Sunak blocks expansion of green homes plan - report

Under-fire UK Finance Minister Rishi Sunak has blocked plans to help people save on fuel bills by making homes more energy efficient, according to media reports on Wednesday.

Downing Street and the Department for Business were pressing for an expansion of the Energy Company Obligation (Eco) scheme to be included in the government's energy security strategy due out on Thursday.

The £1bn scheme uses money raised from a levy on energy bills to pay for home energy efficiency improvements for the poorest households.

Officials wanted the Treasury to put in around £200m extra a year so the scheme could be expanded beyond people receiving benefits.

However, Sunak is understood to have rejected the calls, as the Treasury stuck to spending plans set out last autumn for the next three years.

The finance minister has come under increasing criticism over his recent spring financial statement that has left 1.3m households facing a cost-of-living crisis as food and energy prices soar at the same time as he hit all taxpayers with a promise-breaking tax rise that took effect on Wednesday.

“It would have been something that we could say to households: ‘We’re on your side, we want you to reduce your bills.’ But the Treasury doesn’t believe in it,” the Telegraph newspaper cited an unnamed government official as saying.

The source added that the Treasury had kept removing lines from the energy strategy that had spending implications, despite support from the prime minister's office - calling the situation “ridiculous”.

Downing Street and the Treasury have been arguing for weeks over new pledges on nuclear power, delaying publication of the strategy, according to the report.

The current Eco scheme does not involve public money. It is funded by the levy on energy bills, which is then reinvested by energy suppliers. It funds measures such as the installation of insulation or the upgrade of an inefficient heating system for some of the country’s poorest households.

To qualify, households need to be on the Warm Home Discount Scheme or be receiving benefits, such as Universal Credit or Housing Benefit.

The Tories pledged to spend £9bn on improving energy efficiency in its 2019 election manifesto. Measures such as insulation mean that less heat is lost from homes, bringing down bills. Government funding for insulation was provided in the Green Homes Grant, but that scheme was scrapped in March 2021 after widespread criticism about how it worked.