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Planning and Energy Bill

I stand corrected, Mr. Deputy Speaker. We have also talked about the code for sustainable homes. Again, this is an important point. The Housing and Regeneration Bill is in Committee. The hon. Member for Ruislip-Northwood (Mr. Hurd), who is a member of that Committee, has to suffer my company daily. That Bill will make it mandatory for all new homes to be rated against the code for sustainable homes. The code demonstrates the overall sustainability of each new home—not just in energy efficiency, but in water use. Standards set out in the code match up with the progressively demanding building regulations that will be introduced. Code level 6 represents zero-carbon and exemplary development in energy and water efficiency. By making it mandatory for homes to have a sustainability rating, we are providing the information that consumers need to make informed judgments when they buy. Homes built to higher code levels, for example, are likely to have lower fuel bills, which any prospective buyer will consider important. They will move the market accordingly. Fridge ratings could form an analogy. Five or 10 years ago, people did not know what fridge ratings were, and now no one would buy a fridge or other white appliance if it was not energy rated. I think that homes will go down a similar path. It is not mandatory for all homes to be assessed. In some circumstances, developers will be building only to minimum building regulations and there is no need to make them pay for an unnecessary assessment. However, English Partnerships is already building at code level 3. The Housing Corporation will join it for the next affordable housing programme. That will give developers that are building mixed developments a choice about whether they want to be seen to build homes that are less sustainable than Government-funded housing programmes. They will have to consider that when they market their new homes. We are already seeing movement in the building industry to support the code. Developers can already use the code voluntarily. Berkeley Homes, for example, has already committed to building all new homes to code level 3. Local planning authorities are already working with developers in innovative and imaginative ways to help us to meet our house building targets and to ensure that those houses are more stable and resilient, so that they can deal with the challenges posed by climate change, such as more extreme weather and floods. We also believe that we need to develop a similar approach for non-domestic buildings, so that all new shops, offices and so on would have to be zero-carbon. The work undertaken by the UK Green Building Council suggests that it would be possible, in the right circumstances, for the majority of non-domestic buildings to be zero-carbon by 2020. We are considering those findings. The final element that I want to mention is the biggie: last month's planning policy statement on climate change. It has four main themes. The first is the aim to ensure that local plans have strong carbon ambitions and targets. That will fully integrate tackling climate change into all planning policy. It will ensure that councils will take such issues into account when considering the location for new developments so that they can take full advantage of local renewable and low-carbon energy opportunities. The PPS emphasises the need for delivery, accelerating action so that plans do not simply sit on shelves. Secondly, to pick up on a point that my right hon. Friend the Member for Leeds, West (John Battle) made and about which I am excited, the PPS represents a major direction that energy policy can take in the next century. It will help deliver decentralised, renewable and low-carbon energy and expect new development to incorporate local renewable and low-carbon energy when viable. In the Housing and Regeneration Bill Public Bill Committee, we are currently discussing the right to buy and the relative merits and demerits of that. It goes without saying that many communities felt empowered by that in the 1980s and 1990s. Decentralising the energy network, whereby local communities have some sort of facility to generate electricity, feed it into the national grid and be paid for it could be a modern way in which to empower new local communities and provide genuine community spirit. The PPS facilitates that. Many councils are already adopting policies and development plans that require a percentage of the energy in new developments to come from on-site renewables when that is viable. As has been said time and again, that is known as the Merton rule. It follows the example in 2003 of the London borough of Merton, which established a policy whereby new residential developments over a specific size were expected to incorporate renewable energy production equipment to provide at least 10 per cent. of predicted energy requirements. Although the idea has been somewhat derided, I believe that the PPS goes even further and embeds Merton plus rules in all councils. That means that we expect a council-wide, Merton-style rule for cutting carbon by using local renewable and low-carbon energy in new development as well as tailored targets for sites where there are bigger opportunities than the council-wide target. We do not want the average to be the height of ambition. The PPS will encourage new developments that limit carbon dioxide emissions, and help existing developments adopt local renewable or low-carbon energy. Moreover, the PPS confirms that there will be times when local councils should expect higher standards of building sustainability than those set nationally through building regulations. They could include, for example, areas of serious water stress, where, without the highest standard of water efficiency, the proposed development would be unacceptable. Thirdly, the PPS would speed up the shift to renew renewable and low-carbon energy. It expects regional targets for renewable energy in line with national targets—better, when possible. It will