Why making good policy requires careful thinking and plenty of time.
Britain has just begun to face what will prove to be a long drawn-out cost of living crisis. In part this is caused by labour and supply chain shortages resulting from the Covid pandemic, but a more fundamental issue is the cost of energy, aggravated by the unwillingness of energy companies to enter long-term contracts for oil and gas with suppliers such as Russia. It is highly likely that supply problems will lead to a second lifting of the cap on energy prices in October that will cause around 40% of UK households to suffer from ‘fuel poverty’ in the last quarter of 2022. In England this means that they will spend more than the median household income on fuel and their residual income will take them below the poverty line. In the rest of the UK it means that families spend more than 10% of their income on fuel. This will be a catastrophe for around 11million households in the UK. This is a country that is one of the most prosperous in the world in terms of per capita GDP yet it is happy to allow nearly half of its households to freeze. There could scarcely be a more damning indictment of the Tories after 12 years in power. It would not be alarmist to predict civil unrest in Britain in the depths of the winter of 2022-3. In 1978-9 some people may recall, the Labour government of Jim Callaghan was fatally wounded by a ‘winter of discontent’. The same fate may well befall the Tories.
At the same time, we are being told that global warming mandates much greater energy efficiency and in particular more energy efficient housing. The Tories already have one botched insulation scheme behind them. Labour are proposing a decade long programme of retrofitting of homes and large expenditure to back it up. All those campaigning for low energy construction and retrofitting: Labour, Greens, New Economics Foundation, talk as if it is a simple matter of finding the money and then spending it in the construction industry. This is just false. There is no chance of getting a serious programme of retrofitting for at least five years after the government has committed to such a policy. Why is this? The answer takes us to the heart of the issue that Labour Affairs has been talking about for the last two years. The problem is not ‘finding the money’ but mobilising the resources necessary to do the job. The resources are not currently there and mobilising them will take years. This is the fundamental problem that politicians and economists have not grasped.
Let’s take insulation as an example. In order to save fuel, buildings must be effectively insulated. That means that heat loss must be minimised. But in order to effectively insulate a house all aspects need to be considered: gaps, leaks, roofs, lofts, floors, walls (internal and external), windows, doors, all interfaces. Not only are different trades involved, but each has a different role to play in insulation. The insulation job of a roofer is different from that of a plasterer or carpenter. The work needs to be co-ordinated. It is no use a plasterer completing the insulation of a wall if an electrician then comes along and drills a hole in that wall. Each trade needs to understand how their work impacts on that of the other trades and the whole project needs to be co-ordinated so that work happens in the right sequence. Fundamentally everyone needs to be signed up to getting it right: producing an energy efficient building, not just doing their little bit of the job and then walking away from it without regard to the success of the whole. Forget about all the new technology, techniques and materials. If builders built to design specifications and avoided gaps and bodges, they could not fail to come up with a building that is more energy efficient than most that currently exist. Just doing the job properly would go a long way towards producing energy efficient buildings.
This doesn’t happen because it is not in the interests of construction companies to do the job properly. They compete on price, not quality so bodging is built into the system. And bodging won’t produce energy efficient buildings, either retrofit or new build. In the case of retrofit, bodging could even lead to destruction of the interior of the building. Furthermore, the widespread use of subcontracting makes co-ordination and quality control particularly difficult to achieve. The Tories are particularly badly placed to do anything about this since they depend on commercial builders for much of their funding and those builders will not take kindly to governments interfering with established and profitable ways of working.
If Labour hopes to do anything about this, they need to take several steps back and then take in a deep breath, because the problems are formidable. First, there is the structure of the construction industry and the incentives that drive it. Second, there is the need to put together capacity, including the ability of local authorities and regional governments to assemble the know-how to effectively procure energy efficient buildings. There is some evidence that the government of Wales has some idea about how to do this, but time will tell. Third, there should be regulation of the construction sector to at least reduce labour only or microbusiness subcontracting. Fourth, the workforce.
There is an existing workforce. This workforce is poorly equipped to carry out retrofit insulation. It needs its own vocational education. The future workforce will not be able to do any better if they do not get an adequate vocational education and those who are supposed to teach them do not know how to do energy efficient building themselves. To do this they will need the attention of those construction professionals who really do understand insulation and they are a bit thin on the ground. When they are found they need to be recruited to train other workers, apprentices and construction students. For that they need to be paid enough to leave their jobs in construction and become pedagogues (and they need to be prepared for that role as well). On the whole, it won’t be necessary to create new occupations but to upgrade the education within each to ensure that workers know how to carry out their part of an insulation project and not to undermine the work of colleagues in neighbouring trades. There may be some need for new occupations relating to project management and co-ordination, but the fundamentals rest on competent practice of existing occupations.
So local colleges need to receive investment, teachers need to be recruited and trained. Young people need to have adequate transport links to travel to colleges and workplaces. If we wish to encourage young people into worthwhile careers that do not involve attending university, promoting energy efficient construction will be an attractive option for many, including those who do not currently consider the construction industry as a career path. At that point the work of training the new generation of insulators can begin. That will take a minimum of two years and sometimes three for young people entering the sector and it will require an extended effort and extensive investment in workplace and offsite professional development for the existing workforce. At that point serious insulating can begin. We are looking at up to five years from the beginning of the programme before the point is reached where this work takes place on the scale needed to insulate Britain. The arguments of Labour, Tories, Greens, New Economic Foundation, think tanks et al are all fantasy. This is a long-term project.
The good news for Labour, if it wants to hear it, is that the preparation for a serious retrofit programme will involve the revival of communities through the improvement of their vocational education provision and transport links, and the eventual payoff will be an economically more secure and better trained workforce. At that point we can anticipate reduced fuel bills. This in itself is something to aim for. But don’t let us delude ourselves that any of this is easy. It is too late to stop the massive increase in fuel poverty that we are going to see this autumn. But it is not too late for Labour and the trade unions involved in the construction industry to plan for an energy efficient future in construction and to show how inadequately equipped the Tories are to do so. Of course, to deal with the short-term problem would involve adopting a sensible policy of making stable long term contracts for energy supplies and not treating Russia as an enemy. But Labour does not seem to grasp that elementary point.