subject: Win The Environmental Benefits Of The Uk Govt Reducing Vat On All Insulation To 5% [print this page] As the report by the Industry Taskforce For Peak Oil and Energy Security has pronounced, within five years UK faces oil scarcity. But, the sluggish efforts of the Government reveal it is not ready for the prognosis. Our habit patterns need changing. The VAT reduction to 5 percent already available to professional installation; but, excluding nonprofessional installation should be changed. The environmental benefits of the UK government reducing VAT on all insullation work to five percent would benefit all excluded potential beneficiaries.
One group left out is the householder. Yet, under the credit crunch and falling market price of houses era we face, householders are likely to go the do it yourself route. Not surprising the Construction Products Association has seen the light and said it supports the extension of the reduced rate to those who decide to do renovations this way.
It has been noted that the market for thermal insulation has grown due to favourable regulation and rising energy prices. A reduced rate would enhance the appeal for this measure. A test mimicking the VAT exemption increased sales by 120 percent to reveal the potential of what is possible if this is done. This would lead to reduction in CO2 emissions.
As pointed out by the Construction Products Association many homeowners are able to install insulation by themselves. However, they would pay the full rate for such an effort under the current paradigm. As we know buildings are the biggest single energy-using sector and account for 40 percent of energy consumption in Europe
As noted by those who have studied this subject, a reduced VAT rate on insulation products is not necessarily passed on by professional installers to their client. This cannot be ruled out as the reason the UK market has shown relatively low consumption. But, when the installer is the one who will live in the dwelling this will not be a discouraging factor.
The tax revenue increase of a reduced rate in the Isle of Man indicates the economic benefits that may be achieved. There were also improvements in the current stock of housing and a reduction of pressure on development of green field sites. Yet, the UK government has not learned from the example of the Isle of Man. Were the Government to change its policy, it would signal the Government supports the role of consumers doing their part to help the environment this way, as they also help their own checkbook. Such action would encourage sustainable consumption. Installation of insulation reduces the use of heating fuels and the resultant savings are beneficial from the perspectives of both environmental impact and economic gain.
