§ 11 am
§ Sir Sydney Chapman (Chipping Barnet)
I am grateful for this opportunity to raise the important issue of the need for energy efficiency in the commercial sector. It is a great pleasure to be speaking under your chairmanship for the first time, Mr. Atkinson. I am particularly grateful that the Minister of State will be replying to this short debate, because that shows the importance that the Government attach to the issue.
The issue was last raised as long ago as January 2001 by the hon. Member for Eltham (Clive Efford) in an extended Adjournment debate. I hope that I am not quoting him out of context. He said that energy consumption in offices had been generally neglected and that the rate of growth in energy consumption wasthree times greater in the commercial sector than in the domestic sector."—[Official Report, Westminster Hall, 23 January 2001; Vol. 361, c. 215WH.]Replying to that debate, the former Minister for the Environment, the right hon. Member for Oldham, West and Royton (Mr. Meacher), recognised thatWe need a major shift in the way that energy is used in commercial buildings".—[Official Report, Westminster Hall, 23 January 2001; Vol. 361, c. 229WH.]
Little progress has been made in the intervening 32 months. Energy efficiency policies and programmes have focused on the domestic and industrial sectors and have tended to overlook the important commercial and service sectors, which represent about 17 per cent. of total energy consumption. By way of comparison, it is interesting to note that, whereas energy consumption has halved in the past 30 years in the industrial sector, and is down by almost 10 per cent. in the public sector, in the commercial sector it has grown by more than two thirds—the figure is something like 68 per cent.—and Department of Trade and Industry projections suggest that there will be a further rise. That is an urgent situation that must be dealt with quickly. There is real cause for concern if we are to meet our targets for carbon dioxide emissions.
In the commercial sector, offices are a significant contributor to energy use, but I think that the Minister will agree that they also offer the greatest potential for savings. Offices tend to be the same, unlike industrial processes, so if we can identify a significant cost potential, it will be much easier to put that into a policy, which will be more effective. There is cost-effective potential for savings in the commercial sector that can be readily identified. If we can get the large companies and businesses, which have more office space, on side and active in promoting energy conservation in the commercial sector, that will have a great impact.
The rapid growth in energy use in offices is due to a number of factors. Office space has doubled in the past 30 years. There has also been greater use of air conditioning as well as heating in the past three decades. Another obvious point is that there has been a tremendous increase in information technology equipment. That is why there has been a huge explosion of energy consumption in the commercial sector.
93WH The Association for the Conservation of Energy—an organisation that I salute, and that prompted me to raise these matters—under its director, Mr. Andrew Warren, published a report in March that estimated:Using readily available and cost effective technologies, up to 2.5 megatons of carbon could be saved.As the Minister will confirm, the Government anticipated in their November 2000 climate change programme, and repeated in the February 2003 energy White Paper, that six megatons of carbon savings annually must be achieved by the business and public sectors by 2010. If we can successfully tackle the problems in the commercial sector, that sector alone could deliver almost half the savings required. The other half—the public sector—involves hospitals and schools, but not exclusively.
The European Parliament and the European Council approved the EU directive on energy performance of buildings in January. That comprehensive directive in part concerns where omissions can be made from the energy performance policy. I have three anxieties about the directive and I would like three assurances from the Minister. The first concerns listed buildings. We should remember that, while many of the 500,000 such buildings are of architectural or historic interest, they include quite a few buildings in the commercial sector. My first job as an architect was based in a listed building—a very fine early Georgian building.
The directive gives allowances to listed buildings that do not meet energy efficiency requirements where, in meeting the requirements of the directive by installing energy efficiency equipment, the character or appearance of the listed building would be unacceptably changed. It would be helpful if the Government sent the right signal to the owners of the 500,000 listed buildings by saying, "You have to show us that it would be damaging to your listed building if you were to put in energy saving equipment," rather than, "You don't have to do anything because you own a listed building." Have the Government estimated the proportion of those listed buildings that will be outwith the requirements of the directive?
