As the Guardian has noted:
Labour has drawn up plans for what it claims would be the biggest overhaul of housing since the second world war, with a plan to install loft insulation, double glazing and renewable technologies in almost all of the UK's 27m homes.
The party says that the Warm Homes for All scheme will create 450,000 jobs over the next decade. Under the plans, low-income households would be able to apply for a grant, paying no upfront costs. They would keep most of the savings on their bills, though part would be used to pay for a proportion of the work. Wealthier households would be able to claim interest-free loans for the work, with the loans claimed back through their bills.
Unsurprisingly, I support the idea. It is, of course, the Green New Deal Group's '30 by 30' proposal turned into Labour Party policy. But, there is a but. As the Guardian notes:
However, there are significant costs implied by the scheme. Labour calculates that delivering essential upgrades to the UK's entire housing stock will cost about £250bn, or an average of £9,300 per house. The party pledged to provide £60bn of direct public subsidy for the programme, with the rest paid for “through energy savings”.
This is the Achilles Heel of the Labour plan. And the Tories will pick on it, because they have no desire to tackle climate change at all. Most are still in denial about it. And those who think it is an issue think we cannot address it, as if the future of the planet is something we cannot afford.
I have explained how to fund the Green New Deal. But, right now there is fudge going on. Even if the 'rest' of the cost of this proposal will be funded by energy savings (and it might be in the long term) the fact is that it will need funding in the short term whilst the work is done. The costs inevitable come before the savings. So, on that basis an answer as to how the whole sum will be funded is required.
The fact is that, me apart, I can see now one who has n answer to this. Naomi Klein is miles off target in her latest book. Ann Pettifor cogently argues it is by borrowing in her latest book. But no one says who will buy those bonds. I have, here. Changing the rules of ISAs and pension funds could provide all the cash needed to fund the Green New Deal. The issue is so vital I will be returning to it, again and again, I suspect. We have to get this right.
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I couldn’t agree more, especially if pension savings can be diverted away from Aramco.
I’m sure you have plenty of influence in the Labour Party, but I wonder if more support for your idea would help.
My partner is a Labour member and has been canvassed to “help write the manifesto”. If enough people who read this blog or your Twitter spread the word to others who are Labour members and all put your ideas as a priority in their manifesto responses we could help.
I’m cynical enough to think this is a PR exercise by Labour, but we lose nothing by responding.
I have submitted to Labour, albeit via other channels
By which I mean the Progressive Economy Forum
If we have a central bank which can happily create money from nowhere to buy war bonds to fund Britain’s initial part in WW1 (as we do https://bankunderground.co.uk/2017/08/08/your-country-needs-funds-the-extraordinary-story-of-britains-early-efforts-to-finance-the-first-world-war/ ) then we need look no further for the funding. If money can be created out of the ether to blow people to bits it can assuredly be similarly created to keep them warm and help save the planet for future generations too. This is the Magic of Money https://andrewlainton.wordpress.com/2011/06/02/the-magic-of-money-hjalmar-schacht-and-how-to-defeat-hyperinflation/ and if it can work for the Nazis it can most certainly work for us too.
The reality is that is beyond 99.9% of people’s comprehension so we need a plan that can be sold
That’s my version
I saw a Sky news slot, with the presenter grilling Rebecca Long-Bailey about the plan.
It was really bad… it did not seem that labour had a credible plan.
Its totally messed up that we can even start to talk about Co2 reduction, without it being thrown out by popular opinion, because the costs are too high. Realistically, there is no cost that is too high, that will help avert the impending threat of global climate catastrophe.
Regardless of the financial costs of such a plan, we need to ask
– Do we have enough workers available and skilled to perform these installations?
– Do we have enough materials?
If not, we need to apply enough tax to drain the economy of demand, and then the government can take up the slack by employing the now unemployed labour, to do the job. There will need to be training centres setup across the country to reskill workers to be able to install. There will need to expand manufacture of materials so these workers have something to install.
Something like this is what is needed to be done. Economics costs, taxation, etc, should then be worked around this to make it happen.
To claim that the Economic costs are too high to make it happen, and pushing this out to the masses on national TV, is just totally messed up thinking. Global heating is happening now – do the rich believe that its not going to affect them?
If Labour are still frightened of explaining how they can perform, and finance the economic miracle which is the Green New Deal many voters will be lost because they will not believe it can be done; because weeeeeecaaaaaaaan’taffffoooooord it. They have no money so they believe this means the government has none either. Because that’s what we have repeatedly been told.
Language is such a powerful tool that people are more inclined to believe what they are told than believe the evidence of their own observations.
They will instead vote for Brexit to ‘be done’ even though nobody is explaining how that will benefit anybody, except a vanishingly small minority of the already uber-wealthy.
Just so you know, the Guardian link is to the Saudi page again, not warm homes.
Corrected
Thanks
“an average of £9,300 per house”…….which is worth? I’d guess £150k…. £200K? So rennovation costs +/-5% of the value?
Bolt this on to the mortage with a subsidy?
I ran some numbers on fabric rennovation vs savings. Even with zero interest you are looking at very long payback times – min 20 years moving out to perhaps 40 (depends on the property). What is clear is that energy savings per se will only pay back over a long period of time.
£9300 is the cost of a “nice kitchen” ….people that want “a nice kitchen” don’t think twice about lobbing £9k (& more) at “the nice kitchen problem” which makes it interesting that they do think twice with respect to energy renovation. The problem resolves down into a highly prices asset, that needs a modest amount of money spending on it to get it to the point that it reduces energy by 50% & is thus fit for total de-carb either via heat pumps or hydrogen/fuel cells.
