Rishi Sunak’s Summer Statement: Industry responds

Chancellor Rishi Sunak has confirmed a £3 billion green jobs plan to save money, cut carbon and boost employment in the wake of the coronavirus pandemic – but what do businesses think?

Pathway to COP26 report

Chancellor Rishi Sunak has confirmed a £3 billion green jobs plan to save money, cut carbon and boost employment in the wake of the coronavirus pandemic.

In his much-awaited Summer Statement, which serves as a recovery plan for the UK economy, he outlined how he planned to tackle “profound economic challenges” with a “historic investment in infrastructure”.

He promised to create green jobs to ensure a green recovery that holds “concern for our environment at its heart”.

Any net zero-focused stimulus package is welcome

Steve Jennings, Head of Energy & Utilities at PwC UK, commented: “Any stimulus package that helps us on the path to net zero by 2050 is welcome and the £2 billion committed to green homes grants will help accelerate the pace at which homes are retrofitted with energy-saving insulation. Not only is this critical to the success of any widespread energy efficiency programme, it will also quickly create jobs, which is hugely important to the economic recovery following the COVID-19 crisis.

“A recent report published by PwC and Energy UK highlighted that 60% of consumers are more engaged with their energy use than before lockdown, which means the timing of this grant scheme is coming as people take a greater interest in the impact of their energy use, both in terms of the environment and their pockets.”

We expect more positive news to be delivered in the Autumn budget

Mark Richards, Partner of Energy, Environment & Infrastructure at Bryan Cave Leighton Paisner, told ELN: “Reflecting on the Chancellor’s statement, it seems we are all super-Keynesians now, focusing on a green recovery and much-welcomed capital investment to retain and protect jobs. It would be easy to be disappointed at the lack of spending commitments to large capital projects – however this statement was really about stimulating the UK economy and protecting jobs.

“I’m sure the Chancellor will have plenty in reserve, in terms of sustainable capital investment, to announce as part of the National Infrastructure Strategy to be released in the Autumn, as part of the Autumn budget and spending review.  The shape of the UK recovery will dictate the extent of capital investment and further stimulus and we hope the Chancellor can continue to work at ways to enable private sector investment and delivery of capital investment in our energy and infrastructure.”

Upgrading homes is essential – and so is slashing energy bills through efficient measures

Director of the Centre for Energy Policy at the University of Strathclyde, Professor Karen Turner, said: “We welcome the public investment announced by the UK Chancellor today to help make homes across England more energy efficient. Our economic analysis shows that this can help aid near term economic recovery through the jobs created for installers and for example in sectors that manufacture and sell the materials needed. This immediate boost is one key priority for government at the moment and will be an important way to ensure that the impacts of the economic downturn are minimised.

“However, the Chancellor is correct to identify that another priority is to get money into people’s pockets as quickly as possible as a result of reduced energy bills. Our analysis shows that this is more likely to transpire where grants reduce the need to recover costs, for example through loan repayments, near term rises in energy bills (as is the case with the current ECO programme) or increased taxation.

“Our research also shows that, while it is important to more fully support low income households in increasing energy efficiency and reducing fuel poverty, this will provide limited stimulatory power, simply because such households have limited spending power. On this basis, our research shows the important near term and sustained wider economy benefits of using public funds to support increased energy efficiency across all households. The contributory voucher scheme is a good first step in this regard.

“Crucially the announcement made today shows that actions that will help the UK meet climate change targets can also be good for people and the economy, both in the short and long term.”

Home and building upgrades are key to sustainable recovery

Michael Lewis, CEO of E.ON, suggested: “There can be no doubt upgrading the UK’s homes and buildings is the best possible way for a green economic recovery; it delivers more jobs, more economic stimulus – quicker and with more tangible impacts– as well as other benefits including better health and wellbeing and lower energy bills. It will also spread those benefits across the country in the areas that need it the most.

Upgrades mean homes will be healthier, more comfortable and greener

Caroline Bragg, Head of Policy at the Association for Decentralised Energy said: “Our members- energy businesses up and down the country- are delighted that the government has today kickstarted a national buildings renovation programme.”

She added that this will allow industry to “get started providing good, green-collar jobs right away” and stated if policies are designed correctly, the support could employ close to 40,000 people over the next two years and make homes “healthier, more comfortable and greener”.

