VAT cut can succeed where Green Deal fails

Builders organisation the Federation of Master Builders believes that cutting VAT to 5% for housing RMI work will help more households than Green Deal finance can.
The FMB statement was made in response to figures from the Department of Energy and Climate Change which show that of the 38,259 Green Deal assessments carried out so far, only four have turned into actual Green Deal plans.

Research commissioned by the FMB shows cutting VAT to 5% on energy-efficient glazing and boiler replacements could result in an additional 57,668 households with both measures installed by 2020 .

FMB Chief Executive Brian Berry said: “These latest Green Deal statistics show the scheme is attracting some interest. However, there are disappointingly few households actually using Green Deal finance to pay for the work.

“The complexity of the scheme and the high interest rate is severely limiting the number of households that see the Green Deal as relevant. 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.”

He concluded: “Government is doing its best to portray the Green Deal as a success, but it is now time for 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.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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