On 5th November 2014, the Bishop of St Albans tabled an amendment to the Infrastructure Bill, during its Report Stage, which sought to hold the Government to its commitment to a zero-carbon homes strategy as originally envisaged, including removing exemptions for small construction companies and allowing construction companies to buy themselves out of their obligation to build zero-carbon homes. Following the debate on the amendment, assurances were given tat consultation on the commitment were ongoing, and the Bishop did not press it to a division of the House.
The Lord Bishop of St Albans: My Lords, in speaking to Amendment 108A, I should like to thank the noble Lord, Lord Berkeley, for co-sponsoring it. I bring forward this amendment out of concern that the standard proposed in the Bill is significantly lower than that already agreed through cross-industry consensus. I fear that an excessive focus on off-site carbon savings will undermine the effectiveness of the proposals and that an exemption for small sites will create confusion by causing the emergence of a two-tiered regulatory system. It is essential that housebuilders meets the carbon compliance standards that have already been agreed through cross-industry consensus. This was endorsed by the Government back in 2011 and strongly supported by around 70% of those responding to their consultation. I am therefore troubled by the proposal of a new on-site energy performance standard for zero-carbon homes that is lower than the one already agreed. It is not clear why this reduction is necessary. The proposed exemptions from the standard for homes built on small sites and for starter homes would also serve to undermine the main purpose behind the zero-carbon standard: namely, that of prioritising carbon reduction. It is to address the lack of measures necessary to realise the Government’s stated commitment to carbon neutrality that I have tabled this amendment which requires the previously agreed carbon compliance standard to be met on-site before allowable solutions can be undertaken. It also requires all homes to meet that standard, ensuring that no exemptions are allowed.
First, I will address zero-carbon standards. Your Lordships’ House will be aware that the zero-carbon homes standard was originally created by the Zero Carbon Hub set up by the previous Government. This involved the green technology industry, developers and the Government. Together the decision was taken to set the standard based on what was technologically available back in 2010-11. As this Bill is addressing homes that will be built after 2016, what is technologically achievable will be far greater than the minimum standard set out back in 2011. The cost and viability of these technologies will have improved along with their accessibility and reliability. It is therefore difficult to see on what basis the Government have drawn their conclusion that the previously agreed standards are now unworkable. Surely standards must be set at the optimal point, which has been previously agreed through intense cross-sector scrutiny, and must be consistent across the board. There should be a common standard regardless of the size of the development.
It is essential that these agreed standards apply to all homes, especially starter homes where tight budgets are more likely to squeeze out energy-saving measures. The proposed exemptions for small sites are problematic as such sites are much more likely to be in rural areas that are off the gas grid and therefore expensive to heat. We must not allow this Bill to be a means of compounding the desperate situation of those households already struggling with fuel poverty. As we have already heard, there is currently a lack of clarity over what comprises a small site. A consultation on small sites was promised before the summer but has yet to take place. It would be very helpful if, in his summing up, the Minister could tell the House when the consultation can be expected. As many as 12.5% of homes a year could come under the small sites exemption if these sites are classified as 10 units or fewer.
It is also as yet unclear which parts of the zero-carbon policy the exemption refers to. Does it refer only to the allowable solutions flexibility mechanism, which can be used to top up the carbon savings from code level 4 to level 5, or will developers of small sites be exempted even from the code level 4 on-site standard? The proposed reduction to code level 4 is in itself damaging and unnecessary. Three of the country’s largest housebuilders have recently shown that code level 4 compliance can be achieved primarily through improved efficiency of the building fabric, in the form of insulation and glazing, and not requiring any expensive renewable energy technologies. Furthermore, these developers have stated that they expect to be able to build these code level 4 homes, when delivering at scale, to the same price as it currently costs to build to the 2010 code level 3 building regulations.
In the immediacy of economic pressures, we must not lose sight of the overriding purpose for which the zero-carbon standard was designed. The recently published IPCC report reiterated the very real dangers of anthropogenic global warming and the concurrent impact on humanity across the world. Carbon reduction is essential to climate change adaptation and mitigation.
Briefly, and in passing, I am also glad to say that my own church, the Church of England, is playing its part. Vicarages and other properties are now normally being built to the highest green standards and more than 400 of our church buildings, many of them medieval, now have some form of renewable energy.
In conclusion, the Bill would lead to confusion in the supply chains and among house buyers, a two-tier regulatory environment and greater fuel poverty. Moreover, the large-scale exemptions signal a retreat from a full-blooded commitment to reducing carbon emissions, the goal on which the future flourishing of our country as part of the global community depends.
