Party pledges to subsidise Green Deal interest rate

Labour has outlined a package of policies to improve the energy efficiency of buildings, including interest free loans and tighter regulations.

The party鈥檚 long-awaited energy efficiency green paper sets out six commitments (see box) on how the party would improve the energy efficiency of buildings.

In the paper shadow energy secretary Caroline Flint said she wanted to 鈥渂ring and end to cold homes鈥.

Labour said the current government鈥檚 policies 鈥渄id not meet the scale of the challenge鈥 of improving the nation鈥檚 building stock.

It said the government鈥檚 flagship Green Deal scheme, which offers loans for energy efficiency, was 鈥渄isappointing鈥 and that 99% of people 鈥渄ecided it was not an attractive financial proposition鈥.

It said Labour would provide a government guarantee to the Green Deal Finance Company, which provides to loans for the scheme, to help bring the interest rate down and subsides the interest rate for up to one million loans in the next Parliament so they were interest free.

Labour said the subsidised interest rate would be paid for with 拢300m already allocated to support energy efficiency in the next Parliament.

It also said the Green Deal鈥檚 sister scheme, the Energy Company Obligation scheme, which pays to insulate people鈥檚 homes, was 鈥渆xtremely complicated to implement and difficult to administer鈥.

However, the party said it would not change the scheme until its current iteration runs out in March 2017 because it was 鈥渕indful of significant disruption鈥 to industry that earlier changes would cause.

It said that under its revisions to the scheme it would require energy companies to pay into a central pot to fund local energy efficiency schemes that could be delivered by small and medium sized firms.

But Labour said it would use 拢80m of the current ECO budget to fund energy usage reports for 500,000 homes a year.

It also said the government鈥檚 requirement that all private sector rented properties have an Energy Performance Certificate rating of E or above from 2018 was 鈥渘ot sufficient鈥 or 鈥渁mbitious enough鈥 and this should be increased to a C rating from 2027.

It said: 鈥淥ur proposal would give landlords 12 years after the next election to make sensible plans to improve the energy efficiency of their properties and give them the option of doing work incrementally or all in one go.鈥

Flint added: 鈥淥ur country needs more than warm words. It needs a plan for warm homes. A plan which creates new jobs and opportunities for apprentices.

鈥淎 plan which moves towards a fairer Britain, where all homes can reach a standard of comfort and where those with the least do no pay ever-rising sums to heat their homes.鈥

Paul King, chief executive of the UK Green 黑洞社区 Council, said Labour鈥檚 plans would mean energy efficiency 鈥渨ould no longer be the Cinderella of energy policy鈥.

鈥淭his is a well-intentioned plan that recognises the importance of a long-term, multi-Parliament approach, designed to give industry the confidence it needs to invest. 

But that 鈥渃apital investment鈥 and 鈥渇iscal incentives鈥 were key to making it a reality.

Labour鈥檚 energy efficiency plans

  • Pay for 500,000 home energy reports each year
  • Provide 200,000 fuel poor homes with free energy efficiency improvements
  • Issue up to one million interest free Green Deal loans
  • Set a target to upgrade rented homes to an Energy Performance Certificate standard of C by 2027
  • Make energy efficiency a national infrastructure priority
  • Streamline energy efficiency regulations for non-domestic buildings