Energy Performance of Buildings (England and Wales) (Amendment) (No. 2) Regulations 2015
Debate between Lord Teverson and Lord McKenzie of Luton(8 years, 5 months ago)
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Lord McKenzie of Luton (Lab)
My Lords, this Motion to Regret is about the introduction of regulations without proper consultation and without taking account of their practical and financial consequences.
The regulations are concerned with the energy performance of buildings and amend the principal regulations, which call for the production of energy performance certificates when buildings are constructed, sold or rented out, and for the display of such certificates in large public buildings. They implement an EU directive which seeks to establish common measures across EU member states to increase the energy efficiency of buildings, reduce their carbon emissions and lessen their impact on climate change. Enforcement of these regulations is the duty of local weights and measures authorities—I shall refer to them as trading standards—which are service departments of local authorities.
The further measures required under these amending regulations are argued by the Government to flow from the Article 258 reasoned opinion from the European Commission and are necessary, it is said, to ensure that the enforcement of the principal regulations is effective and robust. They require enforcement arrangements to be put in place in another area when a local authority is itself under a duty—for example, to display a certificate—and to notify the Secretary of State that it has done so; the collection by trading standards of information covering buildings for which it has enforcement responsibilities, to enable effective enforcement to be planned; and the recording of all enforcement activity, with an annual report to the Secretary of State.
Let me be clear that we are thoroughly supportive of efforts to increase the energy efficiency of buildings, to reduce their carbon emissions and to lessen the impact on climate change. The issue here is the manner in which amending regulations have been introduced, which has denied those working in trading standards the opportunity to point out, in consultation, the ramifications of what is proposed. Indeed, the inadequacy of the consultation is a matter that your Lordships’ Secondary Legislation Scrutiny Committee determined should be brought to the special attention of the House.
It is also about recognising that if these additional responsibilities are imposed on trading standards without additional funding, the inevitable consequence will be to draw effort away from other enforcement activity.
We are grateful to the Chartered Trading Standards Institute and the Association of Chief Trading Standards Officers for their briefing, which I believe has been generally circulated to noble Lords. This sets out matters that they should have had the opportunity to explore in a consultation before these regulations came into being. Fundamentally, the institute and the chief officers reject the notion that this is a minor change to the current situation and explain why it could significantly shift the focus of their efforts, to the detriment of consumers. To understand why this might be the case, one should just reflect on the range of areas for which trading standards has responsibility. The list includes consumer safety, counterfeit goods, product labelling, weights and measures, underage sales, animal welfare and more. They cannot all have the same priority.
This must be seen also in the context of the resources available to trading standards. The institute describes it as a small and financially stretched service which has seen average budget reductions of some 40%, and staff numbers have halved in the last five years. Unless the Minister can tell us otherwise, the DCLG appears to be denying the service extra resources, notwithstanding that these amending regulations, with their reporting requirements, are an extra burden.
As our briefing points out, to date, EPC rates have not been a priority for trading standards, given the assessment that there is a relatively low level of consumer detriment associated with non-compliance. The focus has been on tackling the supply of dangerous counterfeit products or protecting vulnerable residents from scam mail—both of which activities are often linked to higher-level organised crime. So the concern is that, without further resources, the additional requirements to record and report activity under these EPC regulations will inevitably cause activity to switch away from enforcement activity that addresses greater consumer detriment. This cannot be an outcome that the Government should be happy with.
The Minister will also be aware of the BIS-led review into trading standards, which is exploring whether trading standards is the most appropriate mechanism for delivering some of its enforcement responsibilities and how its enforcement burden might be lightened. It seems a little odd, therefore, that these regulations take us in the opposite direction. The institute asserts that the enforcement of EPC regulations anyway has little relevance to the rest of the trading standards remit—a view supported by the LGA.
Noble Lords will be aware that the Secondary Legislation Scrutiny Committee was unconvinced that the EU processes, involving a letter of formal notice of infringement in July 2014 and the reasoned opinion in June 2015 with a two-month deadline, precluded some consultation, particularly with those who will be most affected by the new regulations.