Lord Ahmad of Wimbledon (Government Response): …I now turn to Amendment 108A, in the name of the right reverend Prelate. As I said during the discussion on a similar amendment in Committee, this amendment will result in significant problems by prescribing energy performance levels in the Bill. We all share the desire to see energy-efficient homes built that help to reduce carbon emissions and fuel bills. We should not forget that this Government have made significant progress towards delivering on the commitment made by this and the previous Government to ensure that zero-carbon homes are built from 2016 onwards. Since we confirmed our commitment to the 2016 target for new homes to be zero carbon, we have further strengthened the requirements of the 2006 building regulations in 2010, and again in 2014, achieving a 30% total reduction. In fact, the most recent changes we made to the building regulations in 2014 will help to save homeowners an average of £200 on their fuel bills, compared to new homes built before we came to office.
Of course, we are not stopping here. As I have said, we have confirmed that from 2016 all new homes will have to meet even higher standards for on-site measures to be set out in building regulations. These will be set at a level equivalent to that required for a home built to the code for sustainable homes level 4 standard and will save homeowners on average £700 more annually when compared to a typical existing home. The right reverend Prelate talked of building to code 4. This can be done, which is why we think it is a reasonable standard to set. However, as shown by the Zero Carbon Hub’s as-built performance gap programme of work, there are challenges. We should set a realistic and achievable target, not one which pushes the industry to a point where it cannot deliver in practice.
To change the energy requirements for new homes, it is always necessary to consult carefully those affected. We should not forget that we are talking about a technical area that impacts across the whole construction sector. Additionally, the industry reports on building types that this amendment ignores and does not address, such as high-rise flats, because more work is needed. The categories listed in the amendment contain different building types and a rigid standard to cover them all. This may not work in practice. It may, but it is important to take the time to work through it in consultation with the industry. It would not be workable to deliver the proposed standard within six months. Even if it were, it may not be prudent to have such a rigid timeframe for delivery in primary legislation.
The independent Zero Carbon Hub recognises that further technical modelling is required. If, in the light of consultation, even slight adjustments were needed we would not be able to make them without new primary legislation. I assure noble Lords that the Government will strengthen standards and deliver zero-carbon homes from 2016. That is and remains a clear commitment on which we will be held accountable if we do not deliver. Between now and 2016 we will consult widely as to how the new proposed carbon compliance standard can be met. We will share that consultation with noble Lords.
My noble friend Lord Teverson and the right reverend Prelate the Bishop of St Albans asked about exemptions. The number of smaller housing developers competing in the market is significantly lower than it was prior to 2008. Smaller developers often face greater set-up and purchasing costs, compared to larger developers. New regulatory requirements often hit smaller developers earlier, as there are shorter lead times to starting development. With all this in mind, it is vital that the Government give the sector the support it needs, and exemption from the full cost of the carbon requirements is one way of doing so.
Let me also reassure the right reverend Prelate that we work closely with partners such as AIMC4 that have shown that it is possible to build homes to meet a higher level of energy efficiency. The work of that group has helped the Government in deciding to set the on-site requirement at around code level 4, as this should be affordable and achievable for the majority of developers. It is important to recognise that this work was limited in scope and did not extend across the full range of buildings such as flats.
The point was made that the setting of on-site standards could result in a watering down. We worked closely with the Zero Carbon Hub, whose work was hugely influential in helping the Government decide what further action to take from 2016. The hub did not recommend an on-site level for high-rise apartment blocks, recognising that further specialist work was required.
My noble friend Lady Maddock asked some specific questions about rowing forward and rowing back, as she described it, and said that some explanation was needed. I am sure she will appreciate that there are discussions taking place. I hope that my comments have somewhat reassured her that the commitment of the Government to achieve our objective when it comes to zero-carbon homes and to the policy that we have agreed from 2016 remains a priority.
I hope that my responses have been sufficient to reassure noble Lords of the Government’s position on both these amendments and that the approach I have outlined here, as well as in Committee, has demonstrated why these amendments may prove problematic in terms both of increased demands on the home building industry and of the mechanics of delivery. On the basis of these reassurances and accepting that we are still working towards the issuing of the consultation on zero-carbon homes, I hope there is sufficient to encourage the noble Lord, Lord McKenzie, and the right reverend Prelate not to press their amendments.
Lord McKenzie of Luton: …Part of the debate we had from the noble Baroness, Lady Maddock, and the right reverend Prelate the Bishop of St Albans has been about why we have moved back from the starting position. The right reverend Prelate made the important point that the standard was agreed basically in 2010 and technology has moved on since then. We are now, in 2014, talking about standards to be set in 2016. Also, the noble Lord, Lord Teverson, as well as the right reverend Prelate, made the point about the impact of all this on fuel poverty, particularly on smaller sites, which are likely to be more prevalent in rural areas than urban areas, and the huge importance of all this given the IPCC report, which the right reverend Prelate just referred to…