Rishi Sunak U-turn will mean higher energy bills for millions, experts warn

TOPSHOT - Britain's Prime Minister Rishi Sunak delivers a speech during a press conference on the net zero target, at the Downing Street Briefing Room, in central London, on September 20, 2023. The UK looked set to backtrack on policies aimed at achieving net zero emissions by 2050 with Prime Minister Rishi Sunak expected to water down some of the government's green commitments. The move comes amid growing concern over the potential financial cost of the government's policies to achieve net zero carbon emissions by mid-century. (Photo by JUSTIN TALLIS / POOL / AFP) (Photo by JUSTIN TALLIS/POOL/AFP via Getty Images)
Rishi Sunak at Wednesday's press conference announcing the reversal of green policies. (AFP via Getty Images) (JUSTIN TALLIS via Getty Images)

Rishi Sunak’s watering down of green policies will lead to either higher energy bills or colder homes for millions, experts have warned.

This week, when Sunak announced a series of net zero U-turns, one involved the scrapping of policies forcing landlords to upgrade the energy efficiency of homes.

It means landlords, as well as homeowners, will not need to upgrade homes to an energy performance certificate (EPC) grade C by 2035. EPCs are rated from A (most efficient) to G (least efficient).

Downing Street claimed progress has been made on homes reaching grade C or above - 47%, up from 14% in 2010 - without having to penalise people for missing the target.

But the Resolution Foundation, a left-leaning think tank, said on Friday that the policy will disproportionately affect low-earning tenants.

Watch: Rishi Sunak waters down climate commitments to avoid public ‘backlash’

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Its chief executive, Torsten Bell, said: “The state of our private rented sector is a disgrace, which is why the government was previously planning to require landlords with highly energy inefficient homes to sort their properties out.

“What’s the result of that not happening? Higher energy bills/colder homes for tenants.”

Bell, referring to the below chart, said it “spells out who will be at the sharp end of this impact: one-in-four of the poorest families in England rent terribly insulated homes”.

Nearly 25% of the poorest families in England rent poorly insulated homes. (Resolution Foundation)
Nearly 25% of the poorest families in England rent poorly insulated homes. (Resolution Foundation)

'Green crap' comparisons

Following Sunak’s announcement on Wednesday, analysis by the Energy and Climate Intelligence Unit (ECIU) also indicated cancelling energy efficiency regulations for the private rental sector could cost households almost £8bn in higher bills over the next decade.

ECIU energy analyst Jess Ralston said: “The PM has sided with landlords over renters, putting their energy bills and cost of living up by ducking the improvement of rules on energy efficiency.”

Tory former environment minister Lord Deben compared Sunak’s U-turn to David Cameron’s “cut the green crap” promise in 2013.

This included a substantial reduction in energy-efficiency subsidies, such as loft insulation, and the effective banning on onshore wind. Critics have argued the impact of those decisions is still being felt today, with one analysis claiming cost millions of households about £170 each last year (and the country £1.5bn in total) because the rate at which homes were becoming properly insulated dropped off a cliff.

Lord Deben said: “If we had not gone back because of the ‘green crap’ we would have had much cheaper electricity because we would have moved much faster towards renewables. The government of David Cameron was wrong then and this government is wrong now.”

The impact of Cameron's approach is demonstrated in this chart, from the Institute for Government, showing a significant drop in installations of loft and cavity wall insulation since 2013. The National Housing Federation has said higher energy efficiency can save up to 40% on household heating bills.

Installations of loft and cavity wall insulation in homes between 2010 and 2021. (Institute for Government)
Installations of loft and cavity wall insulation in homes between 2010 and 2021. (Institute for Government)

Landlords are also criticising Sunak's green policy

The National Residential Landlords Association (NRLA) praised the dropping of plans to fine landlords who fail to meet energy efficiency targets, saying "many are themselves struggling financially" during the cost of living crisis.

But it also criticised uncertainty over government policy.

Chief executive Ben Beadle said: "Ministers need to use the space they are creating to develop a full plan that supports the rental market to make the energy efficiency improvements we all want to see.

“This must include appropriate financial support and reform of the tax system which currently fails to support investment in energy efficiency measures.”