14:30 Philip Dunne (Ludlow) (Con)

That this House has considered energy efficiency measures in buildings to achieve net zero.

I am very pleased—I would almost go so far as to say that it is serendipitous—that for the second time in succession you, my constituency neighbour, are chairing a Westminster Hall debate, Mr Pritchard. I hope that you and other hon. Members will find the subject relevant. It is an important debate for colleagues on both sides of the House who share my enthusiasm for exploring a variety of routes to reach net zero emissions as soon as possible—certainly by 2050. One is the groundbreaking Environment Bill, on which I had hoped to contribute in the Chamber. Several colleagues who would like to join this debate are in the main Chamber. Should some of them succeed in arriving before I sit down, I hope you will be liberal in your interpretation of the rules, Mr Pritchard, and allow them to chip in should they wish to catch your eye.

Yet another important feature of today is this debate, in which we highlight the vital need to reduce fossil fuel use in heating the buildings in which we live and work if we are to achieve net-zero Britain. I declare my interest as a property owner, and I refer to my entry in the Register of Members’ Financial Interests. The debate is timely, as last month the consultation on minimum energy efficiency standards in the non-domestic private rental sector concluded, and earlier this month the future homes standard consultation ended. Given that the Budget is confirmed for next month and the comprehensive spending review is to take place later this year, this is the ideal time for the Government to set out their ambition to show global leadership in improving the energy efficiency of buildings in this country ahead of COP 26 in November.

What is the scale of the challenge? The built environment accounts for nearly 40% of national energy use and approximately one third of UK emissions, but progress in the decarbonisation of buildings has been limited. Enhancing the energy efficiency of the UK’s housing stock is therefore one of the critical steps in achieving our net zero target.

The future homes standard is focused on new builds. The Government have called on the industry to deliver a further 1 million new homes over the course of this Parliament, with a more ambitious target of achieving 300,000 new additions each year by the mid-2020s, so getting the regulations right will have a significant impact on the carbon footprint of millions of future homes. That is good news for the environment as we move to net zero, and for people who are fortunate enough to live in the more fuel-efficient buildings of the future. The homes we are building in this and subsequent Parliaments should last more than 100 years—way beyond the 2050 target date for net zero. We must ensure that the standard of homes being built now contributes to meeting that target. It would clearly be perverse and extremely costly to build homes now that require retrofitting to reduce emissions at a later stage. There should be plenty of opportunities from technical innovation in new build standards to incorporate in the future homes standard. I have no doubt that the Government, in their response to the consultation, will seek to address the challenges we face in ensuring homes become more energy efficient and encouraging new technology and innovation in house building. I would like to see them include the notion of embedded efficiency in the materials used for construction, and not just focus on the future annual running costs.

I have concerns about some elements of the proposals that were consulted on. There is, for example, the suggestion that the fabric energy efficiency standard will be removed, which would make it possible to build less energy-efficient properties and still get them to pass building regulations by fitting larger renewable energy systems; as a result, properties would become more expensive to heat, which could increase fuel poverty. Taken over a large enough area, additional renewable energy capacity might be needed away from the new housing, bringing additional cost. I hope the Minister will reflect on that.

The proposals explicitly remove local authorities’ right to set higher than minimum energy efficiency standards, as higher standards are likely to increase costs for home builders. That would restrict their ability to set their own ambitious targets to tackle climate change, with homes that are sustainable for the future, and remove the incentive for home builders to innovate and become market leaders in energy efficiency.

The Committee on Climate Change published analysis about reaching net zero emissions by 2050 and recommended that by 2035, almost all replacement heating systems for existing homes must be low carbon or ready for hydrogen, so that the share of low-carbon heating increases from 4.5% now to 90% by 2050. In 2015, the Energy Technologies Institute estimated that 20,000 households per week—over a million per year—would need to be switched from the gas grid to low-carbon heating between 2025 and 2050 to meet the then 80% emissions reduction target in the event that non-fossil fuel gas alternatives have not been developed by then.

