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

Photo: Getty
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Here's something the political class has completely missed about Brexit

As Hillary Clinton could tell them, arguments about trade have a long, long afterlife. 

I frequently hear the same thing at Westminster, regardless of whether or not the person in question voted to leave the European Union or not: that, after March 2019, Brexit will be “over”.

It’s true that on 30 March 2019, the United Kingdom will leave the EU whether the government has reached a deal with the EU27 on its future relationship or not. But as a political issue, Brexit will never be over, regardless of whether it is seen as a success or a failure.

You don’t need to have a crystal ball to know this, you just need to have read a history book, or, failing that, paid any attention to current affairs. The Democratic primaries and presidential election of 2016 hinged, at least in part, on the consequences of the North American Free Trade Association (Nafta). Hillary Clinton defeated a primary opponent, Bernie Sanders, who opposed the deal, and lost to Donald Trump, who also opposed the measure.

Negotiations on Nafta began in 1990 and the agreement was fully ratified by 1993. Economists generally agree that it has, overall, benefited the nations that participate in it. Yet it was still contentious enough to move at least some votes in a presidential election 26 years later.

Even if Brexit turns out to be a tremendous success, which feels like a bold call at this point, not everyone will experience it as one. (A good example of this is the collapse in the value of the pound after Britain’s Leave vote. It has been great news for manufacturers, domestic tourist destinations and businesses who sell to the European Union. It has been bad news for domestic households and businesses who buy from the European Union.)

Bluntly, even a successful Brexit is going to create some losers and an unsuccessful one will create many more. The arguments over it, and the political fissure it creates, will not end on 30 March 2019 or anything like it. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.