The directive gives a dispensation to temporary buildings. It has also been over-generous with its definition of a temporary building as a building with a planned time of two years or less. That is far too long. Our landscapes and urbanscapes are littered with portakabins, and the qualifying period ought to be reduced from two years to, say, six months.
My third specific comment on the directive concerns industrial processes. It refers to "industrial buildings and offices", which is unclear. Will the Minister please ensure that offices in the industrial sector cannot be included in the dispensation?
I have a query about energy performance certificates under article 7 of the directive. As the Minister knows, certificates must be displayed in any office of more than 1,000 sq m, which, in my imperial-preference language, is about 1,000 sq yd. Buildings of more than that size which are visited regularly by the public—that is an indistinct phrase—must display the certificate. I welcome that because it should lead to significant improvement in energy performance in larger buildings. However, the directive also states thatother relevant climatic factors may also be included.94WH I hope that the Minister will look at that to see whether, in the United Kingdom, other climatic factors will be included.
This subject is necessarily complicated and I want to finish by posing a series of queries to the Minister. If he cannot deal with them all in detail now, which is understandable, I will be pleased to hear from him after the sitting.
I can see how, under section 2 of the Building Act 1984, it would be possible to incorporate requirements under the building regulations not just for new build but for refurbishment of owner-occupied properties. It is more difficult to see what legislation exists to facilitate certification for rented properties. I do not want to go too deeply into the rented office sector, but clearly there is a problem when someone owns an office or commercial property and rents it out. There is no incentive for the tenant to put in the energy-saving equipment—why should he? I am not attacking landlords, because there are very good landlords, as well as tenants, but a landlord may say, "Well, I'm receiving my rent, so what incentive is there for me to spend a lot of money to create energy savings?" The rented sector needs careful examination.
Similarly, article 8, which deals with the inspection of boilers, and article 9, on the inspection of air conditioning systems, are relevant. Is the Minister convinced that the Government have the right under existing legislation to require the inspection of boilers and air conditioning systems in rented properties?
My final point is that, despite the directive, building regulations, the Building Act and much other legislation, energy conservation is so important that we need primary legislation to fulfil the requirements of the EU directive on energy performance of buildings and other directives.
I know that space in the Queen's Speech is at a premium, and many Ministers will be disappointed because they cannot get their pet legislative proposals into the Government's programme. I want to be constructive, so I would like to make a suggestion. I hope that the Minister will say—of course he cannot confirm that today—that he will make the most rigorous representations to the Cabinet and his ministerial colleagues to include space for primary legislation dealing with energy conservation. If, by chance, they cannot find room for a Bill, will he look favourably on the possibility of legislation being made available to a Member who is lucky in the ballot for private Member's Bills?
§ Brian White (Milton Keynes, North-East)
The other alternative is to use the regulatory report process, which can help Departments to achieve changes in primary legislation using a different route.
§ Sir Sydney Chapman
As ever, the hon. Member for Milton Keynes, North-East (Mr. White) makes a valid point. There are other ways of doing this. I have only once been lucky in the ballot for private Member's Bills, in my very first Session in 1970. I had a Rural and Urban Environment Bill, which bit the dust because of a lack of time. It was to do with listed buildings, trees and other such things. The Guardian reported it biting the dust by saying "Trees bill axed". I am going to put in for a 95WH private Members' Bill in the next Session. Perhaps, as it will be one of my last Sessions in this place, I might be lucky—or luckier.
There is a need for primary legislation. I hope that that might include a requirement for larger property owners not just to provide energy certificates, but to carry out improvements for energy conservation when the properties are sold, let, re-let or subject to a rent review. I had the great privilege of attending the World summit on sustainable development in Johannesburg, just over a year ago, in my own right as chairman of the Environment committee of the Council of Europe. I had a little competition to find out whether we were sure that we were getting over to our constituents—we all have the best and most far-sighted constituents, which is why we are here—what sustainable development is, and to find out how many of them know what it is. The competition was for somebody to give the best definition of sustainable development in as few words as possible. I came up with a seven-word definition, which I am still waiting to hear bettered. It is "Conserving Earth's finite resources for future generations". That is a major undertaking and we have realised almost too late that we are squandering many of the world's finite resources. We have to turn the tide, and one way of doing that is not just to talk globally but to act nationally and in our own homes and offices to ensure that we achieve sustainable development.
