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“Carrots and sticks” can help get Britain insulated, says minister

With Britain now bound by legal commitments to reduce emissions, finding ways of making every part of the economy and everyday life more energy efficient is an issue that cannot be neglected. Achieving those goals is, however, another matter.

The failure of the Green Deal is an example of how a well-meaning scheme can fall well short of its goals, with the poor take-up of loans under that plan leading to its eventual abandonment.

In response, the government has been working on devising something more comprehensive and effective. Known as the Clean Growth Plan, it aims to offer a comprehensive approach to sustainable development that will help Britain meet its goals and give a boost to hard-pressed consumers rather than placing ever larger burdens on them.

Home energy efficiency is unquestionably a key element of this. Homes account for 13 per cent of UK emissions, or 22 per cent if the electricity they use is taken into account. Better insulation and other energy-efficiency measures could help reduce this substantially, but, as the Green Deal has shown, the incentives need to be effective. 

Speaking to the BBC Radio 4 Today Programme, energy minister Claire Perry said a mixture of "carrots and sticks" would be central to persuading property owners to take steps to make homes more energy-efficient. This would mean rewarding them generously for positive work like fitting insulation, while penalising them for neglect.

She noted that one of the ideas she is "interested" in is that suggested in a recent report by Frontier Economics, which called for a variable stamp duty rate. This would mean lower stamp duty levied on more energy-efficient homes, but higher charges where the energy performance is poor.

This could have a significant impact on the cost of homes and thus the rate at which stamp duty is set, the minister noted. She remarked: "It's more likely that a home where insulation has been put in would attract a higher value, because the running cost of that home over the lifetime of ownership would be lower."

If the Frontier report proves particularly influential, the Clean Growth Plan may go further still and impose fines on those who sell colder homes. 

The plan will not just be about insulating homes, of course. It will also cover emissions issues elsewhere, such as in industry and transport. Nonetheless, the benefits of having more home insulation are numerous and not restricted to the quest to make Britain greener. They also mean the pressure to build more power stations could be eased by the reduced energy needs, and alongside this, fuel bills could be trimmed. 

Indeed, the potential benefits in these latter areas are particularly large, according to another recent report, jointly produced by the UK Energy Research Centre and University of Sussex Centre on Innovation and Energy Demand, which calculated that if home insulation levels were brought up to scratch in every dwelling in Britain, the energy saving would be the equivalent of six times the output of the Hinkley C nuclear power plant that is currently under construction. 

That study said the value to the economy of such an undertaking would be £7.5 billion in direct terms - including the money earned by insulation makers and fitters - while the wider economy would gain over £47 billion a year. The latter would accrue from indirect benefits such as the impact of money that would otherwise go on fuel bills being spent elsewhere, and savings to the NHS of having fewer people falling ill due to being cold in their homes.