Ahead of today’s Spring Statement, a group of Conservative Environment Network (CEN) MPs has urged the Chancellor to cut VAT for energy-saving products and home installation to 5%.
The move could cut the cost of installing cavity insulation by £142 and loft insulation by £120 for the average household, lowering energy bills by up to £399 and £493 at the current energy price cap.
However, if the energy price cap rises as high as £3,000, as some experts warn, the measures could save the average household up to £599 and £740, respectively. Over 4 million homes need cavity wall insulation and nearly 5.5 million homes need loft insulation.
As well as slashing VAT in the Spring Statement, the group of CEN MPs also called for the government to expand successful energy-efficiency schemes to help energy-poor households insulate their homes.
They also called for a national energy-saving campaign to encourage people to adjust their boiler flows downwards to cut gas use while keeping their homes warm.
CEN MP Stephen Crabb commented: “Insulating homes is one of the quickest ways to lower people’s energy bills and reduce our reliance on imported energy.
“While some energy saving materials benefit from a lower VAT, insulation and the cost of installation is largely taxed at 20 per cent. With millions of draughty British homes and soaring energy bills, we should cut this tax on energy efficiency.
“This measure could be implemented quickly while avoiding the need for a new bureaucratic government scheme. It will help many households invest in insulation and cut their energy bills.”
