3. Stamp duty
Stamp duty is well understood among consumers and can drive behavioural change in the housing market. We were among the first of the UK’s leading financial services providers to co-sign an open letter to the Chancellor in September 2021 that called for the adjustment of the stamp duty regime to help embed energy efficiency and low carbon heating in the decision-making process of home buyers, and to create an additional incentive for homeowners to retrofit their property.
The incentive of reduced stamp duty would also serve to increase the importance of EPCs as a mechanism to benchmark energy efficiency and raise awareness of them, and could support local supply chains through the growth in demand for home improvements.
An energy saving stamp duty incentive would not provide a ‘magic green bullet’ however, and would need to be part of a comprehensive policy and funding landscape that manages the consequences of property prices becoming more aligned with energy performance, in addition to investment in the right skills and training of the SME retrofit workforce to match increased consumer demand.
4. Support for employers and employees
The trend of employers adopting flexible working practices has been accelerated by the pandemic. However, any reduction in carbon emissions resulting from reduced travel and office use has been offset by the increase in households’ carbon emissions caused by working from home more often. There is an untapped opportunity to encourage employers to support their employees in making energy improvement measures with tax incentives, for example through salary sacrifice or benefit in kind schemes.
Breaking down existing tax barriers for employers would enable businesses across the UK to help their employees make green changes to their homes. This would help create an active partnership between employers and employees with the goal of reducing both their personal and business carbon footprint.
5. Addressing the skills gap
It is essential that there is a labour force of sufficient scale, in the right trades and in the right locations if we’re going to reduce the UK’s carbon output in line with the Government’s targets.
Should our other four asks be implemented, we’d hope to see a significant increase in the number of homeowners wanting to make energy efficiency improvements. It would be a mistake to lose this momentum by undermining the confidence of otherwise engaged homeowners to find tradespeople to carry out work to their home to a high standard, which is why investment in reskilling and retraining will be critical. This presents a significant opportunity to create hundreds of thousands of high-skilled jobs in proven green technologies across the country.
Lloyds Banking Group currently makes a larger apprenticeship levy contribution than any other employer, paying £11.9 million as of 2022. The immediate change we are calling for is to raise the annual transfer cap in the Apprenticeship Levy to allow larger businesses to use more of their levy funds to support SMEs that are unable to access enough levy funding to pay for apprenticeship training themselves. As this is a way for large businesses to support sectors and skills of their choosing, we argue that this could be spent on regulated training and apprenticeships across retrofit trades and technologies.
