Energy Efficiency Measures: Net Zero Buildings

[Mark Pritchard in the Chair]

I beg to move,

That this House has considered energy efficiency measures in buildings to achieve net zero.

I am very pleased—I would almost go so far as to say that it is serendipitous—that for the second time in succession you, my constituency neighbour, are chairing a Westminster Hall debate, Mr Pritchard. I hope that you and other hon. Members will find the subject relevant. It is an important debate for colleagues on both sides of the House who share my enthusiasm for exploring a variety of routes to reach net zero emissions as soon as possible—certainly by 2050. One is the groundbreaking Environment Bill, on which I had hoped to contribute in the Chamber. Several colleagues who would like to join this debate are in the main Chamber. Should some of them succeed in arriving before I sit down, I hope you will be liberal in your interpretation of the rules, Mr Pritchard, and allow them to chip in should they wish to catch your eye.

Another important feature of today is that it is the first day of Lent. I am joining colleagues here and individuals from around the country in making five green pledges for Lent: to cut down food waste, to use less single-use plastic, to make more zero-carbon journeys, to buy less new and so support local charity shops and the excellent repair hub in Ludlow, which is open on alternate Saturdays, and and to litter-pick. I urge the Minister to join me in following one or more of those pledges if he is observing Lent.

Yet another important feature of today is this debate, in which we highlight the vital need to reduce fossil fuel use in heating the buildings in which we live and work if we are to achieve net-zero Britain. I declare my interest as a property owner, and I refer to my entry in the Register of Members’ Financial Interests. The debate is timely, as last month the consultation on minimum energy efficiency standards in the non-domestic private rental sector concluded, and earlier this month the future homes standard consultation ended. Given that the Budget is confirmed for next month and the comprehensive spending review is to take place later this year, this is the ideal time for the Government to set out their ambition to show global leadership in improving the energy efficiency of buildings in this country ahead of COP 26 in November.

I congratulate the right hon. Gentleman on securing this important debate. One important measure that we will need to adopt, including in Greater Manchester, is retrofitting our much older housing stock. That obviously costs money—he is right to allude to the opportunity that the Budget presents to discuss that need—but it also requires people with skills to undertake the retrofitting work. Does he agree that the Government’s new points-based immigration system causes concern about the construction sector’s ability to meet the needs of a very extensive retrofitting programme in Greater Manchester?

I absolutely agree that retrofitting existing housing stock is one of the biggest challenges we face in trying to reduce fossil fuel use in our buildings. Much of my speech relates to that, so I will go on to talk about it. I will not talk about immigration status, but the hon. Lady makes an important point when she says that we need sufficient skilled people to do the work right across the Government’s infrastructure programme. It does not apply exclusively to retrofitting homes, although that forms part of it. If the skilled tradesfolk I know in my constituency are anything to go by, most earn considerably in excess of the Government’s threshold requirements, so skilled tradespeople may well still be able to come here as they meet the requirements of the points system.

I am pleased that there has been some progress in building more efficient homes over the past 30 years. Overall emissions from homes have been reduced by about one fifth since 1990, despite the fact that there are approximately one quarter more homes now. That is ostensibly due to policies to improve boiler efficiency and basic insulation in the early 2000s, but progress seems to have stalled in recent years. Now is the time for this energetic and committed Minister, whom I am absolutely delighted to see retaining this brief, to make his mark by re-energising energy efficiency across the built environment in Britain.

I am glad that the right hon. Gentleman has mentioned the Minister’s energy and enthusiasm, because I want to ask about energy efficiency in social housing. I am sure he is aware that measures such as insulation, window glazing and low-carbon heating can be installed very easily and cheaply in larger buildings. There are some very good examples of local authorities building low-carbon social housing and slashing energy bills for tenants. In my constituency, Camden Council has been reducing carbon emissions in its housing stock, and it has used refurbishments such as Swiss Cottage library to make big energy savings and install solar panels. Does the right hon. Gentleman think it should be down to cash-strapped councils to carry out those innovations, or should the Minister and the Government be playing more of a part in investing properly in energy-efficient social housing?

I am glad that the hon. Lady has raised social housing, because I will touch on that in my remarks. I am sure the Minister will respond to that point, because there was a clear commitment in the manifesto on which we were just elected to provide funding for energy efficiency measures specifically in social and affordable housing. I think she will get some good news from the Minister when he responds to the debate.

What is the scale of the challenge? The built environment accounts for nearly 40% of national energy use and approximately one third of UK emissions, but progress in the decarbonisation of buildings has been limited. Enhancing the energy efficiency of the UK’s housing stock is therefore one of the critical steps in achieving our net zero target.

