heat is generated, and the way in which it circulates. Many problems of air change are connected more with heating systems than with the viability of living in a particular room.
The hon. Member for Mid-Worcestershire suggested a "rolling exemption" for homes that had been subject to the current more stringent building regulations. I think he meant that, as more homes are built to the new higher standard, it will be less necessary for new surveys to be carried out.
Although the building regulations have been improving steadily, they are still nowhere near setting the thermal efficiency standards achieved by homes in other parts of northern Europe—Scandinavia in particular, but also Germany and Switzerland. I hope that no one believes that the current regulations have achieved, as it were, a plateau of energy efficiency.
§ Angela Eagle
I am not sure whether the hon. Gentleman was present when I said that we would undertake a review of the building regulations this year—a follow-on from the review by the previous Government in 1995. The issues that the hon. Gentleman is raising will be at the forefront of our minds.
§ Mr. Stunell
I did hear what the Minister said earlier, although not from inside the Chamber. She has made my point for me. Introducing a rolling exemption in Committee would mean that homes built this year to the current high standard would never have to be surveyed again, although the building regulations might have improved further in five or 10 years. In that regard, I do not agree with the hon. Member for Mid-Worcestershire.
I have dealt with the issue of possible extra costs to the Government; let me now deal with the question of extra costs to members of the Council of Mortgage Lenders. My hon. Friend the Member for Torridge and West Devon said that it had been estimated that a further cost of £15 and an extra 10 minutes of examination might be necessary, whereupon someone observed sotto voce that that would increase the inspection time by a factor of three. People may feel that surveys are not always very thorough.
It has been asked whether the inspection should be an option for purchasers. When given the option of a full survey, most purchasers decline to pay the extra money, and it is clear that if the inspection were optional we 1370 would be back to square one: few people would tick the relevant box on the mortgage application form. Again, I speak from personal experience, having recently filled in two such forms and not ticked the "full survey" box.
§ Mr. Stunell
It is a matter of personal choice, is it not? Whatever the rights and wrongs of the choice, I am opposed to an opting-in arrangement.
Obviously, the extra survey costs will be passed on to purchasers in one way or another. They will have to fork out, just as they would if their surveyor's report said that they should replace a window or redecorate the front of the house. When they are deciding whether to buy the house, they will have to decide whether to bear that extra cost. Alongside the cost, however, will be the saving—the pay-back period. When I was working in this area, I found that the pay-back period for such measures as improved roof and wall insulation was often very short, much shorter than the pay-back period for double glazing. Many purchasers would automatically think of installing double glazing when revamping a newly purchased house; it might benefit them considerably to know that they could use their money to better effect by adopting the suggestions in the survey form and installing, say, wall insulation. The costs are not substantial, and are easily recoverable.
The Bill will bring about considerable benefits. Advice will be given to 400,000 home purchasers each year, which will allow them to save money in the long term. The measure will contribute to the reduction in carbon dioxide emissions, which is not only Government policy but essential for the prevention of further drastic climate change. It will also improve the transparency of the housing market in one important respect, by making purchasers and sellers aware that there is both a cost and a benefit in improving home efficiency. Home efficiency will stand in the marketplace alongside double garages and en-suite bathrooms.
I support the Bill, and the Liberal Democrats will back it strongly.
§ Mr. Gerald Bermingham (St. Helens, South)
My hon. Friend the Minister referred to my state of health. I noted her touching concern, but it is not my health that I am worried about; it is the health of the town that I represent. In St. Helens we make all the products that we have been discussing: we make the glass for double glazing, we make the wall insulation, we have Ibstock brick. I therefore have a considerable vested interest in energy conservation and insulation.
I remind my hon. Friend the Minister, however, that I am not a believer in the "apple pie and clotted cream" school of politics which seems to have entered the House in about 1987. I have seen Ministers come and go, and no doubt I will see a few more come and go before my time is up. I have consistently and persistently attacked the building regulations, because, by and large, they are a load of rubbish.
As for the Bill, although I support it, it needs an awful lot of amendment. I say that cold-bloodedly. We are back with the apple pie and clotted cream brigade. The 1995 amendments to the regulations were not improvements; 1371 they were tinkering by the "We will play to the gallery; gosh, we are going to do something about it" brigade. If in the months ahead the Government produce any regulations along those lines, they can expect me to be equally critical.
§ Mr. McWilliam
The warmest home I ever owned was a Georgian flat in Edinburgh that was built 200 years ago, before there were any building regulations.
§ Mr. Bermingham
I am not surprised. The warmest house I ever owned was built at about the same time. Metal ties between the inner and outer walls were not used in those days, and, as my hon. Friend knows, metal ties are the best way of losing heat in a building because the heat flows along them, regardless of the amount of cavity insulation. The Swedes, who are practical people, use plastic ties. Heat does not flow along them. That is the sort of minor point that our building regulators overlook. They talk about single, double and triple glazing. The measures that we are discussing are more efficient, but we do not cater for them in our public or our private build, because it might increase the expense. And look at all the cowboy builders there are! My learned friend—I am sorry; I thought I was somewhere else for a moment. My hon. Friend the Member for Blaydon (Mr. McWilliam) will doubtless mention that if he is called to speak. If we are to increase efficiency, we have to examine this matter root and branch, not tinker with it and say:Each mortgage lender,"—whoever that might mean; I shall return to that—as part of any survey or valuation required by it and in accordance with guidance given by the Secretary of State, shall(a) provide the borrower with information".What is the basis of the information? Are we going to examine how the property is actually built? Are we going to say to the surveyor who has been sent by the building society, "Gosh, you have to provide this and say how many joules are lost per hour", or whatever measurement is used? How will the magistrate understand what the basis of the information is?
I do not know. I do not understand that sort of thing anyway. I know whether a house is warm and efficient. It is all very well talking in such language, but if the Secretary of State says, "The calculation shall be according to this formula or that formula," there will be arguments over the formula.
What qualifications will we ask of the surveyor? Modern valuation surveyors come in all shapes and sizes. Some are qualified, some are not. Some estate agents have not a qualified person in the premises. That is a problem. The whole profession is not regulated or controlled. There are no professional standards.
If we were to say that every estate agent has to be a qualified quantity surveyor or a member of the Royal Institution of Chartered Surveyors, fine, but what about the boy who is sent to look at No. 32 Redbrick avenue, who says, "The next door neighbour's house sold for £32,000, the one on the other side sold for £42,000, so let us take an average of £37,000"? That is what happens; I notice the hon. Member for Hazel Grove (Mr. Stunell) nodding in agreement.
1372 That is the guy to whom we are going to say, "Tell us what the heat loss valuation is and what improvements are needed." If he does not know what sort of ties are in the wall, how will he know what sort of insulation we need? How will he know what the density and quantity of the insulation is? It is the world of make-believe. Can we come to the world of reality? That is what the Bill should be doing: bringing us to the world of reality.
The Minister will say, "Of course I will take advice from my civil servants and we will be told by the institutes," but they all have a vested interest in this. What we should saying is, "Let us examine the matter root and branch. Let us go back to when we build houses, whether they be flats or houses in the private sector or public sector. These are the standards and qualities that we will build to." We should not tinker with the building regulations, but examine them root and branch again. We should say what sort of material should be used, what the quality of material should be, and the quality to which properties should be built.
I look again at the building industry, and I regret to have to say this. There are some very good builders, but there are some awful cowboys around as well and they are building houses that will fall over unless they are propped up in a few years' time. As a practising lawyer—I declare an interest because, in my time, I have prosecuted a few people in relation to this sort of thing; no doubt I will prosecute a few more before I am done—I have witnessed the sheer criminality of the way in which people are exploited.
A home is the essential part of any person's life. It is the most important thing that any of us will ever acquire or seek to acquire, whether it be rented or purchased. We have a right to expect that that home should be of a merchantable quality.
Therefore, we have to examine the building industry and say, "Right. Let us look at the quality of the products." I do not think anyone would criticise the major manufacturers, which include Pilkington and Ibstock, both of which are in my constituency. They are world leaders, so our materials are first class. Our architects are first class, but let us consider our builders. They range from the superb to the ridiculous, so we have to have quality control there.
