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More than 6,000 jobs could be lost because of changes to subsidies under the Government’s Green Deal energy-saving scheme.
The warning from industry experts comes after construction giant Carillion said last week that 4,500 jobs were under immediate threat from proposed cuts to subsidies for solar panel installations.
The Solar Trade Association said that longer term, 90 per cent of the 25,000 jobs in the industry could go.
The latest changes to the Green Deal, quietly released last week, appear likely to wreck the new loft and cavity wall insulation industry, which is dominated by small firms.
The Green Deal is the Government’s loan scheme, which is due to come into force next October. It will enable householders to install energy-saving measures, such as insulation, with no upfront costs. Repayments will be made over time out of the savings.
The Government last week announced a further £200 million of funding in the form of payments made to early applicants. But subsidies for loft and cavity insulations will be scrapped for all but the ‘fuel poor’ – defined as households that spend at least ten per cent of their income on energy.
Knauf Insulation, which operates in 35 countries, warns that thousands of jobs could be lost and many small firms forced to the wall as fewer people will make the changes if they have to take out a loan at commercial rates of interest, rather than being subsidised.
A spokesman for the Forum of Private Business said: ‘Now these subsidies look set to be withdrawn, the industry faces collapse. In essence, these firms have been given a year’s notice without any consultation or warning from the Government.’
According to Knauf, the average loft and cavity wall insulation job costs up to £100 once the current subsidy is taken into account. But if the subsidy is withdrawn, the average loan required will be about £5,000.
Steven Heath, external affairs director of Knauf, said: ‘There are 2,500 technicians, 1,500 fitters plus 4,000 support staff, assessors and management in the industry and the vast majority will lose their jobs.’
The Department of Energy and Climate Change published figures last week suggesting that the number of homes having insulation installed will plunge from 800,000 a year to 110,000 after the subsidies are cut.
The Government has also been accused of undermining the solar panel industry by slashing subsidies so homeowners take twice as long to recover the cost of panel installation, typically £10,000 to £20,000.
Tags: Green Business, Helen Loveless, Solar Panels, unemployment
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