Net Zero Minister Defends U-turn on Heat Pump Deadline for Landlords

Secretary of State for Energy Security and Net Zero Claire Coutinho during the Conservative Party annual conference at the Manchester Central convention complex in Manchester, England, on Oct. 2, 2023. Danny Lawson/PA

The net zero secretary has defended the government’s binning of deadlines for landlords to improve energy efficiency including by installing heat pumps.

Claire Coutinho, the secretary of state for energy security and net zero, said ministers didn’t want to put more pressure on rents after opposition MPs criticised the government for the U-turn, saying it will raise household bills for renters.

It came as rents across the UK reached new records amid an ongoing mismatch of supply and demand.

David Fell, senior analyst at property broker Hamptons, told The Epoch Times the policy to impose a deadline came at a particularly “unfortunate” time for many landlords.

But he also said landlords had been improving the energy efficiency of rented properties faster than homeowners even before the government proposed the deadlines.

The Conservative government began back-pedalling on a range of net-zero policies after it avoided a by-election wipeout in July, with the Labour loss attributed to London’s expansion of the Ultra Low Emission Zone.

Last month, Prime Minister Rishi Sunak vowed to “adopt a more pragmatic, proportionate, and realistic approach to meeting net zero,” delaying the ban on new petrol and diesel cars and promising to “never force anyone to rip out their existing boiler and replace it with a heat pump.”

The government previously planned to raised the minimum Energy Performance Certificate (EPC) rating from E to C from April 2025, with existing landlords given an extra three years to comply.

Labour Party leader Sir Keir Starmer inspects a heat pump demonstrator during a visit to renewable energy company, Octopus Energy, in Slough, England, on Jan. 23, 2023. Jonathan Brady/PA Media

It means some landlords will have to insulate their properties, replace gas boilers with heat pumps, or leave the rental market.

The statutory Climate Change Committee (CCC) said the requirement for landlords to improve energy efficiency would have reduced tenants’ bills “significantly” with the savings partially offset by rent increases. The estimate is based on the assumption that energy prices will remain elevated over the next few years.

After Mr. Sunak announced he won’t force anyone to install heat pumps, the CCC said the U-turn will lead to higher household energy bills.

Opposition Parties: Dropping Deadlines Will Lead to Bigger Bills

Opposition parties criticised the U-turn in a debate on Monday, citing the CCC’s forecast.

“The cancellation of some net-zero measures is likely to increase both energy bills and motoring costs for households,” Ed Miliband, shadow secretary for energy security and net zero, said after Ms. Coutinho’s statement on Mr. Sunak’s new net-zero policy.

“Why did it say that? Let me explain. The government now say that landlords will not have to insulate homes, but as the CCC points out, these regulations ‘would have reduced renters’ energy bills significantly,’” he said.

“Moreover, the cost savings would have outweighed any changes in rent. Therefore, they are not lowering costs; they are raising them.”

Caroline Lucas MP speaks to a TV crew on day 13 of COP26 at SECC in Glasgow, Scotland, on Nov. 12, 2021. Ian Forsyth/Getty Images

Caroline Lucas, the sole Green Party MP who’s standing down in the next election to dedicate herself “fully to climate and nature,” also cited the CCC, saying the policy reversal will “cost renters an extra £300 a year.”

She also slammed the minister’s speech, claiming it “takes Orwellian doublespeak to new levels.”

“I do not know how the secretary of state has the gall to stand at the dispatch box and say that this is about easing the burden on hard-working people, when she knows that all the evidence shows that what has been announced will increase costs for ordinary people,” she stated.

Wera Hobhouse, Liberal Democrat spokeswoman for energy and climate change and transport, also said it’s “unforgivable that the government have cancelled the obligation for landlords to upgrade homes to an EPC grade C rating by 2028 at the latest.”

She called on the government to allow landlords to offset spending on insulation against their income tax bills.

Minister: Deadline Will Drive Up Rents

Responding to the criticisms, Ms. Coutinho said the reason the government didn’t pursue the policy is that “it could have cost property owners up to £15,000, and we did not want to put further pressure on rents at a time when families are really struggling.”

The minister said £6 billion of taxpayers’ money has been earmarked for insulation during this Parliament “with a further £6 billion to 2028 and an additional £5 billion through the energy company obligation and the great British insulation scheme.”

Commenting on Ms. Hobhouse’s proposal, the minister said many landlords are pensioners and will not necessarily pay income tax.

“However, we will continue to look at everything we can do to ensure that insulation is properly delivered,” she said.

Speaking after Labour MP Cat Smith, who made the same criticism, Ms. Coutinho said the deadlines would have led to higher rents and may have led to “more shortages in the private rented sector.”

“That is something we absolutely must not see at a time when families are struggling,” she said.

Expert: Landlords Were Upgrading Homes Anyway

The supply of private rental homes are still well below the 2019 level while demand remains high above the pre-pandemic level, with rents at historic highs.

In an email to The Epoch Times, Mr. Fell said the timing of the previously proposed deadlines “was particularly unfortunate for many landlords, given large numbers of them are currently grappling with large increases in mortgage costs.”

“This is likely to continue to for at least the next 12 months as investors roll off cheap fixed rate mortgages. Additionally the proposed cap on upgrade costs was much higher than when the requirement to achieve an EPC rating of E was first introduced in 2018,” he said.

Mr. Fell also said that landlords have been improve the EPC rates of homes even before the deadlines were proposed.

“The share of rented homes with an EPC rating of D or below has been steadily shrinking for the last decade, with the rate of improvement outpacing owner occupiers.”

He added that it’s “not inconceivable” that Labour may enter government and reintroduce the requirement next year, but he’s optimistic that any new legislation may offer “more ‘carrots’ and fewer ‘sticks’” as parties increasingly recognise the current pressures being faced by landlords.