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The Government say that the aim of stamp duty relief on zero-carbon homes is to stimulate demand for such homes, but it is almost inevitable that the present uncertainty, as long as it exists, will hold back both demand and supply. How can industry and buyers aim
for a target when that targets definition is not established or keeps changing? No wonder there is so much uncertainty in the building profession. The Government have told builders and developers that they want all new homes to be zero carbon by 2016, even though theythe Governmentdo not know what that means. That is why they are having to launch a fresh consultation.
A recent survey by the National House-Building Council found that most of those surveyed did not know what a zero-carbon home was. The lack of explanation and education about zero-carbon homes means that, according to the council, there is a
distinct possibility that purchasers will decide against buying newly-built, low carbon properties.
Another cause of uncertainty in the existing Treasury statutory instrument needs to be resolved. It is not clear whether the energy required to power day-to-day appliances used when a zero-carbon house is finally occupied can come from renewable sources via the national grid, or must come from a renewable source connected to the property directly and exclusively by private wire. I think that that is what the statutory instrument suggests, and it would be helpfulcertainly for the building industryif the Minister cleared up that confusion.
Even if we succeed in tying down the Treasury definition of a zero-carbon home, there are other dangers with the approach announced in the Budget. By the end of the year, after the consultation process, we will have a new definition of what constitutes a zero-carbon home, but that definition may well be different from the one contained in the statutory instrument. Any such difference would be even more confusing and damaging: for instance, developers might develop, build and market new houses in the quite proper belief that they were meeting the definition of zero-carbon homes agreed after the consultation, whereas buyers might not be aware that those homes did not fulfil the Treasury definition of zero carbon for stamp duty relief purposes. That is a recipe for unhelpful uncertainty, and it is certainly no way to kick-start the market.
Under amendment No. 20, the Treasury definition contained in the statutory instrument would be amended to ensure consistency with the final definition agreed following the summer consultation proposed on page 105 of the Red Book. Getting rid of the uncertainty matters, but the signs are that designing and developing zero-carbon homes will be a challenge.
So far, the Governments stamp duty relief policy has been less than impressive when it comes to kick-starting the market. In the eight months between the start of October 2007when the statutory instrument giving stamp duty relief on zero-carbon homes came into forceand the end of March this year, a grand total of just 10 homes qualified for zero-carbon stamp duty relief. In fact, there were six homes last year and four this year, with just one in March, so the run rate of zero-carbon homes qualifying for stamp duty relief seems to be tailing off, if that would have been thought possible at the end of 2007. Given the lack of homes that are qualifying for the relief, will the Minister enlighten us as to the carbon savings that have resulted from the zero-carbon homes that have qualified so far? What research is the Treasury doing to find out whether the stamp duty relief for zero-carbon homes, as it currently operates, is really making a difference to buyers behaviour?
I have a suggestion for the Minister. Given that so few people have qualified for zero-carbon home stamp duty relief so farjust 10what about getting them all down to Westminster to have a round table discussion about these issues? There are so few of them that it would be perfectly feasible. If she would give me their contact details, I would be happy to organise that meeting so that we could all learn from the minimal transactions thus faror perhaps we could do a conference call, which might be more environmentally friendly. I would be happy for the Minister to sit in on that.
There is a serious point here. We need to understand which people and which homes have already qualified for the relief. Are the people claiming the relief major developers who have just sold their first prototype building to someone and are perhaps therefore in a position to start being able to mass-produce, which would clearly be very good in terms of reaching the 2016 ambition; or are they, as I suspect, individuals who are keen to play their role in tackling climate change and have had themselves a zero-carbon home built to a more individual specification, which may suggest that we are less likely to see mass production of such homes? I would love to be able to sit down with those people and talk to them about whether they felt that the current stamp duty relief policy had influenced their behaviour in relation to buying a zero-carbon home and, if not, what policy would have positively influenced their behaviour in order to cut emissions further.
I must question the Minister about whether the Treasurys zero-carbon home stamp duty relief policy joins up effectively and more broadly with the ambition of the Department for Communities and Local Government to have all homes built as zero carbon by 2016. I have discovered through parliamentary questions that the 10 zero-carbon homes that have qualified for stamp duty relief so far were all in a 1 per cent. stamp duty band, which means that they probably had an average cost of £187,500. We can therefore broadly assume that their average stamp duty would have been 1 per cent. of that£1,875. If so, the £15 million budget set aside to fund the policy from now until 2012 will fund a total of 8,000 homesfewer than 2,000 a year. If we are to hit our zero-carbon homes ambition by 2016, we should by then be building 240,000 zero-carbon homes a year. These things do not seem to match up with one another. When I questioned the Minister in the statutory instrument Committee when the regulations first went through the House, she was unwilling to explain how the £15 million budget had been arrived at. I am pretty confident, and perhaps she can confirm, that the assumptions behind that budget were that 8,000 homes within the 1 per cent. band were receiving an average of £1,875. Will she have yet another go at clarifying the underlying assumptions as regards the £15 million that is currently set aside for the policy?
