Bosses of Arrival, Ecotricity, and Bulb are among more than 30 business leaders to urge government to take step to make low carbon products and solutions more affordable for consumers
Leading green technology businesses have urged the government to use its new found independence from EU regulation to scrap VAT on 'green' products such as electric vehicles (EVs), low-carbon boilers, energy storage devices, and insulation, arguing the move would accelerate uptake of low-carbon products and services critical to the UK meeting its net zero goals.
The chief executives of Arrival, Bulb, Ecotricity, and the Association for Renewable and Clean Technology are among more than 30 business leaders who wrote to the Prime Minister last Thursday calling for VAT on products that reduce household and individual carbon emissions to be axed.
The executives said they were "disappointed" by the lack of policies geared at helping people play a part in reaching net zero emissions following the government's recent controversial decisions to axe the Green Homes Grant, reduce the Plug-In Car Grant, and reject calls for VAT cuts on green products in the latest Budget. The group warned that without more consumer-facing policies and incentives cash-strapped families could be "priced out" of the critical switch to green energy tchnologies.
"Families shouldn't be taxed for choosing green options, and low-carbon technology must be affordable for everyone," the letter states. "Scrapping VAT on green products will boost consumer spending in green technologies, stimulate growth and create highly-skilled green jobs in all four corners of the UK. This is particularly important for clean tech businesses, who'll grow and create jobs as a result."
The VAT exemption should be extended to EVs, EV charging technology, heat pumps, energy storage devices, solar panels, secondary or double glazing, insulation, energy efficiency fittings, low-carbon boilers, and green 'white goods', the business leaders said, noting previous legal obstacles faced by governments looking to cut VAT had been removed following the UK's departure from the EU.
The letter comes just a few weeks after car industry groups called on the UK to emulate the government of the Netherlands and scrap VAT on EVs in order to encourage more consumers to go electric, and a few months after MPs on the Environmental Audit Committee urged the government to remove the tax on green home improvements.
The chief executives of Fischer Future Heat, Moixa, Etopia, the People's Energy Company, and Citizens Advice also signed today's letter, which calls for "urgent action" ahead of the COP26 Climate Summit that the UK is set to co-host this autumn.
The move comes as pressure builds on the government to flesh out its climate strategy ahead of the vital UN climate talks, with a report published in the Guardian this morning warning that recent domestic policy moves had left senior international figures concerned about the UK's ability to show climate leadership.
Christiana Figueres, former UN climate chief who led the 2015 Paris Agreement, told the paper an apparent mismatch between the UK's domestic and international climate policies was "worrisome", while European Climate Foundation's executive director Emmanuel Guerin said it was "very, very suboptimal".
The decisions to slash the UK's overseas aid budget, axe the Green Homes Grant scheme, cut EV incentives, and support airport expansion, as well as the failure to initially intervene to block planning approval for a new coal mine and the refusal to rule out new oil and gas exploration licenses are among the actions that have left world leaders and climate diplomats concerned about the UK's commitment to its net zero emissions targets, according to the report.
"There have been recent decisions in the UK that are not aligning with the ambition of the net zero target," Figueres said. "It is worrisome. There are raised eyebrows among world leaders watching the UK."