GMB Welcome Study Showing That Energy Efficiency Could Save Households £5 Billion Per Year While Creating 108,000 Jobs
We need compulsory programme to insulate all the nation’s housing to the highest standards as it is shameful that we have insulation installers idle and losing their jobs says GMB
GMB, the union for energy workers, welcome new Verco and Cambridge Econometrics’ research showing that a big boost in energy efficiency investment would save UK households £4.95 billion a year and that a radical insulation programme would pay for itself and achieve huge economic benefits to UK. See notes to editors for copy of press release and executive summary of report “Building the Future: The economic and fiscal impacts of making homes energy efficient published 30th October”.
Gary Smith, GMB National Secretary for Energy, said “GMB welcome this report which states that “the Government’s energy efficiency strategy acknowledges that improving energy efficiency is fundamental to decarbonising the UK economy, combating fuel poverty, maintaining secure energy supplies, reducing domestic energy bills, reducing the need for new electricity generation capacity, and increasing the productivity of businesses. However, successive governments have failed to put in place policies or investment which could realise this opportunity.”
We need to move on from this failure. We need a compulsory programme to insulate all the nation’s housing to the highest standards.
It is shameful that we had insulation installers idle and who lost their jobs. There were billions meant to be spent on improving energy efficiency in homes that went unspent. Some of the poorest will struggle to heat their homes this winter.
We have a gathering crisis in the energy sector and a government no idea how to resolve it."
Contact: Gary Smith 07710 618 909 or 0207 391 6700 or GMB press office 07974 251 823
Notes to editors
1 Press release on Verco’s work on the Building the Future report published 30th October 2014
Verco and Cambridge Econometrics’ research for the Energy Bill Revolution campaign has been published today: http://bit.ly/EBRreport
The research shows that a big boost in energy efficiency investment would save UK households £4.95 billion a year. The radical insulation programme would pay for itself and achieve huge economic benefits to UK.
• New research reveals that a far more ambitious home energy efficiency investment programme would increase UK GDP by£13.9 billion a year by 2030
• Radical programme would create up to 108,000 new UK jobs
• It would deliver £4.95 billion in financial savings per year for UK households by 2030
• Gas imports would be cut by 25%, boosting energy security
• £1.27 in tax revenue would be returned for every £1 invested by Government
The report published today, Building the Future, has piled pressure on Ministers to act to fix Britain’s badly insulated homes. The report from Verco and Cambridge Econometrics shows that a much more ambitious energy efficiency investment programme would pay for itself and significantly boost the UK economy.
The programme would add £13.9 billion annually to the UK economy by 2030, with GDP boosted by £3.20 for every £1 invested by the Government. A national scheme to make homes super-energy efficient would result in £8.6 billion in energy savings per year by 2030, an average energy saving of £372 per household. After taking into account loan repayments this would result in £4.95 billion in financial savings per year for Britain’s households.
Today’s research, commissioned by the Energy Bill Revolution, also finds that as well as helping Britain’s households to save hundreds annually from their heating bills, the scheme would pay for itself within the decade. The Treasury would receive £1.27 in tax revenue for every £1 they invested. And as an infrastructure investment it would be classified as delivering ‘high’ value for money.
The scheme would create up to 108,000 new jobs, rescuing the struggling building insulation market, which contracted by 22% in 2013. It would also reduce the UKs reliance on natural gas imports and make the UK less vulnerable to volatile energy markets. The research reveals that the programme would result in a 26% reduction in imports of natural gas in 2030 worth £2.7bn in that year, helping to create a more resilient UK economy.
The programme would also cut carbon emissions from homes by 23.6 million tonnes per year by 2030 - roughly equivalent to cutting the CO2 emissions of the UK’s entire transport fleet by one third.
The Energy Bill Revolution, the world’s largest anti-fuel poverty coalition, is calling for energy efficiency to be made a UK infrastructure investment priority. As part of this programme they are calling for 2 million UK low income households to receive grants to help make them highly energy efficient (Band C on an Energy Performance Certificate) by 2020; all 6 million low income households treated to this standard by 2025 and all other households offered 0% interest loans to help them reach this standard by 2035.
Director of the Energy Bill Revolution, Ed Matthew, said:
“We have one of the most badly insulated housing stocks in Europe and as a result a truly woeful record on winter deaths and fuel poverty. Fixing Britain’s badly-insulated homes won’t just save lives, it will provide a massive economic boost to the UK economy and it pays for itself. There is now an overwhelming case for it to be made a top UK infrastructure investment priority.”
