Government V Industry 2-0

Every Government has to forge relationships between its officials and industry. Some Governments are more successful at it than others. Some parts of industry are better at maintaining this relationship than others. These relationships depend on the same trust that all relationships depend upon. The trust that one side won’t let the other one down, that one side is listening to the other, even if not always agreeing, etc.. There is always some give and take in every relationship.

The message I get when talking to people now, particularly in the refurbishment part of the industry is that this relationship between industry and Government has broken down and isn’t likely to be fixed any time soon. The reason for this is money. Many companies have invested heavily in preparing for the Green Deal and the ECO legislation, and in the last Autumn it looked as though their investments were going to pay off. Orders were flowing in, the energy companies were starting to sign contracts, and the future was starting to look interesting, if not rosy.

Then Ed Milliband dropped his bombshell by saying that a Labour Government would freeze energy bills, and that this Government didn’t care about consumers pain in the face of high energy bills. I doubt if he or his advisers could have expected what happened next, because if they had, I don’t think they would have done it. The energy companies wailed that green taxes were putting up energy prices and with the help of certain newspapers and some willing bean counters in the Treasury, the Coalition bought that message. The result is that we all save £50 on our annual energy bills and the ECO legislation spending is extended over a much longer period.

The results are almost all negative in the medium and long term, but the short term gain for the Coalition is that it appears to be doing something. A poorly informed electorate will probably accept this and the world moves on. What it leaves behind is a wreckage of wasted time, lost earnings, cold homes, winter deaths, and higher CO2 emissions. I don’t see any vote winners in there, do you?

This is the second time that this Government has done this, with the FiTs changes carried out almost as soon as they came into power. For a group that you would expect to understand the rules of investment and business they seem to have missed some key classes. Investors like long-term programs, and they like to have some certainty. No industry likes uncertainty.

DECC are already talking about Green Deal 2.0, and hoping to engage the industry in discussions about how to improve the legislation to increase takeup. What do you do when a lover cheats on you and then asks you out on a date?

I’ll be washing my hair.


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