For quality control, we need local authorities, their building departments and inspection departments. I go back to my intervention during the speech of the hon. Member for Torridge and West Devon (Mr. Burnett), when I raised the quality of inspection.
There is an old phrase that I have heard many a time, "Pay peanuts and you get monkeys." Why not pay building inspectors properly? Over the years, we have had no end of problems. Why not let local authorities have the funding? Of course I speak about money, which is a terrible thing to speak about in this day and age, but I say unashamedly: if we invest at the beginning, we acquire something that has value and lasts; if we do not have the right inspection processes, we will not have the lasting quality that we require and, as a nation, deserve.
1373 We will now be building for the next 1,000 years, the next millennium, so why not improve and support local government by providing the resources and funding that is necessary for proper inspector?
§ Mr. McWilliam
My hon. Friend is absolutely right. All too often, the required qualification for a building inspector is a fairly close relationship to the chairman of housing.
§ Mr. Bermingham
I say nothing. My hon. Friend has, I think, had some experience of Scottish politics.
As I say, if we start at inspectorate level, we achieve quality control.
There used to a television show many years ago that said, "Never mind the quality, feel the width." I know some bricklayers who say, "Never mind the quality, look at the length I have laid in one day and that is where I get my money from." That is not quality control, which is essential in all this.
When we have quality control in the building industry, we will get houses that will last and are warm, air tight and all the other things that we require. This is not a simple issue. I support the Bill, but it is tinkering with the real issues: quality control, the quality of the properties that we build, the materials we use and the way in which properties are built.
That is why I say to the Minister that I look forward and long for proper building regulations, properly implemented and properly enforced. In that way, we will not need such Bills because our houses will be insulated and our energy losses will be minimal. There are ways to achieve that.
The other day, I was asked to examine a property, not professionally, but by a friend who wanted to show me because I had told him about the Bill. He had hacked away part of the wall. He looked at the ties and there was water all over them. What value those ties if we insulated that wall?
§ Mr. McWilliam
Worse than that, with water all over the ties, the house will be damp because it cannot insulate against the water.
§ Mr. Bermingham
That is right. That is the sort of thing that we should be talking about.
The Bill says that we are to have a survey or valuation; fine. It says that information will be given on how to improve energy efficiency; fine. Who is going to tell us? I, Joe Soap, member of the public, go to my building society and say, "It want to buy 13 Acacia avenue." It sends the surveyor around. The week before, he had been a second-hand car salesman. Probably the week before that, he had been something else. He tells me that I need the following done. I look at him, I do not know anything about building and I say, "Gosh, who do I call?" He nods, winks and says, "Go to Uncle Joe down the road. He knows how to drill a hole in your wall, how to put in a pipe and how to pump in the various stuff to insulate the wall cavity—so he tells me."
Who is going to check it? What guarantees on safety, security or anything else will I have? The answer is none. We are back to apple pie and clotted cream.
§ Mr. Stunell
Does the hon. Gentleman accept that building societies already make loans conditional on a 1374 variety of improvements that the purchaser has to undertake? Does he accept that the building society has a regulatory function when it releases the money and, on consideration, would he agree so enthusiastically with the hon. Member for Blaydon (Mr. McWilliam) that the majority of building inspectors have no professional skills and owe their appointment to patronage—political or otherwise? I was involved in the inspection side of the building industry for many years—not as a buildings inspector—and I feel that the hon. Gentleman does serious injustice to the regulatory system, although that is not to say that it could not be improved.
§ Mr. Bermingham
I thank the hon. Gentleman for that intervention. Had he been listening carefully, he would have noticed that I did not reply to my hon. Friend's intervention as I was not advancing down that line of argument. Of course, many people who work in the inspectorate are honest, hard-working and underpaid. However, there are not enough of them and the regulations are not tight enough. As we have learnt in all walks of life, if we pay people very poorly, we do not always get the best results.
I agree with the hon. Member for Hazel Grove that building societies regularly lay down conditions for granting a mortgage. In my time as a solicitor, I have seen many documents saying that a loan will not be advanced until certain works are carried out and that a certificate signed by the builder has to be produced to that effect. Of course, that does not guarantee the quality of the work.
I do not want to be too cynical, as one should not be too cynical about life, although I have lived it for a long time, but I have heard of work not being up to the required standard, as it was simply a quick way of getting the money. My hon. Friend the Member for Eltham (Mr. Efford) will agree with me about that. In the wonderful world of perfection, everything gets done; in reality, little of anything gets done.
§ Mr. Burnett
Is the hon. Gentleman aware of any significant building societies or banks that instruct unqualified surveyors?
§ Mr. Bermingham
Regrettably, the answer is yes, because a building society instructs a firm of surveyors and that firm decides who to send along. That is the problem. Although a firm of surveyors may have qualified staff—I speak with some knowledge, having once lectured surveyors on contract law—they may well send an articled clerk. The hon. Member for Portsmouth, South (Mr. Hancock) nods sagely and wisely in agreement. The problem arises when they send the office junior.
§ Mr. Clive Efford (Eltham)
I confirm to my hon. Friend that I had a survey undertaken by someone who was not qualified. I am sure that my hon. Friend is aware that the Bill relates to surveys undertaken when a house is purchased. What are his views on the role of building control officers in that process?
§ Mr. Bermingham
They come in earlier when the house is built, when work is carried out or extensions added. In that case, there is certification of the quality of the work. Subsequently, a surveyor viewing the property will have from the vendor the relevant certificate stating that the property had been built or extended to the 1375 required standard. In Britain, the problem has always been that unless certificates are issued to specific standards, they are not readily available. Although one can get permission to build an extension for example, if there is no adequate survey and control of the development of that extension, there is no certification saying that it is of the required standard. Certification has always been a problem.
I hope that my hon. Friend the Minister is listening—I mean that in the kindest possible way—and that when she comes to review building regulation she will take on board the fact that it is essential to address the issue of building certification so that there can be historical certification and so that a building coming on to the market 10 years from now, having been built in 2001, will be certified as having been built to the requisite high standards that I seek in the building industry and that no British Government this century have sought to achieve.
There has always been the laid-back approach of saying, "This is how we've always done it." It is not good enough compared with the system in Scandinavia and other parts of the world where it is appreciated that if one builds to high standards initially, one creates a dwelling or unit that will last a long time and will be energy efficient.
If properties are not energy efficient, there is not just heat loss, but all sorts of other problems. For example, properties have a very short life. The Minister will no doubt agree with me about that. In Merseyside, I am fed up with seeing houses boarded up when they were built only 20 or 30 years ago. They were not built to the old Parker-Morris standards, which were good, but to far lower standards and, as a result, their life expectancy is far shorter and there is great deterioration, although I do not know what that has to do with the Bill. I was probably stepping outside its remit and I apologise, Mr. Deputy Speaker. I am on a hobby horse that I get a chance to ride only every three or four years.
Mr. Deputy Speaker
Order. I remind the hon. Gentleman that other hon. Members are seeking to ride hobby horses within the provisions of the Bill.
§ Mr. Bermingham
This is probably the longest speech that I have made in 15 years, and I have nearly finished. I thank the hon. Member for Torridge and West Devon for allowing me to string together all my complaints about the building industry and, of course, my praise for the makers of building materials, many of whom are in my constituency.
Returning briefly to the Bill, I will support it, but I ask the hon. Member for Torridge and West Devon to look again at the meaning of the words "mortgage lender" because it also encompasses private trusts and others. Will he also think again about the three-year limitation period if a building is less than three years old? I do not anticipate that the Minister will produce the regulations requiring decent building industry standards within the next three years. Therefore, I should like every house to be subject to an energy audit whenever it changes hands. Will he consider adding to his Bill some definition of the standard and qualifications required of the surveyor who performs the survey that leads to the advice?
