The construction industry has warned that a review into green levies on energy bills could result in the loss of more than 10,000 construction and insulation jobs.
David Cameron announced that there would be a review into so-called green levies after the big six utility companies began announcing price increases and partly blamed environmental regulations.
The move has received widespread criticism with the Lib Dems describing it as a “panicky U-turn” and Nick Clegg saying that the potential rolling back of some green taxes was not something he fully agreed with. During an interview, the deputy prime minister said that he believed green levies were not the main cause of rising bills but wholesale energy costs.
The Association for the Conservation of Energy (ACE) estimates up to 33,000 people are currently employed delivering the Energy Company Obligation (ECO) and the green deal. This should have risen to 60,000 jobs in 2015, according to the government’s own projections. Cutting funding for ECO would also impact on manufacturers making insulation products.
Paul King, chief executive of the UK Green Building Council, said, “The prime minister needs to realise that going after ECO in a bid to cut households energy bills could end up costing 10,000 jobs construction and insulation jobs. That will decimate the very industry that is helping people – including some of the most vulnerable in society – reduce their bills in the long-term.”
One manufacturing company has already written to David Cameron about the “devastating” impact the review is already having on the energy efficiency industry. The letter added that whilst ECO has been “designed poorly, implemented badly and has not delivered on its potential”, it should be improved rather than scrapped.
Over 50 business leaders have also branded the review as “shortsighted” as it will result in lower cost only in the short-term. In contrast, they argue that ECO can offer homeowners reduced bills over a much longer timeframe.
Additionally, the House of Commons energy committee has warned that potentially rolling back some of the environmental regulation in the energy market will undermine investor confidence. Ernst & Young echoed this sentiment. The firm warned that “political point scoring” over rising energy bills was leaving the UK renewables sector in a state of uncertainty.