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Green Alliance Speech

Date of speech	17 May 2006

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Draft text of the speech - may differ from the delivered version.

1) Thank you Guy [for my introduction and inviting us to speak]

The Challenge

2) As David Miliband has made clear this evening we face a serious environmental challenge. Climate change is real, and unless we address it, it will have potentially far-reaching economic and social impacts.  David has set that out in stark terms. 

3) This issue can only become more serious over the next 20 years.  The consequences of climate change will undoubtedly be faced by our generation. 

4) Hotter summers, wetter winters and more extreme weather events will be difficult for many - particularly the poorest and most vulnerable in our society - to adapt to. 

5) And the report by Christian Aid this week was also a stark reminder of the international consequences of climate change. There will be profound impacts on the poorest people in Africa and Asia, least well-placed to respond.  According to Christian Aid, up to 182 million deaths in Africa this century from diseases directly caused by climate change. Addressing climate change is becoming an imperative for social justice too.

6) I welcome the chance to speak with David at today's event. In part because as many of you will be aware he led substantial progress in our department in his former job. But also because it is a demonstration of the strong cooperation across the government that the changes in one department can help deliver the aims of another.  Ruth Kelly is strongly committed to continuing the environmental programme of work across housing and local government that David and the Deputy Prime Minister began.

7) For homes are critical to the Government's climate change programme. Over a quarter of the UK's emissions come from the domestic sector. These emissions have been declining over recent years, mainly due to changes in the carbon content of electricity and to better insulation.  But there are also trends that work in the opposite direction, such as the increase in population in the UK, and changes in people's lifestyles that have meant increased travel and use of new appliances. 

The Challenge of Development

8) Faced with environmental challenges on this scale it would be easy to respond by opposing new development or cutting plans for new homes. And indeed that is exactly what some people are trying to do. It would be easy, but it would be utterly unsustainable.

9) For we should be clear too about the housing challenges we face. Over the last 30 years the number of households has gone up by 30%, but the level of new house building has dropped by 50%. 

10) Nationwide, we are seeing household growth of around 210,000 a year as a result of the ageing and growing population, and yet, even despite the recent increases in house building, we are still only building 160,000 new homes a year. 

11) It is because of that gap between household growth and the level of new house building that we see the pressure on house prices. Low mortgage rates since 1997 have helped many into home ownership but for the rising generation, rising house prices are now leaving many behind.

12) If we do not increase the level of housebuilding, then we will see over the next twenty years, the proportion of thirty year old couples able to afford their own homes fall from over 50% today to nearer 30%. That is unsustainable. And we are seeing consequences too in terms of social housing waiting lists, and for overcrowding and temporary accommodation too.

13) So we need more homes for the sake of social justice too. 

The opportunity of sustainable development

14) But the need for new homes should be seen as an opportunity not a threat.  We need to seize on the opportunity afforded by new development to change the way we do things to build communities that are truly sustainable in all senses of the word.

15) Can we use this as an opportunity to profoundly change the way in which we develop? Can we use the scale of new investment and new building to transform the market and deliver real environmental and social benefits for both new and existing homes?  Done badly, increased environmental requirements and standards can push up costs and constrain development for limited gain. But done well, we should be able to use economies of scale and new investment to change the way we do things and to bring down costs of emerging environmental technologies with benefits for all.  Changing the market through new development could help us develop cost effective ways of cutting emissions from existing homes as well.

16) After all, it has been done before.  The cost of manufacturing condensing boilers used to be more than double that of conventional boilers.  Now there is barely any difference in the manufactured cost and we have higher standards in place. Interestingly more than 80% of the boilers sold in the UK are also manufactured here too. 

17) The potential to bring down the cost of other environmental technologies is considerable too. Take solar panels. Still prohibitively expensive in the short term for many people, their costs are already falling as a result of demand in new developments. The Sharp factory in Wrexham has tripled its production of solar cells in less than two years because of increasing demand. And just consider the potential impact on the world wide market for photovoltaic cells, on innovation and on costs, if the Dongtan development leads to a significant Chinese manufacturing venture.
 
