by Peter Franklin
Wednesday, 8
July 2020

Don’t burn our money, Chancellor

by Peter Franklin
Chancellor Rishi Sunak. Credit: Getty

Rishi Sunak has to do three big things in his summer statement today. None of them are impossible on their own — but his problem, and ours, is that all three have to happen at the same time.

Firstly, he needs to give our crisis-hit economy a fast-acting, job-creating shot-in-the-arm. Secondly, he has to pass the Dominic Cummings test — investing in technologies that put Britain at the cutting edge. Thirdly, he has to instil some sort of confidence in our solvency as a nation. Investment is great, but so is not running out of money.

Luckily, he’s spotted something that can jump through all three hoops: Energy efficiency.

No, come back! I promise you won’t find this boring (but if you do, here’s a post about sex with aliens instead).

Energy efficiency is something that can get Britain back to work, fast. Sorting out our draughty, energy-guzzling buildings is a job that needs doing across the whole country right now. There’s no need to wait for planning permission or a public inquiry or new legislation. We can just get on with it. There’s a lot of slack in the construction industry — and therefore the skills, equipment and materials to do the job.

This is more than mere make-work. The relevant tech is coming along in leaps and bounds. Take lighting, for instance. An LED bulb uses less than a fifth of electricity of a traditional incandescent bulb — and lasts twenty times longer. If all our technologies were improving that fast, we’d be living lives of luxury. And it’s not just LEDs — we’re only beginning to exploit the potential of techs like heat pumps and aerogel insulation.

This stuff isn’t just about saving energy and carbon — it’s about saving money too. We could radically improve our household and national finances if we stop wasting expensive resources. What’s more, every unit of energy that we save as consumers generates further savings — like the new power stations we’d no longer have to build or the fuel we wouldn’t have to source from hostile foreign powers. A country that’s as deep in debt as we are is by definition one without enough money — so let’s stop burning it.

One question, though: If this is all so obvious and doable, why haven’t we already done it?

Because government is stupid, that’s why. For instance, there’s a long record of state subsidies for energy efficiency work going to the big energy suppliers — i.e. the companies with the least interest in reducing our energy bills. This makes about as much sense as paying a tobacco company to run a quit-smoking campaign. No wonder we haven’t made more progress.

Don’t get me wrong: more money for energy efficiency is good news. But we need it spent with more intelligence too.


  • July 10, 2020
    Of course, one way to reduce the debt would be to re-introduce rationing. After all it lasted after WW2 for eight years. Think of the benefits- less money spent on food and clothes - all available for taxation. It would also help the health of the nation - no obesity and cost to the NHS. And... Read more

  • July 9, 2020
    The post war governments were able to handle high levels of debt effectively. GDP to debt ratios fell from 250% at the end of the war to around 50% by the end of the 1960s. They did this because GDP grew consistently around 2.5%, there was full employment and there was a increasing but not... Read more

  • July 8, 2020
    I was having a similar conversation with someone who is a bit more clued up about such things than I am and was told that after WW2 our deficit was something like 250% of GDP and now we are at 101% so really "nothing to worry about". He then said something like: Sunak and Johnson are banking on all... Read more

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