Shadow minister for energy and climate change, Luciana Berger MP has said the Labour Party is “wholly committed to the principle and spirit of the Green Deal”.
However, speaking at a fringe event at Labour Party conference, hosted by the Dods Green Deal Dialogue, Berger expressed concern that the policy is “not going to realise the ambition we all want to see”.
Berger added that concern expressed about the Green Deal, which officially launched on October 1, has not been “properly” addressed. Yet she stressed that there are still opportunities for amendments.
Quoting Building magazine, Berger said that, just two providers and seven assessors have signed up to the Green Deal so far.
On the cost of the finance, she said interest rates expected at a level of 7.5% will “severely limit the range of measures a house can adopt if it's going to adopt it all”.
“A £10,000 Green Deal package will be, over the period of a 25-year payback, just over £22,000. Why would anyone sign up to that, no matter what the incentive is?” she added.
Berger pleaded with Nick Clegg to stand by his commitment on the Green Investment Bank, which would be used to capitalise the first run of Green Deal loans.
“If we look in Germany where the KFW bank subsidise the interest rate on a similar energy efficiency scheme, they have seen a take-up of 100,000. I'd love to see that kind of ambition realised here in the UK”, she said.
Barry Gardiner, Labour MP for Brent North, said he struggles to come up with the “least bad thing” about the initiative.
Having asked people on Twitter, he added, his favourite answer was “it's got a catchy title”.
Gardiner joined Berger in identifying financing as the scheme's main downfall.
“It's not providing the real incentive that is necessary to get the behavioural change that is going to redress this market failure.
“It's there in the 7.5% that the Secretary of State has talked about. For anyone who is a home owner, who has got a mortgage, their mortgage is 4 or 4.5% so why would somebody take on a Green Deal at 7.5%?”
Neil Pennell, Head of Sustainability and Engineering at Land Securities said that if the government can make the programme available at an interest rate of 2% rather than 7.5%, it would be more attractive for people.
“It's spending on improving the country's energy performance, which is what we need to do and if we need to subsidise it to make that happen, then that's what it's all about.”
Giles Wilson, deputy chief executive of the Glass and Glazing Federation (GGF) identified a discrepancy in VAT for different energy-efficient products, arguing that rates are much higher on windows and doors than other measures.