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Triple Crunch Log                                                                                                            

10,000 Birmingham council homes to get solar panels in £100m green new deal council decision. Guardian: “In the biggest proposal for retrofitting houses through an energy efficiency upgrade yet seen in the UK, the council agreed a £100m proposal last week designed to create jobs and meet the city's ambitious targets for reducing carbon emissions.The plan – Birmingham Energy Savers – will be jointly funded by Birmingham council and investment from energy suppliers and commercial banks, and follows two successful pilot schemes conducted in Europe's biggest local authority … Under the scheme, the commercial banks will provide half the up-front investment, supplemented by £25m from the energy companies and £25m borrowed by the council. Consumers will pay a levy on their energy bills to repay the loans but Sandy Taylor, head of the city's climate change unit, said households would still be paying lower bills after the retrofit. The council, run by a Conservative-Liberal Democrat coalition, has been working on the idea of a Birmingham "green new deal" for the past year following the commitment made in 2006 to cut carbon emissions by 60% by 2026. … The next phase of the programme will involve using the proceeds from the first 10,000 retrofits for a refinancing of the scheme that will deliver funding of £2bn, enough to refurbish 200,000 homes. … Eventually, he added, the plan was to upgrade all 420,000 homes in the city, which would mean moving on from publicly owned homes to those currently owner-occupied or in the private rented sector.896

4.10.10. UK backs EU plan for controversial 'beyond A' energy labels. Guardian: “The UK government has promised to work with businesses to ensure customers understand new and potentially confusing "beyond A" energy labels for fridges, freezers, dishwashers and washing machines. … According to the EU, a triple-A rated fridge-freezer will consume 60 per cent less energy on average than the same appliance in class "A". However, a triple-A rated dishwasher or a washing machine will use about 30 per cent less energy than a dishwasher or a washing machine in class "A".”897

Oliver Letwin speech suggests key UK government figures are still pushing the low-carbon agenda. Guardian: “The battle at the top of the Conservative party over cuts to its environmental policies broke out in public today when a senior conservative declared that threatened green measures had to be pursued together because they formed a "coherent whole". … Speaking at the party conference in Birmingham, Letwin listed several policies which had been rumoured to be at threat including feed-in-tarrifs for renewable energy for homes and offices, subsidies for electric vehicles and a green investment bank able to make "massive investment", alongside other core policies such as energy efficiency and a new high speed railway. Letwin specifically linked each policy to the prime minister David Cameron's dramatic promise in the first days in power that the coalition would be "the greenest government ever" … Criticising the reliance on net present value (NPV) as a way of making decisions, Letwin said that such an approach would not have led to the building of the pyramids or Chartres cathedral, or "all the things that make life worth living". "NPV is an extremely valuable tool for taking short-term investment decisions which are single generational decisions," added Letwin. "But the most important decisions society has to make are intergenerational decisions, and those economic and accounting tools we have break down at that point and you're forced back on much deeper considerations".”898

Ofgem: Every household faces £60 bill to rewire Britain. £32bn needed to update energy networks to hit renewable targets – but, the regulator warns, the final cost could be even higher. Guardian: “In total, by 2020 £200bn needs to be spent on new energy infrastructure like wind farms, nuclear power stations and gas plants as well as the networks. Energy bills will rise even more if Ofgem's calculations about the cost of investment falling over time are inaccurate. In its worst case scenario in the event of an energy supply crunch, it estimates that bills will rise by 60% by 2016. The average annual electricity and gas bill today is just under £1,200.”899

Swiss urge capital boost for banks, beyond Basle III agreement, to 19%. FT: “Switzerland has called for its big banks, UBS and Credit Suisse, to issue as much as SFr72bn ($74.1bn) of complex new capital instruments as part of the country’s attempts to put a “Swiss finish” on global capital rules. The long-awaited regulations will oblige the banks to hold total capital equivalent to 19 per cent of their risk weighted assets as a buffer to cope with future financial crises, based on their current figures. That is sharply higher than the 7 per cent baseline for so-called core tier one capital announced by global regulators at the Basel Committee on Banking Supervision last month.”900

NEF report on the financial bailout examines “Where did our money go,” and concludes not far. “Public sector support for the banking sector amounts to at least £1.2 trillion committed, equivalent to 85 per cent of GDP – the highest level of any comparable economy. Given this enormous sum – in return there is a shocking lack of information in the public domain about where the money has gone, how it has been used, and what has been the ‘quid pro quo’ for the support. In spite of the scale of support, new lending to households and firms has stagnated. While the Bank of England has cut interest rates, interest rates for households and firms on many mortgages and other borrowing are higher than before the crisis. Overall the banking system is borrowing more than it is lending; its net lending to households and firms is negative. Public stimulus has been the only effective medicine. Any recovery has been driven by fiscal intervention supported by the central bank’s creation of money, otherwise known as ‘quantitative easing’. However, the nature of these programmes means that the recovery is likely to be limited and temporary, as many are now recognising. The return of bank profits has come at a high and counter-productive cost. Banks have returned to profitability, but their actions in doing so are detrimental to employees and customers: raising interest spreads between deposits and borrowing, cutting schemes favourable to borrowers, increasing fees, closing branches, and sacking employees. The banks’ reliance on high-risk securitisation processes has scarcely reduced; the Bank of England is critical of their strategies for reducing future reliance on these processes. Based on Bank of England data, banks now appear to face a funding cliff. In order to maintain existing levels of activity they currently have to borrow £12 billion a month; the projections we reproduce in this report indicate that in 2011 they will have to borrow £25 billion a month. We believe the public sector is likely, once again, to be asked to bail out the banks for the emerging funding gap. This amount now appears almost trivial against the scale of interventions to which the public has become accustomed. But it should be remembered that £25 billion is one-half of annual current expenditure on education; one-quarter of annual current expenditure on health; more than the total value added of the electricity, gas and water supply industries; and three times the value added of the agriculture, hunting, forestry and fishing industries. Further, there is a very real concern that the breadth and depth of the current programme of public spending cuts is being influenced by the likelihood of another wave of bank bail-

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