18) Given the scale of construction needed across the world, particularly in rapidly developing countries, the global benefits from more cost effective environmental technologies could be immense. We in Britain should be seeking to be part of developing those ideas and technologies and securing some of the jobs that new environmental technologies could bring.

Progress so far

19) Already considerable work is underway to drive up the environmental standards of the new homes we build. Stronger building regulations mean energy efficiency standards are 40% higher than in 2002. And we intend to consult on higher water efficiency standards this summer.

20) We have launched the Code for Sustainable Homes, and have said, in response to consultation, that we will strengthen the Code and use it to set new minimum standards for energy and water use, and drive the future direction of building regulations.

21) We have published planning guidance to encourage renewable energy. Planning policy already supports brownfield development and town centre regeneration over out of town shopping.   And we have increased standards in developments like the Millennium Villages in Greenwich and Allerton Bywater.

Next steps

22) But we need to go further and faster.  This is not about symbolic gestures. It isn't about cheap wins and quick fixes. This is about serious long-term engagement.   Only by setting an agenda for the longer term can we provide the certainty for business and individuals, bringing costs down through economies of scale and ensure the environmental agenda remains a positive one.

23) I think we can go further in several areas - in new development, through existing homes, and through local government. I want to concentrate primarily on the opportunities for new development today.

New Development

24) First, we need to set a long term vision for the way we build and develop, and we need to make sure our planning policies and standards support that vision.

25)  We should be setting a long term ambition to move towards carbon neutral development. That doesn't mean setting unrealistic standards in the short term, or setting impossible expectations for our existing homes, our jobs, our transport and our lifestyles. Nor does it necessarily mean carbon neutrality for every new home, or new workplace.  But it does mean raising our game across the whole of our new developments to see what gains we can make.

26) Already we have set out our intention to develop a new Planning Policy Statement on climate change. Alongside that we want to reform building regulations linked to the Code for Sustainable Homes.

27) We want a simpler set of building regulations, rather than the current alphabet soup, backed by a Code that signals their future direction - giving developers the transparency and predictability they have long asked for - but challenging them to find new ways to build sustainably.  We have asked the house building industry to work with us on how best to achieve these aims.

28) But it also means increasing the sustainability of the whole development. After all many of the greatest gains may be at the level of the estate or the neighbourhood, not the individual home.  That is why the new planning policy statement on climate change will focus on ensuring sustainable development, not less development.  But it needs to make clear that the location of new development should support the reduction of carbon emissions, through for example ensuring mixed development and reducing the need to travel.

29) The PPS also needs to show how the planning process can be used to deliver renewable, and more sustainable, forms of energy, encouraging more fuel-efficient technologies such as combined heat and power as well as microgeneration. 

30) Our challenge is to use the review of regulations, the Code for Sustainable Homes and the planning policy statement on climate change, to support a long term ambitious framework for moving first to low carbon and then towards carbon neutral development. 

Exemplar developments - the competition and the Thames Gateway

31) Secondly we also need to demonstrate what can be achieved and use exemplary developments to change the market.

32) We want to challenge industry to innovate and respond. Many of you will remember how John Prescott challenged the house building industry to innovate and build quality homes for less than £60,000. Initially everyone said it couldn't be done. But this week's exhibition has shown quite how well industry has responded to the challenge with some fantastic designs, and higher environmental standards, put into practice for lower costs too.  Those homes are now being built on sites across the country and we are rolling out the lessons from the competition.

33) But now we want to challenge industry again. This time we want innovation to deliver low carbon and carbon neutral homes and estates for affordable prices too.

34) As long as things like green roofs, water harvesting, wind turbines and micro-generation appear too costly to ordinary families it will be hard to promote take-up. Simply exhorting the wealthy to go green won't solve the problem.  The real prize is to bring the cost down for everyone else as well.

35) So English Partnerships will run a second phase of the Design to Manufacture competition, building on the lessons learnt from the £60k, but this time pushing the boundaries further. Using six sites across the country we want to challenge the industry to build low cost, low carbon and zero carbon homes, this time looking at the whole developments rather than individual homes.

