Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what discussions he has had with the Chancellor of the Exchequer on the potential merits of putting zero rating VAT on domestic heat pumps.

The Government maintains a reduced rate of VAT of 5 per cent on the installation of many Energy Saving Materials, such as ground source and air source heat pumps, subject to certain conditions.

The Government keeps all taxes under review, but going further would impose significant additional pressure on the public finances, to which VAT makes a significant contribution. VAT raised around £130 billion in 2019-20 and helps to fund key spending priorities. Any reduction in tax paid is a reduction in the money available to support important public services, including the NHS and policing.

The Government has published the Heat and Building Strategy, which sets out our vision for a sustainable and affordable transition to a low carbon heating sector. The Strategy sets out proposals that will create a long-term, stable, regulatory framework across all types of buildings, while targeting funding to support early adopters and the vulnerable.