§ The Minister for the Environment (Mr. Elliot Morley)
I, too, would like to say how nice it is to see you in the Chair for this debate, Mr. Atkinson.
I congratulate the hon. Member for Chipping Barnet (Sir Sydney Chapman) on his contribution. I thought that it was helpful and constructive and addressed a range of important issues. I can assure him that the Government share his concern in relation to commercial buildings. I share his admiration for the work of the Association for the Conservation of Energy, and he might be interested to know that the Carbon Trust has supported some of its recent reports. That is a good example of how money raised from the climate change levy supports energy conservation.
The hon. Gentleman is right to say that the office sector has continued to increase in importance. It is of course vital that we continue to address energy issues and, as he said, to ensure that energy is used as efficiently as possible. Energy efficiency is the most cost-effective way to cut our carbon emissions.
We all know that we have signed up to some very important targets in the Kyoto agreement and that we also have national targets. Those targets are demanding but important, given the need to reduce CO2 emissions. All sectors must play a part in that, including the commercial sector.
In the Energy White Paper, the Government committed themselves to publishing an energy efficiency implementation plan setting out in greater detail how to meet the challenge. DEFRA is in the lead on that, but we are working closely with other Departments, the devolved Administrations and bodies such as the Carbon Trust and the Energy Saving Trust through the 96WH sustainable energy policy network. I will set out what the Government are doing and respond to some of the points raised by the hon. Gentleman.
Commercial offices are responsible for only 2.5 per cent. of the UK's non-transport carbon emissions. We must view the matter in perspective, but of course we cannot ignore what is a big and expanding sector.
There are four main instruments designed to tackle CO2 emissions in the non-domestic sector. First, there are the building regulations, which are due to be revised in 2005. The hon. Gentleman touched on that subject, and I will look at some of the points that he quite rightly raised. The best builders could do better, which we have been encouraging them to do for some time. In the Energy White Paper, we announced that the better building summit and the sustainable construction working group will extend a challenge to all builders to raise their standards. We also declared our intention of raising standards on building regulations over the coming decade, having learned from the standards in comparable European countries and having looked at the best standards that we can apply in this country.
Secondly, there is the climate change levy, which has been in place for more than two years. Customs and Excise is currently conducting a study of its effectiveness in delivering environmental improvements. The Carbon Trust receives money from that levy. Several of the trust's programmes are designed to tackle energy use in the commercial sector, including offices. They include the provision of advice, information and loans through the action energy programme, the low carbon innovation programme, and enhanced capital allowances—the third instrument—which reduce the cost of buying carbon-reducing products from an approved list.
Finally, there is the European directive on the energy performance of buildings. The hon. Gentleman described those provisions and how they will allow member states to have discretion on the buildings that they may choose to exempt from the requirements to set energy performance standards. In response to his questions, I can reassure him about our intentions. Obviously, we want to see what comes from the detailed developments and consultation that are in prospect on that and on all the other articles. I understand that the Office of the Deputy Prime Minister takes the view that any exemptions should fall in line with the current building regulations.
The hon. Gentleman raised a number of detailed points that I will try to answer. First, there is the issue of historic listed buildings. The energy efficiency provisions in part L of the building regulations apply to all historic buildings, but reasonable provision depends on the circumstances of each case. For example, we would not expect Windsor castle to put UPVC double glazing in. Nevertheless, an awful lot can be done to improve energy efficiency, even in old and listed buildings, such as modifying central heating systems, draughtproofing and insulation. I live in a listed building and have upgraded the central heating and improved the loft insulation and the draughtproofing, which has had an effect. Old buildings with thick walls are often cool in summer and warm in winter, so they are good on energy efficiency.
