Deal or no deal

John Grantchester

John Grantchester on why Ministers need to get the fundamentals right on home energy improvements

With little time left before next Monday’s launch of the Green Deal, the government must react swiftly to criticisms regarding the costs of the scheme to consumers. Upfront charges must be stopped, interest rates slashed and penalties withdrawn if it is to deny media portrayals that the home eco-loans are a rip off. 

At a time of rising energy prices, falling living standards and stretched budgets, the government must not allow scheme charges to undermine consumer uptake of very necessary energy home improvements. Not only would a successful Green Deal cut long-term energy bills for households, it would also reduce the UK’s energy demands as well as save the planet from excessive carbon emissions.

When the government sets the Green Deal finance interest rate, it must listen to the multitude of voices telling it consumers need a good deal. Ministers still have time to influence and reduce the expected rates of 7% – a margin over base rates way beyond most people’s expectations.

Research by The Guardian has discovered that consumers could well face upfront charges of up to £150 just to get a home assessment done (£99 for British Gas), if energy saving measures are applicable to their homes and costs. A YouGov poll has discovered that 51% of consumers concerned about these costs rated it the biggest obstacle to going ahead; and with fears like this, the Green Deal faces some severe difficulties just getting to the starting line.

With the regulations being debated this evening in the Lords, the government must improve its information gathering reports mandated on Green Deal providers to monitor the effects of costs on household attitudes. This must not just be about an information gathering exercise; it must also instruct policy and help corrective action should it be needed once the Green Deal rolls out. There are also many grey areas where it is unclear whether households may face further charges, for example for complainants to the Ombudsman when things go wrong.

There are many challenges to the success of the Green Deal. But in the first instance, Ministers must get the fundamental focus right if it is to stand any chance of success.

Lord John Granchester is a member of Labour’s DECC team in the House of Lords

Published 24th January 2013


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