Clause 1 (3) states: 1376For the purposes of this section measures which are applicable to the dwelling concerned and where the cost of installation will be repaid through energy savings or other benefits within a reasonable period of time shall constitute practicable means".Perhaps the Bill should not only refer to the nature of the proposed improvements, but include a set of specifications for the improvements required and a practical way in which the costs could be computed.
Other than that, I have relatively few criticisms of the Bill. I wish it a speedy passage through the House and I wish it well into law. To come back to where I started, I am worried not about my health but about that of my constituents and about the health of the building industry and the makers of materials. Above all else, I am worried about the health of future generations and the safety and security of their homes. We will never achieve that without proper building regulations.
§ Mrs. Linda Gilroy (Plymouth, Sutton)
I am not quite sure whether I am about to indulge in riding a hobby-horse or eating apple pie and clotted cream—both of which activities I suspect the constituents of the hon. Member for Torridge and West Devon (Mr. Burnett), my constituents and those in neighbouring Cornwall would probably approve of greatly.
I congratulate the hon. Member for Torridge and West Devon on introducing his Bill. As a founder member of the Plymouth energy advice centre and of the west country energy action trust, it would be nice to think that the good and effective work that those organisations have done in the past four to five years to inform, encourage and support the citizens of Plymouth and Devon and Cornwall may have been instrumental in adding to the hon. Gentleman's already significant awareness of these issues. Perhaps it has even played a small part in his decision to introduce his Bill.
Hon. Members on both sides of the House may be interested to calculate how many of their constituents might benefit from the Bill's proposals. I understand—from calculations made for me by the Plymouth energy advice centre, which must be similar to calculations made in other constituencies—that about 900 new mortgages are taken out annually in the Plymouth, Sutton constituency. Approximately 270 of the homes bought will be newly or recently built and meet the higher energy-efficiency levels required by more recent building regulations, so perhaps 650—involving about 750 people—could benefit from the Bill's provisions each year. In the life of this Parliament, about 9,000 people could live in households that benefit from the type of information required by the Bill.
If we apply the 60 per cent. rule that has been suggested by the Association for the Conservation of Energy and Which?, approximately 6,000 people in my constituency live in households in which action might be taken as a result of advice and benefit from the savings.
The experience of the Plymouth energy advice centre is that people are most likely to follow through advice when they are moving into a new home—partly because it is possible to negotiate on and spread the cost of implementing measures, possibly by using the mortgage. Such a possibility is one of the great values of the Bill. It is true also that all my constituents—all 70,666 of them—would benefit from the emissions reductions that would follow from energy conservation.
1377 I also congratulate the hon. Member for Torridge and West Devon on his work—with the able support of that worthwhile organisation, the Association for the Conservation of Energy—since the publication of his Bill. Together, they seem to have persuaded the Council of Mortgage Lenders to make a more positive appraisal of the Bill's pros and cons—as demonstrated in its most recent briefing this week.
The council must, of course, have regard to the cost of the service to its institutions, customers and members, but just as all my constituents stand to gain from the contribution that the Bill can make to reducing emissions, so, too, will the council and its members and their families, shareholders and customers. Moreover, if we add in the value in extra jobs—which the Association for the Conservation of Energy has calculated as about 500 jobs a year and 5,000 over a 10-year period—we have a win-win-win situation in reduced fuel bills, reduced harmful emissions and reduced unemployment. This is a veritable have-your-cake-and-eat-it measure.
Many of today's younger generation have a far better regard for, and intellectual appreciation of, the value of and threats to our environment. As someone who first became aware of the need to consider our environment in the 1960s on reading Rachel Carson's "Silent Spring", I applaud that. It bodes well for our future and for the interest in, and support for, the Bill. I think that we can confidently expect new generations of householders to take advantage of the information that the Bill will bring to their attention.
It is encouraging that so many hon. Members on both sides of the House have attempted to draw attention to many of the other measures that the Government are promoting—and to other measures—that can help us to reduce home energy use. The Energy Conservation (Housing) Bill, promoted by my hon. Friend the Member for Eltham (Mr. Efford), has been mentioned. Other Bills on today's Order Paper—including my Bill, the Warm Homes and Energy Conservation (Fifteen Year Programme) Bill—also deal with the importance of energy in our lives.
By introducing targets for 500,000 homes to be provided with a comprehensive package of home insulation and other energy efficiency improvements, my Bill would address many of the other issues for which hon. Members have expressed their support. It would effectively ensure that something was done about the 8 million homes that are lacking and unable to afford warmth, and it focuses particularly on people in poverty. The Bill introduced by the hon. Member for Torridge and West Devon would also undoubtedly be the vehicle for giving people access to good quality information on which they can take sensible action.
We are all lulled into a false sense of security by the use of the phrase global warming to describe a process that is bringing many uncertain, but also probably damaging, changes to the climate—such as disappearing coastlines, more volatile weather patterns, cracking and melting ice-caps, flooding and changes in the atmosphere—that have all sorts of unpredictable consequences for agriculture and are as likely to be damaging as helpful. Hon. Members have mentioned the helpful outcome of the Kyoto conference. Global warming is much too nice a phrase to describe such potential dangers. It is a classic example of misleading warm words.
1378 The hon. Member for Torridge and West Devon has not allowed his faculties to be lulled into such a false sense of security. I support his Bill and commend it for the support of other hon. Members.
§ Dr. George Turner (North-West Norfolk)
I congratulate the hon. Member for Torridge and West Devon (Mr. Burnett) on targeting an important and serious matter for the House to debate. He will know from the speeches of other hon. Members that he is addressing but a part of a major matter for Government action. As a new hon. Member, I have already learnt that the function of private Members' Bills is to raise specific issues., but it would be unusual if this occasion were not used to widen the debate. I wish the Bill well and believe that it will make an important, if not major, contribution to tackling the problem.
I have spent much of my professional career involved in energy matters. As a scientist and engineer, I was glad to see that the Bill was appropriately called an energy-efficiency measure rather than an energy-conservation measure. As any physicist will quickly observe, energy conservation is a matter of science and one of the basic tenets of much of physics. Energy is conserved; how we use it, and from where and to where it flows, is the task and the problem that we are debating.
In my very earliest research work, I had the task of trying to keep things cold—indeed, close to absolute zero, at minus 232 deg C. Much of my mental work and research was spent finding the right materials to ensure that heat did not flow from high to low temperatures. Moreover, in those days, one had to consider a lesser range of materials than is available now. Later in life, I was involved with the opposite end of the temperature scale in designing furnaces for experimental work. The research work in our universities, which I applaud, has resulted in improvements to materials that are now more commonly available for building work.
Much of my professional work was done in a building shared with the environmental science group at the university of East Anglia, which is internationally known for its environmental work and which gave birth to a climatic research unit that has played an important role in the development of our understanding of the issues of energy efficiency and emission control. I am aware of the serious aspects of the issue before us today and of how important it is that we use the right materials in our buildings and construct them properly. People should be made more aware of the need to conserve energy in their everyday lives so that we can conserve our planet.
Those points have already been well and truly made by other hon. Members today and I shall not echo their words of wisdom, except to say that building regulations and the way in which we construct new buildings are important aspects of Government business. My constituency contains the construction industry training board, which is responsible for training in the building industry. It is important that we adopt a root-and-branch approach and tackle the skills and training of those who construct or modify our dwellings.
§ Mr. McWilliam
Does my hon. Friend agree that one of the problems is that we have not, by and large, had proper apprenticeships in the building industry for such a 1379 long time that the odds on someone being able to fit wall ties without getting them dirty, or on getting someone who knows what sort of insulation material to use and what not to use, are pretty low and that it is high time we got back to training people properly?
§ Dr. Turner
I accept the thrust of my hon. Friend's intervention. The CITB, which had its levy—with the first increase in several years—approved in the House this week, seems to be aware of the problem. It also has Government support and appears to have adopted the right approach, with its involvement in the new deal and its policy of seeking partnerships with schools and colleges, which will encourage young people to enter that important industry. There is some prospect of improved training, which must be encouraged. Regulation is important, but if people know how to do their work correctly, less supervision and less remedial work are required.
