The Government announced yesterday that no further public funding will be provided to the Green Deal Finance Company. This leaves the energy efficiency supply chain at a loss to understand how the Government thinks it will meet its fuel poverty and climate change targets. Yes, the Green Deal has not been as effective as the Government originally forecast, but the principle of a Pay as You Save mechanism to support energy efficiency investment remains sound. Working to build on the existing framework, not pulling the rug from under it, was the way forward.
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.