Labour on course to win sweeping majority – what it means for UK environmental policy

Patrick Rogers, Policy Consultant

Following yesterday’s election, exit polls have indicated a sweeping victory for the Labour Party, a result poised to usher in substantial changes to the UK’s energy and housing sectors. Starmer’s majority in parliament will grant him significant powers to enact key policies to promote decarbonisation. Environmental issues were clearly present in voters’ minds, as the Green Party also had its strongest ever performance, gaining three new seats.

Labour’s platform includes the ambitious goal of making Britain a Clean Energy Superpower by establishing ‘Great British Energy’, and launching the ‘Warm Homes Plan’, while their commitment to planning reform promises to address key housing issues and promote sustainable development across the UK.

In this article we examine the potential impacts of these key policies on the UK’s environmental landscape and what real estate investors should look out for.

Clean Energy

A key building block in Labour’s platform is the pledge to ‘Make Britain a Clean Energy Superpower’ through the establishment of Great British Energy. This new public investment vehicle is intended to crowd in private investment and accelerate the growth of renewables such as onshore and offshore wind. Such measures are aimed at giving a much needed boost to energy security and bringing down bills for consumers in the long term.

Its manifesto addresses the urgent need to enhance energy efficiency in British homes, spotlighted by recent energy crises. Labour proposes a substantial investment increase, pledging an additional £6.6 billion over the next parliamentary term. This investment will double the current planned government spending and aims to upgrade five million homes.

Warm Homes

Central to Labour’s strategy is the Warm Homes Plan, which will provide grants and low-interest loans for insulation, solar panels, batteries, and low carbon heating improvements. This initiative will be implemented in partnership with combined authorities, local and devolved governments.

A significant component of the Warm Homes Plan is reintroducing the minimum energy efficiency standards for private rented sector homes by setting a target for 2030. In September 2023, PM Rishi Sunak removed the MEES requirement for all private rented homes (domestic properties) to reach EPC C by 2028. It is unclear what the new minimum EPC rate will be, but it is anticipated to be EPC B by 2030 for domestic properties. Such a standard is expected to save renters hundreds of pounds annually. Labour is keen to stress in its manifesto that no household will be forced to rip out their existing boiler under these new measures.

An unfortunate legacy of the Conservative government was the short lifespan of any grant program intended to accelerate domestic and commercial retrofit. This has had the effect of creating lasting uncertainty on the supply-side, and caused heat pump installers to leave the market to protect themselves against sudden cuts to support schemes. Labour will look to create a stable policy environment which could accelerate activity in the retrofit space and bring costs down for commercial retrofit.

Planning Reform

Throughout this election campaign, planning reform has been repeatedly promised as a key strategy to address the affordable housing crisis and stimulate economic growth. It is crucial that new developments are well-connected, adhere to higher standards than those in the current draft of the Future Homes and Buildings Standard, and tackle embodied carbon emissions.

Labour has pledged to update the National Policy Planning Framework, including restoring mandatory housing targets. The party has also promised to prioritise development on previously used land (brownfield sites) and to fast-track approval for urban brownfield sites.

What to Keep an Eye On

Real estate industry actors are advised to pay close attention to any reform to the National Planning Framework, and to the forthcoming Future Buildings Standards which will contain a new definition of a net zero building, due for introduction in 2025. We could also see a revival of 2030 MEES targets for commercial buildings, which had been shelved since first mentioned in the Energy White Paper 2020.

Contact the Policy and Regulation team at Longevity Partners for more information on how we can support your firm in navigating the evolving UK regulatory environment.

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