encourage technical innovation. If one word sums up the theme of today's debate, it is ““innovation””. The PPS helps innovate. It will develop decentralised, renewable energy generation networks. It is all exciting stuff, which will provide what the Bill hopes to achieve. Fourthly, the PPS will help create communities that are resilient to the effects of climate change. We must act to reduce the impact but also to mitigate it. The PPS will ensure that communities are fit for future climates. It especially emphasises the importance of providing public and open spaces in new developments, recognising the many benefits that green spaces provide, not only to local people but wildlife and biodiversity. In summary, the planning rules go much further than the Bill, which would simply enable councils to set requirements for energy generation. When councils do not take the new planning rules seriously and reflect them in their plans, they are more likely to find those plans amended or overturned. Let me discuss the extent of consultation on the PPS to show the depth of support for its approach, in contrast with the limited endorsement that the Bill received. The draft PPS was first published for consultation more than a year ago. It closed in March 2007 and we received more than 300 responses. A range of organisations responded to the consultation, including 11 developers, 158 local planning authorities, 22 regional planning organisations, 39 non-governmental organisations, 38 professional bodies and 12 quasi-governmental organisations such as the Carbon Trust. Consultation responses showed strong support for the PPS and made clear the value of using planning positively to help shape and deliver places with lower carbon emissions that are resilient to the impact of climate change. More than 200 consultees agreed that the proposed climate change PPS, as part of the Department's wider package of action, including the 2016 zero-carbon homes policy, would secure planning strategies that deliver reductions in emissions and help shape sustainable communities that are resilient to the extent of climate change, which is accepted as inevitable. The consultation also sought views on the proposal that local planning authorities should ensure that a significant proportion of the energy supply of substantial new development is gained on site, renewably and/or from a decentralised renewable or low-carbon energy supply. That approach was supported by 169 respondents; only 21 disagreed. There is, therefore, a range of support for our approach. Let me deal with the Bill. It would enable a local planning authority to specify for any development in its area: the generation of energy from renewable sources as part of the proposed development; the generation of low-carbon energy as part of the proposed development, and an energy efficiency standard in all, part or parts of a proposed development that exceeds any required by national building regulations. My interpretation of the Bill, which the hon. Member for Sevenoaks reinforced in his opening speech, is that its purpose is to promote the Merton rule. As I said, the PPS promotes Merton plus—and more. I want to make it clear that I disagree with the fundamentals of the Bill simply because it is impractical and ineffective. We therefore reject the means rather than the end. The approach in the PPS means that councils need to examine the best options in their areas, which could mean on-site renewables or local low-carbon energy like CHP. It would not be sensible to specify rigidly the right solution for each development or to predict the most effective technology in the coming years. The pace of change in technology and research and development is too fast. For that reason, we do not want councils to insist on on-site renewables if there are better ways of cutting carbon from local energy. Insisting on an on-site definition may be a barrier to local renewables. That is because a new housing development could get more power from a medium-sized wind turbine on a nearby hill or verge, rather than from one for every individual house in the development. A site near a power plant could utilise its surplus heat with a combined heat and power generator. A medium-sized wind turbine or a combined heat and power plant may not be feasible within many individual development sites but could provide the most cost-effective way of cutting carbon and be located locally and close to the development—perhaps on a highway verge or other open space. Experience suggests local policies are most effective if they include elements of both on-site and near-site generation and do not rule out, for example, low-carbon CHP such as that in Woking, or medium-sized wind turbines serving a whole development. I strongly believe that councils could set targets for decentralised renewable energy if the evidence suggests that that is sensible. However, the overall approach should promote and encourage renewable and low-carbon energy generation but not dictate or prescribe the solution for every area. The hon. Member for Sevenoaks made that precise point. That will become increasingly important as we work towards our zero-carbon homes target and our similar ambitions for zero-carbon new non-domestic buildings. Evidence increasingly suggests that it would be impractical and not cost-effective if every development specified on-site, rather than near-site, renewable energy. For example, Element Energy, in its recent work for the Renewables Advisory Board on the potential contribution of renewables to the zero-carbon homes policy, recommends that"““local offsite generation is encouraged””." It advises that it is important that"““larger scale CHP and district heating is culturally and commercially attractive in the UK since it offers a relatively cheap route to compliance””." Similarly, the work that we commissioned from the UK Green Building Council on energy efficiency in new non-domestic buildings also underlines the importance of local energy solutions in moving to zero-carbon new buildings, and highlights the planning