Perhaps I can finish with a question to the Minister. Does she accept that, without further resources, these regulations will divert some of trading standards’ efforts away from vital consumer protection, in particular its combating of the proliferation of scams that prey on the most vulnerable in our society? I beg to move.
Lord Teverson (LD)
My Lords, I cannot get overexcited about this issue. Indeed, as the noble Lord, Lord McKenzie, said, this is an important regulation that has come from Europe, which is about making sure that houses are properly managed in terms of their energy efficiency, which I suspect we all believe is good. Clearly, there should be consultation, if that is possible. My experience of consultation in a lot of these areas is that the Government take little notice of it, but we should have it.
However, I disagree quite strongly that somehow the management of energy performance is less important and has less detriment to people than many of the other areas that trading standards looks at. I remind the House that there are some 20,000 excess winter deaths. This will not solve that, but it is a part of the process of making sure that we do not take the energy efficiency of houses and being able to heat them properly at a reasonable cost for granted. We forget that there is a continuing process of making sure that people understand the costs of energy when they purchase houses or public buildings.
Fuel poverty is one of the major issues in this country that all Governments have failed pretty badly to solve. The numbers have come down slightly recently, but they tend to correlate directly to energy prices.
Infrastructure Bill [HL]
Debate between Lord Teverson and Lord McKenzie of Luton(9 years, 6 months ago)
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Lord Teverson
My Lords, this continues a similar theme. I tabled an amendment in Committee to try to get more rigour into ensuring that the building regulations that we have are met and complied with. There is very little point in our legislating if those standards are not met in practice. I quoted the Government’s own adviser, the Committee on Climate Change, which stated that there seemed to be a big gap between what should be happening with the thermal efficiency of homes and what was actually happening. I was not completely reassured by that, but I accept that that is mainly a role of local government.
I am trying move on to address the fact that it often takes—and certainly has over recent years—a long time for a planning permission to become a built-out and lived-in development. We have the situation—I look on it as an anomaly or rather a loophole—whereby the building regulations to which builders must build relate to the date of the planning permission rather than when the development is constructed and completed. If that is only within a couple of years, it makes no difference whatever. We have, however, a number of developments—at certain times more than others—when that stretches over a considerable period. I realise that planning permissions themselves have a shelf life. After three years, if they have not been used, they go into abeyance. However, I remind noble Lords that under that system, as long as you do a certain amount of work—you do not have to complete it—that planning permission remains live. That is something that is done very regularly to make sure that planning permissions are not lost.
I was very impressed by the Minister’s figure of £200 that would potentially be saved per annum by the moving up of building regulations by the Government. Of course, that illustrates very well the extra cost to residents of houses that do not meet those standards—either because they have been exempted under the small development regime that we talked about in the previous amendment or because houses are being built under building regulations that are several years old.
It seems to me that this is something that needs to be fixed—for consumers and certainly for the government strategy on fuel poverty and zero-carbon homes. So I am putting forward an extremely modest proposal that is a longstop: if developments have not been completed within six years of gaining planning permission, at that point they must comply with the building regulations of that time rather than those when the planning permission took place. I have tried to make this amendment as clear as possible. I hope it says that. I very much hope that it is in line with government policy and that this is something of a loophole that we would like to close—particularly when we have periods when building and construction developments take a particularly long time.
Indeed, I would ask whether there is a temptation sometimes to get planning permissions early. Where we have land banks, it perhaps means that construction is delayed but it almost gives a benefit to developers to hang on to undeveloped land. I would like to see this very sensible measure used as an incentive for building, particularly of dwellings when we have such a national housing shortage, to be started and completed within a reasonable period. I beg to move.
Lord McKenzie of Luton
My Lords, we should be grateful to the noble Lord, Lord Teverson, for raising a very important and interesting point about developments that are not completed within six years of the granting of planning permission. As we have heard, it requires the development to be carried out in accordance with current building regulations relating to conservation of fuel and power. This is an attempt to address the very serious point that we have delays in the completion of developments, particularly housing. Given the housing crisis we face in this country, the objective should be to encourage sites with planning permission to be built out as soon as possible.
