Tax relief for new zero-carbon homes

Brooks Newmark supports an amendment that requires the proposed tax relief for zero-carbon homes be kept reviewed annually to monitor its effectiveness.

SDLT (stamp duty land tax) relief for new zero-carbon homes

Mr. Brooks Newmark (Braintree) (Con): I rise to speak briefly in support of amendment No. 7, which would introduce a requirement that the regulations on zero-carbon homes expire annually. We dealt with the proposal at some length in Committee, but I for one am not able to say that the debate caused the scales to fall from my eyes.

The Economic Secretary is fond of berating Conservative Members for cynicism. I am not a cynic, but I hope that the proposals in the Bill are realistic. It is for that reason that I support the proposed requirement that the regulations be reviewed every year.

In Committee, the Economic Secretary became a little discombobulated when he replied to a perfectly reasonable question from my hon. Friend the Member for Wycombe (Mr. Goodman) about such minor details as how many zero-carbon homes might be expected to make use of the tax relief on them. The Economic Secretary also had difficulty with the number of existing eco-homes. He said, staccato, that there were "few or no" zero-carbon homes today, then admitted that there were "none". Then he softened again, and said that there "may well be" none. I think that his final offer was that the true number was "low or zero". That is not a reassuring background to the introduction of the regulations.

Julia Goldsworthy: How can we assess how many zero-carbon homes exist when we do not know how they are defined?

Mr. Newmark: The hon. Lady's question makes my very point: the problem is that the Government do not create any definitions. They have grand schemes but do not define what we need to do or where we are going.

As I said, the background to the regulations' introduction is not reassuring. We do not seem to know where we are now, let alone where we will be in 2012 or 2016. The Deputy Prime Minister once said, in an immortal phrase, that the green belt was a

"Labour achievement and the Government intend to build on it."

In a similar vein, the Economic Secretary accused Opposition Members of being

"consistent in their opposition to taking forward concrete action on the environment"- --[Official Report, Finance Public Bill Committee, 15 May 2007; c. 134.]

Clearly, there was no irony there.

My hon. Friend the Member for Tunbridge Wells (Greg Clark) has exposed how successful the Government have been at concreting over the environment. They are at the top of the class in that respect, but the foundations of their proposals on eco-homes are a little less concrete.

Such homes involve technology that is new and untested. Either it does not yet exist, or it is experimental and somewhat uncommon. The choice depends largely on the mood of the Economic Secretary. We are justified in feeling a little suspicious of the Government's record on using taxation to effect behaviour change.

I was concerned in Committee, and I remain concerned now, that the Government have proposed a tax relief that will chug along for several years without regular monitoring, and then simply stop. In addition, the relief is founded on the paradoxical assumption that it will contribute in some way to the Chancellor's thrice-announced 100,000 new eco-homes for a magical total of-and I do not get the maths here- 200,000 by 2016. According to the Red Book, those houses will come in at a cost of only £15 million by 2102. Either the incentive will be used widely, in which case it will cost more than the £15 million predicted by the Government, or it will not work and will need to be rethought.

I pointed out in Committee, and it is worth reiterating now, that some £130 million has been spent on seven millennium communities, delivering homes to the "excellent" standard. I was amused to see-I made this point in Committee-that one of the seven communities, in east Manchester, was, in true new Labour fashion, named New Islington. It is a wonder that the Chancellor did not go the whole hog and call a street there Granita or New Granita.

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The fact remains that, after 10 years, the homes have not been delivered, so the idea that a large number of homes will be built in time to take advantage of clause 19 is optimistic-or indeed over-optimistic. The Economic Secretary talked of a non-linear projection for uptake, but was unable to provide figures for the uptake of eco-homes by the 2012 cut-off point for the regulations. Even using a curve rather than a straight line, it ought to be possible to extrapolate back from the aspiration of 200,000 eco-homes in 2016 and give us at least a ball-park figure for uptake by 2012-it could even be a Gallions Park figure. In the absence of that figure, my hon. Friends have proposed the only workable answer to the Treasury's remarkable opacity and confusion on eco-homes by requiring an annual review of the policy to see whether it is having the intended effect.

The Economic Secretary offered the Committee a vague and open-ended commitment to review the regulations in or around 2012, if he is still around. That is not really a commitment at all, because it seems to depend on the prevailing circumstances. He also contends that this is a bold, innovative and radical policy, but let us hope that the Government have paid enough attention to his fourth adjective of choice and ensured that it is also coherent and that eco-homes will in future receive annual scrutiny.

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INTERVENTIONS IN THE SAME DEBATE

Mr. Newmark: I remain confused. The Economic Secretary made the strong statement that the estimate for 2012 is £15 million. Perhaps by using a linear accelerator, he will magically get from the figure for 2012 to that for 2016. However, he has admitted that he does not have a definition. How can a projection be made when there is no definition of the proposal that the Government are setting out?

Ed Balls: I am happy to dwell on this point if hon. Members really want me to do so. There are two fixed points. We start from zero. Under any definition, that figure is zero, or thereabouts -[ Laughter. ] Well, as I said in Committee, there might be one or two developments, and a planning inquiry on a zero-carbon home estate is ongoing. I was asked whether the planning permission for that estate was moving forward-it is. The opposite of going forward is going backwards. As I am sure that the hon. Member for Grantham and Stamford (Mr. Davies) would agree, the Government believe in going forward, not backwards, which is exactly what we are doing on the planning inquiry.

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Mr. Newmark: I appreciate the Economic Secretary's comments on a housing shortage, but the Government have had 10 years to provide more low-cost housing. Is it not therefore a failing of the Government that we have a shortage? Is he proposing that we should be building low-carbon homes in people's backyards? Is that his solution-more building in people's back gardens?

Ed Balls: Unfortunately, I do not have with me the quotes to demonstrate that the Government have been trying to raise the number of new homes built, year by year-and indeed we have been succeeding. Over time, we aim to make more of those homes zero-carbon, through stamp duty relief. That has been difficult to do because of the continuing opposition of Conservative Front-Benchers and Conservative councils across the country. It is that political opposition to new house building that is holding back the productivity of our economy, and making life much more difficult for hard-working families.