My Lords, we have Amendments 93AAA, 93ZAAA, 93AE and 93AF in this group, which I will speak to as well as commenting on the other amendments. I start by offering my warmest congratulations to the noble Lord, Lord Ahmad, on his promotion. He is not a stranger to CLG matters and certainly not a stranger to local government. We look forward to working with him, at least in the remaining months of this Parliament.
As we have heard, the government amendment facilitates allowable solutions, which are not otherwise already available under the Building Act 1984. However, together with other matters which have gone on, this does not represent the progress on zero-carbon homes that was hoped for and which we believe is achievable. It might be worth quoting from the briefing that I think all noble Lords have had from the UK Green Building Council, just to remind us of the figures, which I think the Minister touched on:
“The UK’s buildings account for 37% of total greenhouse gas emissions, with 66% of buildings’ emissions from homes. The UK is committed to reducing emissions by 50% in 2025 and 80% in 2050. Some of the most cost effective potential carbon savings exist in the buildings sector and Government is looking to this sector to deliver significant levels of carbon savings”.
We would say they have not looked hard enough. In 2006, the previous Government announced that all new homes would be zero carbon from 2016, but this of course will not now happen. It was originally planned for there to be three clear regulatory steps along the way to achieving this, in 2010, 2013 and 2016. The code for sustainable homes, a standard against which all new homes would be rated, was introduced alongside the zero-carbon target. The purpose of the previous Government’s approach was to recognise that small, incremental changes to building regulations from time to time were insufficient to generate the fundamental change that was required within the construction industry, and that clarity was needed on the direction and speed of travel as well as on the ultimate destination. That worked, and it is widely recognised that it had a galvanising effect on the housebuilding industry and on the supply chain, and sparked a bout of innovation in the sector.
After promising early announcements, a series of decisions taken by this Government have reduced the ambition. The zero-carbon target was weakened by one-third when it excluded emissions from plug-in appliances, and they are now allowing a further third
to be mitigated off-site through allowable solutions. The standard adopted is also below that recommended by the Zero Carbon Hub. A long-term exemption for small sites is illogical in principle, and we do not yet know how it is to work.
Our Amendment 93AAA would require the Secretary of State to,
“publish a report each year on the progress which has been made towards a carbon dioxide reduction”,
for differing types of dwellings. We propose that the targets should be,
“44% for flats, 56% for semi-detached houses, and 60% for detached homes”.
These are not arbitrary amounts but have been agreed by the Zero Carbon Hub after a significant piece of collaborative work. These are the levels that the industry advises are achievable, and were accepted by the previous Government. By setting the standards at a lower level, as the UK Green Building Council points out, the effect is to transfer more of the carbon savings to allowable solutions, which are generally less easy to verify.
Amendment 93ZAAA, like the amendment of the noble Lord, Lord Teverson, permits a small-site exemption for a limited period. In this case, the exemption threshold is less than 10 units. Let me be clear that we are opposed to ongoing small-development exemptions. Along with the noble Lord, Lord Teverson, we have a degree of equivocation about identifying any threshold, even for a short period. One could advance the argument that because the Government have been tardy in bringing some of this stuff forward smaller developers perhaps need a bit more time to come to grips with it all. Like the noble Lord, I think it is not necessarily right to equate small developments with small builders or ill equipped builders. There is a big question mark, certainly on an ongoing basis, about the risk of sites being deliberately fragmented to avoid these commitments. The Government have a strong case to answer about why they are pursuing this course.
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We justify this very limited exemption on the grounds that smaller builders probably would have a greater challenge to adjust to the requirements, and the Government’s dithering with questions still unanswered has cut the lead time for preparation. Additionally, post-May 2015, we hope to offer the prospect of SMEs having better access to sites in any event. The threshold that we use is simply picking up the planning system minor development definition as it has greater merit.
Amendments 93AE and 93AF relate to the regulations enabling allowable solutions. Amendment 93AF requires that the affirmative procedure be adopted. Given the huge significance of these regulations, that seems to be entirely appropriate. It was not clear quite what is currently planned to make it certain. Amendment 93AE in a sense speaks for itself. It requires consultation with the Committee on Climate Change before any regulations are published. Given the very important role that the committee has, that seems the very least that might be expected.
Amendment 93AA, which was tabled by the noble Lord, Lord Teverson, allows a small site exemption, limited until 2018, with a threshold of fewer than five units. We have already addressed those issues. We certainly would not support ongoing exemptions whatever the threshold.
On Amendment 93AB, we accept that there is a strong case for off-siting to be local to ensure that it benefits the communities affected. However, we have some reservations about how practical it may be. It is currently drafted as an absolute requirement, and an alternative might be a best-endeavours approach.
On Amendment 93AC, £90 per tonne of carbon was one of the options canvassed in the Government’s consultation. The other two were £36 a tonne and £60 a tonne. We have some sympathy with the approach, but recognise the inconclusive nature of the consultation which, the government response concludes,
“brought much conjecture but no new evidence on how the different price caps may impact either on the extent to which allowable solutions measures would be brought forward or on the viability of housebuilding”.
It refers to further analysis being needed. Will the Minister say what is in hand and when it is expected that that further analysis will be completed?
In Amendment 93AD the noble Lord sets out a list of activities which may count as allowable solutions, and they seem entirely reasonable.
Making real progress on zero-carbon homes is vital if we are to meet our commitment to tackling climate change and our emissions targets. We would support a higher standard of zero-carbon homes than the coalition, ensuring that if people pay an uplift on a home due to it being zero carbon, they will benefit from an appropriate higher level of thermal efficiency than at present. The standard should be the one recommended by the Zero Carbon Hub. We oppose an ongoing small developments exemption. We would structure allowable solutions in such a way that developers are incentivised to prioritise onsite measures over external offsets. The noble Lord, Lord Teverson, has an amendment on that in due course. This could be done through the drafting of the primary and secondary legislation. In office, we would produce an energy in building strategy which combined the existing microgeneration energy efficiency and heat strategies. This is a sensible evolution that would ensure consistent priorities across departments.