The future homes standard is focused on new builds. The Government have called on the industry to deliver a further 1 million new homes over the course of this Parliament, with a more ambitious target of achieving 300,000 new additions each year by the mid-2020s, so getting the regulations right will have a significant impact on the carbon footprint of millions of future homes. That is good news for the environment as we move to net zero, and for people who are fortunate enough to live in the more fuel-efficient buildings of the future. The homes we are building in this and subsequent Parliaments should last more than 100 years—way beyond the 2050 target date for net zero. We must ensure that the standard of homes being built now contributes to meeting that target. It would clearly be perverse and extremely costly to build homes now that require retrofitting to reduce emissions at a later stage. There should be plenty of opportunities from technical innovation in new build standards to incorporate in the future homes standard. I have no doubt that the Government, in their response to the consultation, will seek to address the challenges we face in ensuring homes become more energy efficient and encouraging new technology and innovation in house building. I would like to see them include the notion of embedded efficiency in the materials used for construction, and not just focus on the future annual running costs.

My right hon. Friend is absolutely right. East Suffolk Council has ambitious plans to impose higher energy efficiency standards on new build properties and would be disappointed by what it would see as a retrograde move in favour of developers, which already make large profits, by letting them off the hook on reducing carbon emissions.

I am grateful for that example. The Minister should be willing to show some flexibility and consider the councils that want to make progress, because it could have an impact on builders’ inclination to develop to a higher standard within a particular area. In my view, these matters should be determined by self-regulating local authorities.

There are ambitious councils, but is the right hon. Gentleman not concerned that, were regulations determined by councils, developers would be drawn to the councils that do not impose higher standards, where their profit margin would potentially be higher?

That has happened where different rates of affordable housing were implemented by councils across England—in Scotland too, I suspect—and developers were drawn to the areas with the lowest standards. I am sure that the Government, in response to the future homes standard consultation, will seek to raise standards across the board, but say that if any local authorities wish to go further and faster, that will be up to them. That is a risk that we should be able to take.

The Government can assess in detail examples of how we can achieve more effective building techniques and of the associated costs versus the energy efficiency savings. One example from my constituency is in the town of Much Wenlock. The social housing provider Connexus— it is well known to you, Mr Pritchard—built a housing project there two years ago to a passive house standard, which through designer materials manages heat loss and airflow. Thanks to that efficiency, the residents save an average of £665 a year in reduced fuel bills and energy use has fallen dramatically, to the point that many tenants say that they barely need to turn on their heating. However, construction of the project carried additional costs. Connexus estimates that it cost 29% extra to build to a passive house standard compared with standard building regulations. The Government could step in to provide further support mechanisms to social housing groups and local authorities to deliver a very high standard of energy efficiency. It will be interesting to see whether the response to the future homes standard addresses that.

I will focus on the scale of the challenge of making existing housing stock more energy efficient, which, as I mentioned in response to the hon. Member for Stretford and Urmston (Kate Green), will by definition require the retrofitting of a huge number of properties. Some 29 million homes in the UK account for 20% of UK emissions. According to the Government’s live tables, of those homes, only 20 million have energy performance certificate ratings. The remaining 9 million homes are presumably owner-occupied and have not yet been required to undertake an EPC rating assessment.

My right hon. friend spoke about the importance of retrofitting existing housing stock, which makes up about 85% of the homes that we are talking about. Does he agree that one suggestion that the Minister could take away is that over time, we could increase the duty on landlords to ensure that their properties become more energy efficient? A requirement for their properties to reach an energy efficiency rating of D, then C, and so on, would not only give landlords time to adapt, but would help tenants in some of the poorest households to save on fuel bills and would also help meet our carbon emissions targets.

I will touch on that briefly later in my remarks. My hon. Friend is right, and the Government have already introduced requirements for landlords to get to an E rating for all properties other than those in the categories of exemptions—those include listed buildings, properties where the tenant will not allow the adaptation because of its intrusive nature, or where the cost makes the adaptation disproportionate. Those requirements come into effect from 1 April for all new and existing tenancies, and there is talk of progressively increasing the requirement to a C rating, as my hon. Friend alluded to.

That is absolutely fine for new builds and is probably fine for properties in which the work is relatively simple to do, but the big challenge is for existing, and particularly older, housing stock. The work is extremely intrusive and most tenants would not be able to occupy the building while it was being done, so it can only really happen when a tenancy comes to an end. Of course, that does not affect the 9 million-odd owner-occupied houses that do not already have a rating, so about a third of the housing stock is not rated at all. It will not apply to those properties unless the Government choose to change the rules and make owner-occupiers upgrade their buildings as well.

