Asked by: Llinos Medi (Plaid Cymru - Ynys Môn)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential merits of zero rating for VAT buildings retrofitted to (a) Passivhaus and (b) AECB standards.
Answered by James Murray - Exchequer Secretary (HM Treasury)
This Government is committed to improving the quality and sustainability of our housing stock, through improvements such as low carbon heating, insulation, solar panels, and batteries. This will be vital to making the UK more energy resilient and meeting our 2050 Net Zero commitment.
Installations of qualifying energy-saving materials in residential accommodation and buildings used solely for a charitable purpose benefit from a temporary VAT zero rate until March 2027, after which they will revert to the reduced rate of VAT at five per cent.
VAT is a broad-based tax on consumption and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s second largest tax forecast to raise £171 billion in 2024/25. Taxation is a vital source of revenue that helps to fund vital public services.
One of the key considerations when assessing a new VAT relief is whether the cost saving is likely to be passed on to consumers. Evidence suggests that businesses only partially pass on any savings from lower VAT rates. In some cases, reliefs do not represent good value for money, as savings will not always be passed on to consumers.
The Government has no current plans to formally review the VAT treatment of building works. However, all taxes are kept under review as part of the tax policymaking process. The Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances.
Asked by: Llinos Medi (Plaid Cymru - Ynys Môn)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what discussions he has had with relevant stakeholders on rewiring existing (a) distribution and (b) transmission grid infrastructure.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
The reinforcement of our electricity network is critical to deliver clean, secure power to homes and businesses across the country. This reinforcement includes both new infrastructure, on and offshore, and upgrades to existing lines which are always considered first. Transmission and distribution companies are carrying out significant upgrades to increase the capacity of existing lines on their networks. However, upgrading will not eliminate the need for new lines as it will not be sufficient to provide the necessary network capacity in all areas.
Asked by: Llinos Medi (Plaid Cymru - Ynys Môn)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, pursuant to the Answer of 14 October 2024 to Question 7928 on Electricity: Wales, what estimate he has made of the level of investment needed between 2028 and 2033 in the (a) transmission and (b) distribution grids to help meet net zero targets.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
As the independent regulator, Ofgem assesses network owners’ investment plans with regard to their duties, including to support net zero. Government supports Ofgem’s ambition for acceleration of network build and strategic investment in the next electricity transmission price control, covering the period 2026-31. Ofgem’s current consultation on the framework for the next electricity distribution price control (starting in 2028) identifies the need for significant investment ahead of need, strategic planning, and regulatory changes to prepare the GB distribution networks for net zero.
Asked by: Llinos Medi (Plaid Cymru - Ynys Môn)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, pursuant to the Answer of 14 October 2024 to Question 7928 on Electricity: Wales, what assessment he has made of the adequacy of planned investment in the (a) distribution and (b) transmission grid to meet Net Zero targets.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
As the independent regulator, Ofgem assesses network owners’ investment plans with regard to their duties, including to support net zero. Government supports Ofgem’s ambition for acceleration of network build and strategic investment in the next electricity transmission price control, covering the period 2026-31. Ofgem’s current consultation on the framework for the next electricity distribution price control (starting in 2028) identifies the need for significant investment ahead of need, strategic planning, and regulatory changes to prepare the GB distribution networks for net zero.
Asked by: Llinos Medi (Plaid Cymru - Ynys Môn)
Question to the Department for Energy Security & Net Zero:
To ask the Secretary of State for Energy Security and Net Zero, what steps is he taking to increase battery storage capacity in the (a) distribution and (b) transmission grid.
Answered by Michael Shanks - Parliamentary Under Secretary of State (Department for Energy Security and Net Zero)
Batteries have a vital role to play in the energy sector, as set out in the National Energy System Operator’s recent advice on achieving clean power by 2030.
The Government is working closely with the National Energy System Operator, Ofgem and industry to facilitate the deployment of battery storage. The Clean Power 2030 Action Plan will provide details on the steps we are taking to increase battery storage capacity connected to the distribution and transmission networks.