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House of Lords Hansard
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Infrastructure Bill [HL]
05 November 2014
Volume 756

Report (2nd Day) (Continued)

Clause 26: Provision in building regulations for off-site carbon abatement measures

Amendment 100

Moved by

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100: Clause 26, page 26, line 27, leave out “in relation to a building in England,”

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My Lords, I will also speak to Amendments 101 to 107, 122, 126, 127 and 132, which provide for the off-site abatement of carbon to apply to Wales.

Welsh Ministers share this Government’s desire to reduce carbon dioxide emissions from buildings and have requested that we table amendments to extend the application of Clause 26 to new buildings in Wales. Noble Lords will no doubt be aware that the powers to make building regulations under the Building Act 1984 in Wales are transferred to Welsh Ministers. Clause 26 confers new powers to make building regulations for England on the Secretary of State, but these powers for Wales would not be conferred on Welsh Ministers in the absence of these amendments.

In its 2012 consultation on changes to the energy performance requirements of the building regulations, the Welsh Government recognised the technical and economic limits to reducing carbon emissions through on-site measures only in new buildings. The Welsh Government recognise the potential for off-site carbon abatement as a useful tool in the armoury for tackling emissions in the existing building stock and for supporting investment in renewable energy. Any proposals to use this power would be subject to public consultation in Wales and the Welsh Government have committed to a review of the current energy performance requirements of the building regulations in Wales in 2016. The Government have therefore tabled an amendment allowing for the Secretary of State to make separate commencement of the changes to the Building Act in England and Wales. This recognises that the two Administrations could adopt different timelines for implementation depending on the outcome of the review in Wales in 2016 and allows each to introduce the policy at the appropriate times.

Reducing carbon emissions from the built environment is a challenge that all Administrations must face if the UK is to meet its overall climate change targets. Applying the provisions to Wales will enable the Welsh Government to also introduce cost-effective, flexible legislation to meet their objectives. I beg to move.

Amendment 100 agreed.

Amendment 101

Moved by

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101: Clause 26, page 26, line 28, leave out “the” and insert “a”

Amendment 101 agreed.

Amendment 101A

Moved by

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101A: Clause 26, page 26, line 29, at end insert—

“( ) The provisions in section 1(1A)(d) of the Building Act 1984 regarding action to be taken as a result of the building’s contribution to or effect on emissions of carbon dioxide shall apply to—

(a) all buildings and developments consisting of ten or more properties, or(b) from 2018 all buildings or developments of any size.”

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My Lords, this amendment seeks to limit the small sites exemption to two years from 2016 and to abolish it thereafter and to require the threshold in the interim to be sites with fewer than 10 properties. The Government have sprung their small sites exemption on us with little or no consultation, although they are now consulting on the matter. In the mean time, it remains unclear what is meant by small sites or by the exemption. We were hoping to have some clarity on these issues in time for today, but, alas, no. I thank the Minister for his letter of 3 November, where he said that the Government had endeavoured to publish the consultation document and the government responses on the zero-carbon consultation for the House of Lords Report stage, but were, however, still working on the document. It would be helpful if the Minister could say more about when we will be able to see that.

As we debated in Committee, the rationale for any exemption from the zero-carbon homes standards is a bit thin. The Government have already lowered these standards. If there is any justification for a time-limited exemption for some sites, it is that, having announced it, it might be argued that some time is needed to move back to the single standard. However, the longer the uncertainty about the detail of the exemption continues, the less valid that point is. The Government have argued that the exemption will be of help to small builders who have more difficulty in responding to new regulations. While I am sure that we all wish to encourage small builders, this is not the best way to do that.

We have recently had the benefit of the report from Michael Lyons, covering a whole raft of interesting stuff on housing. Within the package of support for SMEs that he recommends, for example, are these points:

“Legislative change to permit ‘redline’ outline planning applications on smaller sites of fewer than 10 homes. Local authorities should identify small sites in public ownership in local plans, and work with … public landowners to make them available for purchase and development by SMEs. Local authorities and their New Homes Corporations, working with lead developers should offer more packaged … opportunities for serviced sites to help SMEs access the market, including in Housing Growth Areas”.

Therefore, there are other ways in which to help small builders. In any event, it was pointed out in contributions to our debate that it is assumed that only small builders build on smaller sites and that larger builders would not seek to parcel sites to take advantage of the small sites exemption. It is also the case that a significant number of homes are provided on smaller sites.

Having two-tier arrangements is anyway a potential recipe for confusion, while having what are perceived as relaxations for housebuilders means lower standards for those who buy and occupy those homes and at macro level, of course, it does nothing to address our climate change obligations. We urge the Government now to complete their consultation process as expeditiously as possible and seriously consider drawing back from this approach.

We are shortly to hear from the right reverend Prelate the Bishop of St Albans, who is to be congratulated on taking forward his amendment and on keeping faith with the zero-carbon policy for new homes in 2016. The zero-carbon compliance test set out in the amendment is for carbon savings to be delivered on-site and it is recommended by the Zero Carbon Hub. This standard was the culmination of three years of rigorous scientific analysis and work to build consensus about a workable zero-carbon homes standard. As we know, there are three elements to these carbon savings: energy efficiency in the fabric of the building; low-carbon heat and power technologies; and off-site schemes or allowable solutions, as we now recognise them.

Things looked encouraging, at least in 2010, when the coalition Government confirmed that all homes would be zero-carbon by 2016 and set out the path to achieving this through staged improvements to the building regulations. However, things then started to slide. The 2013 building regulations fell short of the improvement required to stay on track for 2016 and although a consultation on allowable solutions was published no government response has yet been forthcoming, despite that consultation closing more than a year ago. As we have just discussed, the Government also announced small sites exemptions, the details and extent of which are as yet unknown.

The right reverend Prelate’s approach would help get us back on track to what appeared to be the starting consensus. A requirement that the compliance standards be met on-site before off-site allowable solutions are deployed is something that we support but we oppose, as our Amendment 101A makes clear, any ongoing exemption for small sites. Making real progress on zero-carbon homes is vital if we are to meet our commitment to tackling climate change and our emissions targets. We support a higher standard for homes than that set out by the coalition—the one recommended by the Zero Carbon Hub. We would structure allowable solutions in such a way that developers are incentivised to prioritise on-site measures over external offsets. If we have any reservations they are about whether, given a chance to govern in 2015, these matters can quickly be put back on to the original 2016 trajectory. The right reverend Prelate is right to remind us of where we should be heading. I beg to move.

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My Lords, in speaking to Amendment 108A, I should like to thank the noble Lord, Lord Berkeley, for co-sponsoring it. I bring forward this amendment out of concern that the standard proposed in the Bill is significantly lower than that already agreed through cross-industry consensus. I fear that an excessive focus on off-site carbon savings will undermine the effectiveness of the proposals and that an exemption for small sites will create confusion by causing the emergence of a two-tiered regulatory system. It is essential that housebuilders meets the carbon compliance standards that have already been agreed through cross-industry consensus. This was endorsed by the Government back in 2011 and strongly supported by around 70% of those responding to their consultation. I am therefore troubled by the proposal of a new on-site energy performance standard for zero-carbon homes that is lower than the one already agreed. It is not clear why this reduction is necessary. The proposed exemptions from the standard for homes built on small sites and for starter homes would also serve to undermine the main purpose behind the zero-carbon standard: namely, that of prioritising carbon reduction. It is to address the lack of measures necessary to realise the Government’s stated commitment to carbon neutrality that I have tabled this amendment which requires the previously agreed carbon compliance standard to be met on-site before allowable solutions can be undertaken. It also requires all homes to meet that standard, ensuring that no exemptions are allowed.