The prominence of green recovery in the speech was encouraging

Chris Holmes, Co-lead Investment Adviser to environmental infrastructure fund JLEN, said :“It is encouraging to see the green economy being so prominent in the government’s budget today. Arguably, the impacts of climate change could be much greater than the current economic crisis we face – coastal flooding, extreme weather, drought and forest fires could severely disrupt agriculture, infrastructure and livelihoods.

“While companies that are most closely linked with carbon generation, such as airlines and oil and gas companies, have been some of the worst hit by the coronavirus, environmental infrastructure assets, such as wind and solar plants, have proven very robust during these uncertain times, reinforcing the investment case for building a sustainable future.”

Funding announcement falls short of what is required

Marie Claire Brisbois, Lecturer In Energy Policy in the Science Policy Research Unit (SPRU) at the University of Sussex Business School, said: “While the funding package is a very welcome initial step, the funds committed fall short of what is required to upgrade the leakiest, least energy efficient housing in Europe and takes a piecemeal approach to what needs to be a comprehensive, system-wide transformation.

“Further significant investments will be required to transition to low carbon heat, provide sufficient funds or schemes for retrofitting all private and social housing stock, and incentivize retrofits in the private rental market.

“This can all be done more efficiently as a whole energy systems transformation package that addresses the larger systemic reforms associated with electrification, digitalisation, and decentralisation. This would have the potential to build upon the lifestyle changes the pandemic has highlighted as desirable including changes to working schedules and commuting patterns, active transportation and mobility services, and leisure practices.”

This announcement only represents 2% of all households in the UK

Commenting on the green homes grant announced in the Chancellor’s summer statement, Peter Earl, Head of Energy at comparethemarket, said: “Building greener homes is an essential part of creating a more sustainable future, and this grant is a tentative step in the right direction. Lower household bills, annual savings for millions of households, and a greater focus on measures that help our planet are all welcome news for households across the UK.

“However, it’s important to put the amount pledged into context; whilst it is enough to upgrade 650,000 homes, this only represents 2% of all households in the UK.”

Green jobs proposal will barely touch the sides of the unemployment crisis

The New Economics Foundation tweeted: “The chancellor’s new green jobs proposal will barely touch the sides of the unemployment crisis. Our green jobs proposal will cut unemployment by much more. How do we make up the shortfall? Through more valuable jobs in care and health.”

This ambition must continue through the rest of 2020

In response to the economic update, Chris Venables, Head of Politics at Green Alliance, said: “Today’s speech could mark a really positive first step on the green recovery – but only if this ambition is continued throughout the rest of the year, and particularly in the Autumn budget. The Chancellor’s commitment to putting the environment at the heart of the recovery is obviously excellent – now we need funding and detail to turn this into reality.

“We urgently need to see a clear funding strategy for supporting public transport in its time of crisis, a long term strategy to ensure all buildings are warm and cheap to run, reversing the catastrophic declines in nature, and investing the technology of the future. The jury is still very much out on how green the UK government’s recovery will be – and we’ll be watching over the coming weeks and months.”

Disappointing and short-term

Scottish Carbon Capture & Storage tweeted: “Sunak’s statement on economic recovery is disappointing – the only #GreenRecovery bit is the announcement on home insulation – which is good, but not enough – and his idea of job protection is just about hospitality and tourism. No long-term #NetZero #JustTransition vision here.”

Many aspects of a true green recovery were absent

Richard Black, Director of the Energy and Climate Intelligence Unit (ECIU) said: “In addition to the £3 billion already announced to help people make their homes warmer, today’s announcement opens up another potential avenue through which the UK could start making its energy use less wasteful, by providing employers incentives for job creation and retention.

“With construction being the sector most dependent on furlough funding and yet house-building plans likely to be stymied by uncertainties about the market, insulation is one of those sectors ripe for stepping up activity quickly and easily using the funding on the table.

“Having made repeated statements about the need for a ‘green’ recovery, there are many aspects that this week’s announcements haven’t covered, such as renewable energy and electric vehicles. The presumption must be that the Chancellor sees these as offering less immediate opportunity for job creation than warm homes and will address them thoroughly in his Autumn Budget.”

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