Polls Apart: A Knauf Insulation view on the UK election result and its impact on the energy efficiency industry

By Steven Heath: Director of Public Affairs and Strategy (Knauf Insulation Northern Europe)

A very bad night for Labour and a worse night for the Liberal Democrats has left many big political beasts looking for new jobs. Following them to the job centre may be the pollsters that confidently predicted both parties had a good chance of forming a new Government. For David Cameron and the Conservative Party the euphoria of the night will not last too long in the face of some mighty challenges on the horizon – some of their own making. These include; a now certain referendum on EU membership, a realisation that a federal UK and greater devolution of powers appear inevitable and announcing where the promised £billions in cuts will actually fall.

But what will a Conservative majority hold for the insulation sector and wider energy efficiency agenda? Well, if manifesto commitments are to be believed not nearly as much as was promised by the other two major parties (or former major party in the case of the Lib Dems). While the Conservative manifesto didn’t have our major asks around minimum energy efficiency standards, tax incentives for energy efficient homes or making home energy efficiency a UK infrastructure priority, it did at least commit to the Climate Change Act.

Assuming this commitment extends to the Carbon Budgets designed to deliver against the Act, the new Government will be required to find UK CO2 emissions reduction from somewhere. And the manifesto ruled some options out – a halt to onshore wind farms and a refusal to commit to decarbonizing the electricity grid; the latter opening up the route to gas infrastructure investment.

In fact, the Tory Manifesto states ‘We will cut emissions as cost-effectively as possible’. It is incumbent on the industry now to prove to the new Government that the energy savings available in our leaky housing stock meet this criterion. Indeed all industry voices, and large asset owners such as social housing and local authorities, must unify behind the message that our homes offer a barely tapped resource in emission cuts with a host of co-benefits not limited to jobs, significant GDP growth and better occupant health.

Although thin gruel for both industry and the fuel poor, the manifesto does commit to insulating a million homes with low cost measures over the parliament. While the figure represents a drop of 80% against the previous five years, optimists may well have seen this manifesto pledge as a negotiating position rather than a commitment. Knowing the importance of this issue to the Lib Dems, the Conservative party would have allowed themselves to be negotiated up in a horse trading exercise. However, they have a majority and it is now incumbent on the energy efficiency industry and NGOs to make the case why this level of ambition is woefully low.

So an argument must be won with Government, but new arenas to take that argument have also opened up. A very narrow House of Commons majority with a mostly hostile opposition may mean, where consensus can be agreed, private members bills can fly. The number of new MPs elected yesterday also means the tone of the commons will be very different in the months and years to come. And while there may be disagreement on levels of priority across the parties, energy efficiency and fuel poverty fit well with the different ideologies of most. So we may yet see an ‘Energy in Buildings Act’ containing all the promise shown in the Labour and Liberal Democrat manifestos.

Greater devolution, both to UK nations and city regions, offers potentially a more receptive audience that will have new levers under its control. While over 70% of Government spend flows through local authorities in Germany, only around 16% does so in the UK. That is set to change.

As other arenas open up, the elephant in the room is certainly our possible withdrawal from another. For good or bad, EU directives have driven the environmental agenda. The implications of withdrawal for our climate change commitments, and of course on many other levels, are opaque but seismic.

A further concern must also be the Conservative Party’s proposals for Social Housing. The election campaign’s resurrection of tenants’ right to buy social homes may well undermine the capacity of the sector to soak up some of the proposed home energy efficiency funding cuts. They fund new homes and energy efficiency retrofit of existing homes through long term borrowing against their assets. Force the sell-off of those assets and you undermine their capacity to borrow! Indeed, one significant route to deliver against the commitment to bring about a huge increase in new house building would be undermined should the policy come to pass.

In summary, for those struggling to stay warm and pay bills in our low quality housing stock, the news last night could have been much better. But there is still a case to be made and an argument to be won. We must vastly improve the evidence base for that argument and we must be far more persuasive, and imaginative, in making that case.

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