Boris Johnson, the London mayor, has urged landlords across the capital to renovate their properties, making them more energy-efficient, in an attempt to spur an “employment miracle” among young people and boost economic growth.
Addressing the CBI London annual dinner on Thursday, Mr Johnson encouraged public, private, residential and commercial property owners to follow the success of Germany’s nationwide retrofitting programme, which provided “green-collar” jobs and training for young people.
In addition to cutting C02 emissions, officials in Berlin claimed the programme – boosted by €6.8bn (£5.9bn) in subsidies over four years – helped secure or create some 340,000 jobs in 2010 and provided valuable business to local craftsmen.
Mr Johnson’s proposal came as youth unemployment across the UK approached the politically sensitive 1m mark, with London suffering some of the biggest problems. Unemployed 16 to 24-year-olds in the capital accounted for more than 22 per cent of the economically active in that age group in the year to March, compared with 19 per cent nationally, according to the Office for National Statistics.
The mayor suggested that landlords who followed Germany’s lead would not only generate “massive” numbers of jobs, but the owners themselves would derive “huge savings” in their energy bills. Possible efficiency renovations include fitting greener lighting systems, ventilation and boiler upgrades, as well as installing smart meters and solar panels.
Joking about his aim to boost insulation in London’s lofts, Mr Johnson said: “Whatever they say about us in other countries, the one thing that we won’t be lagging in is lagging.”
The mayor has already set up a £100m fund to retrofit London’s schools, libraries and hospitals. City Hall has also offered 55,000 homes a free green makeover between now and May next year, in order to improve energy efficiency and reduce residents’ bills. Private companies, however, will not receive state funding.
Bill Clinton, former US president, has advocated the adoption of a similar scheme in the US, where he claims that retrofitting 40 per cent of the nation’s building stock would provide 600,000 jobs by 2020.
While the UK scheme does not rely on tax incentives to promote green renovations, British and US officials wanting to replicate Germany’s success are witnessing that Berlin’s scheme is now the centre of a political row. Federal states have blocked a law that would make 10 per cent of the costs of an energy-efficient home refurbishment tax-deductible.
Also speaking at the dinner on Thursday, John Cridland, the CBI’s director-general, warned that heavy-handed regulation coming from the European Union could do serious damage to the UK’s professional and financial services sector.
He expressed concerns about the potential impact of Brussels proposals for a financial transaction tax, the Solvency II capital rules for insurers, the capital requirements directive, audit market reforms and proposals on corporate governance. The City was being “bombarded with unwarranted regulation”, he said.
Mr Cridland dismissed the financial transaction tax as “a Brussels revenue-raising exercise, and one that will hit London disproportionately hard”, pointing to the European Commission’s impact analysis showing that it could dent EU gross domestic product by €100bn a year.
He said London was the “jewel in our crown”, particularly its professional and financial service sector, which accounted for 10 per cent of the capital’s economic output and employed 1m. “London’s leading business sectors offer us the best hope for high-end jobs, value added and export growth,” he said.
Additional reporting by Chris Bryant in Frankfurt
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