Clause 19
Finance Bill
10:45 am
Paul Goodman (Shadow Minister (Childcare), Treasury; Wycombe, Conservative)
This clause covers relief for new zero-carbon homes and as you know, Mr. Gale, Friends of the Earth and the National Landlords Association do not always find cause to unite them, but this clause seems to have done the trick. Friends of the Earth said that it would affect
“a tiny number of new properties”,
while the National Landlords Association said that
“the impact of the tax break is likely to be relatively limited.”
Clearly, they agree on that. I am sure that both organisations, none the less, welcome the proposal, which we will not be opposing. However, their reaction suggests some useful lines of inquiry.
The clause empowers the Treasury to make regulations granting relief on zero-carbon homes, which may take the form of an exemption from charge or a reduction in the amount of tax chargeable. As the House of Commons Library points out—I went to the Library to see what it had to say—
“the budget report itself does not give an estimate, stating the Exchequer impact to be ‘negligible’. Item A.90 in the budget measures shows the cost as...less than £3 million a year”.
This is what the Red Book describes as a relief to
“kick-start the market for new highly efficient technologies in homes.”
The Library also says that
“at this stage it is difficult to estimate how many homes would qualify for the tax relief, and much will depend on the projected number of new homes that may be built during the qualifying period.. .at this stage there does not appear to be any reliable estimate or figure of the likely number of houses to be covered and how much this will cost the Government until 2012”.
That is the Library’s assessment.
So it is not at once apparent how this welcome but modest measure can accurately be described as “likely to kick-start” a market, or how exactly it will make a substantial contribution towards the Chancellor’s goal announced last weekend of five eco-towns, containing 100,000 carbon-neutral homes.
When I say “announced”, of course I mean“re-announced”, since that goal was first announced, according to my researches, by the Minister for Housing and Planning almost exactly a year ago, on 17 May 2006. [Hon. Members: “Hear, hear.”] I hear Government Members say “Hear, hear” but I was about to go on to remark that the process of passing this information on to the Economic Secretary, with whom I believe the Minister in question is acquainted, and then for him to pass the information on to the Chancellor, with whom he is also acquainted—though not, of course, in the same way—has taken the best part of the year.
When I say “re-announced”, I mean, of course,“re-announced and slightly modified”, since the Housing Minister’s original speech, as the Economic Secretary will know, referred to 120,000 homes, not 100,000, so there has been a net loss of 20,000 homes. When I say “re-announced”, I mean, “re-re-announced”, since the Government apparently announced that they would build seven new eco-communities, with 9,000 new homes 10 years ago, and have to date built only one in 10 of those homes.
A number of questions obviously follow. First, how many zero-carbon homes exist at present? The Chief Secretary told the shadow Chief Secretary, my hon. Friend the Member for Chipping Barnet, in the Chamber that the answer is “a very small number”. He was a bit more forthcoming on “Newsnight”, when he told Jeremy Paxman that the answer is
“I think a couple of dozen”.
I will spare the Committee the whole exchange, because it makes for painful reading. However, because it is obviously unsatisfactory for “Newsnight” to have the precise figure when the House does not have it, we are confident that the Chief Secretary will respond appropriately.
Secondly, what estimate has the Treasury made of the number of additional zero-carbon homes that it expects to be in place by 2012 as a result of this measure? Thirdly, what estimate has the Treasury made of the number of zero-carbon homes that it expects to qualify for this tax relief? What proportion does it expect to be exempted from charging altogether?
Fourthly, can the Minister give us an idea where these homes are expected to be built and which local authorities have expressed an interest in seeing them built? The Chief Secretary said on Second Reading:
“a development of zero-carbon homes is going forward at Gallions Park in my constituency.”—[Official Report, 23 April 2007; Vol. 459, c. 661.]
Can the Economic Secretary confirm that, as common sense would suggest, “going forward” means that planning permission for these homes has been given? Fifthly, what carbon saving does the Treasury expect as a result of the measure? Finally, does the estimate in the table contribute to the cost of the five eco-towns and 100,000 zero-carbon homes and where in the Red Book are those costs covered?
The clause gives rise to a number of more specific questions as its main effect is to give the Treasury the power to make regulations granting relief on zero-carbon homes. Picking up on an exchange on the last clause, I may be at fault but I am not aware of having seen the regulations that will offer a definition of zero-carbon homes, that may extend the relevant tax concessions beyond 2012, that may set up a process of certification under the home information pack regime which could affect take-up, and that may, although not necessarily, provide for relief to be withheld where a person acquires more than one zero-carbon home within a specified period. Obviously those are important regulations. If they have not been published, when will they be published?
Can the Economic Secretary tell the Committee whether the definition of zero-carbon home will include carbon emitted during construction or in the manufacture of building materials? What evidence on the carbon neutrality of their homes will people be required to provide and through what process will they do so? Above all, can he guarantee that the House will get the opportunity to debate the regulations which, by their nature, will be unamendable under the affirmative procedure?
Finally, may I offer some good news? Speaking of acquaintances of the Economic Secretary, the hon. Member for Morley and Rothwell (Colin Challen)—the future Lord Challen, as my colleagues insist on calling him—is on the case. I received from him only yesterday an invitation to a meeting entitled “Zero-carbon homes: how we can meet housing costs and protect the environment.” His letter begins: “Dear Helen Goodman”. I look forward to the Chief Secretary’s response.