Green Deal decision 'causing confusion', says BMF
Published: 24 July, 2015
The industry has been 'thrown into confusion' following the government's decision to give no more taxpayers' money to the Green Deal Finance Company, and to stop the Green Deal Home Improvement Fund, according to the Builders' Merchants Federation.
Worryingly, the government has admitted that they have nothing to replace the Green Deal, although they have commissioned an independent review, led by BRE chief executive Peter Bonfield, to look at standards, consumer protection and the enforcement of energy-efficiency schemes, to ensure that any future arrangements provide better value-for-money for taxpayers and consumers.
John Newcomb, BMF managing director, commented: "There has been a huge amount of time and money invested by manufacturers, merchants and their customers to try to make the Green Deal work. We agree that in its current form it was not working. It was over-bureaucratic, the finance package was unattractive and it has been poorly implemented. However, the concept was sound and we believe the Green Deal could have been extensively overhauled rather than scrapped altogether.
"Instead, yesterday's announcement has put paid to one of the Coalition government's flagship policies with nothing new to replace it. Regrettably, this is another case of stop-start Whitehall policy-making that shakes business confidence and damages any industry appetite to invest in low- and zero-carbon solutions to help improve cold, draughty homes and cut rising energy bills."
The Green Deal announcement came hot on the heels of the European Court of Justice ruling that the reduced 5% VAT rate on the supply and installation of energy efficient measures could not continue.
Mr Newcomb said: "The government faces the prospect of having to put VAT up from 5% to 20% on this work despite its General Election manifesto pledge not to raise Income Tax, National Insurance or VAT in the next five years. A fortnight ago, the government decided to ditch its Zero Carbon Standard for new homes, which had been due to begin next year, as well as the Allowable Solutions' scheme formulated to help builders achieve this new standard. There are four and a half years to go to 2020 and the effort required to improve millions of homes now looks even more unlikely to be completed by then. The BMF wants ministers to urgently explain what they will do to increase the number of homes being treated to improve their thermal and energy performance. At present, we have no compelling vision to encourage residents to do the right thing."