I am very pleased to be able to contribute to the debate. The Bill is wide-ranging with many good features and I shall certainly be supporting its Second Reading, but it is certainly also not beyond improvement and I want to focus on one particular area where I believe improvements are urgently required.
The right hon. Member for Greenwich and Woolwich (Mr Raynsford) and the hon. Members for Southampton, Test (Dr Whitehead) and for Brighton, Pavilion (Caroline Lucas) referred to the legislative provision for the introduction of zero-carbon homes standards in 2016, which is the focus of clause 32. When I was a Minister in the Department for Communities and Local Government I was very pleased to have my signature on the regulations that raised the standards of new housing energy performance by 25% compared with 2006, and I was very pleased that at that time we could renew the ongoing commitment for the zero-carbon homes standard to be achieved in 2016. My successors in the Department have seen a further upgrading in October 2013 and again a renewal of the commitment to achieve that standard in 2016. Clause 32 is the enabling clause to make that happen.
The problem is that behind that clause lies what appears to be an intention by the Government to introduce something that will not achieve zero-carbon homes in 2016. That will clearly need to be put right in Committee. There is a two-stage process in achieving zero-carbon homes. The first is to set minimum carbon compliance standards for the building itself. That is partly about the fabric of the building—the walls, the insulation and the solid bits of it—and it is partly about whether or not renewable energy generation, such as solar panels on the roof, is installed in the building. That is the on-site provision—the minimum carbon compliance standard. The UK Green Building Council and the Zero Carbon Hub taskforce have made recommendations about how that can be achieved, but it cannot always all be achieved on site. The design, layout and orientation of the site may not make that possible.
There is also a second stage: that the remaining carbon saving will be achieved off site through allowable solutions. A range of things can be done, such as the builder doing it off site themselves or paying into a fund —a payment that is based on the price of the carbon that is being saved. A key decision is how challenging to make that first stage of on-site provision, and therefore how much spills over into the off-site provision.
My hon. Friend the Member for Bromley and Chislehurst (Robert Neill) commented on the impact on London of having a high level of spill-over to the allowable solutions and his concern that investment might move out of
London as a consequence. In preparing clause 32, the Government sensibly asked the Zero Carbon Hub taskforce to advise them on what standard to introduce. The group recommended that the minimum on-site standard to be achieved before allowable solutions could be used should be an improvement of between 56% and 60% on the energy performance standards of 2006. We must bear in mind that we have made something like a 33% improvement with the two upgradings that have taken place under this Government so far. The figures of 56% and 60% are based on the building type involved, because it is easier to generate savings from some types of house than from others. The recommendation goes on to say that in the case of flats, which are particularly awkward, we should be heading for a 44% improvement in energy performance standards compared with 2006.
The Government have responded by not accepting the proposal for an improvement of between 56% and 60%. Instead, they are going to apply the figure of 44% to all building types—the lower level of saving that the taskforce recommended only for flats. That is a matter of concern, and it is difficult to understand why the Government have come to that conclusion. Was it because of cost, or because of the impact on the market? When the commitment to building zero-carbon homes by 2016 was signed off by the Department in 2011—I announced it from the Dispatch Box, so I know it happened—the assessment was that that was deliverable and affordable, and would have no adverse impact on housing starts or housing delivery. Instead, it would cut the fuel bill of a new zero-carbon three-bedroom house by £1,200 compared with that of the highly desirable Victorian homes that so many of us aspire to having.
What has happened since that assessment and that announcement? The first thing to say is that, since that time, the cost of doing it has been halved. It has not gone up; it has been halved. Upgrading to zero-carbon home standards will now cost only 50% of what it would have done if we had done this in 2011. That is a 50% cost reduction in three years. By 2016—or, probably more realistically, by 2018, 2019 and 2020, when the homes are actually being built—it is likely that the cost will have been halved again.
In the meantime, I have taken the precaution of asking the Prime Minister at Prime Minister’s questions whether it was still the Government’s intention to be the “greenest Government ever”. His response was a strong, positive yes. So my question to the Minister, and the issue that I want to explore as the Bill proceeds through Committee, is, why have the Government wobbled? It certainly was not as a result of the consultation they held, back in 2013, when 70% of the consultees were in favour of the standards proposed by the taskforce. We have heard about the consultation on fracking. Well, here we have a Government policy with a 70% approval rating that would cost at least 50% less than the Government thought it would when they first put forward the proposals. It therefore seems really strange that they should be watering down a policy with a lower cost outcome which is supported by 70% of consultees.
There is also the question of small sites. I am already on record in this place as saying that I think the size limit for small sites should be zero. I do not think there should be a small site exclusion, because that could open the door for unscrupulous developers to fiddle their site sizes and their phases so that they did not
comply with the new standards. I am even more concerned about the false market that could be created in the longer term, whereby buying a home built on a small site could give someone higher bills than a home built on a larger site. What possible rationale could there be for that? I can see no logic in it or justification for it. It would ultimately be detrimental to the consumers who bought the homes if lower standards applied to them.
I hope I have said enough to ensure that the Whips do not put me on the Bill Committee. I hope I have also made the case that the Bill increases and improves the energy performance standards required of new homes. I do not deny the Government that, but they have unnecessarily hobbled themselves. They have failed to be as ambitious as they could be or as the consultees wanted them to be. There is an opportunity now to put that right and make sure that we take a genuine, positive, large step forward to zero-carbon homes in 2017.
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