So now the government wants to talk to the mortgage industry about green mortgages - that should be an interesting conversation.
I suspect - and I could be wrong – the conversation will go something like this:
Yvette Cooper: “We’d like you to provide fiscal incentives to borrowers who take steps to make their homes more energy efficient.”
Mortgage Industry: “I’m sorry could you repeat that? We don’t think we heard you correctly.”
Cooper: “We’d like you to provide fiscal incentives to borrowers….”
Mortgage Industry: “Oh we did hear you correctly.”
Mortgage Industry: “No.”
Mortgage Industry: “Yes”
Cooper: “Oh…….any particular reason?”
Mortgage Industry: “Yes”
Cooper: “What’s that then?”
Mortgage Industry: “Oh it’s simple really. It’s not our job. You need to speak to the utilities industries, you know the gas and electricity guys, they might be able to help.”
Cooper: “We already have.”
Mortgage Industry: “Well then there you go, why did you come to us?”
And so it would go on and on and on until the government gives up and tries to think of some other way of making homeowners make their homes more energy efficient which do not involve it having to offer council tax or stamp duty rebates.
It’s all a bit pointless really as the environmental audit committee last year recommended government-backed fiscal incentives in the form of either stamp duty or council tax rebates. So why is Yvette Cooper trying to place the responsibility on the mortgage industry for providing those fiscal incentives?
Tony Blair is this afternoon making his farewell speech to the Labour party, in which he is listing all his achievements since he became prime minister. Actually it’s quite an impressive list - which is something I find myself saying grudgingly.
That said I’m also reminded of the fact Blair in his first speech to the Labour party conference in 1994 talked about rights and responsibilities. Blair told those at the conference the people of the UK had rights to better public services and all the rest but also had a responsibility to each other.
So far so New Labour, but there comes a time when you have to wonder whether Labour has taken the principle of responsibilities too far?
Now, it seems, the government wants everyone else to take the responsibility instead. And instead of offering proposals that may actually ensure Britain meets its climate change targets, the Department for Communities and Local Government wants to talk to the mortgage industry about ways in which it can govern for it. But let’s look at how the Council of Mortgage Lenders reacted to the news.
The statement from the CML read: “We are happy to discuss with the government its ideas for a framework in which mortgage funding could contribute further to making homes more energy efficient. A number of lenders already take into account utility bills when assessing how affordable a mortgage would be.
In other words: “We’ll talk with the government about it but really there’s not a great deal we can do.”
The next part of the CML statement read: "It is clearly a fundamental requirement that any successful measures must be attractive to borrowers, as well as being able to work within the confines of what mortgage finance is capable of delivering. As the minister acknowledges, there is also a role here for other stakeholders, including energy companies, local authorities and landlords in the social and private sectors."
A shorter version of this statement would have read: “There really isn’t anything we can do - go speak to the energy companies or provide the fiscal incentives yourself.”
How exactly does a mortgage lender provide fiscal incentives to borrowers for being more energy-efficient anyway, without losing money? Or are we missing something here?
Is Cooper and the DCLG willing to provide financial compensation to mortgage lenders that offer these green mortgages and see their balance sheets take a hit as a result?
And if that is the case is the government simply trying to find ways of creating fiscal incentives for “going green” by the back door? After all, it may not be possible for the government to offer fiscal incentives through council tax and stamp duty. That might look like weakness.
Worse still, it might even suggest the government could have cut either one a long time ago and was just being greedy – now a government would never be guilty of that. Would it?
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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