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Ten thousand, ten percent or a green deal? More mangled numbers on the Mail’s conservatory tax

  • 11 Apr 2012, 11:00
  • Robin Webster and Ros Donald

The Daily Mail enlivened bank holiday Monday, headlining on an apparent new " green tax on conservatories", adding in a subhead that "home improvements will trigger mandatory ten percent levy" to pay for energy efficiency improvements. 

The Mail's story followed the release of a consultation in January by the Department of Communities and Local Government (DCLG). As BusinessGreen discussed at the time, the consultation proposes that when a household is already having works done (such as having a patio or extension added, or a boiler replaced), there will also be a requirement to improve the energy efficiency of the building - by getting the loft insulated, for example. 

The consultation, which finishes at the end of this month, also proposes that householders will have the option to take out a loan through the Government's Green Deal scheme - and pay it back through an extra charge on energy bills. 

The Mail's ominous-sounding take on this is that homeowners wanting to "build a conservatory, replace a broken boiler or install new windows" will have to "fork out for measures such as loft or wall insulation".  The piece cites unattributed "critics" who say the scheme is "another grab" at hard-pressed households' cash and fear the "stealth charge" will drive homeowners into the arms of cowboy builders. 

The Huffington Post and Press Association repeated the Mail's 10 per cent figure, with the HuffPo article going one better and claiming that the green tax could add 10 per cent to "household bills".

Yesterday, climate skeptic columnist Christopher Booker then followed up with a full page piece in the Mail warning homeowners the news signals a coming " deluge" of "green 'red' tape". He stated: 

"To install a new boiler or add a conservatory would require special planning permission, granted only on condition that the house is fully insulated from top to bottom - at a price of up to £10,000." 

Quite a lot of numbers. We felt a bit confused.

Ten percent, ten thousand or a tax on energy bills? 

Unpicking them was not easy. First, a look at the ten per cent figure. The Mail says: 

"The work is expected to add ten per cent to the cost of any building project in the home." 

That sounds clear. DCLG's consultation is not so clear. It says:

"...the Government's initial preference is to....cite 10 per cent of the value of the principle work as a guide to a value of the works that would meet the regulatory requirement. This provides an important safeguard and guide for those who do not use the Green Deal [to pay off their improvements]."

Translated from Governmentese, we think this means that if you have a new patio constructed for £1,000, DCLG proposes that you would also have to have £100-worth of energy efficiency measures installed. Crucially, householders could borrow that through the Green Deal, paying it back over time, and therefore incur no upfront costs.

The consultation also proposes a so-called Golden Rule, under which:

"...a building owner accepting a Green Deal should not see any increase in their energy bills - ie the Green Deal charge should be less than or equal to the expected savings generated by the measures, within the particular payback period for that measure (or the package overall)."

So, the idea of the proposal is that energy bills don't go up even when a charge is being levied because the household is saving on energy bils. This seems somewhat what at odds with the HuffPo claim that the scheme will add 10 per cent to all household bills (did the HuffPo read the consultation or just skim the Mail article?)

Now for Booker's estimation that the measures proposed by DCLG will cost a householder intending to put in a conservatory or install a new boiler "up to £10,000". But based on DCLG's 10 per cent rule this would presumably mean the original works would cost £100,000. Which seems like quite an expensive conservatory.

The list of measures that DLCG's consultation considers is: (at lower cost) loft or cavity wall insulation, hot water cylinder insulation, heating controls and (at higher cost) a new boiler, new windows or solid wall insulation.  

The Energy Saving Trust says for a semi-detached house, roof and loft insulation costs £100-£350 to install and should pay for itself in two to four years; draughtproofing typically costs £120-£220, saving around £55 per year; boiler insulation is around £40, paying for itself in six months; and cavity wall insulation costs around £160, with payback in around two years.

As discussed on the Today programme yesterday, insulating your house from top to bottom can cost as much as £15,000. But that is not what DCLG is proposing. If the owners of a semi-detached house installed all of the measures we totted up above, they'd be paying £770 - not peanuts by any means, but still not quite £10,000. 

Will the Green Deal deliver savings? 

Chair of the Energy and Climate Change Committee Tim Yeo backed up the Mail's objection to a mandatory 'conservatory tax'. He told the Today programme yesterday that while he supports the "laudable" aim of the green deal, compelling people isn't a good idea as it will reduce public enthusiasm for the Green Deal. 

This seems like a reasonable point. It does rather make us wonder however, just how it's all going to get done. In 2050, 74 per cent of housing stock will be the draughty old places most of us live in now. The Government faces an epic task getting all those houses insulated - and public willingness to participate is obviously key.

DCLG told us it is only proposing improvement measures where homeowners are building "substantial extensions", and most conservatories will not require any energy efficiency measures under the new regulations. It says reports suggesting otherwise are "simply incorrect". It adds that it's still consulting on proposals for homeowners to undertake improvements, such as loft or cavity wall insulation, when replacing their boiler or windows. A DCLG spokesperson says:

"The Government is listening to consumer concerns on this matter and is looking to develop this policy further with industry bodies and consumer groups before issuing its response." 

The Mail has frequently taken issue with DECC calculations that homeowners will save money through energy efficiency measures.  But if compulsory measures aren't a good idea, and mustering public enthusiasm is, then the Mail's repeated attacks on any and all green policies (energy saving measures included) seem to be doing a pretty fair job of making this a self-fulfilling prophesy.

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