First, I will address zero-carbon standards. Your Lordships’ House will be aware that the zero-carbon homes standard was originally created by the Zero Carbon Hub set up by the previous Government. This involved the green technology industry, developers and the Government. Together the decision was taken to set the standard based on what was technologically available back in 2010-11. As this Bill is addressing homes that will be built after 2016, what is technologically achievable will be far greater than the minimum standard set out back in 2011. The cost and viability of these technologies will have improved along with their accessibility and reliability. It is therefore difficult to see on what basis the Government have drawn their conclusion that the previously agreed standards are now unworkable. Surely standards must be set at the optimal point, which has been previously agreed through intense cross-sector scrutiny, and must be consistent across the board. There should be a common standard regardless of the size of the development.

It is essential that these agreed standards apply to all homes, especially starter homes where tight budgets are more likely to squeeze out energy-saving measures. The proposed exemptions for small sites are problematic as such sites are much more likely to be in rural areas that are off the gas grid and therefore expensive to heat. We must not allow this Bill to be a means of compounding the desperate situation of those households already struggling with fuel poverty. As we have already heard, there is currently a lack of clarity over what comprises a small site. A consultation on small sites was promised before the summer but has yet to take place. It would be very helpful if, in his summing up, the Minister could tell the House when the consultation can be expected. As many as 12.5% of homes a year could come under the small sites exemption if these sites are classified as 10 units or fewer.

It is also as yet unclear which parts of the zero-carbon policy the exemption refers to. Does it refer only to the allowable solutions flexibility mechanism, which can be used to top up the carbon savings from code level 4 to level 5, or will developers of small sites be exempted even from the code level 4 on-site standard? The proposed reduction to code level 4 is in itself damaging and unnecessary. Three of the country’s largest housebuilders have recently shown that code level 4 compliance can be achieved primarily through improved efficiency of the building fabric, in the form of insulation and glazing, and not requiring any expensive renewable energy technologies. Furthermore, these developers have stated that they expect to be able to build these code level 4 homes, when delivering at scale, to the same price as it currently costs to build to the 2010 code level 3 building regulations.

In the immediacy of economic pressures, we must not lose sight of the overriding purpose for which the zero-carbon standard was designed. The recently published IPCC report reiterated the very real dangers of anthropogenic global warming and the concurrent impact on humanity across the world. Carbon reduction is essential to climate change adaptation and mitigation.

Briefly, and in passing, I am also glad to say that my own church, the Church of England, is playing its part. Vicarages and other properties are now normally being built to the highest green standards and more than 400 of our church buildings, many of them medieval, now have some form of renewable energy.

In conclusion, the Bill would lead to confusion in the supply chains and among house buyers, a two-tier regulatory environment and greater fuel poverty. Moreover, the large-scale exemptions signal a retreat from a full-blooded commitment to reducing carbon emissions, the goal on which the future flourishing of our country as part of the global community depends.

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My Lords, I have a great deal of sympathy with the comments of the right reverend Prelate the Bishop of St Albans. I spoke on these issues in Committee. As has been said by both previous speakers, we managed to get such agreement across the building sector and all the organisations that care about these issues as to what the standard would be. When we came in as a coalition Government, we stuck to that. For some reason, we changed our minds. I would really like the Minister to explain what made us question the agreements we had and the standards we had wanted.

I know that two of my honourable friends who have been Liberal Democrat Ministers in the department have pushed to row back from where we were going, and we have now gone forwards again. However, we have not managed to get any farther. We are owned an explanation from the Minister tonight of why we have ended up in this position when we had such a good agreement back in 2010.

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My Lords, I welcome both these amendments; indeed, they are very similar to amendments I tabled in Committee. I am grateful to both the noble Lord and the right reverend Prelate for pushing these further to see what response we get from my noble friend the Minister.

I will try not to repeat everything that I said in Committee. On the minimum number of houses to which this would relate, the Bill takes everything the wrong way. It is absolutely clear that smaller builders—whom this clause does not target very effectively, as the noble Lord, Lord McKenzie, said—are more capable of building better-quality homes than the large builders. They are in no way constrained by technology. The clause somehow conveys a government view that small-scale builders are merely jobbing builders with no skills. That is absolutely wrong and sends completely the wrong message. They can deliver a high standard of homes as well as any other building business.

I agree with the right reverend Prelate. I certainly live in a very rural area. A number of the developments there are small scale, and they are all off the grid. I am off the grid. Local developments in villages around me are off the grid. We therefore have the problem that we institutionalise for another 50 to 100 years, or whatever the life expectancy of the property is, potential fuel poverty for those who live in those houses—that or we have an expensive retrofitting programme in the future, which we are already struggling trying to make work. In fact, DECC’s own figure for the cost of retrofitting the current housing stock to get it up to a proper level is £60 billion. That is quite a big sum. We should not be starting to add to that figure.

I welcome the proposal to keep a minimum number of houses; I suggested five in Committee, but 10 is quite reasonable. I welcome that fact that my noble friend the Minister, judging by our conversations, does not see the figure being any greater than that. Clearly, we are having a consultation process at the moment and I am sure that he cannot be specific until that is closed, but I welcome the fact that the Government have recognised that that number cannot be too large. We certainly need a sunset to this clause. I hope that that will come out of this as well.

My noble friend Lady Maddock has gone through the questions surrounding the standards for zero-carbon homes very well, and how that issue appears to have moved backwards and forwards and backwards. I look forward to enlightenment in that area. I again come down to what the right reverend Prelate said about allowable solutions. I am not at all against them in concept, but wherever possible the targets need to be met within the building itself or very close to it. Once again, if we do not do that, the people who live in those houses will have increased energy bills for as long as they live there. We might neutralise carbon emissions globally—ensuring that is much more difficult on allowable solutions than actually on the property itself—but then you still have the problem that that property requires more energy to heat it and to keep it to the right standards.

I welcome these amendments and fully accept that, if we have a small development exemption, that could well be in secondary legislation rather than in the Bill. That is unfortunate so I look forward to the Minister’s explanation on it, but I recognise his good will and wish to get this consultation out and completed. I am pleased that we are still pursuing zero-carbon homes. It might not be at the pace that some of us would hope for, but it is still a government objective and priority that we wish to achieve. I would have liked to have reached a slighter higher level of achievement but at least we are making some progress on this.

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My Lords, first I thank all noble Lords who have participated in this debate, and in particular the noble Lord, Lord McKenzie, and the right reverend Prelate for their amendments, which have allowed us to discuss this important issue again.

I am conscious that Amendment 101A has already been discussed in Committee. I am of course happy to revisit the subject because of its importance, and in doing so I ask noble Lords to excuse me if I cover points we have covered before. From our previous discussions, and as my noble friend Lord Teverson has alluded to, I know that a clear consensus was emerging that in designing the zero-carbon homes policy we must ensure that smaller builders are protected from increases in costs that may make it more difficult for them to compete. In seeking to limit the scope of the application of off-site carbon abatement measures to developments of 10 or more dwellings, the amendment recognises that important principle. On that basis it is well intentioned and in line with the Government’s thinking on the issue.

With regard to the Government’s thinking, I am conscious that noble Lords would have expected a consultation paper to have been issued by now and in advance of this debate. Indeed, in various meetings that I have held in advance of this stage of the Bill, this was something we discussed. At this point I can only apologise for the delay which has occurred. I assure noble Lords in that apology that the Government are working very hard on the consultation paper, and we are very aware of the interest on this issue and the need to set out our thinking as soon as possible.