I have suffered greatly. In getting an extension to my home, I had to check the measurements daily and one wall in the extension had to be rebuilt three times before it complied with what the architect had asked for. There is much to be done in the building industry and the Government would do well to ensure that, in training and in regulation, we not only exhort good practice but ensure that it happens. It is one thing to specify that there should be insulation around hot pipes, but it is another when, as the home owner, one finds the builders busy trying to get the flooring down before installing the insulation because they want to get finished an hour earlier.
It is human nature that I want to address today, as my contribution to this serious issue. As a politician, much of my experience has been in local government—as an amateur compared with my role today. One lesson learnt from my 20 years in local government is that, while it is important to get the science and technology and the earnest politics right, we must take human nature into account and take people with us. If, in their campaigning and lawmaking, the Government do not take into account the foibles of human nature, they will fail to address this problem. Many of my friends are members of Friends of the Earth and other environmental organisations. I know that there is a danger of projecting a hair-shirt image. To be frank, environmentalists tend to believe that there must be something wrong—or that some environmental damage is being caused—wherever human pleasure is found. We have to ensure that we do not make the same mistake: we must avoid accusations of furthering the nanny state and we must take people with us in this area of Government policy, as in others.
Because of my work as a Member of Parliament, I shall be away from home until tomorrow night. I have to tell the House—unashamedly—that tomorrow night my house will probably be lit by a combination of wax and string, which must be one of the most inefficient methods of lighting a house. However, I would rather return to the candle-lit dinner for which I am hoping than to my wife having to put some sort of fluorescent lighting on the table.
In living our lives, we have to balance aesthetic pleasure and physical pleasure and we must accept that life is not all about finding the most efficient way of doing something. Heaven forbid that Naomi Campbell should be dressed according to the principles of energy efficiency— 1380 indeed, I hope that tomorrow night my wife will not be dressed in an energy-efficient style. Much of our activity is highly inefficient: our clothing and our way of life reflect our use of resources in ways that please us, even if they are wasteful in terms of energy. So be it, say I.
In my right hon. Friend the Deputy Prime Minister, the Government have the right person to lead drives toward energy efficiency. By way of illustration, I should like to refer to the progress that we have made in recent years in respect of the car and the reasons for it.
Mr. Deputy Speaker
Order. I would have some difficulty understanding how that relates to the Bill. The hon. Gentleman must speak within the terms of the Bill before the House.
§ Dr. Turner
I think that I am, in that in making progress in terms of car efficiency and emissions, we have had to use a mixture of exhortation, regulation and encouragement. We had to tell manufacturers that they had to meet more stringent standards; we must tell house builders the same thing. Through the MOT test, we imposed regulation on the consumer and ensured that standards were being met; there is a case to be made for introducing energy-efficiency regulation for houses in terms of fuel consumption. We recognise that simply telling the consumer how efficient his car is or what its emissions are is not sufficient. I also believe that a Deputy Prime Minister who still insists on having his four litre Jaguar is a better messenger for a Government intent on seeing the car used less than one who may take more of a hair-shirt approach to politics.
What lessons are to be learnt? We should take into account what most people do when they read about the energy efficiency of their house as it is expressed in surveyors' language. Since I entered the House, I have had to buy a new house and read surveyors' reports. I do not know how long it is since other hon. Members have read surveyors' reports and noticed the language used, but the ones that I have read have been uniformly boring and pessimistic. I am not sure whether that is because the surveyors want to avoid the possibility of missing a fault in the house, but their reports state, for example, that the lead flashing around the chimney must be wearing out because the house is more than 40 years old and it might be advisable to have it checked. The report might also say that, owing to the chimney's age, repointing may be required some time in the next 10 years.
That is the sort of language traditionally used by surveyors and house builders, probably to protect them from legal consequences. If similar language is used when making statements to householders about the energy efficiency of their homes, the Bill could lose its value. It will be extremely important for my hon. Friend the Under-Secretary to recognise that the report needs to be written in a format that is understandable and to the point—and which householders can read and comprehend. We need to make clear to the householder what action is required.
It is appropriate that the work should be done at the time by the mortgage provider. I would hope that it might be good practice for the mortgage provider to encourage the appropriate work to be done where the return will be speedy by being willing to add to the mortgage for that purpose.
1381 We already know the considerable dangers that exist in many residences as a result of inefficient boilers that burn badly, some of which have been highlighted in the courts. Such boilers not only waste energy, but put lives at risk. It would be appropriate, in terms of the efficiency and safety of households, to consider carrying out much more regular inspections than merely when a house is sold. Strong consideration should be given to requiring that boilers pass an MOT and, where homes are heated by gas—the majority of them, I suspect—that they are serviced so that we know that they are safe and efficient.
I started by saying that I recognise that the subject calls for Government action that goes wide of the Bill; I close by commending the hon. Member for Torridge and West Devon on his Bill which I hope, after suitable discussion in Committee, will find its way on to the statute book.
§ 12.2 pm
§ Mr. John M. Taylor (Solihull)
I intervene in the debate briefly on behalf of her Majesty's loyal Opposition to welcome the Bill that has been introduced by the hon. Member for Torridge and West Devon (Mr. Burnett).
In the past, mortgage lenders have expressed concern about the cost of the surveys, but the hon. Gentleman's Bill allows them to recover reasonable costs from the borrower. It is important to note that the Bill only requires an approved energy rating, not necessarily following the Government's standard assessment procedure; a full SAP could cost somewhere between £50 and £150. However, as Lord Ezra said during the passage of his Bill along similar lines last year, the amount could be as low as £10 to £15 if the building societies incorporated the energy rating into their normal valuation surveys. Where the Bill specifies the provision of a list of potential improvements and the indicative range of costs and pay-back times, most of that information is already available.
We are enthusiastic about the Bill. It does not amount to any great imposition on mortgage lenders and could be a positive step towards informing home buyers of the energy-efficiency status of their potential dwelling. The concerns about additional costs raised by mortgage lenders are largely unfounded, as the Bill does not specify a full SAP, and technological improvements have greatly reduced the amount of time and money that have to be spent to carry out effective energy surveys. Perhaps the House will allow me to emphasise the strong Conservative record on energy efficiency. I cite for example the Home Energy Conservation Act 1995 and the home energy efficiency scheme set up in 1991.
There I speak for the Conservative Opposition. I should like to add a word on my own behalf, as one who, in time gone by, practised as a solicitor in general practice. I hasten to add that, since then, I have gone straight for many years, and have not practised for 10 years—for which the general public are, no doubt, mercifully relieved.
For myself, I note an important innovation in the Bill which should be noted and considered in Committee: the introduction of an obligation on the part of the surveyor to the buyer. Traditionally, and contractually, the main obligation of the surveyor has been to the lender, so the Bill introduces a new dimension to the surveyor's work. I do not intend to delay the House by speaking further 1382 about that new obligation on the surveyor, but it is important to place that point on the record, so that it can be properly scrutinised when the Bill—as I hope that it does—passes into Committee.
§ 12.5 pm
§ Mr. Clive Efford (Eltham)
I express my support for the hon. Member for Torridge and West Devon (Mr. Burnett) and for his Bill. In deference to my hon. Friend the Member for St. Helens, South (Mr. Bermingham), I originally intended to introduce the Bill, but, coming only 18th in the private Members' ballot, I unfortunately missed out on that opportunity, to the benefit of the hon. Member for Torridge and West Devon, who came sixth, and whom I congratulate on his success.
The Government have left no one in doubt that they are determined to achieve their manifesto commitment and reduce carbon dioxide emissions by 20 per cent. of the 1990 level, by 2010. They have taken a strong stance. The position that they held out for in Kyoto is to their credit and they have successfully negotiated for targets that can be easily understood, but it is vital that the wider public realise that it is not merely the responsibility of the Government to achieve those targets and that, if we are to leave this planet of ours in a sustainable state for any future generations, we must all play our part.
