We must go green in order to tackle the cost of living crisis
With food, fuel and energy bills soaring, the Chancellor did the right thing at the end of last month and put money in the pockets of those facing real hardship.
Supporting the country through one of the worst cost of living crunches in recent memory is the only acceptable choice.
Now, whilst it delivered for many households across the United Kingdom, the announcement of a seemingly open-ended windfall tax on oil and gas companies was alarming. It sends the wrong signal at the wrong time. It’s also a sticking plaster solution to much larger underlying problems. Protecting the poorest from rising energy bills, securing the country’s energy needs and creating new green jobs; none of these will be magically fixed by taxing businesses even more. Especially when we already have the highest tax burden in 70 years. What it does need is for the government to double down on green growth and turn the tide on our dismal record on energy efficiency. This is exactly what I’ll be saying at the CBI’s net-zero conference, taking place between 7 and 8 June at the Science Museum in London.
Continuing to encourage investments in innovation, and collaboration between government, business and universities will be essential
Britain’s energy efficiency is among the worst in Europe, homes here lose heat at three times as fast a rate compared to countries like Germany. And yet successive governments have failed to address this. The simple fact is energy efficient homes are the most shielded homes against current or future gas price volatility. And investments in home insulation, electric heat pumps and renewables are a sure-fire route to success. For example, the average energy performance rating for homes in England and Wales is D. Improving the energy efficiency of these homes and those rated below to a C could save households around £500. For SME businesses, targeting their investment to things like installing LED lighting, smart tech and other measures, could reduce energy bills by a quarter, according to the government’s own research.
But with households squeezed by the cost of living crisis, many people just don’t have the funds needed to make these upgrades – this is where the government should and must step in. Targeted measures, like the ones recently announced, that can help households get the ball rolling on green upgrades is the missing other half of the solution to our current energy crisis.
Increasing our domestic generating capacity will also be essential if we are to limit our exposure to future global shocks. Commitment to planning reforms and rapid approvals for wind power is what will really make the difference now.
Tackling this and accelerating our decarbonisation plans will help to unlock a wealth of growth opportunities across the economy. Take carbon capture and storage; this has the ability to create up to 6,000 new highly-skilled jobs in industrial clusters planned for Teesside, Merseyside and Aberdeenshire. CBI research estimates a national retrofit programme for the UK’s homes and buildings could directly create around 150,000 jobs by the end of the decade – many in SMEs, spread across the country. And investing in hydrogen could add £18bn to our economy by 2035 and support 75,000 additional jobs. Continuing to encourage investments in innovation, and collaboration between government, business and universities will be essential for developing ground-breaking green discoveries. HydroFLEX – the UK’s first hydrogen powered train – is a shiny example of this.
The opportunities are endless.
There’s a temptation to treat businesses like a cash machine when the government feels the political heat. But more often than not that only cools investment plans. Banking on energy efficiency and net-zero now though is what can guarantee lower bills for the people of this country and economic growth for tomorrow.
Lord Bilimoria is a crossbench peer and president of the CBI.
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