We recognise that achieving the zero-carbon standard could be particularly challenging for small builders. Smaller developers face extra costs in terms of land acquisition and purchasing. They also rely on an ability to identify and redevelop small sites or to assemble small parcels of land into larger opportunities. Research recently published by the National House Building Council on improving prospects for small housebuilders suggests that the availability of suitable small sites—which they indeed prefer—is declining. It also indicates that any extra regulatory costs can impact on the viability of development. We are concerned that if the costs of zero carbon lead to fewer small sites being brought forward, this will further hinder the prospects for small housebuilding firms.

Therefore, while welcoming the intention behind the amendment, it cannot be supported, principally because it would not provide the flexibility that we need on this issue. Putting a rigid exemption in primary legislation would not be the right way forward. There must be flexibility to respond to changing market circumstances and to listen to those people with the main interests in this area, the homebuilders and environmental groups. Our intention therefore is first to seek the views of those interested parties on how the exemption should work. Only after that consultation would we legislate, setting out the scope of the exemption through the building regulations and providing supporting guidance in that respect. Primary legislation is not required to exempt small sites. Section 3 of the Building Act allows for building regulations to make different provisions or to exempt prescribed classes of buildings from the requirements of building regulations. However, I recognise that the key point of the debate is the threshold to be applied.

The amendment proposes an exemption based on sites of fewer than 10 units. I mentioned during Committee that this was one of the options being considered. I say “options”, because we must leave room for respondents to offer up different options or evidence for consideration. We will also consult on the timeframe that should apply to any exemption. It is this area in particular where flexibility is a paramount consideration. What may be right at the time of designing the exemption may not be right further down the line, and the Government must have the ability to review the operation of the exemption appropriately. I hope that it is helpful to clarify these important points and that doing so provides some further reassurance in advance of the consultation being published. We do, of course, welcome noble Lords’ considered opinions and views as part of that consultation exercise, and I assure your Lordships’ House that they will receive a copy at the earliest opportunity.

The noble Lord, Lord McKenzie, asked about a response on allowable solutions from the Government that was published in July and provided to noble Lords ahead of Committee. I am not sure whether there has been a response, or if it did not reach the noble Lord. I specifically asked for it, and was assured that a hard copy was also sent to the noble Lord in this respect. If, again, he requires a further copy of that, I shall be happy to forward it on.

I now turn to Amendment 108A, in the name of the right reverend Prelate. As I said during the discussion on a similar amendment in Committee, this amendment will result in significant problems by prescribing energy performance levels in the Bill. We all share the desire to see energy-efficient homes built that help to reduce carbon emissions and fuel bills. We should not forget that this Government have made significant progress towards delivering on the commitment made by this and the previous Government to ensure that zero-carbon homes are built from 2016 onwards. Since we confirmed our commitment to the 2016 target for new homes to be zero carbon, we have further strengthened the requirements of the 2006 building regulations in 2010, and again in 2014, achieving a 30% total reduction. In fact, the most recent changes we made to the building regulations in 2014 will help to save homeowners an average of £200 on their fuel bills, compared to new homes built before we came to office.

Of course, we are not stopping here. As I have said, we have confirmed that from 2016 all new homes will have to meet even higher standards for on-site measures to be set out in building regulations. These will be set at a level equivalent to that required for a home built to the code for sustainable homes level 4 standard and will save homeowners on average £700 more annually when compared to a typical existing home. The right reverend Prelate talked of building to code 4. This can be done, which is why we think it is a reasonable standard to set. However, as shown by the Zero Carbon Hub’s as-built performance gap programme of work, there are challenges. We should set a realistic and achievable target, not one which pushes the industry to a point where it cannot deliver in practice.

To change the energy requirements for new homes, it is always necessary to consult carefully those affected. We should not forget that we are talking about a technical area that impacts across the whole construction sector. Additionally, the industry reports on building types that this amendment ignores and does not address, such as high-rise flats, because more work is needed. The categories listed in the amendment contain different building types and a rigid standard to cover them all. This may not work in practice. It may, but it is important to take the time to work through it in consultation with the industry. It would not be workable to deliver the proposed standard within six months. Even if it were, it may not be prudent to have such a rigid timeframe for delivery in primary legislation.

The independent Zero Carbon Hub recognises that further technical modelling is required. If, in the light of consultation, even slight adjustments were needed we would not be able to make them without new primary legislation. I assure noble Lords that the Government will strengthen standards and deliver zero-carbon homes from 2016. That is and remains a clear commitment on which we will be held accountable if we do not deliver. Between now and 2016 we will consult widely as to how the new proposed carbon compliance standard can be met. We will share that consultation with noble Lords.

My noble friend Lord Teverson and the right reverend Prelate the Bishop of St Albans asked about exemptions. The number of smaller housing developers competing in the market is significantly lower than it was prior to 2008. Smaller developers often face greater set-up and purchasing costs, compared to larger developers. New regulatory requirements often hit smaller developers earlier, as there are shorter lead times to starting development. With all this in mind, it is vital that the Government give the sector the support it needs, and exemption from the full cost of the carbon requirements is one way of doing so.

Let me also reassure the right reverend Prelate that we work closely with partners such as AIMC4 that have shown that it is possible to build homes to meet a higher level of energy efficiency. The work of that group has helped the Government in deciding to set the on-site requirement at around code level 4, as this should be affordable and achievable for the majority of developers. It is important to recognise that this work was limited in scope and did not extend across the full range of buildings such as flats.

The point was made that the setting of on-site standards could result in a watering down. We worked closely with the Zero Carbon Hub, whose work was hugely influential in helping the Government decide what further action to take from 2016. The hub did not recommend an on-site level for high-rise apartment blocks, recognising that further specialist work was required.

My noble friend Lady Maddock asked some specific questions about rowing forward and rowing back, as she described it, and said that some explanation was needed. I am sure she will appreciate that there are discussions taking place. I hope that my comments have somewhat reassured her that the commitment of the Government to achieve our objective when it comes to zero-carbon homes and to the policy that we have agreed from 2016 remains a priority.

I hope that my responses have been sufficient to reassure noble Lords of the Government’s position on both these amendments and that the approach I have outlined here, as well as in Committee, has demonstrated why these amendments may prove problematic in terms both of increased demands on the home building industry and of the mechanics of delivery. On the basis of these reassurances and accepting that we are still working towards the issuing of the consultation on zero-carbon homes, I hope there is sufficient to encourage the noble Lord, Lord McKenzie, and the right reverend Prelate not to press their amendments.

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My Lords, I thank the Minister for his response to my amendment. I think we recognise that putting material in the Bill reduces flexibility. The point is well made that these things will need to be dealt with in secondary legislation. The purpose of an amendment such as this is to get some debate and discussion going, as the Minister is well aware. He suggested that Amendment 101A, with its recognition of sites of fewer than 10 properties, was an acceptance of the policy. That was certainly not its intent. The key part of that amendment was that there should not be any exemption after 2018.

The consultation that I was probing was the one that was dealt with in the Minister’s letter of 3 November, which was the consultation on the exemption for small sites. If I made reference to allowable solutions it was not my intention. That was the consultation—knowing when it will happen and, more importantly, what is in it.