This is one of the issues that the Lyons report addressed for us. Although this is not the occasion for an extensive discourse on that report, one of the interesting points it makes is that some 80,000 unbuilt homes have planning permission from 2010 or earlier. Some of these will be built to 2006 standards, and so be eight or more years out of date. One of the issues that this amendment raises is how practical it is retrospectively to amend the applicable building regulations. There will obviously be issues around homes that are partially constructed at the cut-off point. Getting homes built earlier is good for obvious reasons, although, of course, it does not necessarily do anything to raise the standards of applicable building regulations.
I might resort to going back to the Lyons report. Obviously, not all these recommendations are yet, or will become, policy, but under the heading “Use it or lose it”, it suggests that,
“the life of a planning permission should be reduced to two years with higher fees applying for renewal of expired permissions”.
That would present an alternative mechanism whereby people have to go back and face updated building regulations. Certainly, more substantive work should be required to count as the commencement of development. That is a problem the noble Lord identified. The report also suggests that,
“councils should have powers to levy a charge equivalent to council tax if land allocated in a plan with or without permission is not brought forward within five years”.
Compulsory purchase powers could be strengthened and streamlined to make it easier for public bodies to acquire land where it is not brought forward and where it is a priority for development, so there are alternative ways to encourage developments to take place and perhaps to realign the nature of those developments with updated building regulations. The noble Lord has raised a very interesting point which I am sure will get a full response from the Minister. One hopes that something could actually flow from this.
Local Government Bill [HL]
Debate between Lord Teverson and Lord McKenzie of Luton
Lord McKenzie of Luton
My Lords, I thank the noble Baroness, Lady Hanham, for explaining this short Bill. Although I believe it is not her first excursion to the Dispatch Box as a Minister, it is my first opportunity to welcome her, which I do—even if I do not welcome what she has said.
As we have heard, the Bill purports to put a stop to existing proposals for restructuring the councils of Norfolk, Suffolk and Devon and revokes the orders creating unitary structures in Exeter and Norwich. It makes consequential provision for the holding of elections that were due to be held on 6 May 2010 and which were deferred as a result of these orders. This avoids the necessity of interim by-elections and the expense related thereto and, as we have heard, the policy is to extend until 2011 the term of office of councillors who would have retired in 2010, but for the Norwich and Exeter orders. To get back into the normal cycle, one councillor or the only councillor elected to a ward in 2011 will serve a three-year rather than a four-year term. The restriction will fall on the councillor with the fewest votes and where there is an equality of votes or an uncontested election, the councillor to serve for three years will be drawn by lot. Given that the two-tier structures will remain in Devon and Norfolk, we can support this proposition. However, it would appear that should the quashing of the March orders precede the passing of the Bill, amendments will be necessary, as we have heard, to make the proposition effective.
The terms on which we consider the Bill have undoubtedly been changed by the decision of Mr Justice Ouseley to quash the orders which provided for unitary status for Exeter and Norwich. For a High Court judge, sitting alone and seemingly possessed of no additional information to that considered by Parliament, to overrule the democratically expressed will, especially of the elected Chamber, is a highly unusual step. I am told it is possibly unique. This was even in circumstances where the High Court was clear that the Secretary of State was entitled to reach the view he did on the merits of the proposal and that it was not irrational. Further, it was accepted that the final approach to decision-making adopted by the Secretary of State was properly within the scope of the 2007 Act.
In these times of economic stringency, with savage cuts to be imposed on local authorities by the coalition Government, the risks of incurring irrecoverable legal costs making it even more difficult to sustain vital services mean that an appeal cannot be contemplated. For now it is accepted that Norwich and Exeter will be denied the early opportunity to attain unitary status—an opportunity which has seen other local authorities of all political persuasions flourish under both Conservative and Labour Governments.
