More than 10,000 construction and insulation jobs could be lost if the government cuts green levies on energy bills, the latest figures from the Association for the Conservation of Energy (ACE) reveal.
Prime minister David Cameron said last month that green levies, applied to energy companies to support energy efficient upgrades on existing properties, needed to be “rolled back” following controversy over rising energy bills. The system is currently under review by parliament.
Around 50% of levies are applied through the Energy Company Obligation (ECO). But if the ECO were to scale back just one of its obligations (the Carbon Emissions Reduction Obligation) by half from 2014, around 10,000 jobs could be lost at construction firms installing energy efficiency measures and manufacturers making products such as solid wall insulation, said ACE.
Conversely, if the ECO were to continue as originally planned 41,000 people would be employed in delivery next year, some 8,000 more than the current 33,000.
Commenting on the figures, 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 household energy bills could end up costing 10,000 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.”
Rob Lambe, managing director of Willmott Dixon Energy Services, added: “We have invested heavily in establishing a business to respond to the projected market opportunities of energy efficiency under ECO. Over the next year we anticipated employing more than 400 tradesmen installing insulation to solid walled properties. But if ECO funding is cut, this work will simply come to a grinding halt and these jobs will be lost, with thousands more at risk in the wider industry.”
The ECO was introduced in January 2013 alongside the Green Deal to reduce the UK’s energy consumption and support people living in fuel poverty by funding measures to boost energy efficiency in homes worth around £1.3bn every year.
Although the biggest cause of soaring energy bills in recent years has been rising gas prices, the big six energy companies have lobbied for months to have ECO scrapped and ministers have repeatedly signaled that it will be changed. The government is expected to announce its response to the review in the Autumn Statement on 5 December.
