Modifications of Schedule 5 to Value Added Tax Act 1983

Part of Orders of the Day — Finance (No. 2) Bill – in the House of Commons at 12:45 am on 30th April 1984.

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Photo of Mr Gerry Bermingham Mr Gerry Bermingham , St Helens South 12:45 am, 30th April 1984

I do not propose to discuss matters which I discussed earlier but to which the Minister failed to give a satisfactory reply. This amendment deals with insulation. The domestic arguments are well-known, as are the benefits to society. Perhaps the Minister will take on board one point which relates to the industrial sector. If the industrial sector is assisted, as it is currently by other Departments, by being encouraged to develop thermal efficiency, the overall costs will be reduced.

If it is found that such development will cost 15 per cent. more because of the Government's imposition of 15 per cent. VAT on thermal efficiency some industries will be discouraged from investing in that way. Overhead costs of fuel consumption will rise and product prices will also rise.

Surely it would be in everyone's interest to balance overheads and the costs to society and to encourage industry to insulate by not imposing VAT on insulation. A limited amount of energy is available for the next 150 years. It makes sense to conserve oil, coal and nuclear stocks.

1.45 am

It must be in our interests to conserve as much energy as possible so as to stretch the years of fuel availability and keep overall fuel costs down. To do that, we should insulate and ensure that every possible energy conservation method is used. However, we have a Government who preaches the doctrine or of energy conservation and a Treasury which preaches the idea of penalties for conservation.

Whereas the Minister was not prepared to accept the removal of VAT on alterations, I hope that he will accept this amendment dealing with insulation. I hope that the Government will think again.