Giving up the conservatory tax leaves the Green Deal in tatters

The government's flagship environmental policy is now tied to an unpopular measure – but they've got

We’ve had the granny tax, the pasty tax, and the caravan tax. This week the phrase "conservatory tax" was added to the lexicon of media uproar over Coalition plans.

The fuss, which started last week over an alleged attempt by the government to force honest homeowners to spend hard-earned cash on energy upgrades to their homes every time they get the builders in, has now been neutralised by heavy Downing Street briefing that Cameron will block the policy. 

However, the story of this debate about this previously obscure amendment to building regulations is particularly instructive as it goes to the heart of how the government has failed to fulfil Cameron’s pledge to be the "greenest government ever".

And furthermore, Cameron’s intervention may sound the death knell for the most genuinely progressive environmental policy from the Coalition, the Green Deal.

The story is complicated and has been widely misreported. Basically, it goes like this. In January Eric Pickles’ Communities department issued a consultation on changes to the part of building regulations that covers the energy performance of homes, called Part L. This contained a measure called, in Whitehall jargon "consequential improvements" – a policy twice considered by New Labour during its decade in office, and twice rejected by ministers as too controversial.

The policy says that whenever a homeowner makes a significant improvement to his or her home, then that home-owner also has to commit to making improvements to the energy efficiency of the rest of the house, to make it closer to the energy performance standards required in modern buildings.

Seen as vital by environmentalists, the policy makes a lot of sense in theory. More than a quarter of carbon emissions come from people’s homes. And while new houses are actually built to very high energy standards, only a very few homes are built each year, meaning the vast majority of the homes we’ll inhabit in 2050 have already been built. Therefore there is no chance of meeting the UK’s long-term carbon cutting targets without addressing the existing stock of leaky Victorian and Edwardian homes.

But clearly "consequential improvements" is politically tricky. The cost to home-owners – even more to home-improvers, the very definition of the aspirational middle class voters every politician wants to woo – is the exact reason Labour twice ditched similar plans. So why did Pickles think he could get away with it?

The answer is the Green Deal. This policy, due to come in to effect in October, will allow the upfront cost of work to increase the energy efficiency of homes to financed by the private sector. As a home owner, you then pay the cost back through your energy bills, but the scheme is designed so that the better energy efficiency of your home mean those bills will still be cheaper.

Vitally, the existence of the Green Deal meant "consequential improvements" – the so-called conservatory tax - could be introduced without triggering direct up-front costs to homeowners. Overall, quite a clever package. Together the two had the potential to be a genuinely game-changing move to make energy efficiency happen. 

But Cameron’s swift capitulation to the Daily Mail’s outrage (nevermind that your conservatory would have to be 30 sq metres to trigger the improvements), potentially leaves the Green Deal in tatters. 

The government itself predicts that without consequential improvements, the uptake of the Green Deal will be miserable. It’s estimates say that, as it coincides with the ending of the regime of utilities subsidising energy-efficiency measures, the number of loft and cavity wall insulation installations is set to plummet – by up to 93 per cent in the case of loft insulation.

The reason is that simply taking away the up-front cost of improving your home isn’t enough to get people to do it – given all the attendant hassle – even if it makes financial sense. Put simply, people just have better things to do with their time.

Consequential improvements had been seen as the one measure that could conquer this home-owner inertia. But, yet again, the Coalition seems to have shown itself unwilling to make the case for Green measures when under pressure. Consistently other priorities, notably those driven by theTreasury, win out.

As a result manufacturers of insulation fear their market being killed overnight. Meanwhile building contractors, 22 of whom signed up to deliver home-improvements under the Green Deal, are already starting to scale back their expectations of the work it will generate. The signals from the Department for Energy and Climate Change are that when October does arrive, the Green Deal roll out will be limited – essentially just a pilot.

For the industry, of course, it is not just the benefit of insulated homes that the Green Deal was expected to create, but a huge number of jobs – 65,000 was the government’s final estimate. This is now imperilled, with the inevitable impact upon economic growth (or lack of it).

Meanwhile, Tory sources seem to be briefing the Guardian that the whole thing is a mess created by the Lib Dems – even though the Green Deal was originally a Tory policy.

Unless urgent action is taken, the government’s flagship green policy in the built environment (one, incidentally, with almost total support from both greens and builders) will turn into a fiasco.

Two women speak in front of a conservatory. Photograph: Getty Images

Joey Gardiner is assistant editor at Building magazine

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The 11 things we know after the Brexit plan debate

Labour may just have fallen into a trap. 

On Wednesday, both Labour and Tory MPs filed out of the Commons together to back a motion calling on the Prime Minister to commit to publish the government’s Brexit plan before Article 50 is triggered in March 2017. 

The motion was proposed by Labour, but the government agreed to back it after inserting its own amendment calling on MPs to “respect the wishes of the United Kingdom” and adhere to the original timetable. 

With questions on everything from the customs union to the Northern Irish border, it is clear that the Brexit minister David Davis will have a busy Christmas. Meanwhile, his declared intention to stay schtum about the meat of Brexit negotiations for now means the nation has been hanging off every titbit of news, including a snapped memo reading “have cake and eat it”. 

