Haven’t we been here before?

I can get no remedy against this consumption of the purse:
Borrowing only lingers and lingers it out, but the disease is incurable

For a long time after the demise of the Green Deal, the coalition government’s overly complicated energy efficiency scheme for householders, the industry talked of the need for a Green Deal Mark II – Son of Green Deal if you like.

Today, it looks like we might be getting it. Later this afternoon, Chancellor Rishi Sunak will make his Summer Statement. It will add meat to the bones of the post-coronavirus recovery programme.

I won’t be the only one paying careful attention to the announcement of the Green Homes Grant. As usual, the devil will be in the detail. Last time, the very people who were best placed to deliver energy efficiency home improvements – the builders and plumbers who already had trusted relationships with householders – were the very ones who excluded themselves from the scheme because of the overly-onerous bureaucracy and paperwork required to become accredited. And what was all that pay-it-back-via-your-electricity-bill about? In theory, I suppose, an easy repayment mechanism, in practice it was unwieldy and complicated. Whether this government will learn the lessons of the last ones on this remains to be seen.

All this largesse is, of course, designed to run alongside the ‘build build build’ promise that the Prime Minister made as part of the push to rebuild the economy after the coronavirus lockdown. It’s an attempt to prevent the country tipping into the longest, deepest, most vicious recession most of us will ever have seen. If those words sound familiar it’s because they were mentioned in connection with the last one which, although kicking off in 2008, still seems in some ways like only yesterday.

Looking at the headlines on job loss figures and potential redundancies across the economy, not just in this industry, it looks like Sunak has his work cut out. Having said that, the Markit PMI for June looks as though the V-shaped recovery that the economy really needs is happening. At least, it looks like that on paper. Alas, though, real life doesn’t happen on paper. It happens in factories, in shops, in offices, on building sites. Many, many of these are still operating on skeleton staffing levels, others are furiously playing catch-up, not helped by the knock-on effect of suppliers’ own lockdowns and cut-backs. Building materials obviously are affected – we all know about plaster – but it’s other areas too. Second-hand bike prices have gone through the roof because new bikes are on five-months’ delivery schedule. So much for the pandemic finally encouraging people out of their cars and onto their bikes.

In October, the furlough scheme comes to an end and that’s when a great deal more companies will have to make some tough decisions about their staffing levels. Decisions that they may have been putting off for months. And at some point, Sunak is going to come to the bottom of his very deep pockets and discover that there’s no small change left to throw at the recovery. That’s when things are really going to hurt. In theory, if the recovery really is V-shaped and the bounce-back is solid then the pain will be excruciating for some but short-lived. In reality though, there’s a danger that the V is going to be less Churchill and more Harvey Smith.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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