Labour rejects ‘bogus’ civil servant costing of energy efficiency plans

Labour has rejected as “bogus” an official analysis of its plan to improve energy efficiency across millions of homes which found it would cost taxpayers around £12 to 15 billion a year.

The five-page costing, published on the Government website on Wednesday, was immediately dismissed by the party.

It has previously said the package of measures would cost a maximum of £6 billion a year while bringing down the cost of bills for households across the country, subject to Labour’s fiscal rules.

A party spokesperson said: “This costing is ludicrous and uses bogus assumptions. They have costed someone else’s policy, not Labour’s.”

Labour has rejected the assumption that “all installations are Exchequer-funded”, with the party stressing the plan would involve a mixture of grants for low-income households and low-interest loans for others.

It also noted that the description of it as an “uncapped, fully Exchequer-funded, undifferentiated model” does not fit with the party’s policy.

The document was nonetheless seized on by the Tories, with Rishi Sunak attacking Labour leader Sir Keir Starmer over the policy at Prime Minister’s Questions.

The 10-year costing was produced by civil servants in the Department for Energy Security and Net Zero, and published by the Treasury.

It said around £2 billion per year was “currently committed in the next Parliament for home energy efficiency, heat decarbonisation and public sector decarbonisation combined”.

Chancellor Jeremy Hunt appeared to acknowledge the cost of the Labour policy may not be as high as estimated by officials, even as he defended the costing.

Challenged on the assumptions in the analysis, he told ITV News that “even if it’s not double the £6 billion, it is still a very big chunk of a £28 billion spending spree”.

“We’re saying this is not the time to go back to square one. This is a huge sum of money. We follow what Labour say themselves they would do. But the point is, it’s going to be expensive.”

This is also not the first time the Opposition has clashed with the Government over policy costings.

Catherine Haddon, from the Institute for Government think tank, said such costings was a “long-standing convention” but also a “political tool”.

“Costing opposition policies has happened since at least the 1950s. It’s very much a political tool.

“The Treasury only do the calculations based on assumptions about the policy which have to be given to them by ministers or special advisers.

“It’s a long-standing convention,” she said in a post on X.

Former Treasury permanent secretary Lord Macpherson suggested in a post on X that such costings should be ignored.

He said: “Over the next 9 months, we will have to [tolerate] many an ‘official Treasury’ costing of Opposition policy.

“Since time immemorial, whatever the party in power, these costings have had little if any credibility. Political advisers determine the assumptions. #rubbishinrubbishout”.

A Government spokesperson said: “The costing of opposition policies is a long-standing exercise governed by a set of guidelines in place over successive governments.”