The cure to the cost-of-living crisis? A fossil fuel detox and retrofit revolution

The government must revamp its ‘half-hearted’ windfall tax on fossil fuel companies to divert their bumper profits into home energy efficiency upgrades and support for low-income households, writes Ashden’s Harriet Lamb

August has kicked off in style with oil giant BP announcing eye-watering quarterly profits of $8.45bn (£6.9bn), the highest in 14 years. As senior executives welcome these rocketing profits, ordinary people are staring with horror at their rocketing home fuel bills, now forecast to hit over £3,840 a year this winter. It is a tragedy unfolding before our eyes while the government appears to be off on holiday.

BP, whose CEO Bernard Looney said in February that with high prices the company becomes a “cash machine”, is just the latest in the run of super-majors revealing their unthinkable profits. July closed with Shell declaring its highest ever profits at £9.5 billion for the past three months and generous payments to shareholders while Centrica, owner of British Gas, revealing that it had also made a tidy profit.

These bonanzas are of course directly linked to the prices to consumers which are already rising biting hard and will cause untold hardship this winter when it is predicted that as many as half of families will be in fuel poverty and unable to afford to heat their homes. Already advice organizations tell of more and more people phoning in deep distress, even contemplating suicide, as they face bills beyond their pay or benefit packets.

We need a rapid detox from our addiction to these fossil fuels. And, as with any detox regime, a steely start is needed with commitment to be in it for the long haul. For this, the country needs firm government intervention.

It is not that the solutions are hard to find. They are ready to be rolled out. Firstly, the government needs to revamp its half-hearted windfall tax and toughen up the provisions. All the loopholes – as many as in a Swiss cheese – need closing off, in particular the exemptions allowed if companies invest in fossil fuel exploration.

With these funds, additional support could be released for those on low incomes. The government’s £400 discount was quickly rendered inadequate by soaring prices and now won’t even touch the side of people’s bank accounts. In less than three months’ time, a typical energy bill will cost a third of people’s state pension. So more money needs to go directly into immediate measures to help those on low incomes be warm this winter.

Other funds raised through this windfall tax could be invested in tackling the longer-term root causes. That includes investing in low cost, low carbon energy efficiency measures and green energy. Renewable energy – solar with both on and off-shore wind – is the cheapest and the fastest way to increase power while moving away from imports of the volatile oil and gas markets. Funds could also be invested in a massive upgrade of all our old, cold, leaky homes. Britain notoriously has the worst housing stock in Europe, leaving people on low incomes paying for energy that whistles out their window and under their doors. A retrofit revolution would help people have cosier, warmer homes (and so improved health) with lower fuel bills – and of course would help meet our carbon targets.

What’s more this is good news for jobs. Retrofitting will create building jobs right across the country including in areas where work is hard to come by. For example, Cornwall-based Kensa Group manufacture and install ground source heat pumps UK-wide which provide reliable and efficient heating including for multiple-occupancy while Energiesprong constructs external wall off-site insulation making deep whole house retrofit quicker and more effective, particularly on social housing – as in Nottingham and Essex.

But it will also need immediate as well as long-term investment in skills and training. Greater Manchester has become a hub of retrofit training and implementation, with B4Box and Low Carbon Academy training people in green and retrofit construction skills, as well as Carbon Co-Op which runs retrofit training for building contractors and provides homeowners with guidance on how to lower their energy use. All companies need the reassurance that Government support for retrofit is going to stay the course – not the stop-start of recent green home initiatives that have left SMEs and Further Education Colleges stranded with costs that they cannot recoup. It will take time to get off our addiction to fossil fuels – but everyone knows – you have to stay with the program to succeed.

Harriet Lamb is CEO of climate solutions charity Ashden

Ashden is part of the Warm This Winter campaign – a coalition of UK fuel poverty and environmental organizations calling for immediate government action and preparation plans to deal with the energy crisis.

 

 

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