The noble Lord, Lord Teverson, recognised that the Government still have ambitions in this direction to deliver on zero carbon for homes, but it is a question of how we define that. That is the issue. Part of the debate we had from the noble Baroness, Lady Maddock, and the right reverend Prelate the Bishop of St Albans has been about why we have moved back from the starting position. The right reverend Prelate made the important point that the standard was agreed basically in 2010 and technology has moved on since then. We are now, in 2014, talking about standards to be set in 2016. Also, the noble Lord, Lord Teverson, as well as the right reverend Prelate, made the point about the impact of all this on fuel poverty, particularly on smaller sites, which are likely to be more prevalent in rural areas than urban areas, and the huge importance of all this given the IPCC report, which the right reverend Prelate just referred to.

The noble Lord, Lord Teverson, talked about institutionalising fuel poverty if we do not get this right. He also made a point about how we view small builders and that somehow they have to be let off all sorts of standards in order to flourish. The point was made extremely well that small builders can be very skilled and are able to deliver high-quality homes to the standards that we should be looking for. The point I tried to make in moving the amendment was to identify other ways that we could help small builders in terms of access to finance and parcelling land so that they have the opportunity to get in on developments that they might otherwise be excluded from. That is a better way of approaching small builders’ needs than relaxing some of the zero-carbon homes restrictions, which we should be looking to build on and support rather than row back from.

Having said all that, I am sure that this debate will rumble on and we will come back to it on a number of occasions. We hope that we will see that consultation document on small-site exemption very soon. I know that it is not wholly within the Minister’s remit, but it would be helpful if we saw that because it would help our debates and our concerns. As the noble Baroness, Lady Maddock, said, because the Government have moved back from their starting position, the concern is about how committed they are to this. The more the Government and the Minister can do to allay our concerns on that the better. I beg leave to withdraw the amendment.

Amendment 101A withdrawn

Amendments 102 to 107

Moved by

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102: Clause 26, page 26, line 33, leave out “in England”

103: Clause 26, page 27, line 7, after “State” insert “or the Welsh Ministers”

104: Clause 26, page 27, line 22, after “State” insert “or the Welsh Ministers”

105: Clause 26, page 27, line 22, at end insert—

“(5A) Building regulations made by the Welsh Ministers may make provision for the use, in relation to action taken in respect of a building in Wales, of a register administered by, or by a person acting on behalf of, the Secretary of State.

(5B) Building regulations made by the Secretary of State may make provision about the use of such a register for that purpose.”

106: Clause 26, page 27, line 33, at end insert—

“(7A) Building regulations made by the Welsh Ministers may make provision for a payment or payments in respect of a building in Wales to be made to a fund administered by, or by a person acting on behalf of, the Secretary of State.

(7B) Building regulations made by the Secretary of State may make provision about the use of such a fund for that purpose.”

107: Clause 26, page 27, line 41, at end insert—

“(6) The reference to the Building Act 1984 in article 2(a) of the Welsh Ministers (Transfer of Functions) (No 2) Order 2009 (SI 2009/3019) is to be treated as referring to that Act as amended by this section.”

Amendments 102 to 107 agreed.

Amendment 108

Moved by

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108: After Clause 26, insert the following new Clause—

“Determination of planning applications

(1) In circumstances where planning permission for a development has been granted pursuant to section 70(1)(a) of the Town and Country Planning Act 1990 (determination of applications: general considerations), any building work remaining to be carried out as part of that development after the expiry of six years from the granting of planning permission shall no longer be permitted to be carried out in compliance with the Approved Document Part L in force at the time when planning permission was granted, but shall instead be required to be carried out in compliance with the Approved Document Part L in force at that time.

(2) For the purposes of this section—

“building work” has the meaning given in regulation 3(1) of the Building Regulations 2010 (meaning of building work);

“Approved Document Part L” means a document issued in pursuance of section 6 of the Building Act 1984 (approved documents) for the purpose of providing guidance with respect to the requirements of Part L of Schedule 1 to the Building Regulations 2010 (conservation of fuel and power).”

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My Lords, this continues a similar theme. I tabled an amendment in Committee to try to get more rigour into ensuring that the building regulations that we have are met and complied with. There is very little point in our legislating if those standards are not met in practice. I quoted the Government’s own adviser, the Committee on Climate Change, which stated that there seemed to be a big gap between what should be happening with the thermal efficiency of homes and what was actually happening. I was not completely reassured by that, but I accept that that is mainly a role of local government.

I am trying move on to address the fact that it often takes—and certainly has over recent years—a long time for a planning permission to become a built-out and lived-in development. We have the situation—I look on it as an anomaly or rather a loophole—whereby the building regulations to which builders must build relate to the date of the planning permission rather than when the development is constructed and completed. If that is only within a couple of years, it makes no difference whatever. We have, however, a number of developments—at certain times more than others—when that stretches over a considerable period. I realise that planning permissions themselves have a shelf life. After three years, if they have not been used, they go into abeyance. However, I remind noble Lords that under that system, as long as you do a certain amount of work—you do not have to complete it—that planning permission remains live. That is something that is done very regularly to make sure that planning permissions are not lost.

I was very impressed by the Minister’s figure of £200 that would potentially be saved per annum by the moving up of building regulations by the Government. Of course, that illustrates very well the extra cost to residents of houses that do not meet those standards—either because they have been exempted under the small development regime that we talked about in the previous amendment or because houses are being built under building regulations that are several years old.

It seems to me that this is something that needs to be fixed—for consumers and certainly for the government strategy on fuel poverty and zero-carbon homes. So I am putting forward an extremely modest proposal that is a longstop: if developments have not been completed within six years of gaining planning permission, at that point they must comply with the building regulations of that time rather than those when the planning permission took place. I have tried to make this amendment as clear as possible. I hope it says that. I very much hope that it is in line with government policy and that this is something of a loophole that we would like to close—particularly when we have periods when building and construction developments take a particularly long time.

Indeed, I would ask whether there is a temptation sometimes to get planning permissions early. Where we have land banks, it perhaps means that construction is delayed but it almost gives a benefit to developers to hang on to undeveloped land. I would like to see this very sensible measure used as an incentive for building, particularly of dwellings when we have such a national housing shortage, to be started and completed within a reasonable period. I beg to move.

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My Lords, we should be grateful to the noble Lord, Lord Teverson, for raising a very important and interesting point about developments that are not completed within six years of the granting of planning permission. As we have heard, it requires the development to be carried out in accordance with current building regulations relating to conservation of fuel and power. This is an attempt to address the very serious point that we have delays in the completion of developments, particularly housing. Given the housing crisis we face in this country, the objective should be to encourage sites with planning permission to be built out as soon as possible.

This is one of the issues that the Lyons report addressed for us. Although this is not the occasion for an extensive discourse on that report, one of the interesting points it makes is that some 80,000 unbuilt homes have planning permission from 2010 or earlier. Some of these will be built to 2006 standards, and so be eight or more years out of date. One of the issues that this amendment raises is how practical it is retrospectively to amend the applicable building regulations. There will obviously be issues around homes that are partially constructed at the cut-off point. Getting homes built earlier is good for obvious reasons, although, of course, it does not necessarily do anything to raise the standards of applicable building regulations.

I might resort to going back to the Lyons report. Obviously, not all these recommendations are yet, or will become, policy, but under the heading “Use it or lose it”, it suggests that,

“the life of a planning permission should be reduced to two years with higher fees applying for renewal of expired permissions”.

That would present an alternative mechanism whereby people have to go back and face updated building regulations. Certainly, more substantive work should be required to count as the commencement of development. That is a problem the noble Lord identified. The report also suggests that,

“councils should have powers to levy a charge equivalent to council tax if land allocated in a plan with or without permission is not brought forward within five years”.

