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Sector steps up calls for VAT reduction

Campaigners have warned that the government’s Green Deal proposals will only succeed if the rate of VAT for energy efficiency improvements is cut, as the Energy Bill’s report stage got under way.

Supporters of the Cut the VAT campaign, including the UK Green Building Council, the National Federation of Builders and British Property Federation are among the 27 organisations campaigning for reduced VAT.

As the Energy Bill progresses, the campaigners said consumers will be reluctant to take up the Green Deal without a cut in VAT.

Federation of Master Builders director of external affairs Brian Berry (pictured) said: “At a time when energy prices are soaring, the need to make our homes more energy-efficient has never been so urgent.

“It is critical that the Green Deal is a success but it needs to be attractive to consumers who may be reluctant to have a ‘charge’ attached to their property.”

The Cut the VAT campaign supporters have signed a joint statement urging MPs from all parties to ask the government to reduce the rate of VAT to 5 per cent for all Green Deal-approved measures in order to begin stimulating demand.

The Scottish National Party and Plaid Cymru have already signed up to the campaign.

Mr Berry added: “Our homes contribute 27 per cent of the UK’s total carbon emissions and 85 per cent of our existing homes will still be standing in 2050, so it is imperative that homeowners are encouraged to make their homes more energy-efficient if the UK is to achieve its legal target to cut carbon emissions by 80 per cent by 2050.

“Businesses also need to be reassured that there is demand for Green Deal work if they are to invest in new energy-efficient work, as 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.”

Calls for a reduction in the rate of VAT to 5 per cent were also launched by Green Heat managing director Peter Thom earlier this year.

Mr Thom contacted the Chancellor George Osborne and the energy and climate change secretary Chris Huhne, urging them to reduce the rate for energy-efficient boilers and flue heat recovery systems.

Mr Thom has also created a petition on www.grumble.org.uk and is urging the industry to petition the government directly at http://epetitions.direct.gov.uk/petitions/12292.

The VAT reduction will assist registered heating professionals and reduce the growth of unregistered installers and “cash cowboys”, he says.