Perhaps the Minister could also confirm that the original budget of £15 million was set in 2007before this years Budget announcement allowing flats also to qualify. If nearly half of all new properties built are flats, we should have expected the Treasury to double the amount set aside for the policy. Instead, as far as I can see, it has added no new money whatever to pay for the relief, suggesting an assumption that the Budget
change in 2008 will have no impact on the amount of relief it expects to be claimed. Again, that does not make sense.
That brings me to my final point. As with vehicle excise duty changes in the 2008 Budget, which the Government now admit will make virtually no impact in reducing CO2 emissions, the zero-carbon homes stamp duty relief policy came with much fanfare, but as far as the behaviour change it desires to achieve is concerned, it seems destined to fail. Even the Government have said that they expect the original stamp duty relief policy on zero-carbon homes to reduce emissions by 1.6 million tonnes by 2020, when household emissions in 2006 already stood at 155 million tonnes. In this years Budget, Treasury Ministers did not even try to pretend that they thought that the Budget would cut emissions. Page 107 of the Red Book describes the environmental impact of the zero-carbon homes change as including flats. It refers to a
Small reduction of carbon emissions.
Yet again, a Budget measure has been announced that is designed to reduce carbon emissions, but is in reality a shambles. We have no definition for zero-carbon homes, no idea of the real budget needed by the stamp duty relief policy, no idea of the number of homes that will claim relief and no idea of the reduction in emissions that the policy will lead to. The Treasury may talk a good game when it comes to environmental taxes, but its rhetoric is way ahead of its practice. The only way that things will get better is under a Conservative Government because this is not zero carbonit is zero credibility.
Mr. Jeremy Browne: I am grateful for the opportunity to follow the hon. Member for Putney (Justine Greening), because I agree with the central thrust of her analysisthe Governments provisions are gimmicky, inadequate and do not start to deal with the scale of the problem that confronts us. Where I depart from the line taken by Conservative Front Benchers is in the conclusions that I draw. I conclude that the Government need to be far more ambitious and visionary. The criticism made by the Conservative party always appears to be that the Government are gimmicky, so we should abandon all hope and not venture down the path at all. As far as I am aware, its central criticism reflects the fact that the party whose leader has a propeller on his roof that does not work thinks that the Government are too gimmicky.
I am grateful for that intervention, because the hon. Lady made a criticism that the Government have not allocated anything like enough money to reflect the scale of their policy. However, I have not heard financial commitments from the Conservative party to fund such policies. The Conservatives seem extremely reticent about giving hard, cast-iron financial assurances that are designed to change behaviour and reduce CO2 emissions in this country. I have seen the leader of the Conservative party riding his bike to this building, with
an England flag on the back of it when England is doing well in football matches. I know that he has a propeller on his roof that does not work. I have seen all that imagery and gimmickry from the Conservative party, but I have not seen any concrete policies.
On the contrary, the hon. Lady, whenever she makes a political point at the Governments expense in this Chambera legitimate thing for her to dosays that the Governments efforts, which I accept are timid and insufficient, will not make any difference, or make only a negligible one. Her conclusion seems to be that the Government should not be venturing down that path at all. However, perhaps she would like to intervene to say that the Conservative partys position is that vehicle excise duty rates and petrol taxation should be much higher and the number of wind farms should be much greater.
Justine Greening: The hon. Gentleman claims that we have made no progress on our environmental agenda, but he is wrong. For example, the Conservative party suggested a tax on a whole plane rather than air passenger duty, and we proposed feed-in tariffs, which the Government are eventually adopting. We do not have to demonstrate our credentials
Mr. Browne: I will be guided by you, Sir Alan. We wait with keen interest to ascertain whether the Conservative party has anything meaningful to say about reducing, for example, private car journeys. At the moment, it seems big on criticism
In our amendments on homes, we share Conservative Members analysis that the Government lack vision and ambition, but we go on to urge the Government to adopt a more visionary and ambitious set of policies rather than simply throwing up our hands in despair. It is worth sharing some statistics, which show the urgency of the position and the inadequacy of the Governments proposals.
The current housing stock of 25 million homes in the United Kingdom accounts for around 27 per cent. of the countrys total carbon emissionsapproximately double the amount of carbon dioxide that cars in the UK produce. It is worth dwelling on that momentarily because transport gets singled outnot unfairly, because it is a major contributor to CO2 emissions. However, if one stopped the average person in the street and asked whether domestic households or transport was the much greater contributor to global warming CO2 emissions, the reply would overwhelmingly be, Transport. Yet the energy produced in our homes is a major contributor. [Interruption.] The hon. Lady says from a sedentary position that the public perception is that transport is
not a major contributor to CO2 emissions. [Interruption.] The hon. Lady is giving a running commentary from a sedentary position. If she has something to say, she can intervene.
