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VAT cut will boost energy efficiency

VAT cut will boost energy efficiency

Glass and Glazing Federation | Glass and Glazing Federation

6 min read Partner content

It is completely unfair that energy efficient windows have a 20% VAT rate while other energy saving products have just 5%, argued the Glass and Glazing Federation's CEO, Nigel Rees, in an interview with PoliticsHome's Central Lobby.

In his New Year’s speech last week the Chancellor set out a five-point economic plan, including "growing the economy and helping businesses succeed". What practical steps can he take to help the Glass and Glazing industry?

From the Glass and Glazing Industry’s perspective, it is felt that more has to be done to incentivise homeowners into improving and maintaining their properties – in particular making them more energy efficient.

The GGF has supported the construction industry’s “Cut the VAT” Campaign on home improvements, repairs and maintenance work for a number of years and will continue to do so. Currently, the labour and products for home improvements and maintenance are at the 20% rate of VAT and we believe it would grow the economy if the VAT rate was cut to 5%. This would help growth because a significant reduction would mean much more work would be carried out because it would make home improvements more affordable.

We are also constantly lobbying Government to bring the VAT rate on Energy Efficient Windows into parity with other energy efficient products. It is completely unfair to the Glass and Glazing Industry that energy efficient windows have a 20% VAT rate while other energy saving products have just 5%. Again the reduction would mean substantial savings for homeowners and I believe it would grow the sector because it makes glazing more affordable and attractive and our current research shows that 83% of windows in UK properties do not have energy efficient glazing.

If the Treasury were to cut the VAT as illustrated above, it would galvanize the local economies, improve the general economy, create more jobs and improve the housing stock in the UK. It all sounds very logical but for some reason there is a reluctance for the Government to even trial VAT reductions in the construction sector. We will continue lobbying until we see a shift in policy.

This time last year the Green Deal was launched. What is your assessment of its effectiveness and how can it be improved?

It is fair to say Green Deal has got off to a disastrous start. The uptake has been low, the consumer interest and understanding is practically non-existent, the cash back schemes have been ineffective and the number of SMEs signing up to become Green Deal Certified Installers, is also very low. In the glazing industry it’s under 30 companies.

The main problems with Green Deal centre around three key areas; firstly, it’s overly complicated and the bureaucracy just causes delays, indecision and inconvenience. Secondly, it’s not the most attractive proposition as the interest rate on the payback is too high and there are much better finance deals already in the market. Lastly and by no means least, consumer awareness is poor and the Government has put very little money behind the promotion of the scheme. So as a result we have a scheme that few fully understand, is not competitive from a price perspective and is not promoted. Small wonder that uptake is low.

On the positive side, the GGF and the wider industry is keen for the government to support green initiatives that improves the quality of housing, grows businesses and makes the environment cleaner and greener. The GGF also supports ECO (Energy Company Obligation), which is the only part of Green Deal that is truly working effectively. It was very disappointing to hear the Government announcing rolling back ECO because of the cost. This will not just affect housing stock but also local economies and jobs.

How do your Members rate the ‘Help to Buy’ scheme?

Though we haven’t conducted a full Members survey on the “Help to Buy” Scheme, we have found that when we have discussed the subject with Members at our many meetings, that they see it as a positive move. The more new homeowners, the more likely that they will consider home improvements such as new energy efficient windows, doors and conservatories.

Turning to local government, how are restrictions on building over private drains and sewers due to the transfer of ownership from homeowners to private water and sewerage companies affecting the conservatory sector?

This is having a huge impact on the Conservatory sector. The transfer of ownership now means that homeowners have to get clearance – even though they have planning permission to build on their own property - from water companies. This causes major problems on several fronts. For example, homeowners may have to pay for the relevant water company to inspect their private drain/sewer and in some cases even repair the drain or sewer. All of which adds cost and significant delays to the installation. The protracted process, increased cost and long delays can also influence homeowners, many change their minds entirely about having a conservatory installed – which in turn means less work, less growth and a potential loss of jobs.

The GGF is working with Government and the water authorities to try and find an easy solution to avoid this unnecessary layer of red tape.

How does the 'Article 4' directive used by local councils affect PVC-U Double Glazing installers?

Article 4 is a directive used by local authorities to prevent PVC-U windows being installed in conservation areas. The main problem is that Article 4 in itself is simply a directive and not a legal requirement, however it is used to the effect that many homeowners believe it is in fact the law. Our main issue with the directive is that it is not about improving the building but ensuring the property is restored to its original form. This is not only impractical, costly and environmentally unfriendly but it also creates delays in work being carried out and in some cases stops work happening altogether which in turn stifles economic growth, costs jobs, restricts consumer choice and depreciates the quality of buildings while they continue to be energy inefficient.

To tackle this issue, the GGF has set up a Working Party with a view to measuring the scale of the problems this directive causes and also demanding that Government (locally and nationally) revisit the directive to the benefit of all.

Finally, what more can be done on fire safety, in particular how can the Fire Resistant Glazing Group’s development of five point code of core governing principles for all glass and glazing system products be supported by government?

The GGF Fire Resistant Glazing Group (FRGG) has set out its five core governing principles to ensure that where glazing systems are used for the purpose of fire safety, then they must not only be certified but also that it should be installed correctly. If fire resistant glazed systems are not installed correctly then it can result in injuries, damage to properties and in worst case scenarios even death.

Such is the importance and serious nature of fire safety, the GGF FRGG are constantly lobbying that fire resistant glazing is not engineered out of building plans by architects, specifiers or builders because of cost or cheaper alternatives.

In addition where companies or individuals do not follow fire safety best practice, then the GGF FRGG will be raising awareness of the issue to the relevant authorities including Government, Trading Standards and in some cases even the police.

Ideally, it would be good if Government made fire resistant glazing compulsory in all commercial buildings.

Read the most recent article written by Glass and Glazing Federation - GGF agrees headline sponsorship of Glazing Summit

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