The UK ranks among the worst in Europe for the energy efficiency of its homes, according to new research which outlines the urgent need to cut heat waste. Experts warn that while Liz Truss bought the government time with her £100bn package to cut energy bills, similar expensive and unsustainable schemes will be needed unless meaningful plans are introduced to improve housing and reduce demand. Truss’ energy package, a measure likely to define her premiership, is already under pressure due to a lack of detail. There is further concern that additional help will need to be given to poorer households, while relatively short-term help to businesses will also be increased by business groups in the coming weeks. While Truss has pointed to fracking and North Sea fossil fuel expansion as a way to increase energy supply, she has already warned that this will fail to reduce prices – while damaging Britain’s commitment to tackling the climate crisis. Instead, it is being called upon to copy successful policies in Germany and elsewhere to improve the energy efficiency of UK homes to reduce demand. Research by the Institute for Government (IfG) found that the UK scored worse than countries across Europe in a range of climates for the energy efficiency of its homes. Citing analysis of a 2020 study, it found that a UK home with an indoor temperature of 20C and an outdoor temperature of 0C lost an average of 3C after five hours – up to three times more than homes in European countries such as Germany. The analysis concludes that UK households and businesses “are likely to continue to face high energy bills in the winter of 2023 – quite possibly beyond”. He adds: “If the government only focuses on short-term financial support and long-term measures that are unlikely to have a significant impact, it will find itself in an even more difficult position in a year’s time.” The UK is particularly vulnerable to gas price rises. More than four-fifths of UK homes are still heated by gas boilers, which is much higher than most countries. The UK’s housing stock is also the oldest and least energy efficient in Europe. Over 52% of homes in England were built before 1965 and almost 20% were built before 1919. The IfG analysis warns that energy prices are now expected to rise further and remain higher for longer than expected earlier in the crisis, with prices potentially remaining up to four times higher than historical rates in 2025. This means that another huge bailout could be necessary unless Truss acts to reduce demand for natural gas. Experts believe that a serious energy efficiency program could have a real impact within a year. The institute singled out Germany as a success story, where grants, low-interest loans, tax credits and free expert advice were used, resulting in high uptake rates. Britain’s housing stock is among the oldest in Europe. Photo: Tim Goode/PA “Energy efficiency is a huge hole in Liz Truss’s energy plan,” said Tom Sasse, deputy director at the IfG. “Bills have gone through the roof – and show little sign of coming down anytime soon – yet the government has no plan to tackle the fact that we have the darkest homes in Europe. “Borrowing huge sums to freeze energy bills only makes sense if we also have a plan to reduce demand. Announcing a national mission to boost energy efficiency – learning from overseas successes – could make a real difference to reducing the pain ahead for households and businesses.” The cost of Truss’ plan will be revealed this month in a budget statement by the new chancellor, Kwasi Kwarteng. The Prime Minister has ruled out using a windfall tax on suppliers to fund the scheme, which Labor is demanding. However, there are already calls for the statement to support further aid for the poorest households, which face additional pressures from inflation. The Center for Social Justice, a think tank with close links to senior Tories including former party leader Iain Duncan Smith, is calling for an increase in universal credit to help the group. “Frankly, it’s unfair that we’re not using the welfare system the way we can to help people,” said Joe Shalam, his policy director. “Universal credit is the way to do that. We saw it pay off during the pandemic. It is one of the most advanced social security systems in the world.” The Joseph Rowntree Foundation has estimated that, including all government schemes, there remains a gap of around £800 that low-income families will need to meet this winter. It leaves them at risk of poverty or at the mercy of high-interest loans.