An important element in achieving that objective is to educate the public on the issues that need to be confronted, to give them the information that they need and to allow them to make choices. The Bill, and others dealing with similar measures, seeks to ensure that that information is obtained and made available. I take on board the arguments made by my hon. Friend the Member for St. Helens, South, but I am sure that when such information is made available, the public will demand the introduction of the measures that he wants.
Much of the debate since Kyoto has centred on the car. The Government's commitment to an integrated transport strategy will make a huge difference when it is implemented, but energy efficiency in the home will also have a significant influence; several Bills before the House aim to address related issues. In one of the excellent research documents produced by the House, I read that the Socialist Environmental Resources Association has stated that it believes that 16 per cent. of the Government's 20 per cent. target for 2010 can be achieved by home energy efficiency.
According to the housing conditions survey published in 1991, 66.8 per cent.—15.9 million—of homes were then in the private sector. That was an increase from 11.7 million—55 per cent.—in 1981. Of those, 2.4 million homes were built before 1900, 3.8 million were built between 1900 and 1945, nearly 3 million were built between 1965 and 1980, and only 1.3 million were built from 1980 to the date of the survey, in 1991. The average Victorian terraced house rates just three out of a maximum score of 10 on the national home energy rating survey. The age of a property is a reliable indicator of the need for energy efficiency.
The figures demonstrate the need for potential purchasers of a property to be made fully aware of the potential costs, not just to themselves through heating bills, but in terms of the impact on the environment. In the long term, we should not underestimate the impact that the Bill will have on the housing market in terms of new build and improvements to housing. The knock-on effect will increase quality.
1383 I recently visited a project in the constituency of my hon. Friend the Member for Lewisham, West (Mr. Dowd), which was carried out by Hyde housing association on the Adamsrill Road estate. This was an expensive development, because it used a great deal of recycled materials—the main cost was for the use of recycled stock bricks. A whole range of measures were taken which point the way for the future, including the type of boiler, double glazing and glass used, as well as the lighting and ventilation.
My hon. Friend the Member for Bolton, South-East (Dr. Iddon) talked about the need to install proper ventilation in homes when they are improved or built, because there can be huge problems with condensation. Environmental measures can often have knock-on effects in other ways. The estate had a state-of-the-art method of dealing with ventilating the kitchen area. It sensed the dampness in the air and automatically opened the vents, which passed air out through the roof. Such measures can be taken at an early stage in planning, and I am sure that the Bill will encourage those planning new housing to take them on board, as they will have to consider selling the housing at a later date.
The Adamsrill Road project scored 10 out of a maximum of 10 in terms of the national home energy rating survey. The average score for Hyde housing association properties is eight and, as I said, the average score for a Victorian terraced house is three. That shows what can be achieved if people take on board environmental improvements.
The Bill is one of a number of initiatives before the House on energy efficiency related to housing which aim to provide more information and, therefore, more understanding of the issues. In addition to the Energy Efficiency Bill, my hon. Friend the Member for South Swindon (Ms Drown) is promoting the Energy Efficiency (Information) Bill of which, I am pleased to say, I am a sponsor.
Under building regulations passed by the previous Government, all new-built houses are required to have an energy rating. Unfortunately, despite their commitment to market forces, the previous Government did not think it necessary for purchasers of those properties to be given access to that information. In these times of concern for environmental issues—particularly the effect of greenhouses gases—the public must be given the facts to allow them to make proper judgments. The Bill will force house builders to give more consideration to the issue of energy efficiency at the planning stage.
Later today, my Bill will receive its Second Reading. The Energy Conservation (Housing) Bill will amend the Home Energy Conservation Act 1995, with the effect that the requirements currently placed on local authorities will extend to social landlords or housing associations. The Act requires local authorities to prepare a report on energy conservation measures in their area, and they are often required to report on housing association properties of which they have very little knowledge. My Bill will require housing associations, which have the best knowledge of their properties, to do this for themselves. Efficiency will be introduced into the gathering of information and, hopefully, the benefit will pass quickly to tenants.
1384 Yesterday, my right hon. Friend the Secretary of State for Health launched the Green Paper "Our Healthier Nation" and highlighted the connection between poor quality housing and poor health. The report to which I referred earlier—the housing conditions survey—states that 52 per cent. of housing association tenants are low income households. Nationally, 30,000 to 50,000 deaths occur each year due to cold weather. Cold-related illness costs the national health service £1 billion a year.
Fuel poverty is an everyday problem for too many people, especially the elderly. The Government were right to cut VAT on fuel for that reason. However, evidence given to the Trade and Industry Committee suggests that a 10 per cent. cut in energy prices, particularly for domestic fuel, results in a 2 per cent. increase in demand. Some would conclude that a cut in fuel prices is damaging to the environment, but the argument for reducing VAT on fuel was that for people on low incomes, the marginal tax rate was so excessive that they faced the choice of increasing their fuel debt or switching off their heating. It is hardly surprising, therefore, that a cut in VAT resulted in an increase in demand for domestic fuel. A balance must be struck between fuel charges and taxation on fuel, and incomes.
Through this Bill, the Energy Efficiency (Information) Bill and the Energy Conservation (Housing) Bill that I shall present later today, hon. Members can make a significant contribution to achieving the Government's targets for improving our environment. I congratulate my hon. Friend the Minister on her work to promote these issues and on her far-sightedness in supporting my Bill. I hope that hon. Members will give the measures the support that they deserve.
§ Mr. John McWilliam (Blaydon)
I congratulate the hon. Member for Torridge and West Devon (Mr. Burnett) on introducing the Bill which, although it may not have been apparent from my interventions, I whole-heartedly support—indeed, I do not think that it goes far enough. Problems have arisen in the past because of the lack of such legislation.
There are some problems with the Bill. I shall be happy to give way to the hon. Gentleman if he wants to tell me why he included subsection (2) of clause 1. I can understand that, if he can guarantee that in every house built the building standards will conform to the existing energy-efficiency legislation and will not fail within the specified period of 12 years under the latent defects legislation, especially if the builder goes bust in the intervening period, which happens all too often.
§ Mr. Burnett
I am grateful to the hon. Gentleman for inviting me to intervene. We do not want duplication in this matter. The clause may go in Committee, as the Council of Mortgage Lenders does not seem very concerned about that provision. Nevertheless, it is in the Bill as drafted, it is possible that it will remain there, and it is there to avoid duplication and additional cost, where possible.
§ Mr. McWilliam
I am grateful to the hon. Gentleman for that explanation and for the assurance that the provision is liable to disappear at Committee stage—
§ Mr. McWilliam
Possibly liable to disappear at Committee stage. It may have caused some greedy builders to rub their hands. Without it, the Bill would be improved.
The Bill seems to concentrate on information. I am not certain that the energy conservation measure that has already been enacted and which should apply to every new building is covered by the latent defects legislation of, I believe, 1982. I served on the Committee that considered the measure, and I noticed the matter at that time, but I did not raise it because I was too busy with another Committee. It might be fruitful for the hon. Gentleman to consider that issue. It may be possible to incorporate the measure under the long title of the Bill, which is:To make further provision for energy efficiency".Making provision for good energy efficiency measures that fail as a result of a latent defect clearly fits that description, so I think that the hon. Gentleman could get away with it. If not, our noble Friends in another place often ignore long titles when amending legislation, which sometimes causes panic in this place.
Since May, the new Government have established a good record in introducing energy conservation measures in the face of time and legislative pressures. The Government set themselves a very demanding challenge at Kyoto, and this and other measures will help us to meet it.
Another problem with the Bill concerns its application in Scotland. I know from experience that house purchasing in Scotland is a whole different ball game. When I moved from Scotland, I flogged my house within three weeks and invested the proceeds in the money market until I found exactly the house that I wanted in England. I was not at the end of anyone's queue so I could not be gazumped. It was extremely convenient.
When one bids for a house in Scotland, the mortgage lender must guarantee that he will lend against that property. The snag is that someone else who is borrowing from the same mortgage lender often applies for exactly the same thing. How many surveys would be done in that circumstance, as the mortgage lender probably operates with one survey company? The poor customer would not know, and would have to pay through the nose every time. Some Government proposals that seek to address that problem might also help the hon. Gentleman by improving his energy conservation measures.
