Ministers have scrapped the Government's flagship Green Deal home energy efficiency programme as part of their austerity drive.
The announcement comes weeks after The Independent reported that the scheme was at risk of falling victim to the Government’s plans to significantly scale back the Department of Energy and Climate Change’s £3.3bn budget.
It leaves David Cameron’s vow to lead the “greenest Government ever” in tatters, a phrase he even used in a speech at the Royal Welsh Show today.
The home improvement plan was deemed a failure by Decc, who decided to pull the funding after only 10,000 installed the taxpayer-subsidised green technology in their homes.
The closure of the scheme will not affect existing plans or applications for the programme, which is delivered by the Green Deal Finance Company, but the Government has announced it will launch an investigation into alleged scams connected to the scheme.
The Green Deal was launched in 2013 and was hailed as a “revolution” in transforming Britain’s typically energy inefficient housing stock.
It was designed to encourage people to install efficiency measures in their homes by offering loans and allowing them to pay back the money in instalments on their energy bills.
Decc released figures showing there had been just 9,999 Green Deal loans approved by June 2015, with a further 5,597 pending or applied for. It said it was scrapping the scheme “in light of low take-up and concerns about industry standards".
It is the latest sign of Mr Cameron’s waning commitment to green energy. In a sign that the Green Deal was about to be scrapped, the Prime Minister decided not to appoint a minister directly responsible for the scheme, with its brief handed to Lord Bourne – the most junior minister in the department who divides his time with the Welsh Office and is unpaid.
Overall, DECC’s £3.3bn annual budget is expected to be one of the biggest casualties in percentage terms of George Osborne’s austerity drive. He has already yannounced that it would have to find £70m in this financial year and that figure is expected to rise significantly in the autumn Spending Review.
Labour said today's announcement was proof of the Government's "complete and utter failure" on energy efficiency.
“The Green Deal was billed by the Government as ‘the biggest home improvement programme since the Second World War’ but has been a flop from start to finish," Jonathan Reynolds, the shadow energy minister, said.
“Installing energy efficiency measures in the home is an important way of getting consumer bills down, but the Green Deal never represented value for money.
“This is the second major announcement in the two days that the House of Commons has been on recess and it is clear the Department is in complete disarray. With more than two million households in fuel poverty, the Government urgently needs to lay out what plans they have to replace the Green Deal.”
Green party MP Caroline Lucas accused the Government of failing to do enough to ensure the Green Deal succeeded. “David Cameron had the audacity to again call his government the ‘greenest ever’ today – at the very same time as he takes a wrecking ball to key climate and energy policies," she said.
“This week has seen crucial climate and energy policies in the firing line as the Government pursues its myopic and reckless austerity agenda.
“The fact is that the Green Deal never did enough to roll out the home energy efficiency schemes this country desperately needs. But the Government’s rhetoric – which suggests that cancelling the scheme is good for taxpayers – is deeply flawed.
"The Government should be putting home energy efficiency at the very top of its infrastructure priorities – not cutting away at the schemes already in place. We need an ambitious energy efficiency programme for lower bills, decent jobs and to stand any chance of meeting our climate targets."
However the Taxpayers' Alliance welcomed the move, describing the initial decision to launch the Green Deal as a "triumph of politics over policy".
Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "The scheme was poorly designed, and with such high interest rates it's hardly surprising that people weren't queueing up for loans. The Government is right to see sense and dump the scheme, and should concentrate on delivering energy policy based on long term sustainability, not short term gimmicks."
What does five more years of the Tories mean for Britain?
What does five more years of the Tories mean for Britain?
1/8 Welfare payments will be slashed
One of the most controversial parts of the Conservative manifesto was to cut benefits for the working age poor by £12 bn over the next three years. But during the campaign they only said where £2 bn of these savings would come from. That leaves £10 bn still to find. Some experts think the only way they can close that gap is by means testing child benefit – with millions of families losing out
2/8 There will be tax cuts for those in work and those who die
The Tories will increase the threshold at which the 40p rate of tax becomes payable to £50,000 by 2020. They haven’t said so but it is also likely that at some point in the next five years they will abolish that 45p rate of tax altogether for the highest earners. They also want to increase the effective inheritance tax threshold for married couples and civil partners to £1m
3/8 There will be an in/out EU referendum in 2017
The next two years are going to be dominated by the prospect of a referendum on Britain’s membership of the EU. First off David Cameron has the daunting task of negotiating a deal with other EU leaders an acceptable deal that he can sell to his party so he can go into the referendum campaigning for a ‘yes’ vote. This may be unachievable and it is possible that the Tories may end up arguing to leave. Opinion polls show Britain is divided on EU membership, one poll this year showed 51% said they would opt to leave compared to 49% who would vote to stay in
4/8 There will be more privatisation of the NHS
Having won the election the Tories now have a mandate to go further and faster reforming the NHS. In order to make cost savings there is likely to be greater private involvement in running services, while some smaller hospitals may lose services they currently provide like A&E and maternity units
5/8 There will be many more free schools – and traditional state schools will become a thing of the past
The Tories plans to create 500 new free schools and make 3,000 state schools become academies. They will also carry on reforming the Department of Education and remove more powers from local authorities over how schools are run
6/8 On shore wind farms will be a thing of the past and fracking will be the future
Government spending on renewable energy is under real threat now the Lib Dems are no longer in power with the Tories. Subsidies are likely to be slashed for off-shore wind farm and other green energy supplies. Meanwhile there will be generous tax break for fracking as ministers try and incentivise the industry to drill for onshore oil and gas
7/8 There maybe more free childcare – but not necessarily
In the campaign the Tories pledged to double the amount of free early education for three- and four-year-olds from 15 hours a week to 30. The extra hours would only be offered to working families where parents are employed for at least eight hours a week. However they have not said where the money will come from to fund the pledge
8/8 Workers' rights could be reduced
The Tories want to slash business regulation, merge regulator and cut costs. The Lib Dems stopped them from reducing the employment rights of workers in power – but these are now under threat