The BBC is reporting that next Thursday the Government will announce that the only nationwide programme designed to help householders  make their homes more energy efficient is to be cut by 50%.

It is absolutely disgraceful that the big energy companies have  orchestrated this unscrupulous campaign, that appears to be  succeeding in blackmailing the UK government into cutting so drastically its established policy to require energy companies to help customers stop wasting money by wasting fuel.

There has been no increase whatsoever in the levels of social and energy saving  obligations placed upon the Big Six this year. This concerted attack on the Energy Company Obligation  is predominantly a distraction technique, designed to draw attention  from the price gouging they are practicing. The extent to which the Big Six currently overcharge customers is estimated by the founder of one of their  smaller competitors, Ovo, at £3.7 billion a year.

Home energy use has dropped by a quarter since 2005, largely owing to the installation of energy saving measures. This has cut the energy companies’ turnover badly. That is why they are trying to destroy the only nationwide  energy saving programme. But because the costs per kilowatt hour have more than doubled over the same period, the proportion of household budgets spent with the Big Six energy companies has risen sharply.

To help cut fuel bills, it is completely perverse logic   to cut the one programme that helps householders cut fuel bills. There are already 7,000 fewer people employed today than in November 2012 in delivering energy efficiency in homes. The result of halving the ECO programme will be that at least 10,000, possibly 13,000, fewer people will be employed in our sector next year than  anticipated. These are mostly not in household name companies, nor even in SMEs. Decimating the ECO hits hardest at precisely the kind of micro start-up businesses which the UK has been dependent upon to lead us out of recession.

If the BBC report is accurate, this will mean that over the next two years the Big Six will avoid spending £1.3 billion on installing ECO measures, whilst grabbing £360 million more from fuel sales than they had been expecting. There will be 600,000 households paying an average of £400 more each year* than they would have done if they had received the energy efficiency makeover the government had promised the energy companies would provide.

Effectively this entirely self-interested campaign run by many of the big energy companies, designed to slough off their energy company obligations, will end  up lining the Big Six’s pockets even more than today. I am  sure that cannot have been what the Prime Minister really had in mind when he called for the overhaul of green taxes.
Andrew Warren
Director
Association for the Conservation of Energy