The issue of ensuring the heat efficiency of older homes is particularly pronounced in rural areas, such as my constituency and that of my hon. Friend the Member for Central Suffolk and North Ipswich (Dr Poulter), where there are more older homes and—certainly in my case, in Shropshire—a higher proportion of listed houses. Those houses are exempt from EPC requirements at present, and they may also not be connected to the traditional gas grid. For example, only 3% of all off-grid homes are at the required minimum EPC level identified by the clean growth strategy, but rural off-gas-grid homes make up 11% of all UK homes. I encourage the Government to engage with industry to tackle that issue in working to meet the 2050 target.

We clearly face a massive challenge in adapting existing housing stock to reduce emissions and become more efficient. Some 85% of UK homes are heated through carbon-emitting gas heating systems. As I have already indicated, the pace and scale of adaptation to achieve net zero by 2050 will require a dual strategy of making homes more energy efficient and decarbonising their heat sources. The Government have taken action, including through the minimum energy efficiency standards for the private rented sector that we have just been talking about, which came into force for new tenancies in 2019. Those standards require landlords to contribute up to £3,500 to improve rental properties with an EPC rating of either F or G.

The other significant challenge is that achieving net zero for our built environment will require improving not only domestic homes but non-domestic building stock across the country. The 2016 building energy efficiency survey identified some 1.83 million non-domestic premises in England and Wales, with vastly diverse usage and efficiencies, presenting a significant challenge in reducing emissions. In both rented and owner-occupied workplace buildings, five sectors accounted for 70% of total energy use—retail, storage, industrial, health and hospitality—and 67% of energy was used for activities that were not sector-specific, such as heating, hot water, lighting and the like. There is real scope to reduce energy consumption if the approach is correct.

Last year the Environmental Audit Committee took evidence on net zero government and learnt of interesting work going on through modern energy partners, a collaborative programme between the Department for Business, Energy and Industrial Strategy, the Cabinet Office and Energy Systems Catapult, working alongside the Crown Commercial Service and private sector specialists. MEP was launched in early 2018 and was expected to complete in April 2021, at which point the Government may consider the programme for adoption as business as usual.

The Conservative manifesto for the December general election committed to a public sector decarbonisation scheme totalling £2.9 billion over a five-year period, and to funding insulation in hospitals and schools. I trust that will be confirmed in the comprehensive spending review later this year. I do not want to pre-empt the conclusions of the MEP, but I hope that the Government will consider incentivising public sector organisations to invest in their own renewable energy sources wherever possible, which will deliver lower energy bills to help recoup their costs, as well as further reducing emissions and supporting the UK’s growing renewable sector.

I will also touch on the validity of the EPC ratings regime, since they have become the main tool for Government and those looking to buy properties to analyse the supposed efficiency of a building. I am afraid that I have serious reservations about the EPC regime. Its current methodology can produce perverse ratings that will hamper significantly our efforts to decarbonise existing building stock. For example, high carbon-emitting heating options can achieve higher scores because they are cheaper to run, which is clearly contrary to the ambition but a hangover from the legacy purpose of EPCs—they were originally introduced to help reduce fuel poverty, whereas their current use is primarily to assess energy efficiency. Thus, biomass boilers and wood-burning stoves often score badly in EPCs, as the number of models included in the database is limited, default efficiencies are poor and fuel costs can be higher than for heating oil, even though they generate a fraction of the CO 2 emissions of oil, coal or gas per kilowatt-hour.

In assessing EPCs, the weighting of costly measures that can make a material difference in improving energy efficiency, such as replacing single-pane with double or even triple-glazed windows, can only score two points, in the case of double-glazed windows, since it may have a low impact on fuel costs. I encourage the Minister to take away this point and to engage with stakeholders on how the EPC ratings could be updated or amended to reflect better the ambition of meeting net zero by 2050.

In conclusion, I have five clear policy points, on which I hope the Minister will reflect. First, there is a need to strengthen the future homes standard, so that inefficient homes are not being built for longer than is necessary. Local authorities, as we have been discussing, should have the flexibility to set higher standards earlier if they so wish, to meet their own climate change targets. The Committee on Climate Change has called for the date to be moved forward to give certainty, and I hope the Minister will consider that.

