Thank you for giving me the opportunity to speak today.
It’s a privilege to be here amongst such a distinguished group of people.
Let me state from the outset how much I welcome the establishment of the National Centre for Excellence in Housing.
I am delighted that the Centre will build on the successful partnership between NHBC and BRE that has already developed the NHBC Foundation.
The Centre will take this important work a decisive step further and I know that – speaking on behalf of the industry – this is a very welcome development.
I think it is particularly important to understand that the Centre aims to build a truly collaborative approach to finding solutions. And frankly, this could not be more important or come at a better time.
We have also just been reminded why Nick is such an excellent choice as Chairman. His knowledge and expertise is widely known, and I know that the Centre will begin its work under the best possible stewardship.
This launch could not come at a more fortuitous time, sandwiched as it is between two major policy announcements.
Last Wednesday, the Chancellor used his pre-Budget Report to announce that all new homes in the UK must be zero carbon rated within ten years. And tomorrow, Ruth Kelly will be publishing a consultation on a new Planning Policy Statement on Climate Change.
The theme is a clear one.
To tinker with President Clinton’s winning 1992 campaign phrase: “it’s the environment, stupid”
The writing has been on the wall for some time.
We all know that the energy consumed constructing and using buildings accounts for roughly half of all greenhouse gas emissions in the UK.
And not a day goes by without a new and salutary reminder of the impact of climate change.
Just a few weeks ago, Sir Nicholas Stern published his 700-page report into the economics on climate change.
I am not qualified to comment on the accuracy of his projections, but its impact says a lot about the political appetite for change.
1) The Government welcomed it as a vindication of its tough stance on climate change
2) The Conservatives condemned the Government for doing nothing like enough
3) The Liberal Democrats claimed that both parties had failed to understand the enormity of the issue
A new environmental consciousness is shaping politics in this country in a way that we have not seen before.
It is this consciousness that will set the boundaries and define the realities of doing business in Britain for years and decades to come
These changes – across the whole of society - will be regarded by future generations, I think, as nothing short a revolution
It means that our industry – the home building industry – finds itself alongside many others in arriving at a crossroads.
In my view, we have a clear choice:
1) We can cover our heads with our hands, ignore the signs, and simply wait for the crude, blunt strikes of Government regulation to determine what sort of environment we work in.
2) Or we can engage the Government and the policy community, utilise the full power of innovation, help craft ideas and deliver solutions
I know which route I prefer, and which one I believe will deliver greater shareholder value.
While no-one should underestimate the scale of this challenge, by acting now in the right way, we can deliver more new homes and do so in a way that makes a real contribution to tackling climate change
Therefore instead of being part of the problem, home building can actually be part of the solution.
So what’s the best way forward? Where now?
In October, at HBF’s Housing Market Intelligence Conference, I put forward a vision of how we can most quickly and most effectively reach the target of delivering zero-carbon homes, while at the same time delivering the target of 200,000 homes a year.
In my view, to achieve this dual target, we need a policy framework, set out by the Government in consultation with the house building industry, that meets the following criteria:
i) Firstly, we need an approach that encompasses all stakeholders - from regulators to suppliers, from NGOs to utility companies.
The point is this: home builders alone cannot deliver carbon-zero homes in sufficient quantity
So to succeed, we need exactly that spirit of collaboration that the Centre will be developing across this and its many other issues.
ii) Secondly, targets need to be expressed as clearly and simply as possible - we all need to agree what we are measuring so that we can understand what success is.
On this subject, we need to help manage the friction between Government and local authorities on target-setting. I appreciate the drive towards localism in many areas of Government, but this target is tough enough as it is, and we will be far less effective in delivering progress if we are attempting to conform to a multitude of different targets.
iii) The next important point will involve the Government doing something that Governments of all political colours have traditionally found hard to do: standing back
The industry needs the space to do what it does best – change, adapt and innovate.
The Government can monitor progress, and call us to regular account, but it has to agree not to tinker, not to interfere, not to intervene, and not to shift the goal posts.
In saying this, I make a plea: too many interim targets risk giving shorter-term solutions a primacy over longer-term goals. We need to focus our energies on the overall destination, not the stops on the way.
And above all, we need certainty and predictability to guide the decisions made in the board rooms of home building companies and their suppliers throughout the country.
iv) Finally, of course, and most importantly, our customers need to be with us.
Changes and innovations need to be practical and desirable. While we know that consumer opinions are steadily shifting, we must retain the same customer focus that has been delivering high customer satisfaction levels in our recent HBF / NHBC survey.
I am delighted to have had – in the last few weeks – a very warm reaction from Government Ministers and DCLG officials, Opposition parties, the wider policy community and industry stakeholders.
I am also extremely pleased that the Chancellor has proposed a ten-year timetable to achieve carbon-zero homes, rather than the shorter timescale which many groups had been lobbying hard for him to implement.
It demonstrates the value of industry-Government dialogue and engagement; the importance of being at the table; the imperatives of not just being heard, but also being listened to.
On the 9th January, the HBF will be convening a stakeholder roundtable which Yvette Cooper has kindly agreed to co-Chair with me.
We know the destination. We know who the players are. We know that there is the will to get there.
This roundtable event will be the first tangible step in working out exactly where we need to be and, just as importantly, how to do it.
I am delighted that, just today, the Centre has announced a £200,000 injection to fund further work into carbon neutrality.
I know that Anna will tell us more, but it strikes me that this could not be a better focus for the Centre’s energy and talents. As we map out our environmental ambitions, the Centre can and will play an invaluable role in helping the industry achieve them.
I know, as well, that the HBF will be working in close association with the Centre on what takes the highly technical term our Barker 33 Legacy Body. Together we will be working to find solutions to barriers to production on Modern Methods of Construction, or as I prefer to call it: Efficient Methods of Construction
I am much looking forward to working with the Centre on this early next year.
The Centre will, I believe, fast become a unique repository of information and research, a knowledge exchange that brings stakeholders together and shares best practice. It will help shape that policy process.
I look forward with great interest to what you have to say, Anna, about how the Centre will go about implementing its remit. It is a task that certainly has the industry’s full support.
My thanks for your time – not least before lunch – and I do hope you enjoy the rest of the launch.