CCC calls for stamp duty and winter fuel payment reform to help decarbonise homes
Members of the Committee on Climate Change (CCC) have called on Ministers to alter the Government's fiscal policies for winter fuel allowances and stamp duty on homes, in a bid to help decarbonise the UK's housing stock.
Speaking at a Business, Energy and Industrial Strategy (BEIS) Committee hearing on Tuesday morning (26 March), the CCC’s chairman Lord Deben and team leader for building and industry Jenny Hill were quizzed on how the Government should best support the decarbonisation of homes in its upcoming framework for improving energy efficiency across the built environment sector.
The policy is due to be published later this year after the Committee’s six-month inquiry hears from industry experts, investors, academics, green groups and politicians, with the inquiry beginning at a time when energy use in homes accounted for 14% of total UK emissions.
During the hearing, MPs asked Lord Deben how central Government could set policies which help the housing sector to become more energy-efficient and low-carbon at a time when funding is “already stretched”.
Deben, who also chairs green consultancy Sancroft, argued that the £1.2bn which the CCC estimates will be required to bring all “fuel-poor” homes to an energy standard of “C” or above by 2030 could be ring-fenced via overhauls to the UK’s stamp duty and winter fuel payments systems.
“The real way to do [stamp duty] is to say that you cannot sell a house unless it’s gone a step up on the efficiency scale until all properties are at a “C”,” he said.
“If you don’t do that, there should be an arrangement where the money is held back until the next person can. You have to find a way that, at the point at which people have the money to do it, you make sure that they do.”
As for winter fuel payments, Deben argued that the benefit should not be given to all UK residents of a certain age, as it currently is. Instead, he would like to see the allowance given only to those in need of financial assistance, with funding that currently goes to pensioners from high-income households set aside for improving the environmental footprint of “the coldest of homes”.
Hill agreed, adding that stamp duty and winter fuel allowance reforms should form part of “a sufficiently attractive [low-carbon heat and energy efficiency] package for householders which is aligned with ‘trigger-points’ such as moving home or renovating”.
Other elements of this package could include green mortgages, other green finance offerings and the introduction of mandatory “green passports”, which would contain sustainability information regarding the performance of homes, Hill explained.
“What is really important is that we help householders with the upfront costs and that we raise the profile of this issue, so it is at the forefront of their minds when they are moving or renovating,” she said. “There is certainly space for a revenue-neutral scheme.”
Home, sweet home?
The debate built on the CCC’s recent report on the social and environmental state of the nation’s housing stock, which stated that the UK Climate Change Act target of reducing emissions to 80% of 1990 levels by 2050 will not be reached without the “near-complete elimination” of emissions from buildings.
The report placed a specific focus on homes, which the CCC has long claimed have been slower to decarbonise than non-residential buildings. Key findings included the fact that 4.5 million homes suffer from overheating and a further 1.8 million are located in areas of significant flood risks, with the CCC citing the withdrawal of the zero carbon homes scheme as a “setback” to low-carbon progress.
A notable recommendation of the CCC report was for no new homes to be connected to the gas grid by 2025 – a call to action which has since received the support of Chancellor Philip Hammond in his recent Spring Statement. The announcement included a requirement for all new homes built from 2025 to be heated by systems free from fossil fuels, as well as a to implement policies which will increase the proportion of "green gas" within the UK gas grid.
During Tuesday’s hearing, Deben and Hill asked for their thoughts on the Spring Statement, and how the Government should supplement the measures included with other energy-efficiency schemes.
Deben said it was a “great sadness” that Ministers had not made such changes sooner, adding that he was sceptical that Hammond’s plans may be delayed. In particular, he criticised the current system of updating planning requirements as “making standards obsolete as soon as they are introduced”.
“The Government still has not changed the standards for new buildings, so we are building more trouble every year,” he said. “It is true that new houses are more efficient than old houses, but if you add the amount the Government intends to every year, you are simply adding 300,000 emitting houses. Until their emissions are required to be zero, the problem will only get worse.”
The UK Government is currently waiting on the CCC to publish its advice on how to help the nation create a net-zero economy by 2050 – the date by which the Intergovernmental Panel on Climate Change (IPCC) has claimed that global carbon-neutrality must be achieved if the global temperature increase is to be kept to 1.5C.
This advice is due to cover all key sectors and to be published within the next two months, Deben confirmed at the Committee hearing.
However, he was unable to forecast when the UK may begin to see a drop in the emissions generated by its housing stock, arguing that such a success story would only be posted “several years after” current standards are changed.
Several key industry figures and organisations have been calling for a net-zero building stock since before the IPCC report. Among them is the World Green Building Council (WGBC), which last summer made its first call for businesses and policymakers to eliminate carbon emissions for building portfolios by 2030.
In response to the challenge, Prime Minister Theresa May vowed to halve the energy use from new buildings by 2030 and to halve the energy costs from the existing building stock - both domestically and commercially. Heat and power for buildings currently account for 40% of national energy usage.
More recently, the Government published its £420m construction sector deal, outlining a course for halving building energy use and emissions by 2030.
But according to Deben, "real change" will not begin in the housebuilding sector until all firms are required to construct properties to "near-Passivhaus" standards, with their progress "more strictly monitored" by local authorities.
“If housebuilders knew that they were going to be checked and there would be serious consequences if they didn’t build to standard, then I think there’d be a change," Deben concluded.