Going back to my thread about the scale of the challenge in adapting our existing housing stock, the current level of gas boiler sales is over 1 million a year, while heat pump sales are only around 20,000 a year. The capital cost of heat pumps, and the adaptations to existing homes to make them effective through under-floor heating, wall insulation and double glazing, make them a very expensive and disruptive solution for retrofitting homes.

The issue of ensuring the heat efficiency of older homes is particularly pronounced in rural areas, such as my constituency and that of my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), where there are more older homes and—certainly in my case, in Shropshire—a higher proportion of listed houses. Those houses are exempt from EPC requirements at present, and they may also not be connected to the traditional gas grid. For example, only 3% of all off-grid homes are at the required minimum EPC level identified by the clean growth strategy, but rural off-gas-grid homes make up 11% of all UK homes. I encourage the Government to engage with industry to tackle that issue in working to meet the 2050 target.

It is an honour to speak under your chairmanship today, Mr Pritchard. I listened to the right hon. Member for Ludlow (Philip Dunne) with the greatest of interest, not least because I come from one of the coldest parts—if not the coldest part—of the United Kingdom. There is a village called Altnaharra in Sutherland, which is a great favourite of Jeremy Paxman—he goes to catch salmon there. People also have a very good chance of seeing a golden eagle there. However, every year Altnaharra is the coldest place in the United Kingdom.

I have been increasingly worried by something that all right hon. and hon. Members know about: the terrible thought of a pensioner deciding to switch off their heating because they simply cannot afford it. I want to put on the record my gratitude to Councillor Richard Gale, among other colleagues, who has helped to spearhead the issue that the right hon. Gentleman spoke about in East Sutherland and the wider highlands and islands. Although we generate an enormous amount of renewable energy from our onshore and offshore wind farms, in actual fact many of my constituents have heating bills they simply cannot afford.

In absolute fairness to the Scottish Government, I want to put on the record my thanks to them; I may sometimes take a pot shot at them, but they have put tackling fuel poverty at the top of their agenda. Credit should be given where it is due. My wife comes from one of the six counties of the UK part of Ireland—let me get my history right—and I understand that similar moves are being made at Stormont, which we should be grateful for.

In my brief contribution, I will make a couple of suggestions. I live in a particularly cold, energy inefficient house, so I know all about keeping a house warm. Hon. Members will probably be shocked to know that I know all about lighting fires and trying to stay warm and trying to haul ancient shutters shut and getting them to stay shut. Oddly enough, old-fashioned wooden shutters were quite good at energy insulation, although I am not advocating that we step back to 18th or early 19th-century building construction. The right hon. Gentleman talked about retrofitting; that is the problem we face in the highlands. Notwithstanding the good measures undertaken by the Scottish Government, in some ways we were slightly better at these things 25 years ago than we are today.

It is a pleasure to serve under your chairmanship, Mr Pritchard. I thank my right hon. Friend the Member for Ludlow (Philip Dunne) for his comprehensive assessment of the issue.

I wish to make a couple of points during my equally short contribution. It is worth reflecting that building regulations first included energy conservation as long ago as 1972. Since then, year after year, those regulations have been tightened up to achieve much greater energy conservation than before. The problem is that the last substantial upgrade of the regulations to achieve a very good energy conservation outcome was in 2013; there has been no substantial upgrade since that date. That is worrying. Minister, when will the building regulations next be upgraded and what will that include?

In 2015, the long-standing policy of the Cameron Government to achieve zero carbon for new homes was abruptly cancelled. That may seem like a little while ago, but it characterises a lot of the discussion about this issue. I hope the Minister can comment on that in his summing up.

The issue came up during the election campaign. I sat with a company that operates in the sector, in a village where a huge development is taking place. We worked out together how much it would cost to make the houses zero carbon as they were being built, from scratch. We calculated that the total increase in cost would be about £5,000; the total cost of retrofitting the houses was about £25,000. That is a huge difference, and retrofitting also comes with enormous problems—we have already heard about some. The firm I met specialises in alternative heating. Everybody wants a ground pump to be put in to get the best approach to heating, but that is not possible in many houses and is not the best solution. Other options, such as biomass boilers, should be considered, as we move forward.

We need to address this area in more detail, because there are significant opportunities for the UK. Residential and commercial buildings account for 60% of electricity consumption in the world today—a phenomenal amount. I have two points to make about that. First, there has been a lot of talk about increasing the ability of district councils to introduce regulations on net zero carbon. That is missing a trick. I invented neighbourhood plans that have gone out of their way to give communities the freedom to decide lots of important things about where housing should go. They have to work within a strategic framework that is set by the district council, but many neighbourhood plans are trying to achieve more than the district council wants. This is an opportunity to give them the freedom to take that forward.