Lords claim green and sturdy products should be cheaper

The government has today faced fresh calls to step up its efforts to cut VAT on green products after the House of Lords Science and Technology urged it to revisit the idea.

Prime minister Gordon Brown first proposed such a tax cut earlier this year in a joint statement with French President Nicolas Sarkozy, but the proposals appear to have stalled, with approval from EU member states required to force through the deep cuts in VAT the UK and France are proposing.

However, the House of Lords Science and Technology Committee argued that the UK government should push ahead with the plans, arguing that the introduction of lower VAT rates for companies using "sustainable materials and less virgin raw resources" would deliver significant environmental benefits.

In response to the Lords report, a treasury spokesman said, "the government has been engaging constructively at EU level for more widespread application of reduced VAT rates to energy-saving and energy efficient products".

The recommendation is one of a number included in the Lords Committee's new report called Waste Reduction and designed to help cut public and private sector waste and encourage them to adopt greener strategies.

Another recommendation would also see VAT on the repair of products cut to encourage firms and householders to repair rather than replace old and faulty products.

"We would like to see the VAT regime reformed so that products that have a long life cycle, or can be easily and cheaply repaired rather than replaced, are made economically more attractive," said Lord O’Neill, chair of the Lords Science and Technology Sub-Committee on Waste Reduction.

"This would be an important step in turning away from the throwaway consumer culture we have," he added.

Mike Webster at environmental charity Waste Watch welcomed the move, claiming that making repair services cheaper will also serve to have a positive impact on manufacturers.

"A lot of people cannot justify spending a huge amount on a product just because it lasts longer, but if this recommendation is followed through, it should encourage modern electronics manufacturers to produce more sturdy products [as standard]," he said.

The Lords report further called on the government to introduce greater " individual producer responsibility", similar to the WEEE directive governing electronics manufacturers, which makes companies legally responsible for the products they manufacture at their end of life.

The Committee also criticises the government's decision to slash funding for many green business support bodies and claims it should not have gone back on its previous commitment to ensure revenue from the land fill tax was used to help support businesses' waste reduction initiatives.

A version of this article first appeared at BusinessGreen.com's sister site vnunet.com