Compulsory purchase powers could be strengthened and streamlined to make it easier for public bodies to acquire land where it is not brought forward and where it is a priority for development, so there are alternative ways to encourage developments to take place and perhaps to realign the nature of those developments with updated building regulations. The noble Lord has raised a very interesting point which I am sure will get a full response from the Minister. One hopes that something could actually flow from this.

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My Lords, I thank my noble friend Lord Teverson for tabling this amendment. I also thank the noble Lord, Lord McKenzie, for his comments.

I should say at the outset that I share the sentiments expressed on the objective of ensuring that more homes are built, and built according to better standards and in line with standards. My noble friend’s proposed amendment sets a six-year time limit on a development being built to the energy performance requirements in building regulations in force at the time that planning permission was granted for the development.

I should start by pointing out that, as noble Lords may be aware, it is not the grant of planning permission that is the trigger for the application of building regulations’ requirements but the submission of a plans application or a building notice, or an initial notice to the building control body. During my time in local government, I remember many applications that were challenging in that regard. Therefore, we think that the amendment as drafted may lead to confusion about what happens under planning as opposed to what happens under building regulations.

However, setting to one side the issues that may arise from the drafting of the amendment, there are important practical considerations about how new building regulation requirements apply to developments already under way at the time that the new regulations are introduced. It can take a long time to plan, design, finance and build a development, as noble Lords know. It is therefore correct that the building regulation provisions in force when the building regulations application is made remain those with which the development must comply. To provide otherwise would lead to unreasonable disruption, perhaps delay, and increasing financial burdens as there would be uncertainty about construction standards and a risk of disruption to the supply chain part way through the development.

For example, large developments such as the famous “cheese grater” building in Leadenhall Street, London, will take many years to build and complete—often longer than six years. If accepted, this amendment would mean that the technical requirements of those developments would need to be changed part way through construction. Forcing a development to change from one set of building regulation requirements to another half way through a project would cause real problems for builders, as I am sure my noble friend would recognise.

However, in saying that, I put on record that I totally understand and appreciate my noble friend’s concern that developers may play the system by submitting a building regulations application and then doing nothing or delaying the development and not having to meet any more up-to-date requirements that may have been introduced in the mean time. From my experience, I have seen that happen, too. The Government have recognised this issue and so building regulations generally require that whenever any changes are made to building regulations, building work in respect of any applications made before the coming into force of the new requirements must commence at the latest within 12 months—otherwise, the new requirements will apply.

This requirement was introduced in 2006. Before then, as noble Lords will know, the time limit was three years. This time limit is set in the building regulations. This gives the opportunity to adjust the time limit in light of the circumstances when new regulations are introduced. If we were to rely on changes to primary legislation, we would then lose the flexibility to respond. If we stated the time limit at an inappropriate point, we could cause real problems for housebuilding, as I have already outlined. It will be for the Government dealing with building regulations changes for 2016 to consider what time limit may be appropriate. I am sure that they will read this debate very carefully to see the issues raised and the views expressed. I believe that my noble friend recognises that the amendment as it stands focuses only on one specific area of building regulations, the energy performance requirements. The time limit which I have just described applies in respect of any change to the standards in the building regulations. Therefore I am sure that my noble friend recognises that it may lead to confusion for developers if different time limits apply to energy performance requirements than to other requirements of building regulations.

The amendment from my noble friend, as the noble Lord, Lord McKenzie, has said, raises an important issue. However, as drafted, it would not work for the practical reasons that I have outlined. I hope that I have set out in some detail the time limit which already operates in building regulations to tackle the risks of developers who seek to just get regulations in place for the sake of it. There will be an opportunity in the consultation on the 2016 regulations for energy performance requirements to be looked at. I hope that, in the light of the assurances and clarifications that I have provided, my noble friend will be minded to withdraw his amendment.

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My Lords, I thank the noble Lord, Lord McKenzie, for his support and his very good response to the concept that we are discussing. I look forward to the Labour Party developing that policy further. I particularly thank my noble friend the Minister for a very good and useful reply to my thoughts on this. I will read all that he has said very carefully. I bow to his knowledge of this area, which is much more excellent than my own, and which he has both through practical experience and through government. I hope that this might be the start of a further dialogue in this area—one which I will take an interest in, particularly regarding the use of that flexibility that is already there within the legislation. On that basis, I beg leave to withdraw the amendment.

Amendment 108 withdrawn.

Amendment 108A not moved.

Clause 27: The community electricity right

Amendment 108B

Moved by

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108B: Clause 27, page 28, line 7, leave out “renewable”

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My Lords, I begin by apologising to noble Lords for the late tabling of this amendment. It was down to a misunderstanding as to when this group of amendments would be taken.

We now turn to Part 4 of the Bill, concerning energy, and to the community electricity right specifically. Although we discussed this in Committee, the purpose of tabling the amendment is to press the Government again on it. We were not satisfied with the response in Committee and we feel that this needs a considerable rethink in terms of how it is presented in the Bill. I also look forward to debating the amendments that we will come to later today.

The clause heading is “The community electricity right” but it quickly becomes clear from subsection (1) of the clause that this is about not electricity but a subset of electricity that is defined as renewable. That is the point we want to probe. We live in a world where energy markets and the energy system are changing and we are seeing a higher degree of decentralisation of energy, not just in renewable energy but also potentially in gas, both in terms of generation and the extraction of local sources of fossil fuels. Our main concern is that we should not single out a particular group of technologies for what is, in effect, an inflexible proposal from the Government when a much more holistic approach to the issue of community involvement in these projects is needed. There have been examples of local communities being unhappy with proposals for their localities, but there have been many more examples of communities embracing proposals and finding great benefit from the jobs and income that flow to those communities from development in their area.

Although we are fully supportive of the idea of community involvement, we are not necessarily persuaded that a single approach should be applied when considering how to engage communities or help them to benefit from development. The Government’s proposals are restrictive in that sense. Our main concern is that we do not make presumptions about what is going to work in every part of the country. In some parts of the country, rights to buy and ownership stakes will be the interesting issues; in other parts, there may be a simpler formula that enables people to have lower bills for electricity in their local area. We all know that a voluntary approach is being explored to try to identify the best way forward. We will come on to debate the need to allow for a good process and for enough time to come to conclusions before rushing into regulation.

This amendment is not about that but it tries to explore why it is necessary to qualify electricity generation with the word “renewable”. It is defined in law but covers a subset of all types of electricity generation that might attract community involvement and interest. We have seen under the capacity mechanism new development coming forward involving capacity market payments, such as in the small-scale, sub-20 megawatt gas generators that are bidding for 15-year contracts. They may well be located close to communities, which may feel that they would like to have a stake in those projects.

There is an issue here. We fully support more community involvement and better community integration in order to produce much more positive engagement with decentralised electricity production. However, I do not see why the Government have come forward at this time with a narrow proposal applying to a subset of technologies. What is the rationale for this provision relating only to renewables and not to a broader range of technologies that communities might be interested in being involved in or having a stake in? I beg to move.

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My Lords, I very much share the concern of the noble Baroness. I have an example that I raised at a meeting with the Minister. I am grateful for the trouble she has taken to allow us to engage with her and her officials. I made the point, as the noble Baroness, Lady Worthington, has done, that there are many other worthy forms of community involvement in energy.

