08 July 2020
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Photo: Andrew Parsons/Number 10/Flickr CC BY-NC-ND 2.0
Chancellor Rishi Sunak's new £3bn energy efficiency programme is a welcome boost to the green economy, but its ability to catalyse the transformation of the UK's building stock depends on what happens next
One of the many ironies of the Cummings Supremacy is that the Prime Minister's top advisor has become notorious for both bemoaning an absence of mathematical rigour in public life and ruthlessly exploiting low levels of numeracy to land his key messages.
Last week's somewhat underwhelming speech on the government's economic recovery plans from the Prime Minister provided clear echoes of the "we send £350m a week to the EU" referendum gambit that put Boris Johnson on the path to Number 10. The promise of £5bn of accelerated - not new - infrastructure spending deployed much the same trick of using a figure that sounds extremely large but is in fact remarkably modest when placed in context.
Any attempt to then respond with "no, actually, £5bn is a fraction of what is needed if you want to wear Roosevelt's New Deal clothes", requires critics to both repeat the £5bn headline figure and the New Deal message, while also potentially providing further evidence to support the old political cliche that "if you are explaining, you are losing".
The question for green businesses and campaigners assessing the government's surprise announcement yesterday that it is to launch a £3bn, one-year energy efficiency spending blitz is whether this welcome new plan adheres to the same template. Is £3bn a lot or not?
Opinion is somewhat divided on this crucial question.
The obvious answer is a resounding 'yes', and it is notable that most campaign groups and green business leaders have given today's announcement a warm welcome. The £3bn programme marks a drastic improvement on the current underpowered energy efficiency regime. It is set to create thousands of jobs across the country, improve homes, cut energy bills, enhance health, and slash emissions. There is a lot to like here.
However, there are both long and short term caveats to the chorus of approval that the government is yet to address.
Firstly, Ministers now have to execute the new scheme. Mobilising £1bn of investment in school and hospital upgrades while delivering a voucher scheme that helps both the fuel poor and those able to pay for their own home improvements is a sizeable undertaking for a government with - how can we put this delicately - a somewhat mixed delivery record of late. The grant scheme is extremely generous and is likely to be inundated with applications. Ministers will need safeguards to ensure only good quality upgrade work is supported and that taxpayers' money delivers tangible benefits, especially for those whose homes are most in need of improvement.
Secondly, if the scheme works as envisaged a huge question quickly arises as to what comes next. Yes, £3bn over the course of one year is a lot, but £9bn over the course of five to 10 years, as the government promised in its manifesto, is not enough to put the UK on track for its net zero emissions goal.
If the Treasury has simply pulled forward promised funding and now intends to spread the remaining £6bn over the rest of the Parliament and beyond, then any green jobs boom will prove short lived and the UK's energy efficiency efforts will quickly return to their sub prime norm.
There are reasons to be optimistic that the intention is for a more ambitious long term package to be delivered following the initial recovery-focused spending blitz. It was notable the Treasury described the £3bn plan as a "significant downpayment". There is now a broad and vocal consensus - inside and outside government - in favour of a genuinely ambitious longer term strategy.
But can that consensus be sustained and can critics of the approach - allegedly including Dominic Cummings, who is said to be dismissive of the need to prioritise "boring" insulation upgrades - be convinced of its long term importance? Once the initial surge in demand for green home vouchers has passed and the original budget has run dry, can the government deliver the economies of scale, effective regulations, and clever finance options that all experts agree are essential if the country's entire building stock is to be upgraded over the next decade?
It is the answer to that question which will determine whether £3bn is a lot of money that catalyses the UK's net zero transition, or a welcome but ultimately short-term bit of green spin.
A version of this article originally appeared in the BusinessGreen Overnight Briefing newsletter, which is available to all BusinessGreen subscribers.