system's key role in making that happen. The council says,"““planning by local planning authorities therefore needs to incorporate energy planning, undertaking heat mapping and community renewable potential in order to assign the best near-site solutions in terms of carbon reduction and maximising the use of resources.””" We have therefore specifically rejected using primary legislation for the type of provisions proposed in the hon. Gentleman's private Member's Bill, because of the difficulties in keeping it up to date and responsive to fast-moving and changing circumstances. We need policy to keep up with the rapid advances in technology. With the greatest of respect, I suggest to the hon. Gentleman that it would be somewhat cumbersome and time-consuming if that meant amending primary legislation time and again. If, for example, we needed to tighten the requirements on renewables but not on low-carbon energy, it would be far easier to amend the PPS than primary legislation. That is why the PPS is the right place to set out the detail. Because the Bill is a somewhat blunt instrument, it has the potential to undermine the progress towards the zero carbon target, through a series of counter-productive consequences. I understand where the hon. Gentleman is coming from, and that is clearly not his intention, but it could be the effect. First, the Bill does not replicate the safeguards within the PPS. Those safeguards will ensure that environmental standards are raised in a sensible way, so that we can continue to deliver the necessary levels of new housing at the same time. Whatever requirements councils set need to be tested publicly as part of the planning process and need to be compatible with delivering housing targets and affordable homes. The Bill does not have the same safeguards. It requires councils only to set targets that are ““reasonable””, but as my right hon. Friend the Member for Leeds, West said, we could talk for hours—indeed, I am tempted to do so—about what is ““reasonable””. As a result, the Bill could undermine our targets to deliver much-needed affordable housing. Secondly, the Bill could rule out, for example, more cost-effective local but near-site energy solutions, by stipulating just on-site renewables or just low-carbon energy. That excludes local community energy schemes. We recognise that the industry producing solar panels and small scale wind turbines has been arguing strongly for such an exclusive approach. However, we believe that councils should not set rules that deter developers from connecting new developments directly to a local community renewable scheme. That is why the planning rules are clear that councils should consider near-site energy generation as well as on-site generation. By ““near-site”” we mean in the local area and dedicated to serving, or serving via a wider energy network, the development concerned, not a site many miles away, such as in Orkney. Thirdly, the Bill would enable councils to set their own energy efficiency standards. That would effectively allow every council to set their own building regulations, which, as the Minister responsible for building regulations, I believe would cause huge problems for the delivery of new zero-carbon technologies and the delivery of housing. That would not be workable and would be a nightmare for industry to adapt to, which is why the proposal is not feasible. If house builders have to meet hundreds of different types of standards across the country, that will prevent the economies of scale, which have been mentioned, that are desperately needed in the industry for building zero-carbon homes, make it much harder for house builders to deliver the homes that we need and reduce competition, by making it harder for house builders to cross boundaries into areas that require different building techniques. There is therefore a risk that the Bill would distort investment in research and development, and technologies, and could disrupt the orderly development of supply chains for the delivery of zero-carbon homes. I do not think that that is what the hon. Member for Sevenoaks wants. Instead, the Government's current framework will increase national standards substantially and clearly, in 2010 and 2013, and fully reach zero carbon by 2016, so all builders will have to meet higher standards and the construction industry can benefit from economies of scale and, importantly, plan for that zero carbon target. The enabling provision on energy efficiency could set different standards for different parts of the same development, which could encourage the fragmentation of building standards. We are keen to avoid that, as it would be add odds with the approach set out in the PPS, which encourages councils to go for a higher code level for specific sites and where there are particular, demonstrable circumstances to justify such action. It is important to note that, while different councils might be working to different standards, they are all standards on the same scale, set out in the code for sustainable homes, rather than each council adopting an entirely different approach, as the Bill would permit. The House will be pleased to hear that I am now reaching my conclusion. I again welcome the spirit of the Bill and commend the hon. Gentleman for bringing it to the House. But what our green and growing economy needs is an evidence-based and comprehensive green strategy, not a green fig leaf that dies quickly when this season's fashion ends. We need practical, local proposals that capture the support of the wide range of organisations that we need to work with to realise our shared ambitions, not the unrealistic dreams of one particular lobby group. We need a flexible approach that can respond to advances in technology and changes in demand, not a legislative straitjacket that would leave us unable to swim on as the water rises. This is what the current legislative programme offers and, importantly, what the PPS provides, but it is what the Bill would fail to deliver. That is why I do not believe that we should give it a Second Reading.