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Finance Bill

We have had an interesting debate. I have been struck by the good will on both sides of the Committee towards making progress to achieve the desired outcome—the existence of zero-carbon homes, whatever the definition—and to ensuring, by 2016, that all new house building is zero-carbon. That is very positive. My hon. Friend the Member for Wolverhampton, South-West (Rob Marris) made a point about the turnover of housing stock being much slower than the turnover in, say, transport. That has a direct bearing on the carbon savings calculated from the existence of zero-carbon houses. By definition, those savings start slowly and increase as zero-carbon and low-carbon homes, which are not the same thing, are built and have an increased presence in the housing stock. The benefits in carbon savings from the existence and development of such homes will start off as minuscule and rise slowly. If the process is successful, the carbon savings will be much greater at the end than at the beginning. Clearly, they will have to be much greater by 2050 if we are to reach the 60 per cent. or 80 per cent. savings that the Stern report demonstrated were necessary to achieve climate stabilisation. I thank my hon. Friend for bringing that point to the Committee's attention. The other point that needs to be borne in mind before I get into the detail of the debate was made during a very good speech by the right hon. Member for Wokingham (Mr. Redwood). He said, to quote him, that carbon accounting is a very rudimentary science at the moment. That is true, and it will evolve and develop as we go along. We cannot expect to have the same level of sophistication in how we do something this new and novel, even though it is important, as we can in other accounting methods. Hon. Members in all parts of the Committee will have to be patient as we develop our measurements and standardise them for reporting back to the House. We also need to avoid the problems that we have had with the more ordinary accounting methods for companies, which were developed a couple of hundred years ago. They were developed all over the world on different bases and it has taken 200 years to standardise them. We need not only to develop our standards of carbon accounting for our economy, but to do so in a way that can be standardised across the globe if we are to develop emissions trading systems and ways of measuring life-cycle carbon emissions. That is what my hon. Friend the Member for Wolverhampton, South-West was talking about in his speech. Although it is an aspiration for us all, and although these are important tools, we cannot pretend that we have all the answers now. If the Government are to be criticised for keeping coming back to definitions and for making minor savings in carbon emissions at the beginning of an important but long-term process, as a Minister I will have to put my hands up to that. Hon. Members from all parties need to understand, as some have made clear they do in their comments today, that the situation is evolving. Standards have not yet been set and they need to evolve. Global standardisation also needs to evolve. Carbon accounting is a rudimentary science that needs to become much more sophisticated very quickly if we are to be effective. I hope that hon. Members will bear those issues in mind as we deal with the detail on the amendments, as well as with the new clause. Before I deal with the amendments in more detail, let me say that much fun has been had with the number of zero-carbon homes that are in existence, and people have said that the carbon savings are so minuscule that they will make no difference. The stamp duty exemptions that we are debating under clause 90 and the amendments to it are important, but they are only one part of the work that the Government are doing. By definition, since the exemptions are attempting to create a different standard for the emissions of a house over its general life, such houses will form a tiny part of the housing stock and will have to be in the new-build areas. Hon. Members should not forget that the Government have a raft of other policies that deal with existing housing stock and make it more energy efficient. Those policies include the carbon emissions reduction target regulations and Warm Front regulations, which are doing so much on energy efficiency. We have a whole range of retro-fitting activity, if I can lump it all in that phrase, that attempts to deal with our existing housing stock. It is true that we need to go for housing with low carbon emissions and to try to retro-fit some of our stock in order to bring that about, but the strict definition of zero-carbon would require most existing houses virtually to be demolished and rebuilt for them to reach code 6. When we consider the work that the Government are doing, we should distinguish between new build and how important it is to have radically more energy efficient, very new buildings that people can live in, of which I know there are only 10, although I hope that there will be very many more soon. However, it is not surprising that the process has taken this long, when we did not start with definitions that people agreed on and when a lot of this work is new and being done for the first time. Therefore, I crave the indulgence of the House in saying that such work is front-end loaded and that the results are back-end loaded. I hope that people will accept that, by definition, that must be the case. Clause 90 has two purposes, the first of which is to ensure that the relief from stamp duty land tax for new zero-carbon homes is extended to cover new flats. I perceive that that has a general welcome around the House. The relief will apply to any new flat that meets the stamp duty land tax zero-carbon standard that is purchased from 1 October 2007, which is the date on which the existing relief was introduced. We do not want to exclude any zero-carbon home, whether a flat or house, that comes on to the market.