The Chancellor has announced a £150 cut to household energy bills by removing some levies on electricity bills into the Exchequer and axing the Energy Company Obligation (ECO) scheme, the UK’s biggest insulation programme for households.
UK Government Commits ECO-cide
E3G estimates that this means that total funding for green homes is being reduced from £20 billion to £15 billion this Parliamentary term – a cut of a quarter in warm homes funding. Most of the cut will be on insulation measures, with the scrapping of ECO. This is the end of a 30 year old supplier obligation for making homes more energy efficient. In that time, 15 million homes have been helped, with the average home saving £7,500, a total saving to the country of £113 billion. It has led to a fall in total household energy demand which has reduced the cost of new power infrastructure.
As a result of poor regulation and oversight, the most recent version of ECO (ECO4) failed, with installation of inadequate solid wall insulation. The obligation needs to be reformed to make it as successful as previous iterations of the scheme. By axing it, the Treasury has removed the main programme to provide a long-term solution to fuel poverty and one of the most important schemes for reducing the cost of power infrastructure in the future.
Ed Matthew, UK Programme Director at the independent climate change think tank E3G, said:
“Cutting taxes from electricity bills is a crucial step towards helping people to switch to clean energy. But this is overshadowed by the morally indefensible decision to scrap the national home insulation scheme, ECO. This is exactly the kind of sticking plaster politics this government promised to end and fatally undermines the best long-term solution to fuel poverty. It will also cost 10,000 jobs and prevent 1 million families from insulating their homes in the next 4 years. The Chancellor must reverse this cut and maximise energy savings for the fuel poor.”
Available for comment
Ed Matthew, UK Programme Director for E3G: Tel: 07827 157906 / ed.matthew@e3g.org
Ellie Mae O’Hagan, UK Energy Team Programme Leader: Tel: 07732 891599 / elliemae.ohagan@e3g.org
Notes to Editors
- E3G is an independent climate change think tank with a global outlook. We work on the frontier of the climate landscape, tackling the barriers and advancing the solutions to a safe climate. Our goal is to translate climate politics, economics and policies into action. About – E3G
- For further enquiries email press@e3g.org or phone +44 (0)7783 787 863
