Big news: some landlords of some properties might have to improve them by 2018

I’ve asked a couple of questions recently about when DECC intends to end the suspense over the commitment they made in the Energy Act before last (the Energy Act 2011). This commitment requires landlords of private rented properties to bring their houses up to scratch, as far as energy efficiency is concerned, or risk not being able to let them after 2018. Now I was on the 2011 Energy Bill Committee and naively, thought that this would be fairly simple to make happen. So simple, in fact, that, along with some other colleagues in the Bill Committee, I proposed an amendment pulling the date for compliance forward to 2016.

In the end, it was 2018 that made it into the legislation. And the Act states that, some time before 2018, ‘the Secretary of State must make regulations’ setting out how landlords of properties ‘in relation to which there is an energy performance certificate (EPC)’ must get their properties fit for letting by 2018. No level of efficiency is mentioned in the Act, but the talk at the time was that the expected EPC level to be attained would be the not exactly stunning level of ‘E’ or above. But nevertheless, capturing a swathe of properties which are notoriously poorly insulated and which are statistically disproportionately inhabited by people in fuel poverty would be a real step forward.

And then…silence.

At the last DECC questions before the recess, I was very pleased to hear my colleague, Jonathan Reynolds, receive a clear commitment from the Minister, Greg Barker, that DECC will definitely be consulting on the matter this summer. Just …er…two years and eight months after the Act became law.

So that’s all fine then (I’ve noticed that I keep using this phrase as an irritating stylistic device in a number of blog entries over event months…). Well not exactly (and I’ve noticed myself adding this even more irritating rejoinder on numerous occasions. In my defence, there is a clear ‘not exactly’ in this story, so it will have to do. I promise not to do it again though).

The ‘not exactly’ here is that, when the original clause went into the Bill, the Minister guiding it through (yes it’s our old friend Greg Barker again) seemed pretty certain that it applied to all rented property and all landlords. And I am afraid to say, the committee did not then examine the issue much further. But in fact, if you read the legislation fairly carefully, it doesn’t appear to apply to the whole sector.

Basically, the Act refers to ‘the property’ of the landlord throughout the clauses dealing with the 2018 requirement. What that means, it appears, is that a landlord who is renting out a ‘property’ will have to have to produce an EPC for that ‘property’ at an ‘E’ rating or above before he can let it out after 2018.

But, as may have been spotted by many people who rent such properties, landlords very often do not let out ‘a property’; they will let out rooms in a property, perhaps at different times. Something like 14,000 such properties – so-called houses in multiple occupation – in my city, Southampton, are let out in this way. On the face of it and as matters stand, it looks like a high proportion of ‘properties’ will simply be exempt from the requirement for this reason.

I did move a ‘ten minute rule‘ Bill a while ago to try to plug this gap with some simple wording to make the intention of the Act plain but unfortunately it went the way of all such Bills. So it’s now all down to the consultation, which is what the very same Minister told me in response to one of my questions (this is where we started at) which asked about whether the regulations would seek to include HMO landlords in the Act or not.

So I guess we will have to wait and see. I understand that nice Mr. Pickles over at DCLG is not keen at all on any regulations being laid, let alone any that include HMO landlords, so I’ m sure Greg will need all his legendary courage and fortitude to ensure this happens.

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On fat ladies and Kenneth Wolstenhome

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I don’t want to rain on anyone’s parade but I am less than impressed by the seemingly premature crowing about how the Energy Bill is ‘now in the statute books’, and that ‘the way is now open for new market arrangements.’ It’s true that the Bill now has royal assent but a quick look at what is in the statute books will underline just how far off we really are from the entrance of the eponymous singing fat lady.

