UK retailers are urging the European Commission to lower VAT on energy-efficient household products on the day the Retailers’ Environmental Action Plan (REAP) is launched.

The British Retail Consortium is calling on Commission President José Manuel Barroso to allow retailers to apply a reduced rate of VAT to products with “high potential” for energy savings.

The BRC said the Commission is about to announce plans to use “limited” VAT reductions to encourage improved energy efficiency for buildings, but that this does not go far enough.

In a letter to Barroso, the BRC said: “We are helping millions of people make straightforward, affordable and more sustainable choices but we need politicians to help us go further. Reducing VAT on energy-efficient consumer goods is an essential part of delivering sustainability.

“The retail sector urges the Commission to come out with a robust proposal this spring which would enable us to become part of the solution in building a new green economy in Europe.”

The REAP, launched today, will log the environmental achievements and commitments of retailers throughout the EU.

British Retail Consortium Brussels director Alisdair Gray said: “The UK is in recession. Price is an even more important factor in customers’ buying decisions. Retailers are doing a great deal. They need and deserve help to achieve more. By cutting VAT on ‘greener’ household goods the Commission will show it’s matching rhetoric with policy.”

BRC said reduced taxation would make a “significant contribution to achieving Europe’s carbon reduction targets” as household products account for 16 per cent of total energy consumption in the EU and 10 per cent of EU greenhouse gas emissions.

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