Decarbonisation of heat ‘offers chance to reskill post-lockdown’

A mass replacement of gas boilers within the next decade should be part of a post coronavirus crisis economic stimulus package, a former deputy governor of the Bank of England has proposed.

Sir John Gieve, who was deputy governor of the bank in 2008 when it was shaping its response to the financial crisis that triggered the last recession, told Radio 4’s Today programme this morning that the government should focus its post-pandemic support on large scale investment programmes that create demand for skilled workers.

An example of such a programme could be the mass replacement of gas boilers, he said: “One is the Green New Deal replacement of 25 million gas boilers that we need to replace in the next ten years or so if we are going to have any chance of meeting our carbon targets.”

The government has already committed to phase out the installation of new fossil fuelled fired boilers by 2025.

Sir John, who was permanent secretary at the Home Office before joining the bank, said that replacing boilers would be easier to roll out than many other infrastructure projects.

“Everyone will be saying we should do infrastructure projects but big infrastructure projects can take years to get going and are very capital heavy in terms of investment.

“The boiler project is very difficult and very expensive but it is quite labour intensive, skills intensive and much more dispersed around the country and there are much less problems with planning consents.”

He said that programmes like mass boiler replacement could help the economy to avoid a recovery based on low wage and low productivity activity, which he said had largely been the case following the 2008 financial crisis.

Sir John said the government should have a “major go” at reskilling people and provide them with “clear pathways” outlining the skills that will be in demand in the future.

And while he said it was important to provide immediate support to companies during the current phase of the crisis, it would be important not to prop up sectors that will no longer be viable in the future.

“The danger is we will end up with continuing to support incomes through universal credit for millions more and subsidising old industries that find themselves in difficulty and may not be viable in the shape they want into the crisis.

“We have to accept that the shape of the economy will look substantially different after the crisis to what it was last year.”