INDUSTRY NEWS 5
Sunak announces removal of VAT on energy effi ciency upgrades
it is positive to see tax breaks to help con- sumers install energy effi cient technology to reduce their bills and energy usage in the long-term.
he hancellor also unveiled a plan to increase the threshold at which people start paying national insurance contribu- tions by £3,000 to £12,570 from July, and a 1p cut in income tax.
Construction reacts to Sunak’s spring off erings
he housebuilding and wider construc- tion sector has given a general welcome to hancellor ishi unak’s pring tate- ment, in which he announced the removal of A on energy effi ciency measures for homeowners, as well as a new tax plan to ease the rising cost of living, and a cut in fuel duty.
hancellor ishi unak’s pring udget announced a removal of VAT on energy effi ciency measures for homeowners, in the context of high in ation and lowered economic growth projections. unak explained that homeowners won’t have to pay the 5% VAT on “energy saving materials, such as solar panels or heat pumps,” but this would only be a fi ve-year arrangement. e also confi rmed the introduction of cheap taxpayer-backed loans to help homeowners install heat pumps, solar panels and other energy effi ciency meas- ures such as insulating properties to com- bat rising fuel bills. he pring tatement also cut vehicle fuel duty by 5 pence per litre, but there has been a muted response from business in general to the fi scal moves announced.
While unak said that the economic effects of the war in Ukraine would only become clear later, he announced a cut in the UK’s growth forecast from 6% this year to a modest .. e said the projec- tions for growth in 2023 were of an even more disappointing 1.8%.
This is against a challenging economic
backdrop where in ation has reached 6.2% and is expected to continue growing to 7.4% by the end of this year, according to the ffi ce of udget esponsibility. atthew ratt, roup of edrow, commented We welcome the hancel- lor’s focus on boosting growth and sup- porting consumers with the rising cost of living. As the UK moves toward net zero,
Brian Berry, chief executive of the
Federation of Master Builders, said that unak’s A cut was an important move he A cut will help householders in- sulate their home at a time when energy bills are escalating. It will also provide a much-needed boost to local builders operating in the retrofi t market. Berry added: “The Government now needs to build on the A cut and imple- ment a long term ational etrofi t trate- gy to provide business certainty.” He also said that the hancellor’s commitment to improve the ’s skills system was en- couraging, notably the push for greater numbers of employers to train up staff. This is particularly true for construction, a sector that has suffered long-term skills shortages.”
However the FMB chief executive said that the Government’s measures “should focus on providing long-term solutions that incentivise more businesses to play their part in training the next generation of tradespeople.”
arc lessing, of micro-home developer Pocket Living, warned that major issues remain for home buyers despite unak’s udget announcements he 1 increase in house prices in ng- land shows again just how dysfunctional the UK’s housing market is, and why real change is needed now.”
He said house prices, when combined with the cost of living crisis, were resulting in a signifi cant loss of opportunities for those desperate to get
onto the housing ladder.” Vlessing added: “We need the Government to act now to unlock affordable housing delivery, especially for fi rst time buyers who cannot otherwise afford to buy. This can only be achieved through reform of the planning system that will enable innovative developers to deliver, without requiring any additional state spending.” Phil Hurley, chair of the Heat Pump Association, gave an expected welcome to the removal of A on energy effi ciency measures, calling it “great news for the heat pump industry, and households.” He added that the HPA had been “working hard behind the scenes calling for fi nan- cial incentives to tackle the barriers to heat pump uptake.”
However Hurley warned that “this decision alone will not be enough to enable all households to access technologies such as heat pumps,” while it “will play a role in helping to accelerate the switch to low carbon heat.” He said that a further step that still needed to be taken to be taken was “the removal of illogical environmental levies on electricity.” Bradley Tully, senior public affairs
offi cer at I oyal Institute of hartered urveyors, commented on the remaining barriers to low carbon building adoption ur fi ndings from the market suggest that the biggest barrier to improve the energy effi ciency of homes is cost – for 85% of respondents in fact. However, the road to achieving net zero always required the retrofi tting of existing homes across this country to make them greener, and discounts for homeowners looking to support these ambitions have been a long time coming.” He added: “We are delighted the hancellor has fi nally listened to our call and taken action to cut VAT.” Trevor Morriss, principal at architects
A, said While I am pleased to see the Government’s new programme of cheap loans for retrofi tting projects, I am concerned that this seems to be a reincarnation of the failed Green Homes rant. If the overnment invested the same amount they are spending on the Palace of Westminster refurbishment into low-carbon heating solutions and insulation, almost 19 million homes could be upgraded by 2030!” e added etrofi tting, however, will only go so far in greening homes and pro- tecting households from the downsides of the ’s dependency on fossil-fuel heating. Government and industry must harness the impact that higher building standards will have so that we can ensure the delivery of high-quality and sustain- able homes that are fi t for a net-zero future, and seek genuine renewable solutions.”
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