The example that I gave at the time was the Plymouth Ovo Energy project—the Plymouth Energy Community, which even contains the word “community”. I was struck by the reply I received from one of the Minister’s officials. Both my noble friend and the official realised that perhaps I deserved a rather fuller reply. I am pleased to say that I received one in a letter from the official, written on the same day. Perhaps I may quote from it because it begins to give an explanation regarding the question that the noble Baroness has just asked. The letter states that there are,

“strong examples of ways in which the community energy sector is innovating, growing and maturing. However, I would say that they focus on different areas of community energy. The Community Electricity Right concentrates on new renewable electricity generation schemes and involves communities as investors”.

Never let us forget that we are talking about the statutory scheme, not the current voluntary arrangements. It is the statutory scheme that is in the Bill. The letter continues:

“On the other hand, Plymouth Energy Community mainly focuses on the supply of electricity from existing schemes and principally involves communities as energy consumers”.

My immediate reaction is: why is this so narrow? The letter goes on to explain:

“Energy supply and generation are dealt with quite differently within the regulatory and policy framework. As such, it would not be appropriate to include the Plymouth Energy Community directly within the scope of the Community Electricity Right”’

The letter then makes what is really the most important point:

“I would just like to add that DECC is taking separate measures to promote local supply. For example, we have formed a dedicated Local Supply Working Group formed of DECC officials, Ofgem, Academics, Local Authorities and community energy groups to explore the regulatory barriers limiting local supply. They will be reporting to the Secretary of State in March next year”.

As I said a moment ago, that goes some way to meet the concern that I expressed. However, I then have to go on and ask my noble friend the Minister this question. What other forms of community involvement are being considered? Here I refer to the task force’s report, which we had only on Monday. On another occasion I expressed my displeasure that it had all come so late, two days before we have to debate the whole subject. That report has a lot to say about various forms of community sharing. They are described in annex A of the report, although at this hour of the night I would not dream of reading it all out.

We must remember that we are at this stage, and the task force is concerned solely with the voluntary system. It had nothing to say—I suspect because it felt that it was outside its terms of reference—about the statutory power for which power is being taken in this Bill. The main point on this amendment is: what other forms are being considered? Yes, the letter is referring to the supply side. The noble Baroness asked about cheaper electricity. When winding up the debate in Committee, I referred to the McAlpine schemes and their proposals to offer cheaper electricity to communities within the reach of the particular scheme that was being developed. It is a very familiar concept in many other areas of the world—notably, nuclear power stations in France. They gained popular consent by being generous with the prices that they charged.

That leads me to my final point. There is no doubt that large parts of the renewable energy industry are dead against any form of statutory straitjacket being imposed on them. They would much rather continue with and demonstrate the success of the voluntary scheme with which they are engaging. I had a very strong statement from the Solar Trade Association. It says that the task force report is an interesting starting point but that,

“it must be given time to be put into practice”.

I think later on we shall say that we have won that argument—we have got more time. Secondly, it says that,

“Government and the community energy sector need to be flexible and proactive in supporting this and in establishing an evidence base”.

Thirdly, it says that,

“no evidence has been provided by the Government that the extensive yet unspecified powers within the proposed Bill are needed or will lead to increased investment”.

Similar points have been made by other parties that have been advising me.

Echoing the noble Baroness, one has to say: what other forms of community involvement are being considered? Will the Government recognise that what they have said is intended to be a backstop provision only if the voluntary system is seen not to be working? Is that still very much their approach on all this? There is no doubt that the provisions of the Bill have worried the industry.

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My Lords, I thank the noble Baroness for tabling the amendment and my noble friend for his contribution.

The amendment seeks to extend the scope of the community electricity right provisions to include all electricity generation. I listened very carefully to what the noble Baroness said about also looking at different models. I hope I will be able to lay out clearly that what we are trying to do, in the first instance, is to take the positive step of focusing on community-shared ownership of renewables but our drive really is to increase that shared ownership as a positive step in enabling people to take some stakeholding in their local communities and to drive forward a voluntary approach, as has been worked through the Shared Ownership Taskforce.

We have made it very clear that we are not excluding other forms of energy; we are just saying that within the renewables sector we are concentrating on wind and solar, which are two mature sources and therefore it is easy to demonstrate their benefit to local communities. We are absolutely clear that this legislation should apply only to renewable electricity technologies. There are two key reasons for this.

The noble Baroness said that some communities embrace renewables and others do not. We want to bridge that disconnect between national and local benefits for renewable electricity schemes. What we have seen often is that nationally there is great support for the renewables sector but that is not always reflected when it becomes a local issue, where the impacts are felt directly by communities.

What we want to do through this legislation is to seek to redress the imbalance by ensuring that communities have the opportunity to get much more involved and can develop a real sense of ownership of local schemes being developed on their doorstep. This is about promoting decentralised energy generation that is happening in people’s homes and in local communities right across the country.

Renewable electricity generation, particularly from technologies such as wind and solar power, is now well established. This typically translates into lower risk profiles for community investors, which is an important safeguard. It is important to remember that shared ownership is still very much a developing concept in this country. The Shared Ownership Taskforce published its final framework on Monday, and I very much take on board the point my noble friend made that it came a little later than expected. The members of the taskforce have worked long and hard to develop a framework which both developers and local communities can work with. This has been a challenging task, even for the most established renewable technologies where there are successful case studies working on the ground.

To say simply that we need to extend the concept of shared ownership to all forms of electricity generation, without proper consideration of the inherent issues that each faces, therefore makes little sense to me when the voluntary approach on shared ownership to date has been solely developed for, and has focused on, those particular renewable sectors. It is right that, if these powers were ever exercised, we would expect them to focus specifically on established and mature renewable electricity generation technologies, such as solar and onshore wind.

I would like to reassure the noble Baroness again that this is the first step in increasing community shared ownership of renewables. If it is successful, there is nothing to stop us considering extending it to other technologies, because we want lessons to be learnt and to do the proper consultation that everybody would expect to take place when we extend this.

In responding to a couple of questions that were raised by my noble friend, we are encouraging local electricity discount schemes and recognise that they are a valuable initiative which we wholeheartedly support. However, we must remember and recognise that offering reduced-price electricity is giving a gift to the community, not providing the community with the chance to invest in schemes such as community electricity. There is a slight difference there, which we need to be able to recognise.

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A moment ago my noble friend said that there was absolutely nothing to prevent the scheme being extended to other forms of community involvement. However, the word “renewable” is in the first paragraph of the first clause of the part of the Bill which deals with energy. Will extending it to other forms require further primary legislation?

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It would require proper consultation. We would have to go through the proper consultation processes to ensure that, having seen what has worked or not worked with these initial schemes, when going forward on including other schemes we are able to respond to the needs of those technologies. That is what local communities will ultimately have to face. It is not about primary legislation; it is about looking at how we would be able to add those new schemes through consultation. We have said very clearly that we are not stopping or excluding other provisions of electricity supply. We would have this opened up but we are starting with the focus on the renewable sector. I hope that I have been able to make that a little clearer to the noble Baroness. If I have not done so, I will repeat what I have already stated: these provisions would apply only to renewable electricity schemes. To clarify my noble friend’s point, we would have to readdress it in primary legislation.

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My Lords, there we have it. This does not feel to me like appropriate primary legislation. If we have the potential for bringing in new definitions of what these schemes apply to, perhaps we should put it in a schedule or in secondary legislation and have this slightly less draconian in order to give us that flexibility. The Minister has made it clear that this is quite a new thing; it is not tried and tested. I find it quite surprising that this is coming from an anti-regulation Government, and that we should be imposing this quite bizarre new set of regulations on an industry that is growing and developing and delivering great economic benefit to the regions. Yet here we are, imposing this ownership requirement from on high. Although it is obvious that the Government have consulted the industry, it is none the less really unhappy about this—that goes certainly for the solar industry. It does not see the right as something that will help it boost investment; rather, it sees it as an impediment to increasing investment. I am afraid that I am not persuaded.

