VAT reduction to improve Green Deal

Over 25 industry bodies have released a joint statement calling on the Government to use cuts in VAT to incentivise consumer take up of the Green Deal. The organisations, which include the Bathroom Manufacturers Association, Builders Merchants Federation and British Property Federation, are urging the Government to reduce VAT to 5% for all Green Deal approved measures.

The statement has been sent to MPs, as they prepare the final stages of the Energy Bill, which is the legislation that will introduce a Green Deal. It reads that “a financially compelling package to improve the energy performance of homes, and a rate of 5% VAT is a logical step which makes the energy-efficient measures more affordable and Green Deal packages more attractive.”

All the 26 organisations involved believe that the Government must do more to stimulate demand in the energy saving market. The Green Deal is a scheme which will bring old, poorly insulated and homes which waste energy up-to-date. The Government reports that a quarter of the UK’s carbon emissions come from the energy used to heat homes. It suggests that consumers don’t have to pay up front but businesses will get their money back via the energy bill. But the financial savings must be greater than the costs attached to the bill. Although much of the Green Deal is focused upon insulation and heating controls, it is expected that taps and showers will also be included as part of the Green Deal scheme.

Yvonne Orgill, CEO of the BMA, said: “Through the MTP and National Conservation Water Group we have collectively been lobbying the Government for the inclusion of water saving products, linked to WEPLS, with the support of EST, Waterwise etc and were advised that taps and showers would be included. It is looking as though Green Deal will be introduced in phases, with the easy quick wins in the first phase, i.e. insulation/cavity/boilers/heating controls/heating/glazing/lighting/solar – similar to the old CERT scheme.

New products will be brought on line… as the market deems it.” But she points out: “The training element for assessors does include water efficiency, so it’s a mixed bag ofinformation at the moment.”