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Planning and Energy Bill

My Lords, I beg to move that this Bill be now read a second time. This might be a short Bill, but it is an important one. Its aim is to enshrine in law the so-called ““Merton rule””. It was taken through the other place by my honourable friend Michael Fallon. We are pleased that we are going to have a maiden speech today from the noble Lord, Lord Mogg, who is, I gather, quite an expert in this field. We look forward to hearing him later today. In 2003 the London Borough of Merton amended its local planning framework to require that, for new developments, at least 10 per cent of the energy required must come from renewable or low-carbon sources generated on site or nearby. About 100 councils have either introduced the Merton rule or are in the process of doing so. The Bill will give Merton-style policies statutory protection. It will permit, but not require, any council to specify that developers should use a small amount of energy from local, renewable resources. It is permissive, localist and green. Most people now agree that climate change is a serious threat and action is needed. Even those who disagree with the science will surely support efforts to reduce our dependence on foreign oil and gas. Electricity generation accounts for about a third of the UK’s total carbon emissions. Only 4 per cent of our electricity comes from renewable sources. The Government say they hope to increase that to 20 per cent by 2020, but it is difficult to see how that will be achieved. If we are to meet these challenges, it cannot just be a matter for central government. Local authorities must be empowered to act too. Electricity cannot be stored in any great quantity and about 5 per cent of it is lost through the distribution system. Clearly, it makes sense to produce electricity as close as possible to where it is needed. However, there are many barriers to doing that. Councils are unsure of the legality of introducing their own versions of the Merton rule. Last year’s energy White Paper said that, "““planning is one of the most significant barriers to the deployment of renewables””." The Bill seeks to remove those barriers and ensure that at least a small proportion of the electricity needed by new homes is produced locally. If we can increase demand for renewable electricity technology, innovation will increase and costs will fall. Councils will also be encouraged to emulate and compete with one another to set new standards for energy efficiency. The Government’s approach to the issue has been slightly confused. They first backed the Merton approach, then withdrew their support in the face of opposition from some housebuilders, and then finally agreed to incorporate it into central planning guidance last year. They opposed the Second Reading of this Bill in the other place but did not actually vote against it, so I hope the Minister will clarify that today. The Government have argued that this legislation is unnecessary due to planning policy guidance that they have already introduced and other legislation that is being produced. That, however, is not the case. Their Planning Bill will make developers consider climate change measures but does not go into the detail of microgeneration. Planning guidance is a step in the right direction but will not have the same power as this Bill. The Bill is also important because it will enable councils to act quickly, without waiting months or even years for other legislation to come into effect. The Government want to build 3 million new homes by 2020. About 40,000 new homes are being built every quarter. There is a bit of a temporary hitch with the economic situation at the moment, but, if the targets are going to be achieved, these are the sorts of numbers that will be involved. We want as many of those as possible to include some degree of local power generation. The Bill will give councils the certainty and clarity to act now. I emphasise that no compulsion is involved here. The crucial word in Clause 1 is ““may””. The Bill will not force any council to introduce new regulations or policies against its wishes. Only new developments will be affected. The Bill frees councils to set their own policies to match their own circumstances. A local authority in a windy area, for example, would be free to set wind energy standards different from those set elsewhere. The Prime Minister himself has said that, "““the empowerment and strengthening of local councils ... is what we must now do””." That is exactly what the Bill will do. We are not creating red tape but removing the barriers to letting local authorities do what is needed. Merton Council says that no developer has ever had a problem meeting the rule’s requirements. In every year since it introduced its 10 per cent rule, the total number of new houses there has exceeded the target set by the Greater London Authority. Developers will be consulted when local rules are drawn up and Ministers will have the power to approve local development plans. The British Property Federation, which represents the UK property industry, has said its concerns have been dealt with ““very satisfactorily and constructively””, and it supports the Bill. The Bill has cross-party support. Two former Labour Environment Ministers sponsored it in the Commons, as did a former Secretary of State for the Environment in my party. An Early Day Motion supporting this type of legislation was signed by more than 300 MPs last year. The Local Government Association supports the Bill, the energy industry supports it and environmental groups support it. Even the Minister charged with speaking on the Bill in the other place said that he supported the ““intent, manner and sentiment”” of the Bill and agreed that local councils should be given the lead in promoting renewable electricity generation. The question being answered is clear: do we continue to depend on ever more detailed guidance from central government, or do we let councils set their own targets based on what they think is best for their areas? Energy efficiency and local generation are essential parts of our solution to the problems of climate change and energy independence. Local authorities should be empowered to deliver this. I urge noble Lords to back the Bill. I commend it to the House. Moved, That the Bill be now read a second time.—(Lord Hanningfield.)