So, the Chancellor Rishi Sunak announced in his recent Spring Statement that he was scrapping VAT on small scale renewables from April 2022.
Of course, for there to be no VAT paid by a homeowner if they choose to install solar panels, an air source heat pump or insulation for the next five years will always be welcomed by me.
Anything that reduces the cost of making your home more comfortable, more energy-efficient, more affordable to heat in the long-term and better for the environment is a good thing.
But, as usual the government just hasn’t gone far enough.
I realise the government have to try and balance the books, (and we have to acknowledge the support they gave so many people during the Covid pandemic), but with the cost of living crisis kicking in harder than ever, the government need to wake up and smell the coffee when it comes to funding ecological home improvements.
My biggest gripe is that there really is no long-term plan
George Clarke Architect, writer, TV presenter and Ecodan Ambassador
Harsh reality
Most of the homeowners I know who have already carried out ecological upgrades to their home or who are considering installing solar panels or air source heat pumps are actually lucky enough to have savings in their bank account or have disposable income every month so they can afford to pay the capital cost for the kit as well as the full installation.
They have the money.
Yes, a reduction in VAT is definitely going to help them to retain a few quid in their bank accounts, and I’m sure the headlines the chancellor grabbed when he made the announcement might make those people who were considering adopting renewable technology actually go ahead and do it.
However, the harsh reality is that the people who need green technology most, those that need protection from insane super-expensive fossil fuel prices, are those who are in really struggling to pay their bills, feed their kids and survive another day.
There is no way on earth those people suffering with the increased costs of living, who are under so much financial pressure and possibly on the verge of fuel poverty, are thinking about carrying out ecological homes improvements.
They are the ones that need the most help right now. Cutting fuel duty by 5p per litre (when fuel prices have gone crazy in the last 6 months!) or reducing VAT on renewable technologies to zero is going to do very little or even nothing for them.
No credibility
My biggest gripe (and I bang on about this a lot!) is that there really is no long-term plan.
There is no long-term plan for all housing in Britain to be made green and energy efficient. Worse than that is there is no credible funding strategy in place by the government.
If green home upgrades are going to be carried out at scale then there has to be a brilliant and radical funding strategy, where everyone can access funding if they so I need it, to carry out ecological work.
Rishi Sunak started to blame the war in Ukraine for the fuel crisis and spiralling living costs, but the honest truth is that costs were going crazy anyway.
The lifting of the price cap on fuel bills was always going to hit people hard, particularly those on low incomes. If your utility bills more than double overnight and the cost of your food, the fuel for your car and general living costs go up and up while your wages broadly stay the same you aren’t thinking about making any home improvements, never mind green/ecological ones, that aren’t regarded as ‘essential’ when you're struggling.
Government subsidies
Governments over the decades have heavily subsidised fossil-fuel industries and it is time for them to subsidise green home improvements in a massive way.
A few VAT cuts here and there really isn’t going to have the impact the home industry and the planet really needs.
The government must implement a credible, long-term funding strategy to make all homes in Britain green, reduce our dependence on fossil fuels and make the country ‘energy self-sufficient’ so we don’t rely on buying fossil fuels at all, especially from other countries.
As we all know, the green homes grant as part of the government’s “build back greener” initiative was a complete farce and was scrapped after 6 months!
There were many reasons for this failure, but one that I really need to highlight is that Britain needs an army of highly trained installers for insulation and heat pump systems in its battle against climate change and home energy inefficiency.
We have to build up those skills and create a massive new generation of super-green mechanical and electrical engineers.
This all needs to be backed by government in a big, big way and the steps the chancellor has taken recently aren’t big, they are tiny.
We know what is needed
Where are the radical financial incentives that will genuinely make a difference?
Where are the government-backed Green Mortgages that could add the capital cost of ecological home upgrades to a to a low-cost, relatively low-interest mortgage spread over a long repayment period?
What about the UK Infrastructure Bank? Check them out at www.ukib.org.uk. Their current mandate is to “lend to local and mayoral authorities for strategic and high value projects”, but why can’t the government step in in a big way and use this financial vehicle to provide ‘ZERO-INTEREST’ loans to individual homeowners and private sector/public sector landlords?
What a brilliant thing that would be!
We know exactly what we need to do for all of UK housing to be green and energy efficient using clean renewable technologies rather than expensive and climate-damaging fossil fuels.
We have the knowledge and technology to do it, but without a revolutionary long-term funding strategy in place to pay for it, as well as thousands of highly-trained installers to actually do the work then its just not going to happen, certainly not at the scale it needs to.
Surely the Chancellor knows that!
George Clarke is an Architect, writer, TV presenter and Ecodan Ambassador
