ACE’s Director reflects on some of the comments in the Secretary of State’s speech to the Conservative Party Conference. In her conference speech, the Secretary of State suggested that ‘our energy policy should once again be driven by the people who pay the bills.’ Yes indeed, but let’s not forget that we already have relatively cheap energy and our dissatisfaction with our bills is more effectively tackled by helping us to use this resource more wisely than by focusing obsessively on marginal reductions in the cost of a kilowatt hour. ‘Getting a grip to protect families from endless worry about their energy bills’ should start with ensuring that their homes are energy efficient, not with providing secure supplies.
An ACE-convened business coalition has today written to Chancellor George Osborne in the wake of the judgment by the European Court of Justice that the UK’s 5% reduced VAT rate on professionally installed energy saving materials breaches the 2006 VAT Directive. The letter highlights the unhelpful nature of the judgment for those industries involved in the supply and installation of the measures potentially affected. It also urges the Chancellor to make clear in next week’s Budget that any changes to the reduced VAT rate will be deferred until Budget 2016 at the earliest.
For the benefit of consumers and the supply chain, and unlike the Energy Company Obligation (ECO), longevity, simplicity and flexibility must be at the heart of the next supplier commitment’s design. Its objective must be to serve as an important and stable plank to meeting carbon budgets within a wider framework of policies and measures that support a nationwide transformation of the housing stock through staged deep retrofits. It should be capable of delivering a wide range of measures to a large number of households, and drive the best possible outcome for consumers by lowering their bills and improving their health and comfort, both in the medium and long-term.