97WH The hon. Gentleman also asked about the percentage that would be affected. It is not possible to calculate the exact percentage until there has been more careful consideration of which regulation should apply to which buildings. That is being considered and the figure will be available in due course.
The hon. Gentleman raised the subject of temporary buildings, which are in fact classed as those remaining in place for not more than 28 days. I can reassure him that the Government do not accept the two-year rule and that, as far as we are concerned, after 28 days the building regulations will apply.
Part L does not apply to industrial and commercial processes that consume energy, nor to that part of the building's environmental energy consumption needed to convey waste heat to the outside air. However, industrial and commercial buildings are not exempt from the building regulations unless they are controlled by other legislation. I agree with the hon. Gentleman that, even in industrial premises, there is no reason why the regulations should not apply to office accommodation. That makes absolute sense, but the wording is not clear and we are looking to clarify it.
The hon. Gentleman also described how article 7 requires building energy performance certificates whenever buildings are constructed, sold or rented out, and said that, in certain circumstances, it calls for building owners to display certificates prominently. The article also gives member states discretion to call for additional information to be displayed on the certificates about the building's internal climate. Interpreting the requirement to display information is proving difficult, and officials are in the process of seeking advice from the Commission and other member states. Again, we accept that that is a reasonable point. It will be interesting to see what officials discover in those discussions, but how we implement the directive is a matter for the UK, taking account of what it legally obliges us to do and the constraints placed on us by other policies for better regulation.
A separate issue is what information such certificates should convey. I understand what the hon. Gentleman said, but it may not be practical to convey the range of temperatures and other climatic parameters encountered and expected in larger buildings, which commonly accommodate many different types of activities. Nevertheless, we shall give consideration to those desirable points.
We intend to implement article 8 primarily through the provision of information. However, we shall also consider the energy and safety benefits of regular inspections for fuels with a higher potential for soot formation, the build-up of which could lead to incomplete combustion and the production of carbon monoxide.
The hon. Gentleman reasonably expressed concern about how quickly and by what means the Government intend to bring the directive into effect. Article 15 98WH requires us to transpose all the requirements into UK law by 4 January 2006. We announced in the Energy White Paper that the Office of the Deputy Prime Minister would take the lead in implementing it, for the good reason that the requirements fit well into the framework of the building regulations. We believe that many of the requirements can be implemented through changes to the existing building regulations without having to make changes in primary legislation.
Section 1 of the Building Act 1984 applies to construction work for new buildings and refurbishments on whatever scale, although, as the hon. Gentleman said, section 2 may need extending to oblige building owners to carry out regular inspections of boiler and air conditioning plant. The European Communities Act is likely to be the most appropriate way to implement those parts that cannot be implemented through existing legislation. However, I assure the hon. Gentleman that we will consider whether his suggestion of using a private Member's Bill could be a viable alternative. We shall certainly consider all ways of implementing the directive as quickly as possible. I know that the routes of private Members' Bills are often rocky, as those who have been involved in them over the years know well, but it is a sensible measure that would command widespread support.
§ Sir Sydney Chapman
I am very grateful to the Minister, and thank him for the way in which he is treating the matter. Let us hope that this debate is the beginning of a dialogue, because the issue transcends normal party politics.
One of the reasons why I was pleased to have been successful in gaining the debate today is that the week after next is energy efficiency week. The debate is a good curtain raiser for that most important event.
§ Mr. Morley
The hon. Gentleman is absolutely right, and his timing is most fortuitous.
I shall certainly look carefully at the hon. Gentleman's speech to ensure that all the points that he raised have been addressed; any that I have not had time to answer will receive a written reply. We in government must look to our own performance. We must also look at heating and cooling product standards. We recognise the importance of energy efficiency overall, which is why I welcome what the hon. Gentleman had to say. His suggestions were constructive, sensible and helpful, and I intend to ensure that the Government respond in kind. Such proposals will be an advantage, not only in terms of our commitment to sustainability but because efficiency savings make good sense for the commercial sector itself.
§ Sitting suspended until Two o'clock.