Household goods designed to tackle high prices from energy suppliers should be free from VAT to enable more people to buy them, according to the British Retail Consortium (BRC).
The organisation has called on chancellor Alistair Darling to remove the tax from products designed to be energy-efficient and has also advocated a scheme similar to the car scrappage plan where motorists are encouraged to switch vehicles for cleaner models.
Nearly one per cent of the UK's carbon emissions could be cut each year if energy-efficient products had their VAT removed, according to models carried out by the organisation.
Stephen Robertson, director general of the BRC, said: "The government's working against its own objectives when it sets targets for reducing carbon emissions, while charging full VAT on the efficient products that will move us towards those targets."
He added that implementing a scrappage scheme could speed up the rate at which inefficient equipment is removed from people's homes.
Homeowners could also switch energy companies to pursue the cheapest market rates currently available.
If you want to find out more about switching energy suppliers and how you could save up to £378 in minutes, click here.