Chancellor Rachel Reeves is facing urgent warnings that potential Budget cuts to key energy efficiency schemes could devastate a rapidly growing industry and cost tens of thousands of jobs across the United Kingdom.
Broad Coalition Raises the Alarm
In an exclusive letter sent to the Prime Minister, Chancellor Rachel Reeves, and Energy Secretary Ed Miliband, a coalition of 300 businesses and organisations has voiced severe concerns. This diverse group includes major industry players like Bosch, Mitsubishi, and EDF, as well as advocacy bodies such as the End Fuel Poverty Coalition and Citizen's Advice.
Their collective plea centres on rumours that the Treasury is considering significant reductions to the Energy Company Obligation (ECO). This scheme is vital for funding energy-saving improvements, like insulation and efficient boilers, in low-income households.
The Schemes at Risk
There are also growing fears of a massive cut to the Boiler Upgrade Scheme, which provides grants of up to £7,500 to help homeowners install eco-friendly heat pumps and move away from polluting gas boilers.
The companies argue that these programmes support a “rapidly growing” and essential part of the UK economy. They state that any cuts would not only cause immediate economic damage and widespread job losses but also have long-term negative consequences.
Consequences of Cutting Funding
In their letter, the coalition warned that reducing this funding would keep millions of households dependent on imported, high-cost gas. This would leave the UK economy more vulnerable to the kind of volatile gas prices that have already cost the country over £100 billion in the last four years.
“Each building heated with a heat pump reduces equivalent gas use by over 80%,” they noted. “Maintaining funding provides a long-term route out of our current predicament of dependence on fuel imports.”
Echoing these concerns, Leo Vincent, Senior Policy Advisor at the climate change think tank E3G, issued a stark assessment. He stated that if the plans proceed, the government would “decimate tens of thousands of jobs and trigger the collapse of hundreds if not thousands of small to medium businesses.”
Vincent added that millions of families would lose the chance for permanently lower energy bills, and the country would miss a critical opportunity to cut its carbon emissions. He described the potential move as “exactly the kind of sticking plaster politics this government promised not to do.”
When approached for comment, a Treasury spokesperson said: “We do not comment on Budget speculation. We recognise energy costs are significant concern for households, and this Government is taking decisive action to tackle it including extending the Warm Homes Discount and funding to help upgrade thousands of low-income homes to be warmer and more energy efficient.”
