Clause 19
Finance Bill
11:00 am
Julia Goldsworthy (Shadow Chief Secretary To the Treasury, Treasury; Falmouth and Camborne, Liberal Democrat)
The regulations may have arrived with my mail this morning, but it had not been processed by the time I arrived here today. They may be sitting in my in-tray, but I have not had a chance to look at them yet. In any event, there was hardly a huge amount of time to scrutinise them before the debate.
As the hon. Member for Wycombe said, we do not know what impact clause 19 will have on Treasury revenues. My key concern is that although it will provide a demand-side incentive for people to purchase new zero-carbon homes, there will not be a similar incentive for builders to build them. That lack of symmetry may mean that demand will not be met, thus there will be no opportunity to take advantage of the tax incentive.
Given that the announcement was made in the pre-Budget report, I wonder if there have been any applications since then for zero-carbon homes. Proposed new section 58B(5) states:
“The relief may take the form of—
(a) exemption from charge, or
(b) a reduction in the amount of tax chargeable.”
Do I take it that it depends on the price of the property—that if it is above the £500,000 threshold it will result in a reduction, but if it is below that threshold it will result in an exemption? Exactly how will the measure operate? Will the Economic Secretary explain why it should apply only to the first time that the new building is sold? Why are not the Government extending it to future sales, as that will clearly have an impact on the price?
I mentioned regulations, but my concerns revolve around the impact that the proposal will have on affordable housing. A couple of years ago, there was a high-profile demonstration in my constituency of a zero-carbon house, a BedZED property, that could be built for less than £70,000, which still puts it out of reach for people on an average household income, which in my constituency is just below £20,000 a year. The £70,000 is just the price of the property; the key expense will be the plot of land. What impact does the Economic Secretary think the measure will have on the entire price scale, not just on the most expensive properties? People who want to buy new, affordable housing will still find it very difficult to buy a zero-carbon home.
What impact will the measure have on social housing stock? It would be excellent if new social housing could be built on a zero-carbon basis. The fundamental problem is that the proposal will apply only to new properties when, as the Chief Secretary said earlier, one third of all emissions from the UK are from the housing stock. How does that break down between projected new housing stock and existing housing stock? Three quarters of the stock that is standing today will still be standing in 2050, and on that basis the key target must be existing stock, not least because that is where fuel poverty, for example, is at its worst.
In my constituency, there is very poor, usually very old, housing stock, a high incidence of fuel poverty and a poor take-up of the Warm Front scheme, not least because there are no installers anywhere in the county of Cornwall. That deprived group of people cannot access the environmental benefits of the clause or take advantage of provisions that would have an impact on their pockets and save them money. The problem is that those people, whether they are in rented or privately owned housing stock, will not be in a position to benefit from the proposal.
There is great innovation out there, but I am worried that the measure is a very limited way of stimulating increased development. In my constituency there is a hot rocks project—technologies investigating making use of disused mines as a way of cutting down on heating costs. Carrick Housing is being innovative in retrofitting those technologies to its existing social housing stock. The proposed incentive sits outside that framework, however. What plans are there for incentives not only for people looking to buy new houses, but for developers and builders? Ultimately, if using more energy-efficient materials increases costs, the builder who uses them faces increased risk. What plans do the Government have to tackle the inherent inefficiencies in the existing housing stock?