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I have just two questions on these proposals for my hon. Friend the Financial Secretary. What are we waiting for? How can we move more quickly? I was encouraged by the comments made about these proposals by my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs to the all-party group on the environment earlier this evening. He said that he intended to put environmental issues centre stage, and that he was taking the lead at DEFRA to enable all Government Departments to play their part in tackling global warming. I desperately want the Treasury to do even more than has already been done to make progress.
We have to ensure that we meet our targets, and to do that we must drive forward this agenda at national and local level. The Government have done a certain amount of reporting so far, but they could do more. New clause 9 will not cost the earth. It simply asks for an annual report from the Treasury so that we can have an informed national and local debate on the fiscal measures needed to speed up energy efficiency and introduce systems for microgeneration, small-scale energy generation and the conservation of water. That would signal to local authorities that they, too, were part of the team, and that their work in the local strategic partnerships was important in this regard. When the Environmental Audit Committee visited Woking, we saw the work that had been done there. Admittedly, it had perhaps been done on the basis of market initiatives rather than of environmental concerns, but it had nevertheless been done. We have also seen the work that has been done in Nottinghamshire. It is important that local authorities should be part of the UKs collective effort to address climate change. I do not see why we should not all sign up to that as quickly as possiblehence the important debate that we are having now.
Let me say
something about energy efficiency. My constituency has very low
standards of heating and insulation, and a very high incidence of fuel
poverty. The Government are spending a massive amount on initiatives to
improve health through warmth. They
should take great credit for improving building regulations, and for
seeking to make improvements through the code for sustainable homes.
However, as our Environmental Audit Committees report on
sustainable housing points out, even more could be done. The steps that
the Government have taken could be greatly reinforced by a review of
fiscal measures, as paragraph 50 of our report
explains.
We should take each and every opportunity to promote microgeneration, but we will need capital grant assistance to promote such technologies andhelp low-income households to benefit. The new Department for Communities and Local Government has already announced its intention to end planning restrictions on the domestic installation of wind turbines and solar panels. The Government are starting to make a great deal of progress. What is needed now is a way of overcoming the barriers to microgeneration, and securing the incentives that supply companies can provide for innovative action. It is vital for the Treasury to be part of all that.
I welcome the opportunity to debate stamp duty. Our report said that the next steps should involve more support for the 70 per cent. of households that are owner-occupiers and mostly not in fuel poverty. We recommended that the Treasury should consider reducing both stamp duty and council tax in the case of houses built to higher environmental standards, and asked for consultation on the issue, to be completed by September 2007 as part of the spending review.
I acknowledge that the Government have made a huge amount of progress, but we must accelerate it. It is vital to have a time frame consistent with consultation, but we also want to see real progress on the Select Committees recommendations.
Mr. Elliot Morley (Scunthorpe) (Lab): It is a pleasure to follow my hon. Friend the Member for Stoke-on-Trent, North (Joan Walley). I agree with much of what she said. I also welcome the new clause tabled by my hon. Friend the Member for Nottingham, South (Alan Simpson). The issues are importantthere is a real debate to be had about how fiscal measures can encourage the developments that society needs, such as increased energy efficiency and the combating of climate change.
The Treasury and, indeed, the Chancellor have an excellent record. The Chancellor has not been afraid of innovation through fiscal measures. The climate change levy, for instance, has been extremely successful. Climate change agreements have reduced emissions from major users. The pioneering of carbon trading in the United Kingdom has greatly influenced the European Unions scheme, and is a great success. Even measures that do not receive the attention that I think they deserve, such as the reforms of company car taxation, are having a huge impact on emissions and the buying habits of the companies that are major purchasers of cars in our country. That decision alone was a bold one. The fact that the Treasury took that decision demonstrates that it has not shied awayfrom the bold and radical use of fiscal measures to encourage environmental improvements. I greatly welcome that and the thrust behind the new clauses will continue it.
Of course there is a role for reporting and some very good points have been raised. DEFRA has already made a commitment to providing an annual report on measures to reduce emissions and on the sort of steps that need to be taken. My hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz) brought forward measures in his successful Bill, which he introduced with great skill. I am pleased that the Government supported and endorsed his Bill, which included reporting measures both to the DTI and to DEFRA.
There has always been a great deal of argument about the Government having a co-ordinated approach to sustainable and environmental measures. It is absolutely right that the Government adopt such an approach, so we need to think carefully about how best to carry out the reporting. We do not want individual reports from individual Departmentswe need some co-ordination in a cross-government approach. Those issues can be discussed in respect of the shape of the reports and the commitments that have been given. That perhaps still requires some extra thought.