36) We are promoting other exemplars too. At Northstowe in Cambridge around 10,000 new homes are to be built on former MoD land in a development managed by English Partnerships. Broadly we want to achieve up to 50% reductions on energy and mains water use compared with conventional housing, using technologies and design approaches such as microgeneration. 

37)  In the Thames Gateway the sheer scale of development is a huge opportunity too. To kick start innovation and knowledge transfer, we want to  explore the scope for the Thames Gateway to become a model site for developing emerging technologies with the opportunity to export knowledge to the rest of the country and the wider world.
 
38) We will therefore undertake a feasibility study immediately to explore the scope to make the Thames Gateway a low carbon development area and to move towards carbon neutrality. We want to assess how far and how fast we can move to ensure cost effective changes which support 120,000 new homes and 180,000 new jobs as well as supporting existing jobs and communities too.

Existing homes

39) Of course we know that new development remains a small proportion of our domestic carbon emissions. New development matters because it sets the standards and can help change the market in a way which could help existing homes as well. And by 2050 they will form a much higher proportion of the stock.  Nevertheless we also know that in order to meet our targets over the longer term, we need to reduce emissions from existing homes as well.

40) Already the Warm Front and Decent Homes programmes are improving insulation, cutting consumer bills and cutting emissions across the country with more than one and a half million homes reached since 2000.  The Energy Efficiency Commitment, delivered by the energy supply companies, has filled 800,000 cavity walls, and insulated the lofts in one million homes.  Now we are working with Defra, DTI, Cabinet Office and HMT to review whether there is more we can do in existing homes. And we will say more about this in due course.

41) And there are further opportunities too. We should not underestimate the potential of Home Information Packs. As part of our international commitments we will introduce energy performance certificates for every building that is bought, sold or rented. Home Information Packs allow us to do that in a cost effective way for house sales from June 2007. The energy performance certificate in the HIP will inform buyers how energy efficient their home is and what they can do to improve it.  Analysis has shown that more than 90% of some types of home improvements take place just after a home is sold. Without proper energy efficiency information it is much less likely that a new boiler or a bit more lagging will be part of that work.

42) As you will know there has been plenty of opposition to HIPs - often from vested interests who make money out of the current process. Yet HIPs are a great way to give people proper environmental information about the home they are about to sell or buy. Opponents of HIPs should consider the serious missed opportunity to improve environmental information without HIPs in place.

Role of Local Government

43) Finally, and crucially, local and regional government has a critical role to play. Speaking on behalf of Communities and Local Government, we have a clear responsibility in this area.
 
44) It is the local level of government that directly shapes the places we live in, and the lifestyles we lead through policies on planning, housing, and transport. Regional bodies too can have an important impact, particularly through the planning system.

45) A number of local authorities are already setting the pace on what can be achieved. It has been calculated that if all local authorities took the actions that the best have already taken the UK's emissions could drop by nearly one-fifth!

46) Cities can play a similarly strategic role. The 56 largest cities in England have nearly two-thirds of the jobs and population, but produce half the emissions. The cities need to be at the forefront of more resource-efficient and low-carbon forms of development.  Manchester and Birmingham have put climate change in their business cases for future development. We encourage all the Cities to do more and go further.

47) So we will be looking further at how we can engage with and support local authorities as part of the work Ruth Kelly and Phil Woolas are leading around Local Government reform.

Conclusion

48) Our opportunities are considerable. But our challenges are considerable too.

49) We know that we cannot change the way we live and the way we build overnight. Nor can we ignore the pressing need for development and for new homes while we do more research and get our standards right. But we can raise our game. We can raise our ambitions.

50) No one developer can do this alone. No one local authority can do this alone. No one government department can do this alone. But we can make a commitment to work with you and to work with each other to develop communities for the future that truly are sustainable in every sense of the word.

51) Social justice demands that we build new homes for the next generation. Social justice also demands that we ensure that their homes and their communities are sustainable too.