Thank you for subscribing!
Glass is coming under pressure from soaring costs and rising imports
Slashing VAT on double glazing would bring down domestic energy bills and smooth our route to Net Zero, campaigners say.
The move would also help shield the UK glass industry from a growing tide of imports and keep domestic furnaces firing, the Treasury was told.
Unlike other energy saving materials, such as heat pumps, double glazing still attracts a 20 per cent VAT rate.
This means, say manufacturers, that windows can be overlooked when homeowners are retrofitting homes with eco-friendly tech.
Yet, without proper insulation, much of the clean energy generated is just “flying out the door”, says trade body, the Glass and Glazing Federation.
Meanwhile, thanks in part to soaring energy costs, imports of glass from abroad are growing while UK production slows, it warns.
Supporters of a VAT reduction for double glazing say that extending the relief to windows would be a “win-win” for the Government, increasing work for manufacturers and tradesmen while lowering bills for consumers, thanks to greater energy efficiency.
It would provide a much-needed boost for the foundational glass sector, they say. GB News has previously told how, like other energy intensive industries, glass is coming under pressure from soaring costs and rising imports.
ESMs are seen as vital to decarbonisation plans. Selected materials attract no VAT, although this is currently set to rise to five per cent next year.
The relief is intended “to incentivise the installation of ESMs across the UK to improve energy efficiency and reduce carbon emissions”.
But, despite repeated efforts, attempts to include double glazing have proved fruitless.
The Government has said that the primary purpose of double glazing is not to save energy.
But Chris Beedel, head of Government Advocacy at the Glass and Glazing Federation, said: “We feel kind of overlooked. We want homeowners to benefit from a VAT reduction that would be passed back to them.”
Mr Beedel said that grants for initiatives like heat pumps were encouraging homeowners to make their houses more energy efficient, but windows, with their higher VAT rate, were often missing out. This is despite the technologies going hand in hand.
He said: “Low carbon heating systems are great. But the energy they produce is just flying out the windows and doors, and uninsulated walls.
“It's no good insulating a building if you then don't put new windows and doors in, because they become the point of least resistance.
“If people just did the right thing, and installed insulation and new windows and doors at the same time, that's where the VAT would make a big difference and it would make our product more attractive.
“A VAT cut would do a lot for our industry. It would spark interest with homeowners - even if it was just 10%, it would be very welcome.
“It would make it more attractive to do your insulation before or at the same time as a low energy heating system such as a heat pump.
“It would bring some parity with insulation and other products as well.”
Business leaders have warned that the glass industry is “at a crossroads”, with manufacturers facing decisions on whether to rebuild furnaces that are coming to the end of their lives in the UK, or abroad.
Losing the furnaces, and the skills needed to make high quality glass, would be a huge blow to one of the UK’s foundational sectors, Mr Beedel said.
A VAT reduction would “signal to our industry that people care and that they value the products”.
He explained: “We haven't relied on government subsidies, or loans - we have just got on with it.
“And, as such, the Government says, ‘you're getting on with it, so you don't need our help - we'll leave you alone’.
“Well, actually, now, we do. We've come to a crossroads. We have a depth of knowledge and understanding, as well as potential investment, that will secure a UK manufacturing industry for years to come.
“But there are huge volumes of glass coming in from Turkey and China and India now which are competing with UK manufactured products and there's very little to adjust that.
“VAT relief would show that the government takes our industry sector seriously and wants to help our industry grow.”
Support for the call also came from outside the glass sector. Lord Foster of Bath believes tax breaks could play a key role in tackling climate change.
Three years ago, the Lib Dem peer successfully persuaded the then-Chancellor to include retro-fitted batteries in homes in the VAT exemption.
He has since called to have double and triple glazing added to the list.
He said: “The case seems obvious since building regulations now require - for energy efficiency reasons - such windows in most new housing and for window replacements.
“But it’s been rejected because it’s claimed the ‘primary purpose’ is not saving carbon emissions.
“Given current weather suggests how vital it is to redouble our efforts to tackle climate change, this is a poor excuse, and the government should think again.
“Climate change is real. Simple schemes like giving VAT reductions to encourage the use of energy saving measures in our homes can play a role in combatting it.”
The Federation of Master Builders said a VAT cut would encourage people to install more efficient windows with any new renovation.
Jeremy Gray, Head of External Affairs for the FMB, said: "Reducing VAT on all aspects of repair and maintenance work to homes would ultimately help stimulate the market and ensure tradespeople have a healthy pipeline of work.
“While some product installations already enjoy 0 per cent VAT, like solar panels, expanding this to glazing would help bring down the costs for homeowners on what is a common installation with any new renovation or extension.
“It's a win, win all round with more work for those in the industry, less costly installations and reduced energy bills for homeowners."
Governments have also previously argued that, because most homes already had double glazing, a VAT cut would not present value for money.
But Mr Beedel said breakthroughs meant today’s glass was far more efficient than its predecessors.
He said the Government’s ambition to build 1.5 million houses presented a golden opportunity to “glaze them really well with high efficiency products that are also secure and safe”.
The association also estimates that, across the UK, a minimum of 80 million windows should be replaced now with more modern, efficient glazing.
This extra demand would help ensure that domestic furnaces stay firing.
“It's in the government's interest to keep those plants here and to keep them running,” Mr Beedel said.
“Otherwise, we will end up at this point where you'll have more imported glass in windows and homeowners won’t know if it's come halfway around the world on the ship, and it was made using heavy oil.
“We mustn’t move away from UK manufacturing, as once a furnace is gone it is unlikely to ever come back.”
A Government spokesman said most goods and services were subject to the standard rate of VAT.
On assessing exemptions for energy saving materials, the Government looks at the “primary purpose” of the technology. While double glazing could improve energy efficiency this wasn’t its primary aim, it has said.
The spokesman said: “We are supporting families in every postcode to improve their energy efficiency at home by cutting VAT on the installation of certain energy-saving technologies, including heat pumps and solar panels, and by offering grants to reduce upgrading costs."
