Dave Toke on Government retreats and a new cock-up in its home insulation programme
The Government has delayed the start of a new four-year phase of its already minimal home energy conservation programme. This means that tens of thousands of poor households will miss out on vital cost-saving measures. The Energy Company Obligation (ECO), whose funding is small compared to the tax concessions handed to oil and gas companies, is a pale reflection of the scheme which operated under the last Labour government.
This is the latest problem for a strategy that is failing to live up to the spirit of the UK’s commitments following the COP26 climate change conference held last year in Glasgow. The Government is busy boosting the oil and gas industry’s ability to sell oil on world markets with new tax concessions for development. Yet it has delayed action to mandate heat pumps in new homes and refuses to repeal the ban on onshore windfarms in England.
The latest delay in the insulation programme appears to have been caused by a failure to prepare the necessary legislation. This failure speaks volumes about the Government’s priorities when it comes to energy conservation.
Rates of loft and cavity wall insulation have plunged by over 90% since Labour’s scheme ended in 2012, despite the fact that the majority of buildings are under-insulated even with these most basic measures. Other types of energy conservation support are practically non-existent. Since 2012, the Conservative-led governments have organised feeble efforts to mount failed schemes to fund energy conservation whilst starving the successful ECO programme of funds.
The next phase of the Energy Company Obligation, funded by a levy on electricity consumers’ bills, was supposed to start in April. However, according to the Energy and Climate Information Unit (ECIU), it may not now begin until the autumn.
Jess Ralston, senior analyst at the ECIU, said: “With this further delay to the highly successful ECO insulation scheme and Treasury having blocked additional help for homes leaking heat, voters struggling to pay the bills, many of them in swing seats, will be wondering when help is coming. The recent energy security strategy, with its focus on North Sea drilling, will not bring down bills now, but there are plenty of roofs that still need insulating.”
The Government claims it does not have money to spend on energy conservation, yet the ECO scheme could be boosted by large amounts simply by reducing tax concessions to the oil companies. Doug Parr, Greenpeace chief scientist, points out that while the Chancellor’s recently announced tax breaks for investment in oil and gas supply are worth between £2.7bn and £5.7bn to the oil companies, “a £3bn efficiency programme on homes would save bill payers over £700m every year, for good”. This tax concession is only the latest in the multi-billions-worth tax concessions for oil and gas companies. Since 2015, they have not had to pay any taxes at all on their UK activities.
The currently planned ECO programme is for £1 billion a year over four years. The range and type of measures is limited, and it is only large enough to serve some of the needs of a minority of the fuel-poor who are eligible. Only households on low incomes will qualify for support, and the funding is predicated on the fact that the majority of this group will not benefit. There will be strict limitations on what can be financed. Only the worst insulated houses can be helped, and then only if the work is going to give very large specified improvements, so buildings with an existing energy performance certificate rating of C will not be funded.
However, attention to this failure has been distracted by reports that Boris Johnson wants to increase spending on insulation at the expense of cutting other decarbonisation programmes. Surely we can no longer be fooled by such tactics. At best, such shuffling of the deckchairs on a sinking ship can hardly inspire confidence!