Energy Efficiency and Microgeneration Bill [HL]

My Lords, I beg to move that this Bill be now read a second time. It is traditional at this point for everybody to do a runner out of the Chamber. I do not have the voice to speak over them. I apologise to the Minister because it will be quite difficult to hear what I say. I apologise to Hansard, because it will be difficult to record what I say. However, I thank all those noble Lords who, on a Friday afternoon, are taking part in this debate. I had prepared a long speech, but I shall cut it rather short in case my voice disappears entirely. I shall just run through the pertinent parts of this small Bill. The purpose of the Bill is to deal with the great threat of climate change. It is a practical attempt to solve some of the issues which are stopping people reducing the high level of carbon which is pumped into the atmosphere from domestic use. It is interesting to note that a study carried out by Carbon Neutral North East questioned people about how they were affecting climate change themselves. A staggering proportion, more than 70 per cent, thought that their actions had nothing to do with climate change. They just got up in the morning, had a shower, came home again and turned on the heating. The fact that between 25 per cent and 28 per cent of our emissions, depending on which figures one reads, come from the home is a real concern. If we are to meet our Kyoto targets, and our further targets of reducing emissions by quite significant amounts in the coming decades, we have to look at changing the issue within the home. That is why the Bill picks out two areas where it is important that people are given help. The first is behaviour. A lot of carbon is wasted because we live in a society which wastes a great deal anyway, and it is done without thought. The second is cost. It is amazing how much energy can be saved in the home through just the most basic of measures. This is why the Bill concentrates on what are seen as the uninteresting measures, loft insulation being the most important. When people talk to me about how they are going to save the planet, they often ask whether they should buy a wind turbine for their roof. One tells them, ““Well, no, loft insulation will save a great deal more””. They often reply, ““Well, that’s not very exciting””. It can be done, on a DIY basis, in an afternoon, and it would save an enormous amount of energy. It is important to note that 75 per cent of the energy used in the house is not from electricity consumption, where most people invest all their effort in saving energy, but from water and space heating, which people are loath to do anything about. The second area which the Bill addresses is people’s apparent need to feel that they are saving money. There is a group of people who will do the work without worrying about the cost, but it is strange that, whenever one mentions microgeneration or any form of energy efficiency, people talk about the payback period. It is galling that, having installed a very fine new kitchen, I tried to raise the subject of the payback period with my wife, but it cut no ice whatever. However, if I were to think about installing a solar thermal panel on the roof, the cost and how long it would take to pay back would be very much an issue. It is a very fine kitchen. If my wife reads Hansard, which I hope she does not, I would say that it is worth every single penny. This Bill is one of the first steps to ensure that many of these issues have real influence. I have been involved in discussions with many in the industry, especially B&Q. Many of the Bill’s measures concern the DIY industry. When I considered the Bill’s home efficiency measures I was surprised to note that we are talking only about a cost of £1,000. Considering that the average gas bill is £1,000 a year and rising, the payback on incurring that cost is not inconsiderable but has to be borne. However, I understand the vicious circle of fuel poverty for the poorest people. They cannot afford to insulate their homes, which means that they have to pay more for heating and have less money to spend on these measures. However, the Bill is aimed mostly at owner-occupiers. It is distressing that owner-occupiers will happily pay higher gas bills rather than go to the effort of insulating their roofs. This comes back to behaviour. We need regulation and inducements to make people change their attitude. I shall consider each clause in detail. Clauses 1 and 2 deal with home information packs and seek to change people’s attitude to energy efficiency. Home information packs will include an energy performance certificate. The home information packs were badly gutted by their opponents. That is a great shame. Even some noble Lords on my Benches are against home information packs but I think that they are an excellent initiative on the Government’s part. I very much hope that they will be taken up by a vast number of people, as I am sure they will, as they quicken the buying process. Once people realise how logical they are, I believe that home information packs will be taken up and will be effective. I have a question for the Minister. This is a Private Member’s Bill but I very much hope she can confirm that the late and rather aggressive response by the Council of Mortgage Lenders to the consultation will not cause delay in the implementation of the home information packs in June. These two clauses take the energy performance certificate out of the small print, where many people will not read it, and put it in the main body of the pack. That is important as people will then take notice of it. Clause 2 requires a property’s energy rating to be included in all estate agents’ particulars. Therefore, this information will be prominent when you are trying to sell your house. It is well known that when you buy a house you negotiate the price on the basis of the state of the carpets and curtains. Given that a property’s energy rating will be so prominent, including all the recommendations on upgrading a house in that respect, it will become standard to start haggling over who should implement those measures. Clause 3 concerns council tax. This is a real concern to those who are looking at the higher end of energy efficiency. Somebody might install a wind turbine at a cost of £25,000 or a solar panel on the roof to reduce their energy bills. This might have a disproportionate impact on the price of the house as it is then seen as more desirable. Those valuing the property might increase its value. There may be a disincentive to implement energy-saving measures if they result in an increase in the property’s council tax rating. The Government are considering this matter but I emphasise its significance as energy efficiency becomes more important. Clause 4 is a review of the permitted development orders for wind turbines on agricultural land. The Renewable Energy Bill of two years ago, which I introduced to this House—the audience was not large, although I believe the noble Lord, Lord Whitty, was present—raised the issue of small generation on houses falling outside planning permission. Mr Cameron in another place will obviously make great use of this. He made much play of sticking one of these turbines on his house, although there seems to be a remarkable lack of its presence as of yet. That is, however, a side issue. There is a slight dichotomy in that, under the Climate Change and Sustainable Energy Bill, which the Renewable Energy Bill became, you can put a small turbine generating up to 50 kilowatts on your house, but you cannot put it on to adjacent land; it has to be within the curtilage of the building. This is unfortunate, because if we are to look at real energy savings using wind turbines, we must put the turbines where the wind is. One of the big problems is that we could start putting a lot of wind turbines on to houses that generate no energy at all, or not enough to offset the carbon used in building the turbines in the first place, because of the wind being disturbed as it comes through housing estates. However, there is a real possibility that many people at the end of lines in rural areas, who use disproportionate amounts of energy to get energy to them, could generate the energy they need by putting a small turbine next to their house. I have a particular interest in this in that I tried to make a small tourist attraction of mine in Northumberland carbon neutral, but the Northumberland National Park objected to a 6.2 kilowatt turbine. That is not a large turbine, but I had to fight for two years and spend thousands of pounds to get that through. If we believe that climate change is real and that we must do something to offset our energy costs, it will be impossible to make any movement at all if such difficulties continue. Obviously if wind turbines are made a permitted development, there are vast areas that we could consider using for small-scale generation. We could, for example, put turbines in clumps on farmers’ fields, which has a great deal of support from the National Farmers’ Union and could be considered as a way of offsetting renewable development costs, as per the Merton rule, in agricultural areas where a great deal more energy would be generated that could feed into the housing estates. This would make life a great deal easier, and has the support of the Town and Country Planning Association. Planners are in an impossible position between those who will object to any turbine being built and those who see putting one up almost as an economic necessity to reduce their energy costs. Clear and present guidance on that could be taken forward, and I very much hope that I can meet the Minister’s officials and discuss this. Clause 5 was an attempt to explore the possibility of using green mortgages to offset the cost of installing energy efficiency measures. The idea behind it was that there would be a saving to the householder in implementing the energy efficiency measures. This would reduce their utility bills and thus make it easier to pay the interest on the mortgage. I know that the Minister will not be able to give a great deal of succour to the idea of taking this forward on the basis that a mortgage is, in legal parlance, a death deed, and that to make any changes to mortgages would mean rewriting most of the financial services provisions on mortgages. Although this is an important measure, I do not believe that the Government would see it as that important. Great progress has been made since First Reading and discussions with the Minister’s department. The alacrity with which her department and her officials have taken on board some of the concepts of the Bill—perhaps they were thinking about them anyway—was shown in the press release of 25 January, which says that Clauses 1 and 2 will be put into regulations. May I say how grateful I am to the Government for moving forward on this? This is a very progressive step. Although it is not as exciting as, say, a very large wind turbine farm, which everyone can become excited about, it will have a massive effect on energy efficiency in the home, because it will hit a group of people who are not covered by other schemes. You are hitting the homeowners, who will feel that it is in their financial interest to make their homes far more energy efficient. There are some technical difficulties through the consultation process of enacting some of the measures in Clauses 1 and 2 for the June deadline, but when they are brought in through regulation there will be a marked increase in the take-up. I know from talking to the industry and to the DIY sector that they believe that it will be an interesting way of highlighting their products. One of the things that I would like to talk about with the Government is the difficulties that they might face in making sure that products that come in under the EPC rating are of high enough quality, because there will be a problem of first getting your review under the EPC and then upgrading your house before you sell it, which is an issue that needs further work and discussion. It would be interesting to consider energy efficiency products having their own colour coding. In the same way that green products are seen as green, I suggest that products that would come under the EPC banner could be given a blue coding. Green products are always seen as having a price premium, whereas energy efficiency products will save money in the long term. I apologise for being difficult to understand on this Friday afternoon. I commend the Bill to the House. Moved, That the Bill be now read a second time.—(Lord Redesdale.)