My hon. Friend the Member for St. Helens, South (Mr. Bermingham) referred to bent building surveyors—there are not many, but they are not unknown. There used to be many such surveyors in my part of the world, but they are less of a problem now. It is difficult when someone thinks that he has paid good money for a good job and the building control department says, "That's done; that's fixed", only to find out five years later that everything is not all right. The house may need a new roof or the owner may discover that the damp-proof course has not been inserted or that the builder used dirty ties, thus causing damp.
The hon. Member for Torridge and West Devon was wise not to include public sector housing in the legislation because that would necessitate a money resolution. If he had done so, the Bill would have had to address the problem that many local authorities inherited 20-odd years ago when the Scottish Office Development Department 1386 and the Department of the Environment produced figures regarding the installation characteristics of poured concrete, which subsequently turned out to be totally inaccurate when the concrete dried out. The insulation disappeared, damp developed and people complained to the local authorities. They claimed that the problem was caused by condensation, and they were quite right—but the condensation was caused by a lack of wall thermal efficiency. Measures such as strapping walls and putting up plaster board are expensive and intrusive.
It would be nice if the Government could allocate more money to local authorities in the future to allow them to address that problem retrospectively. An imaginative pilot scheme conducted in Gateshead has produced extremely good results in flats. The buildings used to be horrible, but now they are attractive, warm homes with safe playing areas in a good environment and are close to schools, nurseries and shops. Such rehabilitation measures could be taken as well, and I look forward to the Government introducing some.
I shall not detain the House any longer. I have a rotten cold and I do not have a lot of voice left. I wish the hon. Gentleman and his Bill, minus clause 1(2), a safe passage.
§ The Parliamentary Under-Secretary of State for the Environment, Transport and the Regions (Angela Eagle)
In common with other Members, I congratulate the hon. Member for Torridge and West Devon (Mr. Burnett) on his good fortune in the ballot and on his choice of subject for a Bill.
The Bill would improve energy efficiency, to which the Government are also committed—that is always a good start. The Bill would also make a valuable contribution to achieving better energy efficiency. I intend to speak about the importance of measures to improve energy efficiency, such as those proposed by the hon. Gentleman; the action that the Government are taking; and the role that we believe that the Bill might play.
Our manifesto made it clear that we are committed to a policy designed to promote the more efficient use of energy. We are keen to carry that policy forward. Energy efficiency is in tune with sustainable development, on which we launched a consultation exercise—as I mentioned in interventions—earlier this week. We believe that it can offer major benefits to households and businesses, and, at the same time, help us to protect the environment by reducing the threat of climate change.
The benefits to householders and businesses are immense. Improved energy efficiency reduces fuel bills and maintenance costs, improves comfort and creates jobs. Energy efficiency therefore makes sense for all of us. It saves money that could be better used to improve our homes and develop businesses. There is plenty of scope for doing that as we look around our domestic, commercial and industrial sectors.
Recent estimates suggest that total emissions could potentially be reduced by about 25 per cent. through the use of cost-effective energy-efficiency measures. As many hon. Members have noted, there is plenty of room to improve energy efficiency in the home, an issue tackled in the Bill. As many hon. Members have also noted, the energy efficiency of the average home is low. The fuel bill for an average three-bedroom semi could be reduced from about £750 per annum to about £400 by the 1387 installation of a standard package of energy-efficient measures, including wall and loft insulation, draughtproofing, hot water tank insulation, double glazing and a new heating system with controls.
In addition, energy-efficient houses tend to be more comfortable—that may seem an obvious point, but it is true. Maintenance costs are also reduced through reduced incidence of mould and condensation. Householders would therefore benefit from the improved quality of their houses and they might feel more comfortable. As some hon. Members have pointed out, they might also benefit from improved health.
Increased energy efficiency would also bring advantages to the economy, because it would create jobs in the energy efficiency installation and manufacturing industries. It would also create marketing opportunities for new or more efficient technologies.
Cost-effectiveness, comfort and economic advantages are not the sole reasons for our desire to promote energy efficiency. Just as important, energy efficiency brings benefits to the environment by contributing to the United Kingdom's efforts to meet international emissions targets and our domestic aims.
The Government have a strong commitment to safeguarding the environment and, in particular, to combating global warming. We have said that we will place the environment at the heart of policy making. Indeed, our policies aim to combine environmental sustainability with economic and social progress. We believe that the three go together. As my hon. Friend the Member for Nottingham, East (Mr. Heppell) said, we also believe that it is important that we have the support of the people if we are to create a consensus in favour of making such progress and changing individual behaviour, which is crucial to success.
Hon. Members will have noted the strong line taken by the Prime Minister when he led the United Kingdom delegation to the Earth summit II in the run-up to the Kyoto conference. Hon. Members will also note that the Deputy Prime Minister took a strong line at that conference when he delivered a signed, legally binding agreement to reduce harmful emissions.
We plan to build on that success internationally, in Europe and at home. The previous Administration offered 10 per cent. as part of the European Union target. We will consider whether we should offer more. We will maintain our domestic aim of reducing emissions to 20 per cent. below 1990 levels by 2010.
The domestic sector offers considerable scope for savings. Domestic consumers are responsible for more than a quarter of national carbon dioxide emissions. The installation of a standard package of energy-efficiency measures could reduce annual carbon emissions from the average home by more than half. That is the prize towards which the Bill seeks to edge us closer.
Meeting the United Kingdom's aims for the reduction of emissions will require major changes in the way in which we generate and use energy. We are looking for a balanced package of measures that will help us to meet our objectives and maximise the benefits that are available. A consultation paper on our climate change programme is planned for later this year.
1388 Energy efficiency will be a key element in delivering our programme to reduce emissions, because of the benefits that it brings. We are developing a package of energy-efficiency measures to meet our objective.
We are initiating a broad debate to engage all sections of our society in realising the opportunities provided by the outcome of Kyoto and maintaining a strong United Kingdom lead on the issues that emerged. We are starting a wider public debate about life style changes, of which today's debate today is only one example. Other debates that I have attended in the not-too-distant past touched on similar issues. I look forward to attending many more.
Other reviews are relevant to the work that we are doing. The review of utility regulation, for example, covers the energy utilities—gas and electricity. The review's objectives include ensuring that the system of regulation promotes the Government's objectives for the environment and sustainable development. We are looking at how regulations should best deal with energy efficiency. The Government will shortly produce a Green Paper on the outcome of the review.
We already have some successful measures to encourage energy efficiency. For example, we provide information and advice. Where necessary, we provide financial incentives, and we seek to improve the availability, take-up and use of energy-efficient domestic equipment. Just recently I was in John Lewis, as part of my official duties, launching one of the new energy labels for domestic washing machines, which provide quite complex information in an easily ascertainable way for customers at the point at which they are considering making a purchase.
We have three main channels for providing information and advice: the energy efficiency best practice programme, the Energy Saving Trust's energy efficiency programme, and the trust's energy efficiency advice centres. All those were mentioned by hon. Members.
The energy efficiency best practice programme provides a wide range of information to stimulate energy efficiency improvements in buildings, industry and transport. It aims to generate savings worth £800 million a year by 2000. It is on target and is currently saving around £500 million each year. We are considering ways of developing the programme's potential to help us meet our aims for the reduction of emissions.
My Department funds the Energy Saving Trust's major promotional programme, "Energy Efficiency", which was developed with considerable help from the trust's partners in the energy efficiency industry and is a success. Recent research shows that an advertising campaign in October exceeded its targets. I have high hopes for a new campaign that started this week.
The trust's network of more than 40 energy efficiency advice centres provides free impartial advice to customers in the domestic and small business sectors. By the end of this year, some 250,000 people will have received advice from the centres. It costs the centres about £12 to advise a customer. Customers taking up advice provided by the centres save an average of £57 a year.
We also fund financial incentives to help the less well-off to improve the energy efficiency of their homes and to help the Energy Saving Trust's incentive schemes to encourage investment in energy efficiency by those who can afford it.
