Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2021

Lord Greenhalgh Excerpts

Thursday 18th March 2021 Grand Committee

Moved by

[Lord Greenhalgh]

That the Grand Committee do consider the Energy Performance of Buildings (England and Wales) (Amendment) Regulations 2021.

[The Minister of State, Home Office and Ministry of Housing, Communities and Local Government (Lord Greenhalgh) (Con)]

My Lords, these regulations were laid before the House on 22 February 2021 under paragraph 12(1) of Schedule 7 to the European Union (Withdrawal) Act 2018. They were debated and moved in the Commons Delegated Legislation Committee on Monday 8 March and considered by the Secondary Legislation Scrutiny Committee on Tuesday 9 March. Mirroring legislation is being prepared for data registered against properties in Northern Ireland, which will be presented in plenary on Monday 22 March. Scotland operates its own energy performance of buildings register and is not covered by these regulations.

This is a straightforward instrument. It relates to the statutory fees that are charged when data is registered for energy performance certificates, display energy certificates and air conditioning inspection reports for properties in England and Wales. Fees are applied to two classes of data registration, covering domestic and non-domestic properties. The regulations propose to reduce fees from £1.86 to £1.64 when data is lodged for domestic properties, and from £9.84 to £1.89 for non-domestic properties. Noble Lords may recall that fees charged for data registrations in England and Wales were last adjusted three years ago, and that they have been amended by statutory instruments on six occasions between 2012 and 2018.

The Committee will recall that the United Kingdom has set a target in law to bring its greenhouse gas emissions to net zero by 2050, to help tackle climate change. Heating and powering buildings currently accounts for 40% of the UK’s total energy usage, and we must ensure that buildings are constructed to high standards of energy efficiency. The energy performance of buildings registers are a key tool in promoting energy efficiency by providing valuable information about the energy performance of buildings and encouraging home- owners and commercial building owners and occupiers to improve the energy efficiency of their buildings. An energy performance certificate is needed whenever a property is built, sold or let, and must be ordered before a property is marketed for sale or rent. At a glance, a consumer searching for a new home or commercial premises can determine how efficient a property might be, while an owner can consider recommendations on how they might improve the energy efficiency of their property.

Historically, the Energy Performance of Buildings (England and Wales) Regulations 2012 implemented the energy performance of buildings directive. We retained those regulations after we left the European Union, as they contribute to our target of achieving net zero greenhouse gas emissions by 2050. They set out the Secretary of State’s obligation to maintain registers of data so that energy performance certificates, display energy certificates and air conditioning inspection reports can be recorded in a readily accessible format and made available to everyone. Regulation 28 sets out a power to levy fees to maintain the registers. Officials in my department calculate the appropriate level of fees each year on the basis of proposed costs of service divided by the forecast number of data lodgements expected.

A reduction in fees is possible now because the Government have invested in a new cloud-based digital platform and moved away from the fixed hardware model that had been in place since 2008. This will ensure the energy performance of buildings register service is user-centred and fit for the future. The new fee rates set out in this instrument will allow the costs of operating the energy performance of buildings register service to continue to be met without profiteering, but nor do we expect lodgement fees to subsidise a loss. Costs of the service have been calculated in line with government policy and tested with Treasury colleagues and stakeholders in the property energy profession.

Domestic and non-domestic data lodgements are now made to a unified platform built on cloud-based infrastructure. There are some technical differences between lodging data for a domestic and non-domestic certificate, which give rise to additional costs for making a non-domestic data registration and hence a differentiation in fees between the two classes, although this is now greatly reduced compared to previous years.

To conclude, these regulations serve a very specific purpose: to reduce the statutory fees charged when data is registered for domestic and non-domestic energy performance certificates, display energy certificates and air conditioning inspection reports. Colleagues in Northern Ireland are proposing to introduce their own mirroring legislation to ensure coherence between different parts of the United Kingdom that make use of the same register infrastructure. This will ensure that fees charged for Northern Ireland data lodgements are in line with those for England and Wales. I hope that colleagues will join me in supporting the draft regulations. I commend them to the Grand Committee.

