The chorus from business is now deafening: "give us certainty on energy policy and low carbon investment"

Businesses need to know what will happen in the future, writes RenewablesUK's Maf Smith. A government in turmoil can't provide that.

Government traditionally likes to avoid picking winners. Individual businesses are rightly in competition with each other. This creative tension is what drives our economic success. Such disagreements are why government traditionally goes to great lengths to avoid second guessing the market. 

However, there are some areas of the economy, like our energy infrastructure, where government has to stay at the table. Today, most politicians will agree that there are market failures in our energy system, and government needs to play a role to solve our so called “energy trilemma”: making sure that the lights stay on, ensuring we have secure sources of energy available, while also cutting greenhouse gas emissions. 

But even though government accepts it has a role, it cannot seem to agree on what needs to be done. It’s said that if you ask four different economists about the economy you will get at least five opinions. Right now the same seems to apply when asking UK Government Ministers their view on energy policy. The "Quad" of ministers is still debating the issue in the final run-up to the much anticipated Energy Bill. Meanwhile, the industry is reeling from a public disagreement between the Energy Minister John Hayes and Energy Secretary Edward Davey on the future of onshore wind in the UK. This was followed by the revelation that the Conservative MP Chris Heaton-Harris supported an anti-wind campaigner in the Corby by-election when he was supposed to be running the campaign for the official Tory candidate instead. To those of us getting used to the vagaries of political point-scoring in the Coalition, these spats may look like just part and parcel of day to day coalition Government. However, to the investment community (and especially the increasing number of foreign companies looking to invest for the long term in the UK’s supply chain) they can be unsettling.  

That is because, outside of Whitehall, in business, something interesting is happening. As government goes through the final negotiations before publishing the Bill, business opinion is settling on a shared viewpoint. 

Last week, the British Chambers of Commerce published a survey of 3,500 member companies. 90 per cent of them want the Government to ensure that the UK has a diverse energy mix, capable of avoiding future supply problems, and that the UK “must not find itself in a situation where it becomes more dependent on fossil fuels from overseas or on one technology at home”. 

In the same week as the BCC’s intervention, business leaders from prestigious organisations including Unilever, Kingfisher, EDF Energy, Doosan Power Systems, Heathrow Airport, Philips, Anglian Water and Johnson Matthey jointly wrote to the Prime Minister, expressing their concern that "the on-going divergence of views at the heart of government on the future of this sector…is paralysing investment and undermining the UK’s growth prospects". There have been similar letters and statements from companies as diverse as PepsiCo, Aviva, BT and Marks & Spencer. And recently seven of the world’s top energy companies – who employ 17,500 people in the UK alone – wrote to the Chancellor warning of political risk in current energy policy. 

Added to all this is RenewableUK’s own recent membership survey, in which almost two thirds of companies from the wind and marine renewables sector stated that policy was less favourable to the sector than 18 months ago. Despite this, 90 per cent of those organisations still expect to see growth over the next 18 months, showing the immense opportunity that clearer direction from government could unlock, as well as the furthering of the commitment that over 130 wind energy companies made to Britain via the Wind Energy Charter in May this year. 

For example, investment in offshore wind alone rose by 60 per cent last year. By 2020, the wind, wave and tidal energy industries alone are set to employ more than 88,000 people, from apprentices to highly-skilled engineers. That’s the scale of the prize on offer – as long as the all-important policy framework is right. 

The case being put forward by businesses, who are ready to make once in a generation investments into our economy, is based upon evidence and global trends. But we run the risk that these investments could be delayed. 

They hinge on the agreement of the UK Government’s Ministerial "Quad" – Cameron, Clegg, Osborne and Alexander – who are apparently set to meet to discuss energy policy. Over the autumn, business opinion has got firmly behind the view that our electricity sector needs to decarbonise. Such a shift will protect us against future price rises, open up investment in new technology and manufacturing, and support a new cornerstone of our economy – the green economy – which alone has delivered a third of the UK’s total growth in the last year. Sometimes business opinion settles on a realisation that future prosperity lies in a particular direction. Sometimes it is important that Government can agree that too, that’s why this Energy Bill is crucial for the sector.

Workers build an onshore wind turbine. Photograph: RenewableUK

Maf Smith is the Deputy Chief Executive of RenewableUK, the professional body for the UK’s wind and marine sectors, with 675 member businesses.

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.