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Energy-efficient home owners should pay less council tax, say campaigners

The UK Green Building Council suggested the changes should be funded by making owners of inefficient homes pay more.

Energy efficiency assessment

Owners of energy-efficient homes should pay less for their council tax and stamp duty to drive take-up of the government's flagship energy-efficiency scheme, according to campaigners.

Publishing an analysis on how to improve the green deal, the UK Green Building Council said the changes would be funded by making the owners of the country's leakiest, most inefficient homes pay more under the two taxes.

The proposed incentives follow government figures, published at the end of June, that showed only 245 households were on the brink of finalising financing under the green deal, six months after its launch.

The scheme sees homeowners take out loans with private companies, attached to their property, to cover the cost of energy efficiency improvements such as new boilers and insulation. But it has been criticised for being too complex, having high interest rates and for the financing being beset by legal and software delays.

Echoing a letter the UK-GBC sent last month to energy secretary, Ed Davey, the organisation said the green deal should be reformed, not scrapped.

Paul King, UK GBC's chief executive, said: "This sends a powerful message to the government that there are viable policy options available to boost demand for the green deal and help tackle the UK's energy efficiency crisis. The research shows not only the impact additional incentives would have on carbon savings, but how they could breathe new life into the construction sector and boost economic growth".

He added: "There are some tough political choices to be made, not least in using the tax regime to nudge householders into action, but the opportunities for UK Plc are just so great, that this is a nettle which needs to be grasped."

Derek Lickorish MBE, Chair of the Fuel Poverty Advisory Group, a government-funded lobby group, welcomed the proposals and said: "any incentive to improve the thermal efficiency of homes is a good thing". However, he said it is important how the incentives are implemented: "The fuel poor tend to live in energy inefficient homes and they have insufficient income to heat them to a good enough level or to put in the improvements required to make them more energy efficient". He called for a long-term commitment from the government to support poorer homes to become more energy efficient.

Low-income households already pay more for their fuel, households with an average income of £6,500 pay £1,954 on fuel a year compared to those earning £42,000 paying just £1,244. Fuel-poor households amount to 18.5% of the population, or 3.6m homes.

A spokesman for the UK GBC admitted the changes faced practical challenges. Many older homes have not been assessed for an Energy Performance Ceritifcate (EPC), the A-G system ranking a home's energy efficiency. The UK GBC plan conceives homes without an EPC being penalised, based on the assumption they are inefficient.

The UK Green Building Council hopes that increasing incentives for energy efficiency properties will boost an increase in demand for retrofit of properties and create economic growth. It suggests that such a scheme could deliver between 65,000 and 169,000 additional retrofits a year, a significant increase on the number so far.

The best methods to to make properties more energy efficient are to install insulation measures such as loft insulation and external solid wall insulation. Other energy saving measures include renewable energy such as Solar PV and energy efficient replacement doors and windows.

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