Concerns Rise over Potential Cuts to UK home Insulation Funding
Reports indicate the UK government is considering reallocating funds from the £13 billion warm homes plan, potentially impacting subsidies for electric heat pumps and, critically, funding for home insulation schemes like the ECO (energy Company Obligation) program. This potential shift has drawn sharp criticism from energy experts and environmental groups, who warn of meaningful economic and climate consequences.
James Dyson, a senior researcher at the non-profit E3G, highlighted the previous impact of ECO cuts, stating, “The last time the ECO scheme was cut, 10,000 people lost their jobs and millions of families were ‘left in draughty homes paying astronomical energy bills’ as an inevitable result.” He warned that further cuts could “collapse the entire insulation industry,” leading to job losses in areas needing skilled employment and hindering efforts to lower energy bills for low-income households. Dyson also emphasized the climate implications, stating it would “rob us of a key tool for lowering carbon emissions in this critical decade for climate action.”
Dhara Vyas, chief executive of Energy UK, labelled the potential changes a “shortsighted and disastrous move,” pointing to past experience demonstrating that cuts to investment in warmer homes have resulted in “customers paying billions of pounds more on their energy bills,” alongside damage to supply chains and businesses.
Greenpeace UK’s policy director, Dr Doug Parr, argued that slashing funding would be “the most counter-productive thing the chancellor could do in seeking to reduce energy costs.” He advocated for reform of existing programs to address issues with installer quality,but stressed that cuts would exacerbate fuel poverty. Parr suggested funding should be sourced through taxation, ensuring “those with the broadest shoulders pay a fairer share.”
Friends of the Earth’s head of science, policy and research, Mike Childs, called it a “serious betrayal of struggling families” to cut the mandatory energy company insulation scheme to reduce energy bills, emphasizing the need for warmer homes and lower bills to “ease hardship and shield people from harm.”
HM Treasury responded with a statement indicating they do not comment on speculation outside of official fiscal events, assuring that the upcoming budget will focus on ”cutting waiting lists, cutting the national debt and cutting the cost of living.”
Alongside the potential insulation funding changes, reports suggest Shadow Chancellor Rachel Reeves is planning to announce a raid on tax breaks on pension contributions, potentially raising up to £2 billion annually. The proposal, as reported in The Times, would cap salary sacrifice for pension contributions at £2,000 a year, triggering concerns about potential costs being passed on to employees through an 8% national insurance contribution on earnings above that level.
