Rishi Sunak is to announce a £3bn package of green investment to decarbonise public buildings and cut emissions from Britain’s poorly insulated homes as part of the government’s Covid-19 economic recovery plan. The chancellor will seek to use Wednesday’s summer statement on the economy to fend off criticism that his proposals lack ambition by insisting that he can “kick start” an environment-friendly revival through the creation of thousands of green jobs in the construction industry. Sunak will say that the extra money for decarbonising houses, schools, hospitals, prisons and military bases will help the UK meet its target of being a carbon net zero economy by 2050, and is likely to say that further green spending will be announced later in the year. Opposition parties and environmental groups said, however, that the green investment pledge was inadequate to meet the challenge posed by global heating. Rosie Rogers, Greenpeace UK’s head of green recovery, said: “Surely this is just a down payment? The German government’s pumping a whopping £36bn into climate change-cutting, economy-boosting measures and France is throwing £13.5bn at tackling the climate emergency. £3bn isn’t playing in the same league.” Ed Miliband, the shadow business secretary, said: “We have consistently called or a recovery which has energy efficiency at its heart and will welcome any measures which achieve that. “But this needs to be part of a much broader and bigger scale strategy for getting on track for net zero, which includes a zero carbon army of young people being put back to work, investment in renewable energy and a plan to green our transport network. When the moment demands the most ambitious green recovery possible, the government has not so far risen to the challenge.” The Treasury said the summer statement was about “securing the recovery” and would be followed by two bigger events – a spending round and a budget – in the autumn. Sunak’s plan was on top of the £5bn of infrastructure spending announced by Boris Johnson last week.
Of the £3bn, the chancellor will earmark £1bn to improve the insulation and energy efficiency of public buildings, and to invest in green heating technology. Sunak will also announce £50m to pilot new approaches to retrofitting social housing at scale to make them greener, through measures like heat pumps, insulation and double glazing, which the Treasury said would support landlords to improve the least energy efficient social rented homes in England. Warmer homes for social tenants could lower annual energy bills by £200 a year for some of the poorest households, the government estimates. The UK’s homes are the draughtiest in Europe, accounting for about a fifth of the UK’s carbon emissions, but sporadic attempts at insulation programmes by governments over the last two decades have failed to make much progress. With the focus of the spending statement on jobs, it is thought most of the remaining £2bn will be spent on creating “green” employment opportunities for construction workers. The Conservative manifesto at the 2019 election promised to invest £9.2bn on improving energy efficiency in homes, schools and hospitals, saying that this, if done at sufficient speed, would create around 100,000 jobs. “The government remains committed to decarbonising buildings to keep us on track to reach net zero emissions by 2050,” a treasury spokesperson said. “The funding expected to be announced this week represents a significant and accelerated down payment on decarbonising buildings, to help stimulate the economic recovery and create green jobs. Allocations for future funding will be determined in due course.” Rogers added: “Of course this money is better than nothing, but it doesn’t measure up to the economic and environmental crises. It’s not enough to create the hundreds of thousands of new green jobs that are needed. It’s not enough to insulate all of the homes and buildings that need to be kept warm and more energy efficient. It’s not enough to ‘build back greener’, and it’s certainly not enough to put us on track to tackle the catastrophic impacts of the climate emergency.” Miliband has previously called for a huge green investment programme to create jobs, particularly for young people, in the wake of the coronavirus pandemic, and to help tackle the climate emergency. Separately, the Liberal Democrats urged Sunak to zero-rate VAT on green products, including wind turbines, solar panels, bikes and e-bikes. The chancellor must not “miss this once-in-a lifetime opportunity to secure a green economic recovery”, Lib Dem MP Layla Moran said. Rain Newton-Smith, chief economist at business group the CBI, said: “Investment in green jobs and technology must be at the centre of our efforts to revive the economy. “This £3bn package of measures will undoubtably fast-forward progress towards net-zero. With the government’s own manifesto promising £9.2bn on energy efficiency alone, we look forward to seeing the full details on delivery of its ambition to build back greener.”