From ‘the left hand does’t know what the right hand is doing’ dept. The ever-so-green Eurocrats apparently don’t want an emissions reduction from energy efficiency…
BRUSSELS MAY KILL GREEN DEAL
GWPF.org Date: 23/11/12 by GreenClick
The future of the Government’s flagship Green Deal programme hangs in the balance after an intensifying tax dispute with the European Commission. If, as threatened, Europe sticks to its ruling it means the Green Deal will be grounded because it will no longer be financially viable.
Brussels bureaucrats have warned Whitehall to overhaul the tax rules regarding energy-saving materials or face the prospect of massive fines at the European Court of Justice.
Currently, the UK Treasury levies a reduced rate of 5% VAT for insulation materials for walls, ceilings, floors and water tanks. However, the full 20% rate of VAT still applies to energy-efficient windows and doors.
In August, the European Commission warned the UK Government the reduced 5% tax rate is unlawful and it must change the law or face the prospect of the European Court imposing huge financial penalties.
The UK Government is fiercely disputing the ruling but today a spokesperson for Europe’s Tax Commissioner Algirdas Šemeta said it was unlikely the challenge will be successful and said the UK had only this week filed the formal paperwork to appeal.
“The current infringement proceeding is on the application of the reduced VAT rate to some goods and services which according to the VAT directive would not be subject to this rate,” she added.
“How this infringement interacts with the eligibility criteria of investments under the Green Deal is a domestic UK issue on which we do not have comments.”
However, she warned of a lengthy delay to a final outcome as the Commission deals on average with 400 to 500 infringement cases a month.
If, as threatened, Europe sticks to its ruling it means the Green Deal will be grounded because it will no longer be financially viable.
Read the rest (if you can stomach it) here.
What I don’t get about this is: The VAT accrues to the treasury anyway, so why can’t the govt. simply plough the revenue back into the Green Deal system if they want to achieve its objectives?
In other news, the ‘Green Levy’ on our energy bills is set to triple over the decade: H/T Bryan
“Energy firms will be allowed to triple the amount of money they add to customers’ bills to pay for renewable power, nuclear and other environmental measures, under plans to be announced by the government next week. The deal over a new energy bill, struck after weeks of sometimes bitter negotiations between the coalition partners, will mean the total amount energy suppliers can add to domestic and business bills will rise from £2.35bn this year to nearly £10bn at the end of this decade. Adjusting for inflation that would be worth £7.6bn in today’s prices, an increase of nearly three times. [The Guardian]“