Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will make an assessment with the Secretary of State for Energy Security and Net Zero of the potential merits of (a) providing VAT relief for heat batteries and (b) taking other fiscal steps to help support the decarbonisation of homes.

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. Our Warm Homes Plan will increase ambition in this area, working with the private sector to make progress and ensuring the energy efficiency of privately rented homes improves.

The Government recently announced a new Warm Homes: Local Grant to help low-income homeowners and private tenants with energy performance upgrades and cleaner heating, and confirmed the continuation of the Warm Homes: Social Housing Fund to support social housing providers and tenants. Further details of the Warm Homes Plan will be set out through the Spending Review.

The installation of qualifying energy-saving materials in residential accommodation and buildings used solely for a relevant charitable purpose also benefits from a temporary VAT zero rate until March 2027.

Last year, a Call for Evidence (CfE) seeking views on additional technologies to potentially include within this relief was run. Heat batteries were one of the technologies put forwards by respondents. As set out in the Government response to the CfE, at that time, the Government was unable to identify sufficient independent data regarding the efficiency of heat batteries, making it difficult to assess the technology’s energy-saving properties objectively.

The Government currently has no plans to add further technologies to this VAT relief. Nevertheless, the Government keeps all taxes under review as part of the policy making process. Changes to the tax system are announced at fiscal events in the usual way.