To ask the Secretary of State for Environment, Food and Rural Affairs what assessment she has made of the impact on carbon dioxide emissions of the extension of the 5 per cent. rate of VAT to apply to the grant-funded installation of (a) factory-insulated hot water tanks, (b) micro-combined heat and power and (c) renewable energy heating systems in the homes of the less well-off.
I have been asked to reply.
As set out in table 7.2 of the Economic and Fiscal Strategy Report, the reduced rate of VAT on the installation of energy-saving materials is expected to save around 0.1 million tonnes carbon by 2010. The extension of the reduced rate in Budget 2002 will lead to further small savings of carbon. The reduced rate will enable further installations of the qualifying measures to be made under grant-funded programmes in homes of the less well-off. By improving energy efficiency, the measures will enable householders to improve comfort levels for the same expenditure on energy as well as to reduce carbon emissions.