Millions of British households are set for a welcome reduction in their energy costs following a major Budget announcement from the Chancellor.
How the £150 saving will be achieved
Chancellor Rachel Reeves has confirmed that typical energy bills will fall by an average of £150 through two key changes to current energy levies. The larger part of this saving, £88, comes from moving 75% of older renewables subsidies away from electricity bills and onto general taxation. A further £59 saving results from the complete scrapping of the Energy Company Obligation (ECO) scheme.
Defending the controversial ECO decision
The decision to terminate the ECO scheme, which provided energy efficiency measures for homes, has sparked debate. Chancellor Reeves strongly defended the move, characterising ECO as a 'failed scheme' that ultimately cost most fuel-poor families more money than it saved them.
Industry and campaigner reaction
However, the abolition of the ECO scheme has been met with significant criticism from campaigners and industry bodies alike. They have described the move as a 'devastating blow', warning that it will cut vital funding for greening homes, cost jobs in the energy efficiency sector, and critically undermine efforts to tackle the UK's persistent fuel poverty problem.
While environmental groups have welcomed the shift of renewables subsidies to general taxation, they have simultaneously urged the Government to provide clarity. There are growing calls for ministers to outline a concrete plan detailing how the support gap left by the defunct ECO scheme will be filled, ensuring continued progress for low-income households and the nation's home decarbonisation ambitions.
