The Rt Hon George Osborne MP
Chancellor of the Exchequer
1 Horseguards Road
Date: 26th November 2014
Making energy efficiency a top priority for the Autumn Statement
I am writing with regard to the Autumn Statement next week, to ask you to make energy efficiency a top infrastructure priority and to allocate funding accordingly.
Hundreds of Brighton Pavilion residents have written to me in support of the Energy Bill Revolution campaign. My constituents are calling for a nationwide programme to make all homes super energy efficient, starting with those of the fuel poor. This would result in lower household energy bills, major carbon savings and huge job-creation.
Every winter in the UK, many thousands of people die because they cannot afford to heat their homes. This is a grossly neglected national scandal. At the start of this year, 2.23 million children in England were living in fuel poverty and a survey by Netmums found 1 in 4 families have had to choose between heating and eating.
Age UK has estimated that one older person dies every seven minutes from cold weather. Illnesses caused by cold homes cost the NHS £1.3 billion a year. Energy efficiency saves lives and, according to recent evidence, for every £1 spent on reducing fuel poverty, a return of 42 pence can been seen in NHS savings.
There is no excuse for ongoing complacency and inaction. Even the economic and fiscal benefits of making homes energy efficient are overwhelming. A new report from Cambridge Econometrics and Verco entitled “Building the Future” shows that a far more ambitious energy efficiency investment programme would pay for itself and boost the UK economy by:
· creating up to 108,000 new UK jobs;
· delivering £4.95 billion in financial savings per year for UK households by 2030;
· increasing GDP by£13.9 billion a year by 2030;
· cutting gas imports by 25%, thereby boosting energy security;
· returning £1.27 in tax revenue for every £1 invested by Government;
· resulting in £8.6 billion in energy savings per year by 2030, an average energy saving of £372 per household.
I’m shocked that, at present, none of the Treasury’s planned £100 billion investment in infrastructure over the next Parliament is allocated to retrofitting homes, cutting energy bills, and tackling fuel poverty. I urge you to reverse this situation.
Allocating just 2 per cent of the Government’s current annual £45 billion infrastructure budget to housing retrofit would allow half a million low income homes to be made highly energy efficient every year. Only this level of investment approaches the scale needed to tackle the scandal of fuel poverty.
Additionally, I would urge you to consider a new, revised QE programme, as proposed by the Green New Deal group. This could not only make every building in the UK energy efficient and, where feasible, fitted with solar pv, but it could also help finance the provision of new, affordable, truly zero-carbon homes, to help tackle the housing crisis. It has been estimated that nearly £500bn of investment in new low-carbon infrastructure is required over the next 10 years, of which £230bn will be required for energy efficiency alone. A ‘Green Infrastructure QE’ programme would therefore need to be of the order of £50 billion a year over the next ten years.
Some other priorities that I would like to see included in the Autumn Statement are as follows:
Tax breaks and other indirect subsidies for fossil fuel exploration and extraction undermine efforts to tackle climate change. They should be redirected towards boosting the UK’s home-grown renewable energy industry or towards ensuring adequate spending on flood protection. The arbitrary cap on short-term subsidies for renewable energy is costing jobs and holding back innovation and cost reduction and should be revisited. Schools should be permitted to borrow in order to finance the installation of solar panels.
Instead of squandering taxpayers’ money on building new roads, which encourage more traffic, worsen air pollution, and cause severe harm to our precious countryside, the £15 billion roads budget should be redirected into repairing and improving local roads, boosting public transport, reopening railway lines, and schemes to encourage walking and cycling.
Brighton’s tourism industry plays a vital part in the local economy and provides thousands of jobs for local people. All across the UK, tourism is the lifeblood of small businesses. Reducing VAT on the tourism industry to 5% would put the UK on a level playing field with European competitors and give an immediate boost to Brighton and Hove’s tourism trade.
The Treasury must get serious on tax dodging, which is still rife, despite some progress at the G20. As Margaret Hodge MP recently put it: “the success of international efforts to tackle tax avoidance depends on all countries being prepared to play by the same rules and not adopting a two-faced approach where they sign up to OECD standards in principle but try to undercut one another in practice”. The UK must build on the G20 agreement to make our tax system tougher and more transparent, including by ending the use of tax havens and introducing higher penalties for companies who don’t pay their fair share.