So, with confusion abounding, here is what we know from the Brexit plan debate: 

1. The government will set out a Brexit plan before triggering Article 50

The Brexit minister David Davis said that Parliament will get to hear the government’s “strategic plans” ahead of triggering Article 50, but that this will not include anything that will “jeopardise our negotiating position”. 

While this is something of a victory for the Remain MPs and the Opposition, the devil is in the detail. For example, this could still mean anything from a white paper to a brief description released days before the March deadline.

2. Parliament will get a say on converting EU law into UK law

Davis repeated that the Great Repeal Bill, which scraps the European Communities Act 1972, will be presented to the Commons during the two-year period following Article 50.

He said: “After that there will be a series of consequential legislative measures, some primary, some secondary, and on every measure the House will have a vote and say.”

In other words, MPs will get to debate how existing EU law is converted to UK law. But, crucially, that isn’t the same as getting to debate the trade negotiations. And the crucial trade-off between access to the single market versus freedom of movement is likely to be decided there. 

3. Parliament is almost sure to get a final vote on the Brexit deal

The European Parliament is expected to vote on the final Brexit deal, which means the government accepts it also needs parliamentary approval. Davis said: “It is inconceivable to me that if the European Parliament has a vote, this House does not.”

Davis also pledged to keep MPs as well-informed as MEPs will be.

However, as shadow Brexit secretary Keir Starmer pointed out to The New Statesman, this could still leave MPs facing the choice of passing a Brexit deal they disagree with or plunging into a post-EU abyss. 

4. The government still plans to trigger Article 50 in March

With German and French elections planned for 2017, Labour MP Geraint Davies asked if there was any point triggering Article 50 before the autumn. 

But Davis said there were 15 elections scheduled during the negotiation process, so such kind of delay was “simply not possible”. 

5. Themed debates are a clue to Brexit priorities

One way to get a measure of the government’s priorities is the themed debates it is holding on various areas covered by EU law, including two already held on workers’ rights and transport.  

Davis mentioned themed debates as a key way his department would be held to account. 

It's not exactly disclosure, but it is one step better than relying on a camera man papping advisers as they walk into No.10 with their notes on show. 

6. The immigration policy is likely to focus on unskilled migrants

At the Tory party conference, Theresa May hinted at a draconian immigration policy that had little time for “citizens of the world”, while Davis said the “clear message” from the Brexit vote was “control immigration”.

He struck a softer tone in the debate, saying: “Free movement of people cannot continue as it is now, but this will not mean pulling up the drawbridge.”

The government would try to win “the global battle for talent”, he added. If the government intends to stick to its migration target and, as this suggests, will keep the criteria for skilled immigrants flexible, the main target for a clampdown is clearly unskilled labour.  

7. The government is still trying to stay in the customs union

Pressed about the customs union by Anna Soubry, the outspoken Tory backbencher, Davis said the government is looking at “several options”. This includes Norway, which is in the single market but not the customs union, and Switzerland, which is in neither but has a customs agreement. 

(For what it's worth, the EU describes this as "a series of bilateral agreements where Switzerland has agreed to take on certain aspects of EU legislation in exchange for accessing the EU's single market". It also notes that Swiss exports to the EU are focused on a few sectors, like chemicals, machinery and, yes, watches.)

8. The government wants the status quo on security

Davis said that on security and law enforcement “our aim is to preserve the current relationship as best we can”. 

He said there is a “clear mutual interest in continued co-operation” and signalled a willingness for the UK to pitch in to ensure Europe is secure across borders. 

One of the big tests for this commitment will be if the government opts into Europol legislation which comes into force next year.

9. The Chancellor is wooing industries

Robin Walker, the under-secretary for Brexit, said Philip Hammond and Brexit ministers were meeting organisations in the City, and had also met representatives from the aerospace, energy, farming, chemicals, car manufacturing and tourism industries. 

However, Labour has already attacked the government for playing favourites with its secretive Nissan deal. Brexit ministers have a fine line to walk between diplomacy and what looks like a bribe. 

10. Devolved administrations are causing trouble

A meeting with leaders of Scotland, Wales and Northern Ireland ended badly, with the First Minister of Scotland Nicola Sturgeon publicly declaring it “deeply frustrating”. The Scottish government has since ramped up its attempts to block Brexit in the courts. 

Walker took a more conciliatory tone, saying that the PM was “committed to full engagement with the devolved administrations” and said he undertook the task of “listening to the concerns” of their representatives. 

11. Remain MPs may have just voted for a trap

Those MPs backing Remain were divided on whether to back the debate with the government’s amendment, with the Green co-leader Caroline Lucas calling it “the Tories’ trap”.

She argued that it meant signing up to invoking Article 50 by March, and imposing a “tight timetable” and “arbitrary deadline”, all for a vaguely-worded Brexit plan. In the end, Lucas was one of the Remainers who voted against the motion, along with the SNP. 

George agrees – you can read his analysis of the Brexit trap here

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.