Fourthly, in publicly owned buildings the Government have a real opportunity to lead by example. They should extend their manifesto commitment to improve schools and hospitals, by enabling public sector bodies to invest in on-site renewable energy sources. That would create jobs, reduce bills and emissions, and show the Government’s commitment to their world-leading ambition in cutting emissions. My final ask is that the Minister commit to a review of the EPC system, which has moved on from its original purpose and can create perverse anomalies, particularly for older, rural homes.

I welcome the Government’s future homes standard consultation and their clear target to reach net zero by 2050, with all the steps that will inevitably entail. I hope the Minister will reflect on the concerns of various organisations that will have submitted evidence through the consultation, and Members’ comments today, to ensure that the real opportunity to bring lasting change to the way we construct, insulate and heat our buildings does not slip through our fingers.

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15:00 Jamie Stone (Liberal Democrat)

I have been increasingly worried by something that all right hon. and hon. Members know about: the terrible thought of a pensioner deciding to switch off their heating because they simply cannot afford it. I want to put on the record my gratitude to Councillor Richard Gale, among other colleagues, who has helped to spearhead the issue that the right hon. Gentleman spoke about in East Sutherland and the wider highlands and islands. Although we generate an enormous amount of renewable energy from our onshore and offshore wind farms, in actual fact many of my constituents have heating bills they simply cannot afford.

This is an enormous issue for me, because it is so dashed cold up in my part of the world. I wish it was not so. Who knows? Climate change may have us all growing grapes on the straths of Sutherland and Caithness in the years to come, but I doubt it.

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15:08 John Howell (Henley) (Con)

We need to address this area in more detail, because there are significant opportunities for the UK. Residential and commercial buildings account for 60% of electricity consumption in the world today—a phenomenal amount. I have two points to make about that. First, there has been a lot of talk about increasing the ability of district councils to introduce regulations on net zero carbon. That is missing a trick. I invented neighbourhood plans that have gone out of their way to give communities the freedom to decide lots of important things about where housing should go. They have to work within a strategic framework that is set by the district council, but many neighbourhood plans are trying to achieve more than the district council wants. This is an opportunity to give them the freedom to take that forward.

The building in Africa that stands out as the best net zero example of its type is the Belgian embassy being built in Morocco. When that is the situation in a developing continent, we have to ask why, and what we can do about it.

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15:14 Jim Shannon (DUP)

We must also all be conscious that a massive part of addressing these issues is to use our Commonwealth, diplomatic and trading partnerships to encourage big industrial countries to take decisions that reduce the size of their carbon footprint. We must be ambitious in our desire to achieve that, but we must always bring people along with us in our attempts to make a difference to this wonderful world that we live in. The Committee on Climate Change has highlighted that Northern Ireland contributed 4% of UK carbon emissions in 2016. That is a small percentage, but it does not mean that we do not have to do our bit and make sure that reductions happen. We have a key role to play in meeting the UK’s legislated emissions reduction targets and obligations under the Paris agreement. With a reconstituted Northern Ireland Assembly up and running, and functioning, there will naturally be a more formalised approach to how we can reduce our emissions in line with the rest of the United Kingdom. The Minister is always very assiduous in replying to comments and questions, so could I ask him—I probably know the answer, but for the record—what discussions he has had with the Northern Ireland Assembly at this early stage to see how we meet the targets?

I was interested to learn that the built environment contributes around 40% of the UK’s total carbon footprint. Almost half of that comes from energy used in buildings, for example plug loads and cooking, and infrastructure, such as roads and railways, and has nothing to do with the functional operation. Newly constructed buildings are more energy efficient, but 80% of the buildings we will have in 2050 have already been built, so a major priority is decarbonising our existing stock, the cost of which has been mentioned by previous speakers.

