Green Recovery Stimulus for UK’s Housing Sector

Geography: Europe
Sector: Housing

Read More: UK’s Plan for a Green Recovery

The UK Treasury has now published the foundations of Chancellor Rishi Sunak’s Summer Economic Update for a green recovery. Of the GBP 3 billion “green” package that was announced on July 6, 2020, GBP 1 billion will be made to retrofit public sector buildings such as schools and social housing, making them less carbon intensive. The other GBP 2 billion will be given to homeowners as financial incentives to insulate their homes and thus improve energy efficiency. The Green Homes Grant scheme will issue vouchers worth up to GBP 5,000 to use on energy-efficient appliances.

Given that the UK emitted 435.2 metric tons CO2equivalent in 2019, of which 19% came from the residential sector and 18% from business, improving energy efficiency in homes and businesses is essential to reducing the UK’s greenhouse gas emissions. Because the UK is currently not on track to meet its target of reducing emissions by 80% by 2050, government action is required.

If the GBP 3 billion package is a one-time investment, however, it falls short of its promised GBP 9.2 billion for energy efficiency. Given that the German and French governments promised EUR 40 billion and EUR 15 billion respectively for a green recovery, it is also significantly less than neighbouring European countries’ investments. In addition, the funding aims at creating jobs in the short term, while providing a GBP 1,000 bonus for furloughed employees. UK employers have reduced more than 600,000 staff jobs due to COVID-19 since March, and the Organisation for Economic Co-operation and Development (OECD) predicts increases in the UK unemployment rate by the end of this year; it is expected to soar to 14.8% if a second wave of COVID-19 hits the country, or to rise to 11.7% even without a second spike.