Noble Francis, of the Construction Products Association, a trade body, said: “The reduction in VAT on energy-saving materials from 5pc to 0pc merely makes a dent into the overall cost rises. This won’t make a difference in terms of the cost of living crisis or increasing demand for energy saving retrofit activity.”
He added: “This is a big missed opportunity. There is a very big policy hole when it comes to energy efficient retrofit works.”
The benefits of the tax cut will only be felt by wealthier households who were already thinking about undertaking works and will give minimal help to middle and low income homeowners, experts warned.
Jess Ralston, of the Energy and Climate Intelligence Unit, a non-profit research group, said: “It will provide a boost to middle and higher income households, but if you haven’t already got money in the bank to do the works, it won’t make any difference.”
Matt Copeland, of National Energy Action, a charity, said: “It is much richer households that will feel most of the benefits.”
Energy charities and campaign groups criticised Mr Sunak for failing to introduce more effective policies.
“The policy is lacking when you think of all of the options the Chancellor had on the table, like introducing low interest loans for works,” said Ms Ralston.
Over the last 20 years, changes to VAT have made no difference to demand for general home improvement works, said Mr Francis. “I have tested demand at every time over the last 20 years that the Government has changed VAT and it hasn’t made any difference at all,” he said.
For the Government to meet its “net zero” targets and improve Britain’s energy security, 60pc of the country’s 29 million homes need to undergo works, said Mr Francis. “This needed to start 10 years ago,” he warned.