Justine Greening: I did not intend to interrupt the hon. Gentlemans speech, but I did not claim that the public did not think that there were emissions from transport. I said that many people in my constituency are also aware that their household emissions are even greater than those from transport. That is not to say that they do not believe that transport emissions are a problem.
Mr. Browne: I am grateful for that intervention. Perhaps we can resolve the matter only through opinion polling or asking a sufficiently wide cross-section of the public. I was not trying to be especially controversialI simply observed that transport attracts far greater attention in the debate on CO2 emissions than domestic households, yet the latter contribute significantly to the total amount of CO2 emitted in the United Kingdom.
Rob Marris: I suggest thatI stress that I am not citing actual statisticsin 20 years, 80 per cent. of current homes will still be used, whereas 80 per cent. of the road transport fleet will not. There is much higher turnover of transport stock and it is therefore much easier to tackle transport emissions than to deal with emissions from homes. I say that as someone who has lived for 25 years in a property that was built in 1888.
Mr. Browne: I am grateful for that intervention because that takes meyou will be relieved to know, Sir Alanto the amendments that the Liberal Democrats have tabled. They try to widen the scope of consideration so that the Government do not concentrate only on new homes, which are clearly important, but focus on the UKs housing stock as a whole. In any given year, roughly 1 per cent. of the houses occupied in the United Kingdom will have been built in that year, while 75 per cent. of houses in 2050 will have been built before 2007. If we concern ourselves solely with newly built houses, we will address the situation only incrementally.
Indeed, I would like us to go much further in that regard, too. It distresses me that large new housing developments are built on the edges of towns throughout the country with the car in mind. It is hard for the people living in those houses to buy a pint of milk or beer without getting in their cars. Such developments are often built without shops, pubs, village halls, churches, post offices or other amenities, which people cannot reach without driving a car. The houses are quite well insulated, but they could still incorporate large numbers of building features that would improve their carbon emissions.
There is a lack of ambition among builders in that regard. However, if we neglect the existing housing stock, we will not tackle the problem with anything like the urgency that it requires, particularly given the interesting cultural dimension in this country, whereby people often aspire to live in older houses. People in the United States, for example, would think that the best house that one could buy would be a brand new one, in the same way that people in this country would, by and large, like to buy a brand new washing machine, car or whatever else.
The most expensive and desirable houses in the United Kingdom are often those built, say, 200 years ago. There is not quite the market drive towards new house building in this country as there is in some countries. Whether because of a cultural or social dimension, it is seen to be desirable to live in an older house, often with not very well insulated windows, for example. We therefore need to turn our attention to how we improve such matters.
I am not the only person who takes that view. In the Select Committee on Communities and Local Government report Existing Housing and Climate Change, the hon. Member for Milton Keynes, South-West (Dr. Starkey), the Labour Chairman, called for a
much clearer focus on what must be done to bring existing housing up to required energy efficiency standards.
We need the Government to go further and do much more to help householders radically cut carbon emissions from their homes, whether they were built in 2007 or 1707.
That is the position of my party, too. We have put forward large numbers of policies to try to accelerate the level of home insulation, as well as other measures that can be put in place to try to reduce CO2 emissions both in Britains existing housing stock and in newly built houses. That is the scale of the ambition that we urge the Government to adopt. We have no problems with the measures in the Budget; we just think that they do not go far enough.
Rob Marris: The speech that the hon. Member for Putney (Justine Greening) gave was interesting, as is her amendment No. 20. Unfortunately, however, as sometimes happens, she leavened her speech with too much righteous indignation. I will bear that in mind when I think of the reports of the views of Conservative party activists on eco-towns, for example, which the Government are putting forward and which are so important.
I want to distinguish between the construction and the occupation of new properties. If we are talking about zero carbon, the first thing that I would like to do is change the terminology. It is a little late for that, because the terminology is already in statute, from the Finance Act 2003, but we are almost certainly not talking about zero-carbon homes. Rather, we are talking about zero-CO2 homes. I venture that almost no home will be built in the United Kingdom in the next 100 years without any carbon in it, because wood is carbon and the architraves around the doors, if nothing else, are likely to remain wood.
The reason I stress that point is that it highlights the use of language and whether we are talking about emissions when we talk about zero-carbon homesI will use that phrase, because it is in the legislation already and in the proposals before us. However, we need to distinguish between emissions from the construction and emissions from the occupation of such homes. That is why amendment No. 20 is interesting. Indeed, I shall be interested to hear what my hon. Friend the Exchequer Secretary says about definitions and the need for definitions.
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