On which technologies are mature, we have been using various forms of renewable electricity for many decades, including hydro, energy from waste and biomass, but these are excluded. The Government have chosen just two technology types, which happen to be, coincidentally, a little bit contentious politically, and have decided that they are going to impose this ownership right on them.

It is not appropriate to be rushing this measure through with primary legislation at this stage. I have not been persuaded that the definitions are clear. I suspect that this will be an issue that is returned to when this Bill passes to another place. However, at this stage, I do not feel inclined to divide the House, and I am happy to beg leave to withdraw the amendment.

Amendment 108B withdrawn.

Amendment 109

Moved by

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109: Clause 27, page 28, line 9, at end insert—

“( ) Before making regulations under—

(a) subsection (1)(a), the Secretary of State, or another person with the consent of the Secretary of State, must conduct a progress review of voluntary shared ownership and stakes offered to communities, and the Secretary of State or that person must set out the results and conclusions of the review in a report to Parliament.(b) subsection (1)(b), the Secretary of State, or another person with the consent of the Secretary of State, must appoint a panel of experts to review and advise on community stakes and engagement in offshore renewables, and the Secretary of State or that other person must set out the results and conclusions of the review in a report to Parliament.”

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My Lords, that was a very interesting and revealing debate, because we have not always kept clear in our minds the distinction between the innovating and expanding voluntary sector and what would inevitably have to be, on the basis of the Bill, a very rigid, defined and inflexible sector. One has to make it quite clear that we are dealing here with two different approaches to this whole problem. We have all agreed that community involvement is a very good thing; it is simply a question of how.

In the first of these three groups of amendments we have dealt with what is included, and we have had a very interesting answer on that. The second group, which we come to now, poses the question: how? How will the regulations be introduced? The third group, which we shall come to later and to which I think there will be a happier answer, concerns the “when?”.

The previous amendment considered the “what?”. In this group, we debate the whole question of the process and say straightaway that the Bill appears to have nothing whatever to say about any form of review of the developing experience of the voluntary approach. Happily, the task force’s report offers some valuable advice and comment on that. Indeed, in its chapter 5, it talks about implementation and monitoring, and devotes nearly a whole page to the review process. It makes it perfectly clear that in any development of this policy there must be proper reviews at regular intervals, and it suggests in the first place six months from the original report and thereafter annual reviews.

However, one question which is not answered to my satisfaction in the task force’s report is who should do the reviewing. It assumes that it will be itself; that it will be continued either in its current form or as a monitoring group which it would set up. I have had some very firm representations that, if there is to be a different group, it should be the department itself. The argument is put that the task force seems to be wholly committed to one form of participation; namely, shared ownership. I think that we have already established that there can be other forms of community participation which have the same value of promoting community support for a development and giving a community a feeling of involvement in what is going on in its area.

My first amendment in this group, Amendment 109, suggests that the reviews should be carried out either by,

“the Secretary of State, or another person with the consent of the Secretary of State”.

I must ask that, when Ministers publish their formal response to the task force’s report, they make two things absolutely clear. They should make clear, first, that there will be regular reviews of how the voluntary approach to community involvement is evolving and, secondly, who will conduct these reviews.

The amendment also suggests that the results of the reviews should be reported to Parliament. That would give them added authority. This all relates to what the Bill refers to as “land-based” facilities, although it goes on in Clause 27(1)(b) to say that this could be extended to offshore facilities, which opens up a whole new range of complications. I have received a long brief on that from Renewable UK, which I find very persuasive. At this hour of the night I would not dream of reading it all out. The concept of community involvement in an offshore development is something quite different from what community involvement would be in, for instance, an onshore wind farm or an onshore solar energy facility. It seems to me that a lot needs to be thought through.

Amendment 110 makes the obvious proposal that before laying any draft regulations Ministers must consult wisely. I am sure that they would be doing that already and the task force assumes wide consultation would have to happen. However, it was considering only the voluntary system and not the regulations proposed in the Bill. Amendment 110 says that,

“the Secretary of State must consult”,

and proposes a list of those who should be consulted.

The remaining two amendments in this group, Amendments 111 and 112, aim to clarify what seems to be obvious from Clause 28(5)—that there should be no retrospection. It should apply only to schemes where the definitive decision is taken after the regulations come into force. I am glad to see my noble friend nodding her assent to that.

As I understand it, we will not see the formal response to the task force’s report until after the Bill has left this House. The Government received it only on Monday and they must have time to deal with it. That is not very satisfactory, but I therefore do not expect that the Government will have any chance to legislate to implement the recommendations in these amendments while the Bill is in this House. My purpose in moving them is to set out clearly what is an essential process before any regulations can be laid under these two clauses and Schedule 5. I hope that that will be taken on board.

In the light of all the representations, one might wish that Part 4 was not in the Bill and that we could proceed with a voluntary scheme, but I accepted the point made firmly by my noble friend Lady Kramer that it would send the wrong message if it were to be withdrawn. I accept that, and we have to proceed. I hope that I have left my noble friends and colleagues on the Front Bench with a clear view that they are stepping on to extremely contentious and dangerous ground. They want to put what, at the moment, appears to be a satisfactory voluntary scheme—which is moving ahead in all sorts of different ways—into a statutory straitjacket. These four amendments are essential conditions if that is ever to become acceptable. I beg to move.

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My Lords, I rise belatedly on the Bill and in today’s debate as well, as I have not had much opportunity since Second Reading to participate in debates relating to these matters. In the context of the amendments that have just been moved and spoken to, I want to put on record the considerable interest in community electricity and voluntary schemes that exists in Wales. I am glad that in speaking to his first two amendments the noble Lord, Lord Jenkin, referred to the need for consultation with Ministers in Wales, particularly on Amendment 110. Indeed, so much interest is there that some have raised the possibility of a Community Energy Wales being created to be somewhat similar to Community Energy Scotland, which already exists.

I plead with the Government that in any development of these schemes, the way in which they are reviewed and the initiatives that are taken centrally, the maximum possible flexibility should be given for initiatives to be encouraged in Wales. We have had a wide range of community efforts in Wales. I see the noble Lord, Lord Bourne, is in his place; he will be very much aware of that from his home area in Ceredigion. Very often, the energy of the people who can be brought together to get such schemes to move forward should be harnessed. I therefore hope that the maximum freedom can be allowed for those in Wales involved in this—at National Assembly level and at community level—and that this will be taken on board in looking at the review procedures for these purposes.

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My Lords, it is very late and I do not wish to detain the House. However, I want to add my strong support for the amendments tabled by the noble Lord, Lord Jenkin of Roding. They seem very sensible. I am absolutely convinced that we need to ensure that there is a proper consultation process. It is absolutely right that we should be stipulating that this should not have a retrospective element. I hope that the Minister will be able to put our minds at ease by at least helping us to understand that this should not apply retrospectively. I have looked carefully at the schedule, but it does not seem to be explicit there and it needs to be clear. Should there be any doubt over that, it would set a difficult and unwelcome precedent so we are supportive and we look forward to the response.

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My Lords, I thank my noble friend for tabling these amendments. The first part of Amendment 109 seeks to include a requirement on government to conduct a progress review of the voluntary approach and report the findings to Parliament before regulations may be made in respect of onshore facilities. The second part seeks to require government to appoint a panel of experts to review, advise and report on community stakes in relation to offshore renewables before regulations may be made in respect of offshore facilities.