--- Later in debate ---

[Lord Greenhalgh (Con)]

My Lords, I thank everybody for this short debate in Grand Committee considering the draft regulations and for the many cricketing metaphors, as well as the reference to the important rugby match taking place at the weekend. I am sure we can all agree that this is one of the shorter and easier instruments that we have been asked to debate.

The proposed statutory instrument will reduce the fees that are chargeable when statutory data is lodged to the energy performance of buildings register. The reduction is possible because the Government have invested in modernising the register by using new information technology and the latest software development techniques. The register service is now hosted on a cloud-based digital platform that is managed in-house, with lower running costs, the benefit of which can be passed on to fee-payers.

The noble Baroness, Lady Wilcox, asked how the fees were calculated. Noble Lords will be reassured that we aim for a cost-neutral service over time. As I said in my opening speech, there is no desire to profit from this. The fee modelling indicates that the data lodgement fees can be reduced, and the cost of the service has been calculated in line with government policy as set out in Managing Public Money from Her Majesty’s Treasury. The registered service costs from April 2021 to March 2022 have been modelled at £2.25 million, and our forecast fee income over the same period will deliver approximately the same amount from a projection of approximately 1.36 million data lodgements.

In response to the noble Lord, Lord Addington, I say that there are very clear benefits from these EPCs. They provide policy-makers and markets with information about the energy efficiency of the building stock as well as supporting and encouraging individuals to make informed choices about how to improve the energy efficiency of their building. Increasingly, government policies such as minimum energy efficiency standards in the private rented sector, the renewable heat incentive, which supports installation of renewable energy production, and the Green Deal, which supported installation of energy efficiency measures, have relied on buildings having a current EPC and being linked to achieving a specific EPC rating. The most recent green homes grant, which helps with installing energy-efficient and low-carbon heating improvements to homes, also makes use of the recommendations set out in the EPC where one is available for the property concerned. I assure the noble Lord, Lord Addington, that the Government are delivering an action plan to explore better ways to identify non-compliance and review penalties, provide better consumer information and improve the quality assurance of EPCs, including better oversight, accountability and formal error reporting.

I am surprised that both my noble friends in energy efficiency—the noble Lord, Lord Addington, and my noble friend Lord Moynihan—talked about the difficulty of accessing the data. My understanding is that there is open public access to the register and on the website you can access records by address search or EPC reference numbers, so it should not be too difficult to access the information.

I thank my noble friend Lord Lansley for his policy ideas. One can see that he has tremendous experience of heading up policy thinking, and indeed implementing it as a very distinguished Cabinet Minister. Retrofit is important, but that policy area is very much led on by BEIS, and it would certainly require some thinking about how to operate that. Of course, as he pointed out, any changes to the way we collect the stamp duty land tax would require support from the Treasury. It is an important point that we consider ways in which we can drive the agenda of getting homes to be more energy efficient, and obviously, as he outlines, the existing stock requires retrofitting. However, I will take forward his policy ideas with some enthusiasm. I completely agree with the broad point that very often tax incentives are a better way of achieving policy objectives than direct grant funding.

In response to my noble friend Lord Moynihan, I take the opportunity to highlight that the Government have a plan around this. We set the future homes standard, which is very clear about the need to produce at least 75% lower CO₂ emissions than current standards. That is for our homes but, equally, the future building standards consultation, which was launched in January 2021 and which will close on 13 April, will set a future buildings standard. By having these standards and then having a suite of measures, including the energy performance certificate, I am sure that we will be in a position where we can deliver on the Government’s promise of a zero-carbon economy.

I have certainly done my measured best to deal with the variety of questions that have been thrown at me from my colleagues. If I have not done so, I am happy to follow up with them in writing if necessary. I hope that noble Lords have found the debate informative and will join me in supporting these regulations.

[The Deputy Chairman of Committees (Lord Caine) (Con)]

My Lords, despite my having a wealth of cricketing metaphors, the umpire will put the Question. The Question is that this Motion be agreed to.