“Direct emissions from fuel use in existing buildings rose for the second year running in 2016, mainly due to heating. Heating alone results in 10% of the nation’s carbon footprint and homes are more significant than all other building types put together. Decarbonising our heat supply is one of the big policy challenges ahead. Another major challenge is the carbon embodied through construction. Annual embodied emissions alone are currently higher than the GCB’s target for total built environment emissions by 2050.”

“The built environment is responsible for around 40% of global carbon emissions and architects have a significant role to play in reducing UK greenhouse gas emissions to net zero.”

There are things happening elsewhere that we should try to make progress with. The climate emergency demands urgent action and leadership by architects and the wider construction industry. It is important to reduce operational energy demand by at least 75%, and embodied carbon by at least 50% to 70%, before UK offsetting; and to reduce potable water use by at least 40%, as well as achieving all core health and wellbeing targets.

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15:25 Alan Brown (Kilmarnock and Loudoun) (SNP)

The right hon. Gentleman set the scene very well, including the scale of the issue that faces us in achieving net zero for domestic buildings, and fact that the decline in emissions has stalled in recent years. It certainly struck home to me that about 20 million of 29 million homes have an EPC rating, and of those more are rated D than A, B and C combined, although I suggest that those figures are not reflected across the UK. I will give some statistics later.

I agree completely about the need to decarbonise our heating system. The bigger picture there goes hand in hand with the need for the UK Government to invest in carbon capture and storage and hydrogen production, with projects such as the Acorn project up in Peterhead. The right hon. Gentleman rightly highlighted the big challenge of rural off-gas-grid homes. That is a big challenge for the Government and I, too, look forward to hearing the Minister’s response on that and on the issues about the renewable heat incentive coming to an end. Looking at the bigger picture, that ties in with the loss of the feed-in tariffs for solar. There is now a 20% VAT uplift in solar. All those measures are prohibiting energy efficiency measures that would reduce energy demand and therefore the carbon emissions from homes.

It really is a no-brainer that greater energy efficiency measures can only assist in reducing carbon emissions at the point of use, as well as generation demand, further reducing overall carbon emissions. Energy efficiency can help to reduce fuel poverty and can be part of the green industrial revolution, creating additional jobs in various insulation techniques. Obviously, it is needed to get to our net zero target by 2050, so I must ask why the UK Government are not doing more in that field.

Others Members touched, implicitly or directly, on the fact that direct Government investment in energy efficiency is crucial. The UK Government need to follow the lead of the Scottish Government. Now, I would say that, but organisations in the sector say it as well. The energy companies say it, as do many third sector organisations. The BEIS Committee said it in its 2019 report, “Energy efficiency: building towards net zero”, as did the Committee on Climate Change in its 2019 progress report to Parliament, titled “Reducing UK Emissions”. The BEIS Committee report stated:

The Committee on Climate Change confirmed that policies are not currently in place to deliver the UK Government’s ambition to improve all homes to at least EPC band C. The CCC stated that regulations for the private rented sector prioritise costs for landlords over the costs for tenants to operate their heating systems, and that minimum standards for social housing are required. It then observed that the Scottish Government, by contrast, are demonstrating how an effective policy package for energy efficiency improvements in buildings might be delivered by setting out a comprehensive framework of standards, backed by legislation. That legislation includes private rented sector regulations, phased to set a date for when new tenancies have to comply, and a backstop date for all private rented properties. The Scottish Government also set a higher cost that landlords in the private sector might have to shoulder. There are proposals for all owner-occupiers to be required to meet EPC band C by 2040, with incentives to try to do it by 2030. In the social rented sector, the revised standard published in June 2019 requires all social housing to meet EPC band B by the end of 2032, and sets a minimum floor of EPC band D from 2025, below which no social house can be re-let.

Some 27 million homes need their heating systems decarbonised, so it is crucial that they are as energy efficient as possible. The Government have one live scheme for home insulation measures: the energy company obligation scheme. Yet the Committee on Fuel Poverty states that those measures do not target the right people, so that needs to be reviewed as well.