1389 The home energy efficiency scheme provides grants for insulation measures for householders who receive income-related benefits or disability allowance and are over 60 years of age. A revised, improved scheme came into force in July offering householders more choice from a wider range of measures. The changes will allow the scheme to offer the measures best suited to individuals' homes. The 1997–98 budget is £75 million. We are considering and reviewing that scheme, which was inherited from the previous Government, to see whether it is helping the right people in the most effective way. As I said in an intervention, early indications from the review suggest that, as the scheme is currently weighted, it misses some of those most in need—people in private rented housing.
The Energy Saving Trust runs a wide range of schemes offering financial incentives for the installation of energy-efficient measures. The products promoted include central heating controls; condensing boilers, which are a key to improving energy efficiency in the home; cavity wall insulation; high-frequency lighting; and small-scale combined heating power in industry. So far, the schemes have helped 180,000 people to install energy-efficient goods in their homes.
We are pleased to have been able to announce this year that we have reversed the cut which the previous Government scheduled to the Energy Saving Trust, and we continue to show our commitment to that by providing an extra £5.5 million for the trust this year.
Improving the availability, take-up and use of energy-efficient domestic equipment is also important, and the Government have a market transformation strategy, which we launched in October. It seeks to get the market to provide domestic equipment that does less harm to the environment, particularly by using less energy. It aims to achieve savings of 2 million tonnes of carbon by 2010.
Energy labels are already mandatory for fridges, and are now mandatory for washing machines, washer-driers and tumble driers. Regulations for dishwashers and light bulbs should be introduced this year, and further proposals are being developed.
We shall need to do more to meet our aims for reducing emissions, and we are reviewing our current programme in the light of our commitment to lead the fight against climate change. We shall look for improvements in all areas, including the use of energy-saving technology by home owners and businesses. We take the matter very seriously and are taking steps to introduce new measures.
The environmental task force, which many of my hon. Friends have mentioned, will promote energy efficiency and provide quality jobs and training.
§ Mr. Stunell
Will additional money be available for the materials needed for insulation projects under the environmental task force scheme? That is a serious bottleneck in the proposals before the House.
§ Angela Eagle
The hon. Gentleman must not tempt me to announce increases in ministerial budgets for which I am not responsible, because he will get me into enormous trouble. He needs to be aware that the task force and the new deal are being piloted in several areas. We seek to learn the lessons and practicalities from those pilot 1390 exercises, which we hope to apply to the scheme when it is rolled out nationwide in April so that we can ensure that it is most effective.
As I was saying, the capital receipts initiative is expected to make nearly £800 million available to local authorities over the next two years to support capital spending, targeted on housing and related regeneration schemes. It is expected specifically to encourage energy efficiency projects.
My right hon. Friend the Chancellor also announced that the spring Budget will reduce VAT from 17.5 to 5 per cent. on the installation of energy-saving materials under the Government-funded grant scheme for the less well-off. The Government will explore opportunities for agreement at European Union level on a wider reduced rate of VAT on energy-saving materials and installations.
Last week, we announced that we had allocated an extra £5.5 million to the Energy Saving Trust to avoid the previous Government's planned cut and to maintain the Government's support for the trust. The increased allocation will enable the trust to maintain and develop its successful programmes, and will secure the trust's capability to plan for the climate change task ahead.
Improving energy efficiency is not a matter for central Government alone. Inevitably, local authorities and individuals have a part to play. Everyone can help, and many people are anxious to do so.
Local authorities have a key role in promoting energy efficiency to all households in their areas. The Home Energy Conservation Act 1995 requires local authorities to prepare energy conservation reports identifying measures to improve energy efficiency in all the homes in their areas. We think that the Act has the potential to deliver a 30 per cent. improvement in England in about 12 years, if all the measures identified by local authorities are implemented. However, that is a big "if", and that is what we must concentrate on in our education of the public.
Individuals, too, can take action, within the limits of what they can afford. Energy efficiency need not be costly. There are no-cost and low-cost measures that most people can take. It costs nothing to draw the curtains at night and to heat only as much water as one needs. Fitting a jacket on a hot water tank is not expensive and not hard. Many people could do it.
The hon. Member for Mid-Worcestershire (Mr. Luff) told us a tale of unintended consequences about when he insulated his loft, only to discover that the water tank then froze and subsequently flooded his property. The hon. Gentleman is not here now; he apologised for the fact that he could not stay to hear the rest of the debate. He should probably have lagged the tank while he was putting in the insulation.
Improvements, like all such things, have to be approached carefully and in a balanced way. I am sure that the hon. Gentleman learnt his lesson, and the law of unintended consequences that his story illustrates is something we should all bear in mind when we think about how to advise people about energy efficiency in their homes—
§ Angela Eagle
Let me finish my sentence. Then I shall be delighted to give way to my hon. Friend.
1391 It is important that we bear in mind the proper scale of action and the consequences of the advice that we give to the public.
§ Mr. Bermingham
My hon. Friend was talking about the hon. Member for Mid-Worcestershire and his penny-wise, pound-foolish approach to insulation—an attitude characteristic of the previous Government. Will she assure me that when she reviews the building regulations she will not be penny wise and pound foolish, but will do it properly?
§ Angela Eagle
I intended to talk about the contribution to the debate by my hon. Friend the Member for St. Helens, South (Mr. Bermingham). I certainly intend to pass his wise remarks to my colleagues at the Department of the Environment, Transport and the Regions who are directly responsible for the current review of the building regulations. I know already that they share some of his concerns about the cowboy side of the building industry and are anxious to do what they can to ensure that we tackle the causes of poor housing at source, as well as doing what we can to alleviate the problems that we have inherited.
People need to know what they can do to improve energy efficiency. They also need an idea of how much it will cost and how quickly they can recoup that cost through savings on their fuel bills. We must ensure that as many people as possible have that information when they need it, and that they can find it with minimal effort. That is where the Bill comes in.
Many hon. Members have raised concerns about the fuel-poor. Of course, when energy efficiency is improved in such people's homes, with the extra leeway that they gain they will tend to make their homes more comfortable rather than saving energy. Unashamedly, we think that that is a good thing. We are interested not only in saving energy but in improving comfort and, we hope, health and quality of life, especially for those who live in poor housing. The Bill, however, is aimed at home buyers, who can usually afford to keep their homes warm and will therefore reduce energy use following energy efficiency improvements.
The debate has been wide ranging. Discussion of a modest and well-targeted Bill has been used as a vessel into which to pour all kinds of other things, from the building regulations to the efficiency and, in some cases, the honesty, of those who do the surveys, mortgage lenders and a range of other issues.
None the less, we must see the Bill as a small, well-focused part of a range of measures across the board. We must keep things in focus if we are to make those measures effective. The hon. Member for Torridge and West Devon looks as though he wants to intervene. I should be happy to give way to him.
§ Angela Eagle
He does not want to intervene; he must just have been moving in his seat.
If we concentrate on what the Bill is trying to achieve, we can produce legislation that will improve energy efficiency, for all the reasons that have been given today. 1392 It will help us to implement our policies by requiring the provision of information on energy efficiency for mortgage applicants. We support the Bill—but, as always in cases such as this, on condition that amendments are made.
Despite the drafting problems, the principle of the Bill is good. It is a short and sensible measure, which will make a practical contribution. Home buyers will be advised on how to save money by reducing their fuel bills, which will help them to make their mortgage payments. They will be able to make their homes more comfortable. The Bill will help us to protect the environment by implementing our climate change policies. Businesses installing energy-efficiency equipment, including small businesses, will benefit.
Indeed, the benefits of the Bill are such that more than 260 hon. Members from, I believe, every party in the House have supported an early-day motion on the same subject. Members of the SDLP, Ulster Unionists and United Kingdom Unionists are agreed on this, at least—which demonstrates the power of the approach of the hon. Member for Torridge and West Devon.
The organisation that represents those most concerned with the Bill, the Council of Mortgage Lenders, supports the principle, although, like the Government, it has reservations about some of the details. The Royal Institution of Chartered Surveyors has written to me expressing strong support, but it, too, has reservations.