Read the full report here – http://bit.ly/EBRreport
Posted by Helen Reed on 30th October 2014
2 Building the Future: The economic and fiscal impacts of making homes energy efficient
Energy bills are causing considerable financial hardship in the UK, with millions of people living in fuel poverty. One of the biggest causes of the fuel poverty crisis is the poor condition of the UK housing stock, which is one of the least energy efficient in Western Europe.
Improving the energy efficiency of UK homes is an effective way to bring down energy bills, and offers a long term solution to fuel poverty. In addition, it is important to drive carbon emissions reductions, with buildings responsible for almost 37% of all UK carbon emissions. (note 1)
At the same time, the building insulation market contracted by 22% in 2013, (note 2) as the installation of cavity wall insulation fell by 46%, the installation of loft insulation fell by more than 87%, and the installation of solid wall insulation fell by 30%, compared with the number of measures installed under the Carbon Emissions Reduction Target (CERT) in 2012. (note 3) The Energy Bill Revolution is calling for a radical new approach to home energy efficiency. They are calling for all low income homes to be given measures, by 2025, to bring them up to Band C on an Energy Performance Certificate (EPC), (note 4) and for all other households to be offered 0% interest loans to improve them to an equivalent EPC standard by 2035; delivered as part of a major infrastructure investment programme.
This report has undertaken detailed modelling to assess the economic, fiscal, and environmental impacts of this programme. It concludes that the economic case for making the energy efficiency of the UK housing stock a national infrastructure priority is strong.
In addition to making all low income households highly energy efficient, and reducing the level of fuel poverty, the modelling has established that this energy efficiency programme would deliver:
? £3.20 returned through increased GDP per £1 invested by government
? 0.6% relative GDP improvement by 2030, increasing annual GDP in that year by £13.9bn
? £1.27 in tax revenues per £1 of government investment, through increased economic activity, such that the scheme has paid for itself by 2024, and generates net revenue for government thereafter
? 2.27 : 1 cost benefit ratio (Value for Money), which would classify this as a “High” Value for Money infrastructure programme
? Increased employment by up to 108,000 net jobs per annum over the period 2020-2030, mostly in the service and construction sectors. These jobs would be spread across every region and constituency of the UK.
? £8.61 billion per annum in total energy bill savings across housing stock, after comfort take (including energy price inflation)
? Net benefit of £4.95 billion per annum from the total energy bill savings across the housing stock (after able-to-pay energy efficiency loans have been repaid)
? 23.6MtCO2 reductions per annum by 2030, after accounting for direct, indirect, and economy-wide rebound effects. This is roughly equivalent to cutting the CO2 emissions of the UK transport fleet by one third.
? Improved health and reduced healthcare expenditure, due to warmer and more comfortable homes, and improved air quality. For every £1 spent on reducing fuel poverty, a return of 42 pence is expected in National Health Service (NHS) savings. (notes 5 and 6)
? A more resilient economy, less at risk of shock changes in gas prices, as the economy becomes less reliant on fossil fuels. Investment in energy efficiency in the domestic sector will result in a 26% reduction in imports of natural gas in 2030, worth £2.7bn in that year.
1 Committee on Climate Change, Meeting Carbon Budgets – 2014 Progress Report to Parliament, July 2014
2 Mintel, Policy changes are putting a chill into the thermal insulation market, October 2014 http://www.mintel.com/blog/mintel-market-news/policy-changes-are-putting-a-chill-into-the-thermal-insulation-market
3 Association for the Conservation of Energy, Energy Bill Revolution: ECO and the Green Deal, 2014 http://www.energybillrevolution.org/wp-content/uploads/2014/07/ACE-and-EBR-fact-file-2014-06-ECO-and-the-Green- Deal.pdf
4 Energy Performance Certificates (EPCs) are a measure of the level of energy efficiency of a home. The ratings span from A to G. A-rated homes would have relatively low energy bills, whereas G-rated homes would have high energy bills, and be expensive to heat. An EPC band of C represents a reasonably good level of energy efficiency. The average EPC rating in England and Wales is currently D. Increasing the energy efficiency rating (or EPC) delivers a warmer, healthier, and more comfortable home for the resident, whilst reducing the energy bills.
5 C. Liddell, Estimating the impacts of Northern Ireland's warm homes scheme 2000-2008, University of Ulster, 2008, http://eprints.ulster.ac.uk/26173/1/FPcostbenefitsonweb.pdf
6 Chief Medical Officer, 2009 Annual Report, 2009. http://www.sthc.co.uk/Documents/CMO_Report_2009.pdf