Green Deal could cost insulation industry 16,000 jobs

A coalition of insulation companies, representing over 70 percent of the UK’s £700 million insulation industry, has written to Ed Davey, the Secretary of State for Energy and Climate Change, warning him that the current Green Deal proposals will jeopardise 16,000 jobs in the industry over the next year.

The Insulation Industry Forum is referring to the Department of Energy and Climate Change’s own modelling, which predicts an 87.5 percent reduction in the loft insulation market, a 57 percent reduction in the cavity wall insulation market and a 16 percent drop in the solid wall insulation market in 2013.

The Forum believes that the current proposals will force many loft and cavity wall insulation manufacturing plants to close down, resulting in the number of people employed by the industry dropping from 36,000 in 2012 to just 20,000 in 2013.

The dramatic market reductions will be born out of the delay between the ending of the existing subsidy schemes for cavity wall, solid wall and loft insulation and the full introduction of the Green Deal and the Energy Company Obligation (ECO). The industry group predicts that as a result of the gap, 45 percent of jobs in the insulation industry will be lost, with the loft insulation and cavity wall insulation sectors predicted to be hit the hardest.

The Insulation Industry Forum has also warned that Government’s lack of transition planning could severely stifle and restrict investment and job creation in the solid wall insulation sector – a sector pivotal in allowing the UK to meet its carbon targets.

Insulation Industry Forum spokesperson, John Sinfield of Knauf Insulation said: “The loft and cavity wall insulation installation industry will fall off a cliff in 2013. The policy by the current Government risks destroying businesses, putting 16,000 people out of work and undermining the Coalition’s green ambitions for the country.

“It will result in a lack of continuity of work from January 1 and dramatically fewer insulation installations in 2013 – we predict 16,000 job losses, many of them before Christmas.

“We are calling on the Secretary of State to recognise the scale of the problem that is about to hit our industry and develop a set of measures to address the insulation gap and implement a suitable solution”.

Supporting the Insulation Industry Forum’s appeal, Which? Executive Director, Richard Lloyd, added: “Consumers tell us that rising energy prices are one of their biggest concerns. Lagging lofts and filling draughty cavity walls are relatively straightforward and low cost ways to reduce bills, so this warning about a drop in basic insulation work is clearly worrying. Even under the Government's current schemes it's estimated there are still just over 8 million homes that need their loft insulation topping up and 6 million homes that need cavity walls filled. With all of this still left to complete, the Government must ensure that support is available to get these jobs done.”

The full letter to the Secretary of State can be viewed in its entirety below:

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9th October 2012

Dear Secretary of State,

Although there are numerous positives to the Government’s Green Deal and Energy Company Obligation (ECO), the Insulation Industry Forum, which represents more than 70% of the UK’s £700m a year insulation industry is extremely concerned about the Government’s plans for its implementation. The withdrawal of the existing subsidies ahead of Green Deal Finance and ECO coming fully on stream will put 16,000 people out of work in the industry over the next year – with many jobs going before Christmas, the majority of which will be in loft insulation and cavity wall insulation.

The Government’s own Impact Assessment shows that the loft and cavity wall insulation installation industry will fall off a cliff in 2013,even while assuming all necessary Green Deal and ECO mechanisms are in place from January 2013.

This will have severe implications for our industry. With declining demand, loft and cavity wall insulation manufacturing plants will struggle to remain at capacity, and subsequently not be able to continue with their current investment levels.  It will also stifle and restrict investment and job creation amongst solid wall insulation companies.

The Government’s own figures suggest this will lead to an 87.5% decrease in the loft insulation market, a 57% drop in the cavity wall insulation market and a 16% drop in the solid wall insulation market. It will also prevent the Government from meetings its green commitments.

We are supportive of the Green Deal and ECO, which we want to succeed. We are therefore calling on the Government to recognise the real threat to thousands of jobs in our industry, and work with us immediately to develop a set of measures to address the insulation gap and implement a suitable solution.

Yours faithfully,

John Sinfield, Managing Director Northern Europe, Knauf Insulation

Richard Pemberton, Chief Executive Celotex

Tony Hardiman, Chair Cavity Insulation Guarantee Agency (CIGA)

David Robson, Director Instagroup

John Garbutt, Marketing Director, Kingspan

Thomas Heldgaard, Managing Director Rockwool UK

Alex McLeod, Chief Executive -SuperGlass

Eamon McDonnell, Managing Director Isover Saint Gobain

Padraig Barry, Managing Director Saint-Gobain Weber

Neil Marshall, Chief Executive National Insulation Association (NIA)

Andrew Warren, Director Association for the Conservation of Energy (ACE)