A good way to describe what is now down on paper is to imagine the Bill (sorry, Act) as a wardrobe; it looks OK from the outside but if there are no coathangers on the rails once you open the door. And so you can hardly say that it performs the essential functions of a wardrobe. And as far as the Energy Act is concerned there are precious few hangers currently in evidence. This is because of the extraordinarily high count of consequent pieces of secondary legislation written into it – clauses that require the practicalities of what has been outlined (often in very rudimentary terms) to be set out in Orders. And these Orders will either have to be laid down on the Parliamentary order paper and (hopefully) not objected to, or, more seriously, will be subject to finding an afternoon in a committee room to debate and agree a raft of secondary measures.

The to do list now numbers no less than seventeen affirmative resolutions (the afternoon’s debate) and twenty-three negative resolutions, some of which may need to be fully debated depending on other parts of the Act. Subjects in the queue for debate include: how the Secretary of State is going to decide on a decarbonisation target; the carbon intensity of electricity generation; how to make electricity capacity regulations; the capacity agreements themselves; how auctions are carried out; the settlement body that will oversee them; a huge raft of regulations relating to CfD investment contracts and payments; how to make renewable obligation transitional arrangements; what emission performance standards will consist of; arrangements for altering licences… In short, most of the meaty content of the Act.

Some of this to do list is, of course, bound by time constraints, so one might imagine that some of the entries will need to be on the statute books by the end of the year at the latest. This means that there remain fewer full weeks in the Parliamentary calendar than resolutions that need to be laid down. And this is certainly true as far as affirmative resolutions are concerned; there is roughly one committee session for every eight sitting days up to the end of the year.

That is if they have been written, of course, and the first week back has gone by without anything appearing. So I wish the put-upon scribes and drafters below DECC bon voyage. The only saving thought is that there seems to be very little primary legislation now going through the House because members of the coalition are increasingly vetoing each other’s pieces of pet legislation. And because of this no secondary legislation will appear to compete with the needs of the Energy Act.

Demand side reduction: the story so far…

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Pressed to include measures to permanently reduce demand in the already sprawling Energy Bill, action-man Minister for Climate Change, Greg Barker, swings into gear. Pow! He promises agog MPs on the committee that there will be amendments to the Bill in the lords. Blam! New clauses are added that require the government to run a ‘demand side reduction’ pilot under the existing capacity payment arrangements. Zap! A £20 million pilot fund is set up with the aim of dispensing its largesse on schemes in 2014.

Just one hurdle remains: how do you actually decide on what schemes really are demand side reduction, will permanently save energy, and hence might be encouraged through the new fund? Action minister is not fazed. Turning to his civil servants he tells them: ‘make it so’.

 Now read on…

Various civil servants sit round the table, each willing the other to come up with the solution to the conundrum. What did the minister mean by ‘make it so?’ A senior member of the gathering breaks the silence. ‘Why don’t we ask the people who have been telling us that we need this stuff in the Bill what on earth they were on about? Then we can work out what to do’.

 

And so, in October a mighty conclave is convened. It has a working paper to go with it. People from the energy saving community are summoned to opine on the working paper, which helpfully has in it one or two starting principles such as ‘ savings to be relevant to peak periods e.g. winter weekday afternoons’.

The conclave is stunned. Who is able to think up a scheme that works and qualifies under this mystical injunction? It seems like no-one can.  Economy-7 type measures? No that’s at night. Dynamic demand measures? Well, not really just during winter afternoon peak hours. The meeting breaks up in confusion, but agrees to reconvene later, helpfully supplied with a note of what has gone on and a sample bulletin scribed by DECC officials.

 At last! A helpful example of a solution to the puzzle appears in the sample bulletin for the second meeting at the end of November. ‘People might think of schemes like replacing all the existing street lights with LED bulbs. That would be the sort of plan that would qualify’.

And with that the scheme is under way.  Except…

A small boy passing by observes, ‘but surely…er…street lights don’t generally come on during peak hours in the afternoon. So how will that help?’ But it is too late. He is just a small boy after all.

So the grand plan gets under way, with much nodding of heads; they have really ‘made it so’, just as the minister had ordered. And still no-one has any idea what kind of scheme would be judged to qualify.

The end