BUILDING bosses have given a lukewarm verdict to the Government's Green Deal, saying ministers must try harder to broaden its appeal.

The Federation of Master Builders (FMB) says the energy-efficiency policy has failed to capture the attention of small and medium-sized businesses.

The FMB revealed it has given the Green Deal two out of five on a report card, and wants the Government to reduce VAT to five per cent to galvanise work.

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The Green Deal operates as a loan, allowing people to make energy-saving improvements to homes and businesses, such as insulation, draught-proofing and solar panels.

The Government says savings on energy bills after improvements will cover the loan.

However, Brian Berry, FMB chief executive, said: “It’s clear the Green Deal has not achieved the desired results in its first full year.

“The majority of small and medium-sized installers and homeowners have failed to engage, and the financial package underpinning the scheme has proved unattractive to most consumers.

“Consumers are not interested because of the limited appeal of the financial incentives currently being offered.

“As a financial package, it just doesn’t stack up, and there are many attractive high street alternatives out there.

“The most effective measure to kick-start demand would be to reduce the rate of VAT from 20 per cent to five per cent on all domestic repair and maintenance work, including energy-efficiency improvements.

“This would be a real incentive to homeowners to think about getting a quote on repair and maintenance projects.”