We note the decision of the Examiners that the Bill is not hybrid, but this was neither a spurious concern nor a delaying tactic. It is right that due process has been followed, even though the two councils withdrew their memorials before the hearing. Perhaps the Minister would say something more, particularly following the exchange with my noble friend Lord Richard about the structure of the Bill, and the decision of Mr Justice Ouseley to quash the orders. Does this mean that the orders under consideration are not relevant orders for the purpose of the Bill; that their revocation can therefore have no consequence; and that no councillor remains in office under Article 11 of the orders?
The Bill does not repeal the relevant provisions of the Local Government and Public Involvement in Health Act 2007, but prevents the Secretary of State making any orders which implement proposals for unitary authorities received before the coming into force of the Bill. Therefore, I ask the Minister whether it is envisaged that the Secretary of State will issue any further invitations for proposals for unitary status during the term of this Government, or whether the Bill signifies the denial of such possibilities. Has the Liberal Democrat wing of the coalition Government acquiesced to this?
When the orders to introduce unitary status for Exeter and Norwich were debated in your Lordships’ House in March, it is fair to say that they were hotly contested. The effect of the Motion agreed at that time was to call on the Government, notwithstanding the extensive consultation undertaken previously, including that by the Boundary Committee, to conduct further consultation. This was particularly in light of the fact that we consider there to be compelling reasons to depart from the presumption that the previously established five criteria should be the only basis for proceeding with unitary arrangements. The other place accepted that compelling reasons had been established.
However, if that was the view of noble Lords two and a half months ago, how can we view a situation where, within a couple of days of taking office and without any consultation or new data or information being provided, the Secretary of State decreed that Norwich and Exeter should be denied unitary status—as should Suffolk, which fulfilled the criteria? What democratic legitimacy underpins the Bill? As far as I can tell, the Liberal Democrat general election manifesto was silent on the matter. It proclaimed a commitment to giving more power to local people, saying that “local people” should,
“have the power and funding to deliver what they want for their communities”,
but seemingly not if they wish to do this as a unitary council. True, the Conservative manifesto had a commitment to scrap uncompleted plans to impose—
Lord Teverson
I apologise for intervening but the noble Lord’s remarks are very provocative given that all the way through our discussion, and previously, the opposition Benches have forgotten about the community of Devon. They always think about one community, not all communities. In the south-west, the community of Devon as a whole is very important. The noble Lord mentioned the success of unitary authorities. Frankly, Torbay unitary authority was a huge mistake and is not considered successful. Plymouth unitary authority, the establishment of which everyone supported, has also struggled hugely within historic Devon. That needs to be remembered.
Lord McKenzie of Luton
My Lords, I can cite a number of flourishing unitary authorities, particularly my own, Luton, and those created in Bedfordshire under the previous Government’s legislation but with Conservative-controlled councils. What I am trying to discover is the democratic legitimacy of the Bill before us. The Conservative manifesto contained a commitment to scrap uncompleted plans to impose,
“unwieldy and expensive unitary councils”.
However, no one is supporting unwieldy and expensive unitary councils. I shall come in a moment to the impact assessment, but perhaps the Minister can tell us whether she views the unitary councils which came into existence some 15 months ago—some of them Conservative controlled—as unwieldy and expensive? Why could not the significant service improvements already being delivered by these councils be delivered by Exeter and Norwich?
The coalition document—the post-election manifesto—looks in both directions. It supports the,
“radical devolution of power and greater autonomy to local government”,
but not, it seems, if you are a citizen of Norwich or Exeter.
The Government cannot possibly argue that they have a democratic mandate from the general election for this measure. Halting the creation of a unitary Norwich and Exeter is totally incompatible with the expressed policy of devolving power to local government and local areas. It runs directly contrary to Conservative manifesto rhetoric around leadership and the promotion of,
“single municipal leadership injecting dynamism and ambition into their communities”.
