Finance Bill

I did say that I would respond in detail to the contributions of Opposition Members, including the right hon. Member for Wokingham, and I hope to do so in a way that provides further substance and detail on the consultation that we are taking forward on the definitions. I hope that by the time I address amendment No. 7, I will have set out the procedures that we intend to take. They will give the right hon. Gentleman and other Opposition Members greater reassurance, and will allow us better to strike the balance between giving the industry some planning certainty on the one hand—that is very important—and making sure that we keep a close grip on that policy area and review our progress as we go along on the other. I hope that when I have made more progress, the right hon. Gentleman will find that I have addressed his point. If he does not think that I have done so, I will, obviously, take a further intervention from him. Clause 19—he said, turning to his speaking notes after some time—deals with the exemption from stamp duty land tax for new zero-carbon homes announced by my right hon. Friend the Chancellor of the Exchequer in his pre-Budget report and his Budget statements. The clause amends the stamp duty land tax legislation in the Finance Act 2003 by inserting new sections that provide for a relief or exemption for the first sale of new zero-carbon homes. I am sure that anyone following this debate will be entirely clear that that is what we have been discussing for the past 15 minutes. The new sections enable the Government to make regulations that define new zero-carbon homes, quantify the amount of relief or exemption, and deal with administrative matters. The relief is an attractive incentive to those who wish to build and live in greener homes, as it will allow a relief of up to £15,000 on stamp duty land tax; the figure will depend on the sale price of the house. The regulations will cease to have effect at the end of the five-year time limit, on 30 September 2012, unless a decision is taken to extend that period. I will come back to that point later. The regulations were made available in draft before the Public Bill Committee debate on 22 May, as the hon. Member for Wycombe said. In that debate, I said that it was an important part of the Bill and that the regulating power that we were making was significant, too. It was important that we consulted properly. We have asked for comments on the draft regulations from more than 200 different bodies with an interest in greener homes. The consultation closes at the end of July and we will consider the responses before finalising the regulations and debating them in the House. The hon. Member for Wycombe gave the impression that the response from external stakeholders was not positive, but Mr. Paul King, the chief executive officer of the UK Green Building Council and campaigns director for WWF, referred to the codes for building regulations—I shall come on to them in a moment—as"““a big step in the right direction””." He said:"““There are developers now with zero-carbon developments in the pipeline. To get from the pioneers to all developers within 10 years is realistic.””" Mr. Zoltan Zavody, strategy manager of the Energy Saving Trust, said:"““Suddenly, the renewables industry can invest in capacity. It knows that there will be a requirement to use its products.””" There have therefore been positive comments about the measure. It is right, given the novelty of the regulations, that we should initially deal with them under the affirmative, rather than, the negative procedure as originally planned, to ensure that the House has a further opportunity to scrutinise their details before they come into effect. In Committee, I said that I would consult the business managers to see whether it was possible both to undertake proper consultation and to use the affirmative procedure. Such is the interest in this policy area that a debate on the affirmative resolution is appropriate. I am therefore pleased to tell the House that the amendment I have tabled to clause 19 provides for the first set of regulations to be made, subject to affirmative resolution by the House of Commons. We believe that that is the right approach but, because of the importance of consultation and the short window of parliamentary time between now and 1 October, we will not be able to bring the regulations into force on 1 October. That is simply a consequence of the parliamentary timetable. On present plans, we intend to lay the affirmative instrument as soon as Parliament returns from the summer recess, and once our consultation is concluded. Our objective remains to ensure that the regulations are approved by the House at the earliest opportunity allowed by the parliamentary timetable. I have looked at the matter in detail, because I wanted to ensure that we did not hold up in any way the forward movement towards zero-carbon homes, which I am sure everyone wants. When we introduce those regulations as part of the affirmative procedure, we will provide for the measure to be made retrospective to 1 October 2007. That means that no one who completes a transaction on a new zero-carbon home between 1 October 2007 and the autumn date on which the regulations are finally agreed by the House will be deprived of the opportunity to claim relief from stamp duty land tax. After the regulations have come into force, individuals who wish to claim relief for transactions made in the period between 1 October and the date on which the regulations come into force can do so simply by amending their stamp duty land tax return and Her Majesty’s Revenue and Customs will repay any overpaid tax. If, by October or November, new zero-carbon homes are still being built, that will not be too onerous a task for HMRC, and we hope to make progress. However, if new homes are in that situation, we have made provision to ensure that no one suffers a setback as a result of the slightly longer timetable required to ensure that the affirmative resolution procedure is used properly after the consultation. We are determined to get the regulations right through consultation and parliamentary debate. It is important, too, that the regulations are set within the wider context of co-ordinated action across Government by the Minister for Housing and Planning and the Chancellor of the Exchequer to achieve zero-carbon homes. Zero-carbon homes, as we set out in the pre-Budget report and the Budget, are important if we are to achieve our target to reduce overall carbon emissions in 1990 by 60 per cent by 2050. Over 25 per cent. of all carbon emissions in the UK result from energy use in the home. By 2050, about one third of homes will have been built after 2007. If we can ensure that as many as possible of those homes—and our goal is that it should be all of them—are zero carbon and make no net carbon emissions over the course of a year, that will make a significant contribution to the 2050 target. In recent years, we have used building regulations to improve the energy efficiency of new homes. Changes to building regulations in 2006 have achieved a 40 per cent. improvement compared with pre-2002 standards, and a 70 per cent. improvement compared with pre-1990 standards, in the energy efficiency of new homes. The importance of the regulatory context will become clear in a moment. We want to go further and use regulations to require new-build houses to meet a zero-carbon standard from 2016. We need to give the house building industry time to adjust to the changes needed in technologies and methods, which is why we have announced the target date in advance and why my right hon. Friend the Secretary of State for Communities and Local Government launched a consultation on changes to building regulations before Christmas, and set out the road map to the zero-carbon standard. The consultation has now ended, and the Government will respond to it in the summer, along with our consultation on stamp duty land tax.