George Osborne, the UK Chancellor of the Exchequer, has announced a cut in energy efficiency funding as part of his annual Autumn Statement. Osborne said that the current scheme, the Energy Company Obligation (ECO), will be replaced by a “cheaper domestic energy efficiency scheme” which is “intended to save 24 million households an average of £30 a year on their energy bills.” He also announced a reform of the Renewable Heat Incentive (RHI) in order generate savings of around £700 million.
The announcement came on the same day that figures for the number of deaths during last winter 2014-15 were released by the Office for National Statistics (ONS), revealing a shocking increase over the previous winter 2013-14.
The ECO places an obligation on energy companies to provide funds for energy efficiency upgrades for households affected by fuel poverty. The new scheme, to take effect from April 2017, will run for five years with a total value of £640 million per year, rising with inflation.
According to the Energy Bill Revolution campaign, the new budget represents a sharp reduction in the amount being spent on energy efficiency with annual spending through ECO falling from £1.3 billion to £800 million in 2013 and a new fall in spending to below £650 million.
“Despite pledging to re-build Britain, the Chancellor has failed to allocate any of the £100 billion infrastructure fund to help re-build the 21 million British households with poor energy efficiency” said Ed Matthew, director of Energy Bill Revolution. “What is worse is that he has cut the existing and inadequate funding for energy efficiency under the ECO. This condemns millions to continue living in cold homes, damages our energy security and makes it all but impossible to meet future carbon budgets. It is short term thinking of the worst kind that will cost thousands of lives, lead to higher energy bills in the long term and increase pressure on the NHS.”
Lisa Nandy, the Labour Shadow Energy and Climate Change Secretary, added that it is extraordinary that the Chancellor has announced huge cuts to home insulation on the very same day that the ONS revealed the figures for the number of deaths due to cold homes and that slashing investment in energy efficiency yet again will lead to more families paying more for their energy bills.
According to the ONS, the number of deaths was 151 percent higher than the previous winter 2013-14, largely due to the ineffectiveness of the flu vaccine. However, up to 9 million UK citizens currently live in fuel poverty, including pensioners and other individuals on low incomes. The majority of the deaths occurred among people aged 75 and over, consisting of respiratory diseases in at least a third of cases with more deaths from circulatory diseases.
For additional information:
Chancellor’s Autumn Statement 2015