There is no doubt about the great role for microgeneration or the great role of small-scale decentralised power. As my hon. Friend the Member for Stoke-on-Trent, North mentioned, there are also barriers. The buying price of electricity needs to be resolved, as it is unsatisfactory at present. I welcome the steps taken to remove some of the planning barriers to microgeneration. Other important issues are the cost of new technology and the Governments role in moving new technology from the development stage into the marketing stage. The inertia that acts as a barrier to new approaches, new ideas and innovation is another problem.
Fiscal measures are crucial and I greatly welcome measures announced in the Budget, such as the additional £50 million to help promote microgeneration. Together with the existing budget, it amounts to about £70 million. Energy efficiency commitments are also important and the Government have been successful in developing them.
I saw for myself how British Gas, as part of its contribution to its energy commitments, gave discounts on council tax for people who took up the option of having cavity wall insulation. It was hugely successful. The discounts were quite modest, but it proved attractive to consumers to secure the discount by taking up the subsidised cavity wall insulation that was part of the energy efficiency commitment. I very much hope that the EEC3 format provides an opportunity to develop some radical innovative ideas about using microgeneration and encouraging new measures for energy efficiency.
Similar
measures can be applied to stamp duty. Personally, I think that some
form of discount on stamp duty is a good idea. I accept that it is a
complicated argument: does it apply to new homes; can it be applied to
retro-fit those who modernise their homes through energy efficiency
measures; can it be linked to a new code of sustainable building; can
it be applied to zero emission homes? There is a lot of debate on those
matters and a great deal of working out still to be done about the
shape that will emerge.
For those reasons, I hope that my hon. Friend the Member for Nottingham,
South will not press the new clause to the vote.
There remains a lot of work to be done on the final shape, although I support the principle of the new clause. I know very well that within the Government there has to be discussion and issues of timing and costs have to be dealt with and resolved. I would not expect Treasury Ministers to accept the new clauses tonight, but we have seen what the Chancellor and the Treasury team can do in using fiscal measures to reach outcomes on climate change and sustainability. They have demonstrated that they are prepared to use such measures and apply themand we know that they work and that they are successful. I recognise that the Government cannot accept these amendments as they stand, but I urge my hon. Friends on the Front Bench to give serious consideration to the very sound principles that they advocate. They make economic and financial sense, and they certainly make environmental sense in the light of the Governments ambitious objectives, targets and commitments. Every section of government has to make a contribution if we are to be successful.
There is no doubt that fiscal measures and economic drivers are key to an overall integrated strategy. I hope that Ministers will give them serious consideration.
John Healey: This has been an interesting debate. It seems that the on-off relationship between the Tories and the Liberals in respect of environmental policiesthat elusive cross-party consensusmay be on again.
I think that the areas of agreement between the Government and my hon. Friend the Member for Nottingham, South (Alan Simpson) are muchgreater than the areas of disagreement. We agreeabout the importance of energy efficiency andwater conservation, and about the potential of microgeneration. We agree too with the assessment that the UK market for the available technologies is in its infancy, and that fiscal and other economic measures may have a role to play, along with regulation, public spending and, in some cases, information campaigns.
The differences between the Government and my hon. Friend the Member for Nottingham, South result from the specific details of new clause 9. I hope that my hon. Friend will take account of what my hon. Friend the Member for Scunthorpe (Mr. Morley) said in that regard. Much of this ground was covered in the debates on the private Members Bill successfully introduced by my hon. Friend the Member for Edinburgh, North and Leith (Mark Lazarowicz). My hon. Friend the Member for Stoke-on-Trent, North (Joan Walley) made a number of telling points, and she is one of the most assiduous and consistent campaigners on the environment in the House.
My hon. Friend
the Member for Scunthorpe also made some telling points when he talked
about the progress that has been made on the environment since 1999,
and the important measures that the Government have introduced in that
time. He played a pivotal part in that process, during his time as a
Minister with responsibility for the environment. He rightly said that
my right hon. Friend the Chancellor
has an excellent record on the environment, and that he has used fiscal
and other economic instruments to good
effect.
My hon. Friend the Member for Scunthorpe was also right in what he said about the climate change levy. The Opposition opposed it when it was introduced, and still do so now. The measure contributes almost one fifth of our emissions savings, as we pursue our climate change objectives. I must advise the Opposition that it is fine to will the ends but, in the end, they must back the means and the measures that will deliver those ends.
We also recognise the importance of household energy efficiency, as my hon. Friend the Member for Nottingham, South and other hon. Friends urged. It is central to reducing further
Mr. Peter Ainsworth (East Surrey) (Con): Will the Minister give way?