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15:36 Chi Onwurah (Labour)

Climate change is the biggest challenge facing us all, and as politicians we must rise to that challenge. I was reminded of that a couple of weeks ago, when speaking at Newcastle’s youth climate strike. The concern of the young speakers about the climate emergency was matched only by their lack of confidence in politicians’ ability to address it. I think, and hope, that we can prove that we have the ability to make real change and achieve net zero in time to save the planet. Today’s debate has touched on several issues that contribute to that objective, associated with energy efficiency.

Insulating our homes to a high standard is essential to tackling the climate emergency, and will ensure that we tackle the fuel poverty crisis in our country—a national scandal, with 10,000 people tragically having died last year because their homes were too cold. At the last election Labour put forward proposals to deliver warm homes for all, with the largest upgrade of UK housing since post-war reconstruction. That upgrade would have cut more than £400 off the average bill, thereby eradicating the vast majority of fuel poverty; reduced childhood asthma by more than half a million cases; and cut the UK’s emissions by 10%. The programme would have created 250,000 skilled construction jobs through the 2020s. Through a climate apprenticeship programme, the training and skills needed to access those jobs would have been available to all.

Labour will not have the opportunity to deliver those policies in this Parliament, but I urge cross-party co-operation on meeting our energy objectives. If we are serious about tackling climate change and fuel poverty, nothing less than a nationwide, large-scale programme will do. I was impressed by the suggestions made by the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) on how to achieve such a large-scale building programme, and the incentives in his constituency to succeed in it.

Unfortunately, the Government’s pledge to invest £9.2 billion in improving the energy efficiency of homes, schools and hospitals does not go far enough. There is no real ambition about ensuring that homes are insulated. Plans introduced in 2018 to insulate 17,000 solid-wall homes are noble, but at that rate it would take 400 years to insulate all 4 million such homes in the UK. In its recent report, “Engineering priorities for delivering net-zero”, the Institution of Engineering and Technology—I declare an interest as a fellow of that institution—set out some of the challenges and emphasised that 80% of the homes we will be living in by 2050 have already been built, as the hon. Member for Strangford (Jim Shannon) stated.

“The proposals will allow new homes to be built to lower energy efficiency standards than homes built today. This is a depressing step backwards rather than the huge leap forwards we need to take in the face of the climate emergency.”

The Government’s own Committee on Climate Change has said that the proposals do not go far enough to protect against overheating, flooding and water shortages. We have been reminded very effectively in the past few weeks of the importance of protecting against flooding.

We must be ambitious when it comes to any aspect of reducing our energy consumption. With the UK set to host COP 26 in Glasgow later this year, we have a chance not only to be ambitious for our own country, but to be an example of ambitious climate policy around the world. We need to look at how we can begin to move towards making buildings more energy efficient. As we heard, buildings account for 37% of UK carbon emissions. Ensuring that homes, the largest contributor to that figure, operate at their peak must be a priority. Ensuring that proper insulation is installed in all homes—particularly the homes of those with low incomes—would have many beneficial consequences. Not only does installing insulation increase the overall energy efficiency of homes and reduce their carbon output, but it reduces the pressures of high energy bills.

In conclusion, I have five questions for the Minister. Will he bring forward measures that focus on energy efficiency, which is vital not only to tackle the climate emergency but to reduce fuel poverty? Will he put in place a well-funded and ambitious plan to insulate existing solid-wall housing? Will he increase the amount available to landlords to spend on uplifting properties to band E? Will he put in place measures to improve energy efficiency in rented properties and new build properties? Will he give local authorities the power and resources to achieve more ambitious climate targets?

We face a climate emergency. This Parliament was the first to pass a motion declaring a climate emergency. We need action by the Government to ensure that we meet the challenge of that emergency.

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15:47 The Minister for Business, Energy and Clean Growth (Kwasi Kwarteng)

I thank the Minister for giving way and for rightly challenging me on the costs of the proposals I cited from the Labour manifesto. Our manifesto was fully costed, and the cost was £60 billion. As we said, we have the lowest interest rates in history. Will he tell me the cost of the thousands who currently die from fuel poverty? What is the cost to the economy of not meeting the challenges of the climate emergency?

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