As a nation of homeowners, the Budget should focus on owner occupiers to deliver Net Zero
Whilst there has been recent media attention highlighting the delay to the long-awaited National Infrastructure Strategy in the Budget, MIMA hopes that any such delay by the new Chancellor, Rishi Sunak, does in fact refocus the strategy to include increased resource tightly aimed at achieving net zero.
We believe that the new, legally binding net zero target and the need to accelerate decarbonisation over the next 10 years – particularly the decarbonisation of heat – the energy efficiency target is not ambitious enough and should be brought forward to 2030, while encouraging homes to achieve standards higher than EPC C.
However, key to delivering on this target, the Government must also focus on the ‘able to pay’ owner occupier households of which there are over 10 million whose homes are rated below EPC C in the UK. Yet there is no substantive policy in Whitehall to drive demand for energy efficiency improvements from these households. Whilst the Government is investigating how to incentivise mortgage providers to support energy efficiency improvements, this is only part of the answer. Simply households will not access supportive finance without fiscal and regulatory incentives.
MIMA, along with the EEIG, is calling upon the Chancellor to invest £525m per year over the next 10 years to fund fiscal incentives and support reduced financing costs for energy efficiency, designed and deployed to unlock five times this amount in investment by able to pay owner occupiers. Additional rewards should be provided for those who invest more to bring their homes up to EPC A or B.
In summary, MIMA would like to hear the new Chancellor, Rishi Sunak announce support for the following 3 steps to keep us on track to reach net zero:
- Introducing a package of incentives and demand drivers for ‘able to pay’ owner occupiers worth £525m per year for 10 years, designed to unlock five times this amount of private investment and get all of these homes to an Energy Performance Certificate (EPC) rating of C by 2030 to get on track to net zero emissions.
- Making good on the manifesto pledges to support energy efficiency improvements for low-income, fuel poor families in private and social housing, extending the Home Upgrades Grant at the level it is proposed to reach in 2025 to 2030 to meet fuel poverty targets.
- Delivering both of the above through a programmatic approach to improving energy efficiency as an infrastructure priority as set out in both the Frontier Economics (2017) report Affordable Warmth, Clean Growth: Action Plan for a comprehensive Buildings Energy Infrastructure Programme and the EEIG (2019) report The Net Zero Litmus Test: Making energy efficiency a public and private infrastructure investment priority.
Sarah Kostense-Winterton, Executive Director, MIMA, comments, “These 3 steps will effectively deliver a ‘High’ Value for Money infrastructure programme for the Exchequer. It’s evident that the investment in funding and incentivising take-up of energy efficiency measures by governments can be self-financing.
We will see benefits all round from increased economic growth with higher tax intake and GDP to lower energy bills of £270 for the average household to a net increase in annual employment of up to 108,000 over the period 2020-2030, mainly in the construction sector. In addition, there is considerable potential to improve productivity in the construction sector. It goes without saying that this must be backed up by informed consumer choice and the highest quality and safety standards – potentially through the Future Homes Standard."
Sarah Kostense-Winterton is Executive Director of MIMA, the Mineral Wool Insulation Manufacturers Association and co-founder and Chair of the Energy Efficiency Infrastructure Group (EEIG).
MIMA represents four of the leading mineral wool insulation companies in the UK - Isover Saint-Gobain, Knauf Insulation, ROCKWOOL and Superglass, the industry trade body for non-combustible, breathable glass and stone wool insulation.