John Healey: No, I will not. The hon. Gentleman came into the Chamber only two minutes ago. He was not here for the debate[ Interruption.]
Madam Deputy Speaker (Sylvia Heal): Order. Whether someone decides to give way or not is entirely up to the hon. Member on his feet.
John Healey: Thank you, Madam Deputy Speaker.
Household efficiency measures are of central importance if we want to reduce greenhouse gas emissions and if we want to provide greater security for the future. Improvements in energy efficiency are also essential if we are to reduce some of the unacceptable levels of fuel poverty in this country. That is why we have introduced all the measures to that end since 1997, many of which the hon. Member for Falmouth and Camborne (Julia Goldsworthy) outlined. She saved me a job by doing that, but she missed the support that the Government have given to the Energy Saving Trust, and the reduced rate of VAT on all the significant microgeneration technologies.
I come now specifically to new clause 9. I remind my hon. Friend the Member for Nottingham, South, and all those who signed the new clause, that my right hon. Friend the Chancellor publishes two documents, the pre-Budget report and the Budget, that set out our analysis of the situation and our plans for appropriate fiscal measures in this area. If my hon. Friend looks at the Budget, he will see that chapter 7, which runs to24 pages, covers issues relating to water conservation, measures to protect natural resources and, in a substantial section, climate change and energy efficiency.
Chapter 7 also sets out a range of new measures introduced at the Budget. It outlines the extra£20 million that we promised to help local authorities to promote energy efficiency, £50 million to try to give a boost to microgeneration markets and the installation of up to 25,000 microgeneration units in schools, community buildings and homes. It sets out a new agreement we have reached with energy suppliers to provide an extra 250,000 subsidised insulation installations by 2008. Those measures will help with our carbon savings and will help to reduce annual fuel bills for those in most poverty.
New clause 10 and new schedule 2 set out proposals on stamp duty. We have been pressed for some time on the matter, but are still not convinced by the case for the proposalsand my hon. Friend the Member for Nottingham, South has not convinced us in his arguments tonight. The new clause and the new schedule duck some of the core questions, such as the level of relief, the qualifying threshold and the nature and scale of the rebates. It is hard to cost the impact of the proposals on the public purse and the contribution they might make to our climate change objectives.
There is a series of principled problems with the proposed policy measure. First, it would make the design and collection of stamp duty much more complex and costly. Secondly, it would require someoneperhaps the conveyancerto withhold money for a period. I am not sure whether my hon. Friend has discussed the proposal fully with conveyancers, because it will impose significant new burdens on small businesses at a time when we want to reduce them.
John Bercow: Will the hon. Gentleman give way?
John Healey: No, I will not; the hon. Gentleman has only just come into the debate.
Thirdly, I point out to my hon. Friends who may be tempted to consider the proposals that a large number of buyers are exempt from stamp duty. Last year, at the Budget, we doubled the starting threshold for stamp duty to £120,000. This year, we increased it to £125,000 and have thus taken 400,000 homes a year out of the stamp duty system. About 50 per cent. of homebuyers are exempt from stamp duty, either through the new threshold or due to the fact that they are buying homes in disadvantaged areas. I ask my hon. Friends how we could refund the tax to people who had not paid it in the first place?
Does not it strike my hon. Friends as unfair that the proposed support would not be available to most people in the country? Fifty per cent. is the nationwide figure for exemptions. In the constituency of my hon. Friend the Member for Nottingham, South the figure is 58 per cent. In the constituency of my hon. Friend the Member for Scunthorpe, the residential sales transactions of 79 per cent. of households are exempt from stamp duty each year; in the constituency of my hon. Friend the Member for Stoke-on-Trent, North the figure is 85 per cent.
The proposed scheme would subsidise certain areas of the country much more than others. It would also subsidise people who are able to pay while doing nothing to help those in fuel poverty or on low incomes.
John Bercow: Will the hon. Gentleman give way?
John Healey: I will not give way at this stage.
Members have urged us to do even more on the environment, and both in the Treasury and as a Government we shall do so, but the measures proposed in the new clause are not the steps we should take. If the new clause is pressed to a vote, I ask my hon. Friends to resist.
Alan Simpson: The Financial Secretary has made an excellent speech, but one in support of new clauses 9 and 10 and new schedule 1. He is absolutely right to tell hon. Members on both sides of the House that there is no point in willing the ends if we do not will the means, and the means that we invite the House to sign up to tonight is to begin with the reporting process. I have yet to be convinced of the arguments against reporting that have been used either in the Chamber tonight or elsewhere, so I wish to press the new clause to a vote.
Question put, That the clause be read a Second time:
Further consideration adjourned.[Mr. Heppell.]
To be further considered tomorrow.
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