I cannot put an exact figure on the benefits of the Bill, which will depend on the number of people who take advantage of the offer of advice, but, as my hon. Friend the Member for Plymouth, Sutton (Mrs. Gilroy) said, the Energy Saving Trust's energy efficiency advice centres estimate that householders taking advice from the centres make savings of £57 a year following average expenditure of £339. The Bill would offer the same opportunity to about 1 million households each year.
Information required by the Bill would reach house buyers at an appropriate time. When people move house, they will have to make decisions about expenditure, and that is a good time at which to draw their attention to the value of energy efficiency.
With the drafting sorted out, the costs imposed by the Bill will not be onerous, and the competitive mortgage market will keep costs down. In any event, we think that the costs will be outweighed by the benefits. We shall need to ensure that the Bill does not cause any delay to house purchases. It is vital that it is not excessively prescriptive: it must not put at risk our efforts to find ways of improving the efficiency of the home-buying process.
As I have said, there are drafting problems. Apart from the need to clarify details and to look closely at the definitions, we see four main problems. First, we want the Bill to contain a clause making it enforceable. Secondly, the form of energy advice to be offered will be dealt with in statutory guidance from the Secretary of State, and we see no need for the primary legislation to specify in detail what that guidance should include. We want to increase flexibility, and to allow advances in technology to be incorporated without further recourse to primary legislation.
Thirdly, we want the Bill to apply only to single dwellings used for owner-occupation. Fourthly, as drafted the Bill would be difficult to implement in Scotland, as my hon. Friend the Member for Blaydon (Mr. McWilliam) pointed out.
1393 We are concerned that the Bill contains no sanction against mortgage lenders that do not provide a borrower with information about the energy efficiency of a dwelling. We need to discuss with the hon. Member for Torridge and West Devon how that will be dealt with in Committee, as there is little point in passing unenforceable legislation.
As I have said, the Bill itself does not need to specify in detail what should be included in guidance to be issued by the Secretary of State. We should consult on draft guidance, to ensure that the views of all those with an interest are taken into account. We want a system that serves the mortgage applicant well, while minimising work for mortgage lenders and those making inspections—and the cost to the customer. The important thing is that the information covers the key issues: what could I usefully do to improve this property's energy efficiency and what is it likely to cost and save me?
I come to some of the points that were made by the right hon. Member for Penrith and The Border (Mr. Maclean) and the hon. Member for Mid-Worcestershire. We, too, want a simple, unbureaucratic system that provides simple advice on the most cost-effective energy-efficiency measures. People want to know what to do, how much it will cost and what they will save.
Broadly, the Government's intention is that the survey or inspection should identify what energy-saving features are present in the property—for example, tank or roof insulation. The details of the inspection will need to be considered carefully to ensure that the cost is reasonable and that preparing it does not delay the sale.
To ensure that the extra cost to the buyer is kept to a minimum, the Government intend that energy features should be noted by the lender's valuer when he visits the property to make his valuation. There would not be a separate energy inspection. Preliminary contact with the industry suggests that a report along those lines might cost an extra £15 to £40, but, of course, the charge cannot be established until we have settled the exact extent of the survey.
We should like to consult on whether an energy rating should be included in the information that is provided to customers. If so, it could be provided by one of the Government-authorised energy rating companies, five of which are currently in operation. That will help to ensure consistent energy rating. I hope that that will answer the more detailed questions of the right hon. Member for Penrith and The Border.
§ Mr. David Willetts (Havant)
The Minister has been speaking for nearly 40 minutes on a Bill which has had widespread support in the House. Will she say when she expects to be bring her remarks to a conclusion?
§ Angela Eagle
I am surprised by the hon. Gentleman's remarks as I stood up at 24 minutes past 12, I have taken many interventions, and we have had an interesting debate. However, I am drawing my remarks to an end. I know that another Bill will have its Second Reading debate after this one, but I am surprised by the hon. Gentleman's remarks, as he has not been in the House from the start and has paid no attention to the debate.
§ Mr. Bermingham
On a point of order, Mr. Deputy Speaker. First, the hon. Member for Havant 1394 (Mr. Willetts), the shadow spokesman, is grossly rude. Secondly, he cannot do his arithmetic because 24 off 51, as it was then, is 27, if my arithmetic is right; no doubt he cannot count. Perhaps he would dwell on his intervention and apologise. It has been a good-natured debate.
§ Mr. Deputy Speaker (Mr. Michael Lord)
The hon. Member for Havant (Mr. Willetts) is responsible for his own remarks.
§ Angela Eagle
I will make progress, despite that discordant note in what has been an interesting and important debate. However, it is important that, when a Bill is going into Committee and the Government consider that some detailed points on drafting need to be dealt with, I give the Government's view. That inevitably takes some time, so I hope that the hon. Member for Havant (Mr. Willetts) will restrain himself and demonstrate a little patience.
Before I was so rudely interrupted, I was about to say that we support home energy rating. The building regulation requirements on energy efficiency are set in terms of minimum standards to be achieved. The rating system might also be a useful part of the information to be provided to home buyers. In drawing up the Secretary of State's guidance on the coverage of energy efficiency information, we would want to discuss that matter and consult on it. However, we would not want to prejudge that option by writing it into the primary legislation.
On a matter of greater detail, I should like the type of dwellings to be covered by the Bill to be specified more clearly. It would be sensible to restrict the Bill to single dwellings, be they flats or houses, being sold with vacant possession for owner-occupation. I would not like registered social landlords to be included within the scope of the Bill. Other levers can be used to improve energy efficiency in the housing association sector, for both new and existing properties.
The Energy Conservation (Housing) Bill promoted by my hon. Friend the Member for Eltham (Mr. Efford), which I hope will receive a Second Reading later this afternoon, specifically addresses energy efficiency in properties owned by registered social landlords.
It would not be practical to apply the provisions of the Bill before us to a landlord's interest in properties that are let. Under existing landlord and tenant legislation, a surveyor instructed by a mortgage lender would almost certainly not have a right of access to tenanted property. Nor would it be sensible for the Bill to apply when the freehold of a leasehold house or block of flats is acquired by the leaseholders or a third party.
A further difficulty relates to the way in which the Bill would operate in Scotland. The Bill's provisions would bear more heavily on Scottish house hunters than those in England, as there is a more sensible system of house purchase north of the border. In Scotland, many prospective house purchasers will bid for several houses before their bid is accepted. Unsuccessful bidders are likely to object to the additional costs of several surveys. We would need to explore the possibility of amending the Bill to make it more appropriate to the Scottish system of house purchase.
The Government are keen to encourage energy efficiency and to draw the attention of home buyers to its value. The Bill would provide an effective tool to help us 1395 carry forward our policies and implement our climate change programme. We support the Bill, subject to exploring in Committee the points that I have raised. We have genuine concerns about drafting that require full examination and should be considered in Committee. Subject to that, I commend the Bill, and congratulate the hon. Member for Torridge and West Devon on placing it before the House.
§ Mr. Burnett
I shall not detain the House long. We have had an informative debate with some excellent and constructive speeches—for which I am grateful—from hon. Members on both sides of the House. One or two hon. Members may have misunderstood one of my remarks about the impact of my Bill. I said that 425,000 mortgages are given every year to buy houses that are not newly built. I believe that the Bill would have a significant impact on the huge stock of older buildings in the country.
I also thank the Association for the Conservation of Energy and the Green Liberal Democrats for their assistance. I am also particularly grateful to the Minister for her comments today and the time she has given in the past month. She has made a number of constructive proposals and the assistance of her officials has also been invaluable.
I hope that the House will forgive me if I do not summarise the compelling points and issues that hon. Members have raised today. It is apparent that there is a real head of steam in this Parliament for measures to protect our environment, for sustainable development and for energy efficiency. They are powerful means by which we can start to curb the pollution that blights our world and ensure that we bequeath to our successors an environment in which they can thrive.
§ Question put and agreed to.
§ Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).