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More than 50 companies and trade bodies including building society Nationwide and energy group E.On have warned that thousands of jobs will be lost and business investments delayed if the government cuts plans to spend an extra £6.6bn on making British homes more energy efficient.
Ministers are currently considering diluting a pledge Sir Keir Starmer made ahead of last year’s election to invest billions of pounds on insulation and other measures in 5mn homes, the FT reported earlier this month.
A final decision on whether to maintain that £6.6bn pledge is expected in June’s spending review, in which Treasury ministers will allocate departmental spending over several years.
Ministers face trade-offs in balancing the UK’s tight public finances with demands to invest in services from defence and asylum to health, education and climate improvements.
But in a letter sent to the Treasury, groups including Velux, the National Housing Federation, and Morgan Sindall Property Services urged the government to “uphold its manifesto commitment”, arguing this was “vital to help grow the businesses who help households lower their energy bills and increase the UK’s energy security”.
The businesses warned that “this sector has been rocked by boom-bust government policymaking”, adding that companies urgently needed “government to give them confidence to invest in the sector’s future, training skilled heating engineers and retrofit installers, or manufacturing insulation and clean heating technologies in UK plants”.
Starmer had pledged to spend an extra £6.6bn for the Warm Homes Plan, taking the total expected spending over the course of the five-year parliament to £13.2bn.
Chancellor Rachel Reeves already announced an extra £3.4bn across three years for the plan in her October Budget, which would equate to a lower annual figure.
One government figure said: “Reeves has had the Warm Homes budget in her sights for a long time, it’s been clear that she thinks savings can be squeezed out of it.”
In the letter, the companies warned of job losses without additional government support.
“Limiting investment to the amount allocated in the Autumn Budget at the June spending review will result in the loss of 3,000 skilled, future proof roles,” they said.
But if the government met its pre-election promise, this could help ensure 12,000 new skilled roles across the retrofit workforce within the next few years, they argued.
The Treasury said: “At the Autumn Budget we allocated £3.4bn for our commitment to the Warm Homes Plan, and the chancellor will set out further details on June 11.”
Separately, climate think-tank E3G said improving the energy efficiency of Britain’s old, leaky housing stock is crucial to lowering energy bills, driving economic growth and ensuring the government can meet its legally binding target to reach net zero greenhouse gas emissions. The country’s housing is among the least energy efficient in Europe.
A paper from E3G said investing £13.2bn in the warmer homes plan would deliver significant economic benefits across the UK, supporting 37,000 jobs and reducing energy bills in 3mn homes.
It would also reduce domestic gas demand by almost 5 per cent by 2029, E3G said, arguing this would help protect households from volatile energy markets.
E3G’s senior researcher James Dyson said: “Fulfilling the manifesto pledge to invest £13.2bn in home energy efficiency is the most productive infrastructure investment this government can make, creating jobs and boosting growth in every part of the country.”
He added: “If this funding is cut it risks torpedoing growth in the constituencies where the government is most at risk of losing seats at the next election.”
