A reduction in VAT to 5 percent on energy efficiency improvement work could help more households than the Green Deal said a representative of the Federation of Master Builders (FMB), one of the UK’s major construction industry trade associations.
The FMB was reacting to the latest statistics issued by the Department of Energy and Climate Change (DECC) which revealed that out of 38,259 Green Deal assessments carried out so far only four have been signed. Research carried out by the group shows that, in contrast, a cut in VAT to 5 percent on energy efficient glazing and boiler replacements could generate an additional 57,668 households having both measures installed by 2020.
“These latest Green Deal statistics show the scheme is attracting some interest” said Brian Berry, the Chief Executive of the FMB, “however, there are disappointingly few households actually using Green Deal finance to pay for the work. Green Deal finance was supposed to bring about a dramatic increase in the number of people improving the energy efficiency of their property by removing the upfront cost, but the complexity of the scheme and the high interest rate is severely limiting the number of households that see the Green Deal as relevant. Instead reducing VAT on energy-efficiency improvement work would create a real incentive and allow small, local firms to carry out the work, which they are currently struggling to win under the Green Deal.”
Mr Berry added that although the government is doing its best to portray the scheme as a success it is now time for an honest debate on how to inspire greater uptake of energy efficiency improvement work in order to cut carbon emissions and protect households against rising energy prices.
“We need to see a range of fiscal incentives to stimulate a long-term increase in demand for this type of work, including a targeted VAT cut and a reduction in Stamp Duty Land Tax for the most energy-efficient properties” Mr Berry concluded.
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