Archived press release

Reduce vat on energy-saving goods say ace and foe

1 July 1997

'In the name of justice, jobs, democracy and energy efficiency' current Treasury Minister Dawn Primarolo MP urged the House of Commons to vote to reduce VAT on energy saving materials to 8%on 27th March 1996 (Hansard Col 1131), and accordingly, in response to a Labour three-line Whip most members of the current Cabinet went into the Division Lobby to support this call. (Note 1: those not on the list were paired).

In tomorrow's Budget, the Chancellor should deliver on what they voted for on 27th March 1996: it is widely tipped that VAT on energy saving materials will be reduced to 5% - the same as it will be on fuel.

Representing the energy conservation industry, Andrew Warren, Director of ACE (Association for the Conservation of Energy) said:

"We shall have no hesitation in congratulating the Government in general and Gordon Brown, Alistair Darling and Dawn Primarolo in particular on now honouring the promise they made in march last year.

This is an important VAT reduction. The energy conservation industry has been stagnant over the past few years. This one policy is expected to increase demand for home insulation materials by 10%; avoid workers from being laid off; cut emissions and so help with the Government's CO2 targets. Treasury Ministers have responded to appeals from the industry, from the fuel poverty and the environment movements. We welcome this green initiative."

Charles Secrett, Director of FOE, commented:

"There will be a tremendous backlash from the environment movement if the Chancellor fails to deliver on the climate change promises the Prime Minister made at The Earth Summit last week. Gordon Brown must cut VAT on energy saving goods to match the low VAT rate on energy use, and promote energy conservation. The Government's environmental credentials are on the line in this budget.

ENDS

NOTES TO EDITORS: The following Cabinet Ministers voted to reduce VAT on energy saving materials to 8% on 27th March 1996; John Prscott; Gordon Brown; Robin Cook; Jack Straw; David Blunkett; Margaret Beckett; George Robertson; Frank Dobson; Ann Taylor; Chris Smith; Marjorie Mowlam; Ron Davies; Clare Short; David Clark; Gavin Strang; Alistair Darling. Plus (non-Cabinet)Treasury Minister Dawn Primarolo and Environment Minister Michael Meacher.

[Index]

If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust