2007 Budget : More can be Done!
Whilst Chancellor Gordon Brown’s 2007 Budget outlines a raft of incentives for low carbon housing, Paul Massey, Ideal Stelrad Group’s managing director, believes that more can be done to make existing properties more energy efficient.
With 21 million domestic properties accounting for nearly one third of the UK’s total greenhouse gas emissions, it comes as no surprise to everyone involved in the heating industry that the Government is once again focusing on this sector to help meet its ambitious targets of reducing carbon emissions.
In the latest Budget, the Chancellor reiterated commitments previously made to exempt zero carbon homes up to £500,000 from stamp duty, which comes into effect in October. This is designed to encourage homebuyers to purchase zero carbon homes and provide a financial incentive for housebuilders to build them. Other plans outlined include new grants for pensioners for installing insulation and central heating, mortgages designed to encourage investment in energy efficiency measures that will increase the sale value of the home and a European-wide VAT reduction for energy saving products in the home from 17.5% to 5%.
At Ideal Stelrad, we fully support these moves and I personally applaud the Government’s decision to implement these policies. The fact is, there is a massive opportunity to make significant strides in reducing carbon emissions by targeting the six million standard efficiency boilers in existing homes and replacing them with highly efficient equivalents. Along with the environmental benefits, this would also save homeowners up to 30% off their heating and hot water bills each year, as much as £200 for the average family household.
However, there are two major barriers why homeowners are yet to grasp the initiative and install an energy efficient boiler. Firstly, the quality of UK boiler manufacturing over the last 40 years has meant that many standard efficiency boilers which should, by now, have reached the end of their operational lives, continue to be operational. The second stumbling block is the cost of installing a new energy efficient appliance, which has inevitably led a repair rather than a replace culture.
This has created a false economy as homeowners are ultimately only keeping a less efficient boiler running longer. What the heating industry needs to do now is continue to educate homeowners that the cost of repairing an older system plus the lost savings in heating bills that could be generated by a high efficiency appliance will make a considerable contribution towards the cost of a new boiler in the first year alone. With a proposed VAT reduction for energy savings products announced in the Budget, this will act as a further incentive for homeowners to make this change and start reaping the benefits of high efficiency technology.