It will also apply to the installation of solar panels, which can make an important contribution to energy saving. Pensioners will also benefit from safer and warmer homes with a cut in VAT to 5 per cent for the installation of central heating and home security systems funded from new Government grants. This is the lowest VAT rate allowed under our EU agreements. In a joined up initiative, Customs, DETR and the Home Office have been working together to ensure a better deal for pensioners and the less well-off. The UK has a disproportionately high level of winter deaths compared to other countries of continental Europe and Scandinavia.
Research shows that cold homes are linked to winter deaths and ill health.
The Government is, therefore, widening the reduced VAT rate to cover installation of energy saving materials in all homes in order to reap the widest benefit in health terms. New HEES will fund the installation of central heating in the homes of pensioners, and the installation of heating system measures in the homes of the less well off. In order to underpin the Home Office initiative on making pensioners homes more secure, the reduced rate will also apply to home security goods installed at the same time as central heating in the homes of less well-off pensioners. Home security goods include locks and bolts for windows, locks bolts and security chains for doors, spy holes and smoke alarms. The reduced rate does not apply to purchases for DIY installation.