VAT ON ENERGY SAVING MATERIALS

Motion Text

That this House notes the continued discrepancy between rates of VAT charged on energy conservation (17.5 per cent.) and on energy consumption (5 per cent.); believes that the Government's limited reduction on VAT on energy-saving materials purchased under certain promotional schemes, while welcome, does not address this wider distortion; notes that in September 1999 the French Government cut VAT on energy-saving materials from 20.6 per cent. to 5.5 per cent. and has not been challenged by other EU member states or by the European Commission; notes a similar reduction has been made in Italy from January 2000, again without challenge; believes that this demonstrates that the UK could extend the current limited VAT reduction to all installations of energy saving materials carried out by contractors and remain in line with EU law; and therefore urges the UK Government to do this at the earliest possible opportunity.