Over 200 businesses from across the construction, property and renewable energy industries have written an open letter to the Chancellor.

Senior leaders from 246 organisations have urged George Osborne to reconsider the Government's U-turn over the long-established zero carbon homes policy.

In his productivity plan, 'Fixing the Foundations, the Chancellor unexpectedly axed the policy designed to ensure all new homes built from 2016 meet zero carbon standards.

A sister policy which applied to all new non-residential buildings such as offices, schools and hospitals from 2019 was also axed.

In an open letter, leaders warn that the policy U-turn has 'undermined industry confidence in Government', and will 'curtail investment in British innovation and manufacturing'.

The letter states: "There was a broad consensus in support of the zero carbon policy, which was designed to give industry the confidence it needs to invest and innovate, in order to drive higher energy efficiency standards and low carbon energy solutions.

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"Abandoning the zero carbon policy will have regressive impacts and be harmful to British industry."

Julie Hirigoyen, Chief Executive of the UK Green Building Council, said: "The speed and the stealth with which this administration has destroyed some of the long-term policies supporting the renewable and low carbon industries has been breath-taking.

"This U-turn not only means our new buildings will be less energy efficient and more costly to run, but it comes at a time when the UK should be taking strong action on climate change ahead of the UN conference in Paris in December."

Mike Roberts, Managing Director at HAB Housing, added: "It may not have been perfect but the zero carbon policy was an attempt to provide confidence to the construction sector, setting out future standards with enough notice for industry to be able to deliver.

"Scrapping the policy sends a terrible message to the industry and undermines all those who have put time and energy into making it work."

The industry has invested significantly to develop the designs and solutions for zero carbon.

A total of £6.4 million, including £3.2 million of public funds, was invested in the AIMC4 project within which housebuilders Barratt Developments, Crest Nicholson and Stuart Milne came together to develop low carbon homes to meet future energy efficiency standards.

(LM)