8 November 2013
Dear Mr Cameron
I write to you to inform you of the wholly devastating impact already being caused to the energy efficiency industry, further to your announcement on green levies at PMQ's a fortnight ago.
Solutions to the very real problem of ever-rising energy prices have come thick and fast. Weve had suggestions of a price freeze, a windfall tax on suppliers, switching, group switching and the wearing of jumpers all thrown in to the mix.
While some are dubious to say the least, others may be part of a solution, but they cannot be the whole solution. The long-term proposition must include addressing the energy efficiency of our homes - this is the only route which offers permanent savings year on year.
So I struggle with the perverse idea that seems to have gained the most traction within Number 10; reducing or cancelling the wrongly labeled green levy that requires energy companies to cut heating bills in peoples homes.
The obligation has been around since the 1990s and has helped reduce energy demand in over 12 million homes; nearly 50 per cent of UK households. That is 12 million homes that have lower bills every year because of this policy approach; those that benefited in year one of the scheme are still benefitting now.
Since the demise of the Warmfront scheme, the Energy Company Obligation (ECO) is the only policy that addresses the quality of the UKs housing stock and more than that, the quality of the housing stock among the fuel poor. The current iteration has been designed poorly, implemented badly and has not delivered on its potential. However, it is not broken. Efficiencies can be gained by giving the supply chain better visibility of demand, by ensuring consistency of compliance across the Big 6 and by reviewing the measures available. This is a long-term policy that seeks to address some of the leakiest housing in Europe and is not one that should be shelved on a whim.
So my plea to you is this: put the policy right so you can continue to proudly claim the great things it has achieved, rather than consider sacrificing it at the altar of short term political point scoring. Otherwise, the remaining 50 per cent of properties that desperately need energy efficiency will lose the protection from ever increasing fuel bills that a warm, energy efficient home affords.
Should the choice be taken to fund an energy efficiency programme from general taxation so be it, it is not for industry to take such decisions. Indeed, I clearly have an interest as the Managing Director of the largest insulation manufacturer in the UK in promoting a strong energy efficiency policy. However as winter is approaching, I would challenge you to say where the best place for the insulation rolling off my production line is: sitting in my factory yard, as is happening since your announcement, or in the walls, lofts and roofs of UK homes?
The real key to reducing the costs of the ECO lies in driving demand for another failing government policy, Green Deal. Again, it may be green but the core function is to protect people from the inevitable yearly fuel bills rises, only this time enabling the able to pay to borrow against future energy savings rather than hit us all on the energy bill.
I implore you to add a real demand driver to Green Deal; use stamp duty incentives linked to property energy efficiency to give this scheme and ECO some impetus. We in the industry have put forward to you what a successful ECO and Green Deal would look like time and time again.
This current hiatus until 5th December is bad enough. Should the decision be taken to pull the scheme entirely, then this Governments promise of a renovation revolution will be well and truly broken - as will the back of an industry that has geared up to deliver it. Do you really want to condemn more families to the choice of eating or heating this winter?
Knauf Insulation, Northern Europe