More than 60 energy firms, environmental groups, and charities have urged Chancellor Rachel Reeves not to cut funding for home insulation, warning it would undermine the UK’s climate goals and harm low-income households.
In a joint letter, groups including Age UK, Citizens Advice, Friends of the Earth, Energy UK, and Greenpeace cautioned that plans to reduce the Energy Company Obligation (ECO) — which funds insulation and heating upgrades for vulnerable homes would be a short-term fix with long-term consequences.
The move, was said to jeopardize the UK’s ability to meet carbon targets and fuel poverty goals while threatening thousands of jobs in the £20bn energy efficiency sector.
Reeves is preparing a multibillion-pound package to cut household energy bills, possibly by slashing green levies that fund efficiency measures, saving an average of £170 per bill.
Critics argue such a move would repeat past mistakes. When ECO funding was previously reduced, around 10,000 jobs were lost and energy costs soared for millions of families.
“Cutting ECO could collapse the insulation industry and strip away one of the best tools for lowering bills and emissions,” warned James Dyson of E3G.
Energy UK’s chief executive Dhara Vyas called the potential cuts “short-sighted and disastrous,” while Greenpeace’s Doug Parr said the government should reform the programme, not scrap it.
The Treasury has not confirmed any decisions but said the upcoming budget would focus on “cutting the cost of living and securing Britain’s future.”
Reports revealed Reeves may cap the amount of tax-free pension contributions workers can make each year, potentially raising £2bn.
The move could increase costs for employees, as contributions above £2,000 may be subject to National Insurance.
