home insulation

UK households to lose billions this year over 2013 decision to cut insulation funding

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Former Conservative Prime Minister David Cameron’s decision to slash support for home efficiency measures in 2013 will see around £1.5bn wasted on higher energy bills in the next financial year alone, an analysis by the Energy and Climate Intelligence Unit (ECIU) has found.

Cameron was reported to have ordered aides to “get rid of all the green crap” with regards to efforts to lower consumer energy bills. The move sparked a furious reaction from campaigners at the time for failing to live up to 2010 manifesto promises on the environment.

The ECIU has now calculated the long-term impact of this decision and believes it undermines the current government’s own ambitions to upgrade UK homes’ average energy efficiency from ‘band D’ to ‘band C’.

If insulation was being installed at the rate seen in 2012, the analysis found that up to nine million extra homes would have been upgraded – saving each household an estimated £170 each.

In July 2020, the government announced a £3bn package for British homeowners to make their houses more energy efficient and improve insulation efforts. The scheme offered households up to £10,000 to insulate their property, but it underperformed badly. The Public Accounts Committee called it a “slam dunk fail” after it failed to draw applicants and was closed after less than a year.

The ECIU report found that the failure to upgrade homes was particularly harmful because those with worse energy efficiency are disproportionately occupied by households on lower incomes who are least able to afford the higher costs of heating.

This problem is worst in areas most in need of 'levelling-up', such as two-thirds of homes in Yorkshire and the Humber that fall below the government’s target for energy efficiency. Households that cannot afford to exceed their current spending would have to cut their gas use by almost 40 per cent under April’s higher prices.

Darren Jones MP, speaking ahead of his Committee’s upcoming report on decarbonising heat in homes, and who chairs the Business, Energy and Industrial Strategy Committee, said: “Levies on energy bills have paid to insulate millions of homes over the past decade, cushioning them from the gas price spike. In other words, the current situation could have been a lot worse for many homeowners facing high gas bills.

“This small mercy does not extend to the majority of Brits who are finding themselves on the sharp end of the cost of living crisis, exacerbated by successive governments’ failures to maintain, let alone improve, support for home energy efficiency.

“The rate of insulating homes has crashed since 2012 through cutbacks on helping households reduce energy waste. The true cost of this short-termist thinking is now coming home to roost for millions of families struggling to pay their bills – bills that are now £170 higher than they would otherwise have been.

“This moment must be a wake-up call for the government to not repeat the mistakes of the past and invest properly in helping people improve their homes. Gas prices are inherently volatile, so the best solution is to reduce this country’s reliance on gas.”

Commenting on the findings, Dr Simon Cran-McGreehin, head of analysis at ECIU said: “The legacy of David Cameron’s supposed ‘cut the green crap’ mantra is a short-term political decision leading to longer-term higher bills for millions.

“With talk of cuts to the ECO initiative, history could be repeating itself – sticking-plaster solutions that don’t help Britons address poorly insulated homes will leave them vulnerable to future gas crises, to Russia turning off the taps and forcing up the price of gas.”

Britain’s gas grid is currently being prepared to accept a blend of up to 20 per cent hydrogen from next year as part of efforts to decarbonise the UK’s gas infrastructure and reduce reliance on imported gas.

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