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The British Retail Consortium (BRC) believes the Government is "working against its own objectives" for reducing carbon emissions by charging full VAT on green domestic appliances.
The BRC has today announced that it is writing to Chancellor Alistair Darling as he begins his pre-budget report in order to set out its priorities for "a balanced approach to sustainable recovery'.
The plan includes the creation of incentives for households to improve their energy efficiency - one of which would be to remove VAT entirely from energy efficient domestic appliances.
The BRC also feels that a car industry-style scrappage scheme could prove beneficial if considered.
BRC director general Stephen Robertson said: "The Government's working against its own objectives when it sets targets for reducing carbon emissions while charging full VAT in the efficient products that will move us towards those targets."
He added: "A modern, efficient fridge freezer uses less than half the energy of a 1995 model. Over its lifetime it can pay for itself but having to find the cost up front puts customers off upgrading - particularly in a recession.
"Removing VAT and exploring the possibility of a scrappage scheme would do a lot to get old energy and water squandering appliances out of people's homes."
According to the BRC, in the UK there are 15m fridges, freezers and washing machines that are more than ten years old.
Another key proposal in the BRC's pre-budget report submission is for the Government to provide "the right policy framework to support high streets". It asks that it back "transport and delivery regimes that work as a service to customers and businesses" and suggests that all workplace parking charges be dropped.