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Finance Bill

Amendment No. 21 replaces amendment No. 4, which should have been withdrawn from the Order Paper. The Government and the Chancellor claim to be concerned about the environment. In this year's Budget statement, the Chancellor said:"““our greatest obligation to the future must be to tackle climate change.””—[Official Report, 12 March 2008; Vol. 473, c. 295.]" The Government claim that they want a meaningful reduction in the UK's carbon emissions and that their zero-carbon homes initiative will kick-start the market for new, highly efficient technologies in homes. They talk about how the policy will set a gold standard for green homes. I do not think that we are quite there yet, so my amendments are a helpful start. They try to explore and challenge whether the Government's zero-carbon policy, as it stands, can ever be truly fit for purpose. Amendment No. 21 aims to clarify what could be an ambiguity in the current drafting of the policy. Amendment No. 20 aims to prevent a likely problem from occurring, which, if not stopped, could really damage the Government's chances of meeting their already challenging ambition of ensuring that all new domestic homes are zero-carbon by 2016. We Conservatives also support that target. Let us not forget that the zero-carbon homes policy was enacted by regulation only eight months ago, in October 2007. Even so, Treasury Ministers are already changing their own policy, less than a year after it went through Committee. In October 2007, the original statutory instrument specifically excluded flats and maisonettes from being eligible for the relief. At the time, my hon. Friends and I questioned the sense of that exclusion; we now know from later statistics that nearly half of all new homes built in Britain are flats. Just months later, by the time of the Budget, the Chancellor was already announcing that, after all that, the zero-carbon homes policy would be extended to include flats as well as houses. We very much welcome yet another adoption of a Conservative proposal and I hope that my amendments today will, similarly, be adopted—although without the eight-month delay. I have no doubt that the Government's ambition, which we support, for zero-carbon homes by 2016 will be better achieved if the amendments are adopted. Amendment No. 21 is a redrafting of new subsection (2)(b). It aims to define better and more carefully what constitutes a first acquisition. My understanding is that the provision is drafted to ensure that stamp duty relief may be claimed only the first time a home is bought. During our debate on the statutory instrument in Committee, the Minister responding said that extending the relief to second and subsequent sales would provide no value to the taxpayer. However, the proposed Government definition in the Bill covers a dwelling that"““has not previously been occupied.””" In practice, that could allow for multiple stamp duty land tax relief claims on the same property, if that property were sold again but never occupied in the meantime. For example, somebody could buy a newly built zero-carbon dwelling from a developer for their elderly parent to live in. They would gain stamp duty relief from the developer because their parent would not yet have moved in, although they were planning to; the residence would never have been occupied. Under clause 90, if, unfortunately, the elderly parent died prior to occupying the dwelling, the next purchaser would presumably also be allowed to claim stamp duty relief, as the home would still not have been occupied. The amendment would clarify the definition of a dwelling in respect of providing stamp duty relief to mean one that has not previously been acquired. It would remove the ambiguity of the current drafting and would deliver the Bill as the Government intend it. I can imagine no objection from the Minister to amendment No. 20. It simply provides an insurance policy—that there will be a clear definition of a zero-carbon home by the end of the year, just as the Chancellor promised in the Budget. Crucially, amendment No. 20 would also require the Government to use a consistent definition of what constitutes a zero-carbon home across Departments, in a joined-up way. That definition would have to be approved by the House, and any anomalies between the definition arrived at after the summer's consultation and the existing definition in the relevant Treasury statutory instrument would have to be identified. Those differences could then be debated and voted on, so that a single, workable definition could be achieved. The lack of joined-up government between the Treasury and the Department for Communities and Local Government is a critical failure, as it means that we still have no clear definition of what a zero-carbon home is—even though the Government first announced their policy on such homes in December 2006. That means that, by the time a single policy is arrived at, it will have taken more than two years to get the definition that we need. 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 target's 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 they—the Government—do 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 helpful—certainly for the building industry—if the Minister can clear that confusion up. 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 Government's 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 2007—when the statutory instrument giving stamp duty relief on zero-carbon homes came into force—and 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 far—just 10—what 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 far—or 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 Treasury's 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 homes—fewer 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 2007—before this year's 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 no 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 year's 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 to include flats. It states:"““Small reduction of carbon emissions.””" Perhaps the Exchequer Secretary can tell us just how small. 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 carbon—it is zero credibility.