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Energy Bill [HL]

My Lords, Amendments 81, 82 and 83, which stand in my name and were aired in Committee, seek to address the problem that the Green Deal may make very modest inroads into the problems of poor standards of insulation in the private rented sector. The Government’s impact statement for the Bill recognises this problem and there was agreement in Committee on the difficulties of reaching those of the 1.2 million private landlords who own substandard properties. In anticipation of continuing problems of getting landlords to take action, the Bill proposes giving enforcement powers to local authorities and giving tenants the right to trigger the necessary action. However, the Bill’s measures kick in, as we have discussed in relation to earlier amendments, only after a review has been concluded and the Secretary of State is satisfied that the measures will not deter lettings in the future. My amendments cut to the chase, making sure that if there is only limited take-up of the Green Deal and if all other ways of securing action by private landlords were to fail, by 2016 it would no longer be legal to let properties with the very worst energy performance. Making the position clear would mean that all landlords and, very importantly, all managing agents—they look after some 60 per cent of private rented properties—know that they have five years to get the substandard premises up to the very modest E rating with 10 years to move them up to the D level. Perhaps I may advance three reasons why these amendments, very carefully brought together by the Association for the Conservation of Energy and Friends of the Earth with considerable support from Members in another place, would help the Bill’s objectives in this tricky area of the private rented sector. First, setting a minimum standard as a legal requirement for letting greatly increases the chances of success in getting the works done to the more than 740,000 offending properties. The take-up of Warm Front and the CERT scheme has been poor in the PRS, and the misery of cold homes with attendant wasteful carbon emissions seems unlikely to end without the sanctions which a legal requirement for letting would bring. As well as fixing the ongoing problems of fuel poverty for some 150,000 PRS tenants, the amendments would reduce problems of fuel debt. Citizens Advice tells me that it had more than 100,000 inquiries last year, which was up 33 per cent on the previous year, from people with fuel debts. A minimum energy efficiency standard of band E would save on average £488 for an average outlay of only £2,535, which would be a very fair rate of return. At the same time, according to the Energy Saving Trust’s research for Friends of the Earth, which the noble Baroness, Lady Maddock, has mentioned, these measures would save 1.87 million tonnes of climate-changing carbon dioxide each year, which Friends of the Earth calculates as being equivalent to taking 800,000 cars off the road. I guess that the Minister shares the widespread view that achieving a minimum standard will require sanctions at a later date. These amendments give that process the necessary teeth without the delays and uncertainties inherent in the proposed review and its aftermath. Secondly, landlords and their agents are well used to complying with statutory requirements. The simplest comparison here is the duty to obtain a gas safety certificate. Obtaining an energy performance certificate with a rating of E or above is just as straightforward and, since few landlords would deliberately flout the law, can be expected very quickly to become a normal part of the letting process. I emphasise my point that managing agents are important in this regard. Few agents wish to bother their landlords with suggestions for extra spending or give themselves more work. But virtually all agents, as responsible corporate entities that are much easier to reach than individual landlords, will make sure action is taken if it is a legal requirement. As the Bill is drafted, no action will be required of the landlord or the tenant until such time as the review has been concluded, powers have been granted to local authorities, and local authorities have taken decisions to act and given the requisite notice, et cetera. The reality is that this leisurely timescale, which stretches past the next general election with no certainty of its outcome, means that all those who are not minded to take these matters seriously will simply sit on their hands. Thirdly, the proposed arrangements, assuming the necessary powers are granted in 2014 or 2015 to local authorities and tenants, rely on either or both of those parties taking the necessary action. Local authorities may already have the power to act against landlords who let the very coldest homes because these properties are likely to fail the test set out in the housing health and safety rating system. Yet despite these existing powers, local authorities, which have a lot of other priorities to handle, are not exercising them. Recalcitrant landlords can be fairly confident that few local authorities will chase after them if and when extra powers are granted to those local authorities. Meanwhile, the fallback of expecting tenants to take matters into their own hands seems even less likely to achieve results. A very high proportion of tenants stay little more than a year in their rented property while, with the loss of security of tenure since 1988, all will recognise the high risk of not seeing their tenancy renewed or even of receiving a couple of months’ notice to quit if the landlord sees them as acting against his or her interests. How much better would be the legal protection given by these amendments to the tenant, and how much simpler, cheaper and more effective for local authorities, if they need only to ask for the necessary certificate in the knowledge that if it is not available the landlord is not permitted to let the property. I suggest that in achieving what the Government wish—a minimum standard, even if it is at a low level in the next five years, with clarity and certainty for landlords and tenants, and ease of administration for local authorities—these amendments, which are so strongly supported by the wide membership of the Association for the Conservation of Energy and Friends of the Earth, do the job to good effect at less cost to the public purse. I should add that Amendment 82 provides for exemptions for meeting the minimum standards, while Amendment 83 gives local authorities the powers to do the works themselves if landlords fail to take action or face fines. I am sure that these consequential amendments could be improved by the Minister’s department. Perhaps I may say a few words about the exemptions from the legal requirement in Amendment 81 to give reassurance to landlords who are anxious about meeting a statutory minimum level of energy performance. It would be sensible for local authorities to have discretion to exempt properties in several circumstances; namely, listed buildings and properties in conservation areas, and national parks where there are special planning requirements affecting the interior or the exterior of the properties. In relation to the debate on excluding properties where the tenant wishes to refuse consent for the Green Deal, an exception might be made here for regulated tenancies where a tenant does not wish to be disturbed. There are 100,000 regulated tenancies out of more than 3 million private sector tenancies. These tenancies have been in place since at least 1988. Unlike shorthold tenancies used in the rest of the PRS where the average length of stay is 14 months, a regulated tenancy has been going for 22 years or more. Because the occupiers have security of tenure, they are unlikely to move. Although these tenants would be well advised to accept the upgrading to their properties necessary to meet the minimum energy performance standards by 2016, I can see the case for respecting their right to veto any works to their home if they cannot face the upset. I hope that the Minister, who has made so many excellent changes to the Bill so far, will see the sense of these amendments and take them away with a promise perhaps to bring back something similar at Third Reading.