As the report by the Industry Taskforce For Peak Oil and Energy Security has pronounced, within five years UK faces oil scarcity. But, the sluggish efforts of the Government reveal it is not ready for the prognosis. Our habit patterns need changing. The VAT reduction to 5 percent already available to professional installation; but, excluding nonprofessional installation should be changed. The environmental benefits of the UK government reducing VAT on all insullation work to five percent would benefit all excluded potential beneficiaries.

In this era of rising bankruptcies and limited income, homeowners are more likely to opt for the do it yourself path. Homeowners would also benefit from tax breaks to support their investments in their housing. The Construction Products Association has understanding demonstrated its support for the extension of a lower VAT rate for such work

It has been noted that the market for thermal insulation has grown due to favourable regulation and rising energy prices. A reduced rate would enhance the appeal for this measure. A test mimicking the VAT exemption increased sales by 120 percent to reveal the potential of what is possible if this is done. This would lead to reduction in CO2 emissions.

As pointed out by the Construction Products Association many homeowners are able to install insulation by themselves. However, they would pay the full rate for such an effort under the current paradigm. As we know buildings are the biggest single energy-using sector and account for 40 percent of energy consumption in Europe

As noted by those who have studied this subject, a reduced VAT rate on insulation products is not necessarily passed on by professional installers to their client. This cannot be ruled out as the reason the UK market has shown relatively low consumption. But, when the installer is the one who will live in the dwelling this will not be a discouraging factor.

The results of the Isle of Man pilot study for EU on the impact of a reduced VAT rate led to improvements to the existing housing stock and reduced pressure on green field site developments. The tax intake increased and the Isle of Man Government concluded the experiment had been a fiscal success. This experiment led the Council of European Finance Ministers to decide that it would allow EU Member States to permanently reduce VAT to 5 percent from the 10th of March 2009. Yet, UU has only extended this reduction in a limited fashion. There is room for reduction of VAT to 5 percent on all insulation work. Even that done by homeowners and any other segment left out so far. Consumers would receive a clear Indication from the Government the tax system supports their part in helping the environment. This step would be an important act towards achieving and encouraging sustainable consumption patterns. This reduced VAT rate should be allowed on goods where the nature of the product is key to its beneficial environmental impact. Insulation leads to a beneficial environmental impact by the reduction of resource use.

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