If the government’s Green Deal is to be taken up next year then the VAT rate for energy efficient upgrades needs to be cut, say construction and environmental organisations.
The Green Deal will be discussed under the Energy Bill and the scheme is aimed at low energy efficient homes and buildings.
By improving their energy efficiency with products such as new boilers, loft insulation and double glazing, homeowners will save on fuel bills and reduce their carbon footprint.
And the Federation of Master Builders (FMB) has said MPs need to lower the current VAT rate from 20% to 5%. Otherwise these energy saving methods won’t be a popular demand.
Brian Berry from FMB said: “At a time when energy prices are soaring, the need to make our homes more energy efficient has never been so urgent.
“It’s critical that the Green Deal is a success but it needs to be attractive to consumers. A cut in VAT for Green Deal energy efficient work makes sense.”
27% of carbon emissions in the UK are emitted from homes and with 85% of existing housing stock still to be used in 2050, more must be done to meet the government’s s targets.
The Coalition currently has plans to reduce carbon emissions in the country by 80% by 2050.
My Berry said: “Businesses also need to be reassured that there is demand for Green Deal work if they are to invest in new energy efficient work because in the current economic climate many firms can’t afford to start training their workforce until they know there is a growing demand for energy efficient home improvements.”
As it stands, the energy saving market will have to expand to meet the proposed Green Deal plans, but this would only happen if there was a real demand for home improvements.
And homeowners should be looking at the Green Deal to save money on bills. The government will provide a loan to cover the cost of having energy saving measures installed, but this will go against the house rather than the owner.
Double glazing, wall cavity insulation and loft lagging are all ways to reduce heat loss in your home.
Other organisations have also joined the call for VAT to be lowered, including the Conservation of Energy and the UK Green Building Council.