ESTA VIEWPOINT
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A slow road towards a green recovery As hosts of the COP26 summit the UK should be leading the way to a green recovery. But current government policies are falling well short, says Mervyn Pilley
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here is an overwhelming consensus from the UK population that any post pandemic response should be based around tackling the environmental crisis more urgently through a ‘green recovery.’ The Chancellor, Rishi Sunak, through his recent summer economic update, has been working hard again to try and deal with the immense challenges facing him. However, the general view of his announced plans is that it represents an encouraging but far too small start along the road. One must hope that an autumn statement will go far faster and further. It was always likely to be ultra-difficult for the chancellor to keep everybody happy due to the costs of dealing with the pandemic and the resulting knock-on effect of the economy. The road to economic recovery is littered with obstacles. Despite that, it would seem to make sense for more joined-up policy thinking. In view of the likely huge increase in the UK unemployment figure it would surely be sensible to strive to invest in creating jobs in what should be a fastgrowing sector – green jobs involving
carbon reduction. Unfortunately, the Government has failed to employ joinedup thinking at sufficient scale. While there are areas of hope, it is noticeable that the £9.2bn earmarked in the Conservative Party manifesto has not really begun to be spent. Yes, a manifesto is just that and not a policy but even that was not enough when compared with green recovery spends in other countries in Europe. There is a debate of just how much of the newly announced spending is new money and not just a rehash of previous announcements. Talking about rehashed things, the green homes grant scheme is effectively a rehashed green deal policy and, as was shown then, it is very unlikely that homeowners will be sufficiently motivated by promises of part payment towards insulation of their homes. One must ask why the Government does not use the tax system far more to change behaviours. It is ironic
Mervyn Pilley is executive director of ESTA (Energy Services and Technology Association)
‘It would surely be sensible to strive to invest in creating jobs in what should be a fast-growing sector’
that the Government withdrew the Enhanced Capital Allowances on the 1st April this year that has immediately taken away an incentive for UK plc to invest in equipment offering energy efficiency solutions. Unfortunately, this is another example of how energy efficiency is treated as the poor relation of carbon reduction whereas it should be an absolute cornerstone of a carbon reduction plan. The Government itself, albeit with a different Prime Minster, has enshrined net zero targets in law so it must do what is needed to avoid breaking its own law. Installers are needed, both for that scheme and retrofit at scale. Interestingly, it is the creation of an army of installers that would potentially help solve a large part of the rise in unemployment. The installers required to carry out retrofit to residential and commercial property is going to be supplied in the most part by SMEs. Main consultants may be the organisers/ facilitators, but the SME supply chain will provide the labour. What does not help, therefore, are confusing policies for incentives to take on trainees and apprentices that never seem to last for long. Very small, one-off grants are not going to solve the big problems. SMEs will have a lot of expensive barriers to jump through to get onto the Government’s chosen quality approval schemes for retrofit. A far greater incentive will be needed to persuade companies to take on a long-term and sustainable workforce. Why could this not be achieved through the tax system? This type of incentive would actually cost the Treasury less as the tax take would go up from PAYE on employees as well as more corporation tax on businesses’ increased profits. The same issues apply to the construction sector in general. Brexit and an ageing workforce, coupled with the abject failure of schemes such as the apprenticeship levy, have meant that the skills shortage in all areas of construction and engineering is only going to get worse. Time is short for all of us. As hosts of the rearranged COP26 we should be leading the world in green policies. Unfortunately, the ambition just is not there. There is going to have to be major increase in green policies in the forthcoming autumn budget.
22 | ENERGY IN BUILDINGS & INDUSTRY | SEPTEMBER 2020
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