A new report from Consumer Focus shows that investing money raised through carbon taxes in a major energy efficiency programme is one of the best ways to create jobs and boost the economy

The research shows that significant Government energy efficiency infrastructure investment could generate up to 71,000 jobs and boost GDP by 0.2 per cent3 by 2015 and create up to 130,000 jobs by 2027.

The report shows that more jobs and greater economic growth could be generated through energy efficiency programmes than by an equivalent investment in other Government spending programmes, or by cuts in VAT or fuel duty.

Investing in energy efficiency has other advantages over alternative options. It is fast to mobilise, and would stimulate economic activity and jobs in all regions of the UK. It employs workers in construction and related sectors, which have been hit hard by the recession. Consequently this sort of investment is less likely than other forms of investment to ‘crowd out’ alternate economic activity.

From next year the main scheme to help fuel poor consumers will be the heating and insulation improvements provided by energy firms through the Energy Company Obligation (ECO). But Government estimates show this will lift only 250,000 households out of fuel poverty, at most.

Consumer Focus, and a coalition of organisations (The Energy Bill Revolution), argue that a proportion of funds generated by carbon taxes, should be used for targeted energy efficiency schemes. The new report details a range of funding options from using 35 per cent of carbon tax revenue to 95 per cent and how this could cut fuel poverty by 75 per cent to 87 per cent depending on the level of investment.5

Mike O’Connor, Chief Executive at Consumer Focus, said: ‘We need to make heating our homes more affordable, cut carbon emissions and achieve economic growth. Using carbon taxes to ensure our homes leak less energy represents a triple-whammy. This would simultaneously improve the quality of life of millions of people, slash carbon emissions and generate greater economic growth than other measures. Consumers will be paying these taxes through their bills. They can and should feel the benefit.”

Consumer Focus is urging the Government to carefully review this new research and the existing evidence from the Energy Bill Revolution, and consider this policy approach on energy efficiency. It would both help our economic recovery and give vulnerable households ongoing benefits from warmer homes, lower energy bills and better health.

Vince Matthews, Marketing Manager, SIG Energy Management said: “The Consumer Focus report underlines what supporters of the Energy Bill Revolution have been saying for some time – namely that with the right levels of economic and legislative support, a concerted push for domestic energy efficiency could provide untold benefits to this country.

We know there is a pressing need to tackle fuel poverty, and that energy efficiency is one of the tools at our disposal to achieve that. What the report shows, and which is less widely acknowledged, however, is that a country-wide energy efficiency programme could be the catalyst that brings the construction industry back to pre-recession levels of growth, and beyond.”

For more information about the report visit Consumer Focus