The Government’s argument for this Bill rests on the assertion that the unitary council proposals do not represent value for money, but this is a somewhat selective reading of the components of the impact assessment, which show that if unitary status were to proceed it would involve gross restructuring costs of some £40 million but gross savings of £39.4 million over the transition period—a broad equivalence but with ongoing savings after this of some £6 million per year; and this is before factoring in the benefits which would flow from the spur to economic development which unitary status would bring to Exeter and Norwich. The impact assessment asserts that the scale of efficiency savings forecast from unitary status could be achieved by other means. Perhaps the Minister in replying to the debate could give us more detail about these other means. What detailed work underpins that assessment and has it been verified independently? What consultation is planned around the proposition?
Much has been made in the past—we have heard it again this afternoon—of the direction that the previous accounting officer required of the then Secretary of State. But the core of the accounting officer’s concern was the lost opportunity of the savings from the Boundary Committee proposals—which of course had little support from anyone—essentially involving unitary counties. However, these opportunities are being rejected by this Government also.
Our starting point in considering proposals for unitary authorities was the five criteria of: affordability; whether there is a broad section of support; strategic leadership; neighbourhood empowerment; and value-for-money services. In the case of Exeter, each of the criteria was satisfied with the sole exception of one component of affordability—the payback period for transitional costs was six years rather than five. Taking account of the accepted ongoing savings, the opportunities for enhanced economic development and the development of Total Place, there were and remain powerful reasons to grant unitary status to Exeter. Similar considerations apply to Norwich where the payback period was originally a little longer than five years but with clear ongoing savings—the House will hear more about this from my noble friend Lady Hollis—and with the Total Place approach enabling the delivery of value-for-money services.
We might have understood if, in the circumstances, the new Government had said that they wanted more detail on these additional issues and indeed, as the House determined, and even Mr Justice Ouseley suggested, some more consultation. But what this Bill does in an arrogant, dictatorial and brutal way is to shut out Exeter and Norwich from the opportunity to become unitary councils—an outcome for which there is genuine local appetite, which in Exeter has cross-party support and in Norwich has the support of the Lib Dems, the Greens and Labour Party members. It is the desired outcome, not dictated or imposed by government but proposed by the democratically elected councils of these cities.
The benefits of unitary city councils are widely recognised. They reinforce a city’s distinctive identity and sense of place. They provide the basis for clear leadership to drive dynamism and ambition into their communities. This opportunity would not be new to Norwich or Exeter. The latter governed itself for nearly 800 years and provided all services for the city until county borough status was removed in 1974. Norwich ruled itself for almost 600 years. In neither case did that undermine the surrounding counties.
A two-tier structure of local government has not served either city well. Both are potential engines of economic growth within their own boundaries and more widely within their counties and sub-regions. The strategic leadership coming with unitary status can provide a powerful thrust to the regeneration and development of the economy in a local area, facilitating councils which are focused, innovative and entrepreneurial, and helping to deliver jobs, economic growth and prosperity at a time when the country most needs them.
Anyone who has served as a councillor in a two-tier system—as I did in Luton, mostly under a Tory-controlled council—will recognise the confusion over who is responsible for which services, which councillor covers which council, and indeed which local election is under-way. More importantly, there are the challenges of keeping a focus on an urban area and its needs within a larger rural county—especially an urban area with pockets of deprivation and diversity. In those days, Luton used to be referred to, not with any particular affection, as the urban bottom of the county. Its needs were neither fully understood nor provided for. What sticks in the memory is the meals-on-wheels service organised from County Hall without any recognition of the cultural needs of our diverse population. I have seen how liberating unitary status can be for a local authority—in particular, the tremendous boost that it can give to regeneration efforts and the concentrated way in which it can meet adversity, in our case the closure of the car plant. This did not harm our relationships with the rest of the county. It strengthened them. Anyway, they have now followed suit and are unitary councils.
Why should Norwich and Exeter be denied the opportunities we have in Luton, opportunities provided by a Conservative Government? The cities have addressed their value-for-money and service-delivery issues. They want to deliver a clear and focused place-shaping for their cities. They want to tackle deprivation and raise educational attainment, skills and aspirations. They want to deliver economic prosperity for all.