To start with the first element of the amendment, as I mentioned in an earlier discussion, the Shared Ownership Taskforce published its final framework on Monday. I appreciate that there has not been much time to consider it, so I will set out today the relevant commitments that the taskforce has made in relation to reviewing and reporting progress. In doing so, I hope to demonstrate that there is already a clear process in place for reviewing and reporting. As such, there is no need to include these additional requirements in the Bill, as my noble friend proposes.

The taskforce intends to set up a monitoring group to ensure that progress is evaluated and reported. It proposes six-month and 12-month reviews and will report its findings to my department. As set out in the Community Energy Strategy, the Government will conduct a review of progress next year. The findings from the taskforce’s progress reviews will be critical to this. The Government wholeheartedly support the work of the taskforce. We will be formally responding to its report early in the new year. In it, we intend to endorse its monitoring and reporting process and confirm that this process will feed into the Government’s review next year. Both the Shared Ownership Taskforce and the Government will be monitoring and evaluating the success of the voluntary approach prior to backstop powers coming into force in line with the Government’s Amendment 129, which we will debate a little later.

Turning to the second part of the amendment on offshore renewables, our focus now is on increasing community shared ownership for established onshore technologies such as onshore wind and solar. These are the technologies covered by the Shared Ownership Taskforce’s voluntary framework. Having said that, the community electricity right powers provide future flexibility to include offshore technologies, but we have been very clear from the start that this would be on a longer timescale. This is not to say that we would not encourage offshore developers to offer a stake to communities where they choose.

The suggestion that my noble friend Lord Jenkin makes in Amendment 109 is sensible. If the Government were ever to consider exercising these powers for offshore renewables, I agree it would make sense to set up a panel of independent experts to provide advice on offshore renewables in advance. This would be a similar approach to the one we have taken for onshore renewables with the Shared Ownership Taskforce, which is comprised of experts from the renewables industry and the community energy sector. However, at this stage our focus is firmly on onshore renewables. It is not our intention to establish a voluntary process for offshore renewables right now. As such it would be premature to commit to this and to restrict ourselves at this point to the wording that my noble friend has proposed. We should therefore wait and consider the option of a panel of offshore experts when we have a clearer position on whether this is needed, and if so, what any panel might look like and report on.

Amendment 110 seeks to introduce an obligation on the Government to consult a range of interested parties in advance of exercising the community electricity right provisions and developing any secondary legislation. I completely agree that consultation is essential to ensure that the Government hear the views of all relevant stakeholders and take them into account before deciding the best course of action. These views will also be critical to the formation of secondary legislation that is fit for purpose and can be implemented successfully. However, I do not believe the amendment is necessary. In Grand Committee I made it clear that the Government intend to conduct a formal consultation before exercising the powers. That position has not changed. The consultation would be open to everyone, including the parties listed by my noble friend in Amendment 110, such as community groups, developers, the Scottish and Welsh Governments and Ofgem. My noble friend’s amendment includes some of the very organisations and bodies that we would expect and encourage to contribute to a public consultation given their clear interest, knowledge and understanding of this area.

I will provide a single response to Amendments 111 and 112 as they are inextricably related. I recognise that this is an extremely important aspect of the provisions, particularly in terms of providing future certainty to the renewables industry. The community electricity right provisions would apply to new renewable electricity projects coming forward in the development process. I confirm that the provisions would therefore not apply retrospectively nor to projects that have already received planning consent. The Government have always been clear that this is our policy intent. For example, the Explanatory Notes to Clause 28(5) explain that this provision ensures that the regulations would not apply retroactively and would apply only to facilities that have not, at that date, reached a specified point of development.

While I am keen to provide these reassurances in the House, it would not be right for me to commit to include in primary legislation a qualification that the regulations may not apply to projects that have applied for, but not yet received, planning consent. That may be an appropriate approach to take, but as I am sure my noble friend will understand, the Government would wish to consult on this matter before making a final decision. In doing so we would look closely at the experiences of successful shared ownership schemes including lessons learnt from the voluntary approach. In conclusion, I hope that I have provided noble Lords with enough reassurance about the Government’s position on these matters and, on this basis, I hope my noble friend Lord Jenkin will withdraw his amendment.

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My Lords, I was grateful for the support of the noble Baroness, Lady Worthington; I hope that she will share my view that we have got almost all that we want. The amendment has not been agreed, but my noble friend on the Front Bench has gone as far as one could possibly expect to say, “Without actually accepting your amendments, we are going to do pretty well everything in them”. It will be for the other place to decide whether that is sufficient or whether it would like to see these included in the Bill. As I explained at the end of my speech, that was the purpose of moving the amendments on Report. Having said that, I thank the Minister for what she said and take much pleasure in begging leave to withdraw the amendment.

Amendment 109 withdrawn.

Amendments 110 to 112 not moved.

Amendment 113

Moved by

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113: Clause 27, page 29, line 40, at end insert—

“( ) Sections 27 and 28 and Schedule 5 come into force at the end of the period of two years beginning with the day on which this Act is passed.”

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My Lords, we can deal with this much more briefly. My amendments in this group address when regulations might be introduced. From Second Reading onwards, I was asking for two years. The government amendment has now suggested what is, in effect, 18 months. I have already given a message to the Minister through her department that I am extremely pleased with that. I feel that the argument has been worth while. We now have time to make sure that the reviews really can be reviews of the way in which the voluntary system is working, without the immediate threat of legislation.

The Government have made it clear that this is a backstop power. Sometimes I get the impression from the way in which Ministers speak that they regard the introduction of regulations as inevitable. I certainly do not. The industry certainly hopes not. It hopes that it can satisfy the Government that progress is being properly made, that it can be extended much more flexibly through the voluntary system and that regulations may in fact be unnecessary. Therefore, when Ministers refer to introducing regulations, they should always say “if necessary”, not “automatically”.

I thank my noble friend again, who has brought a substantial concession in answer to the question of when. I beg to move.

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My Lords, briefly, I again support the noble Lord’s amendment and welcome the government amendment which will indeed delay the “when” aspect of this question. There remain considerable questions about why these provisions have been brought forward, given that the voluntary approach is moving forward. I still think that we are unfairly singling out two technologies relative to other forms of electricity generation. However, I am happy that we now have more time to think. I absolutely echo the words of the noble Lord, Lord Jenkin, that this should be seen as a backstop power, which we hope should not need to be enforced.

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My Lords, I am grateful to my noble friend and the noble Baroness for their contributions. We listened carefully to my noble friend in Committee and I have very much taken on board all the views that were expressed on that matter, including those of my noble friend, industry stakeholders and the Shared Ownership Taskforce. I am pleased, in response, to bring forward government Amendment 129 which revises the date of commencement of these provisions to 1 June 2016. That ensures absolute clarity on the minimum amount of time the Government intend to allow for the voluntary approach to take effect. It means that the Government could not exercise these powers before 1 June 2016 at the very earliest. This date allows just over 18 months from the date on which the Shared Ownership Taskforce published its voluntary framework, earlier this week, to when the powers may be exercised. I hope that by bringing forward this amendment I shall allow my noble friend to go home feeling satisfied with his input, which—as much as is possible—is always my intention.

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I am grateful for my noble friend’s graciousness. She has gone a long way to meet us but, as has been indicated in the original amendment tabled by the noble Baroness, Lady Worthington, I think there is a lot more exploration that will need to be done in the other place. In the mean time, I beg leave to withdraw.

Amendment 113 withdrawn.

Further consideration on Report adjourned.

House adjourned at 10.20 pm.