Wednesday 14 July 2021

Another Nice Disincentive You Got Me Into?

The UK's poorly-insulated and (generally) gas-heated homes produce around 14% of the country's 'greenhouse gas' emissions. This figure has been relatively unchanged for decades. In spite of this, it seems that UK ministers are currently resisting calls to reduce Value Added Tax (VAT) on 'green' home improvements (https://www.theguardian.com/environment/2021/jul/14/uk-ministers-resist-calls-to-reduce-vat-on-green-home-improvements). In October 2019, the UK government bizzarely increased VAT from 5 to 20% on low carbon goods for homes. The new rate boosted the prices of many solar panels, domestic wind turbines, heat pumps and insulation materials. Many bodies (builders, environmentalists and some MPs) regard the increased VAT as a disincentive in any drive to improve the energy efficiency of UK homes. The government's Green Homes grant scheme was rapidly abandoned. They also declined to enforce green standards on new-build properties, forcing extra costs on any house owners who choose to retrofit. It's almost as if the UK government like home 'greenhouse gas' emissions exactly where they are! Why make going 'green' cheaper, when you can always come up with a grandiose plan for carbon neutrality?

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