Maybe provide an interest free load – repaid when the house is sold? (That is how it works for people in carehomes – local gov make up the difference between carehome cost and person’s income/pension & recover the difference when person dies/home is sold).
Mike Parr says:
“an average of £9,300 per house”… etc…
I’m not challenging your figures but question the resort to market mechanisms. Yes, it might be the way to go at it, but essentially it matters little about the money, because the government can ‘print’ it and recover a large proportion in the taxation that flows from the increased economic activity through the tax system. Finally it gets settled by appropriate taxation on the eventual sale transaction at death which goes some way towards keeping the house price inflation under control. Land value tax will help that process in the meantime, since in the long term the underlying land value eclipses that of any development on the land. (Or so the theory goes.)
We need to get over the notion that money is a commodity and that it is scarce. Current distribution patterns leave much to be desired, but there is no need of shortage and distribution is another can of worms altogether. Bugger all to do with economics and everything to do with political will and intent.
The £9,300 is Labour’s own figure – I was just quoting it. Neither am I proposing a market mech’ – the point I was making is that relative to the value of a house the energy reno’ cost is not signicant and I attempted to put it into context with the comparison with a kitchen. Neither do I see money as a commodity etc. What I was trying to do was highlight the fact that there could be a couple of routes to raising the the £9,300/HH – sure gov could print/spend & tax to recover (apologies to all if this is overt simplification) – there could be other ways as well – but regardless of the route – what it all boils down to is – how to get people in their own houses (& there are lots of them) to do something. Example:
“For the price of a new kitchen – you could have a warm comfortable home, the government offers you two routes to this, an interest-free loan from government re-payable when the house is sold or an interest free loan from your bank/building society – with the added bonus of a new kitchen if you go for it”
Anything to get people off their arses and doing something.
@Mike Parr
A considered and coherent response. Thankyou. And I agree.
You could build a house for what some people are prepared to pay to ‘have a new Kitchen’. (In which to microwave their ready meals !!) We have some very strange spending priorities.
I think a key thing is to install Solar PV for free, also insulate (tho most will be double glazed). Give them some PV electricity for free, keep the rest to create a power station with battery storage, you have an income.
Any renewable energy system has an infinite income, the sun shines forever (ok maintenance needed but costs coming down with scale)
Looking at the power generation graphs for the UK electricity grid….I see that solar is available for around 6 hours per day , at this time of year….
SolarPV is usually installed for free…the installer taking the RHI for it…at least it used to be….
My house is provided with hot water by an air source heat pump…..1.25KW of electricity is used to provide the equivalent amount of heat that 4.5KW would be required for otherwise….it is cheaper to run than anything except the latest high efficiency gas boilers..
I note that last night, at around 1800z, the grid demand was 45GW….right on the edge of available resources, with coal providing 2.5GW of energy (1.25GW at this time (15.58z)
A 3.5kW(peak) PV array – south facing for Nov & Dec will provide 3kWhs/day and 2kWhr/day on average respectively. Which, for a gas heated house will provide roughly 25% & 16% of household demand. useful but not enough once one moves to electrical heating. Your stats on generation shows that the UK needs to vastly build out its renewables – specifically wind which tends to provide more power in winter – than summer.
Agreed….
Wind provides more power in very cold conditions, but tends to provide less, in winter, if the conditions are cold and damp….and looking at the grid charts, solar starts producing at around 0830z and halt at 1530z this time of year…so looking at todays grid charts, solar is at 2GW, wind at 0.79GW……coa is producing just over 2GW and biomass at 2.5GW (wood chip fuelled). So you’ll note that wind is its usual reliable self….and without storage it is unreliable….and highly intermittent. Wind speed today is an average of around 5mph over the whole country…11mph in the Irish sea and 8mph in the channel, gusting at 14 and 13 respectively….seriously? It’s a good job we have combined-cycle gas turbine plant to cover the intermittency. Gas is as usual carrying the country at 23.5GW. Nuclear 6,75GW. Incidentally, gas is about at the maximum available now…and we’re taking 2GW from France. And we are at near maximum that can be met by conventional sources .. now.
So, we need more renewables
There is ample room for more
The point is that is where the investment must go
Well that, and energy saving, of course
The Met Office in 2019 produced a report/literature survey on weather and renewables. Once wind farms have a separation of more than 200km, correlation in output breaks down. Thus a more even development would be good (as opposed to the loads of on-shore in Scotland and loads of off-shore in the south of the North Sea). Capacity factors for wind in winter are, roughly double those in summer – off-shore wind can deliver capacity factors of 70 – 80% in January and February (look at Danish stats). Wind power peaks generally occur at 12hour and 96 hour intervals – thus the need for storage.
The only storage system that scales is hydrogen (via electrolysis using green electricity) – which can scale to the multi-terrawatt hours that are needed to power hydrogen gas turbines – which are becoming available in sizes that are useful (i.e. 450MW). As Richard noted, what is needed is vary large scale build out of renewables. Labour’s off-shore proposals for 2030 could be multiplied by any number between 1 and 10 and it would still not be enough.
Agreed
Thanks
Currently, on 6/11/2019 @18.23.
Wind is providing 1.35GW to the grid, 3.05% of the 44.2GW demand.
Gas is now maxed-out at nearly 25GW.
Coal is at 2.23GW.
Dutch, Belgian and French inter-connectors providing 4GW…..
Outside temperature 8 degrees C.
Not even cold yet.
Coal gone by 2025 by current policy.
All the current nuclear will be gone by 2040.
Good luck.
So we need to invest
Your alternative is?