The Right Honourable Sir Keir Starmer, Prime Minister of the United Kingdom

The Right Honourable Rachel Reeves MP, Chancellor of the Exchequer

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Rt Hon Ed Miliband MP, Secretary of State for Energy Security and Climate Change

17 November 2025

Dear Prime Minister and Chancellor

Warm Homes Plan – protecting the Energy Company Obligation and Boiler Upgrade Scheme

We are writing to express our concern about recent media reports regarding potential cuts to the Energy Company Obligation (ECO) and Boiler Upgrade Scheme (BUS).

As a national fuel poverty charity that supports over 25,000 households a year who are struggling to pay their bills, we support the Government’s aim to reduce energy bills for consumers, including prioritising help for those most in need. As such, we support the proposed removal of green levies from bills, but only on the basis that investment in home energy retrofit overall (from government and the energy industry) is not reduced.

However, the Warm Homes Plan must take a much more strategic approach to supporting the market for retrofitting the UK’s homes. It needs to be designed to enable investment in insulation, low carbon technologies and electrification of heat across our whole housing stock.  This is essential to reduce reliance on imported gas, permanently reduce energy bills, address fuel poverty and protect jobs across the energy efficiency sector – currently worth £15bn and employing 82,000 people.

Previous cuts to green levies on consumer bills in 2015, enacted without adequate market protection, decimated the insulation industry and ultimately added £22bn to consumer energy bills (Carbon brief, 2024). While quality issues associated with solid wall insulation installed under the ECO need to be urgently addressed, solid wall installs represent a tiny fraction of the measures installed by the scheme overall. The ECO has been a vital programme for addressing fuel poverty for over a decade, supporting the successful installation of cavity wall insulation, loft insulation, solar power and heat pumps in the homes of low-income people. Any changes to the scheme should be enacted in a way that minimises the impact on the energy efficiency market.

Similarly, any potential cut to the BUS would be disastrous for the transition to cleaner, cheaper heating technologies and would directly and immediately affect jobs and the appetite of business to invest in new skills and apprenticeships. The BUS is one of the UK’s most successful energy policies, contributing to 56% growth of the market for heat pumps in 2024. Without maintaining market growth, manufacturers and installers will exit the sector, which will make it harder and more expensive to deploy heat pump technology in the homes of those in fuel poverty. A route to subsidy-free heat pump installations is highly achievable but only with consistent policy support in the form of the BUS, with subsidies gradually reduced as economies of scale bring prices down.

The framing of BUS grants as benefiting only the rich is also incorrect.  BUS grants are helping households of all income levels to make the switch to clean heat, including encouraging them to take loans or invest their own money in this market. As such BUS is driving the innovation and cost reductions that will ultimately make heat pumps affordable for everyone.

We call on you to honour your manifesto commitment of investing £13bn in the Warm Homes Plan. And further ensure any funding moved from levies on consumer energy bills to general taxation is treated as an additional commitment to avoid a net reduction in the expected investment in retrofitting our homes for the future.

The Warm Homes Plan is an opportunity to set the UK on a path to transforming our housing stock, lifting millions out of fuel poverty, bringing energy bills down permanently and helping the UK achieve energy security. But to achieve this it needs to be designed to underpin long term, stable retrofit market growth that protects and expands clean energy jobs.  

Yours sincerely

Janine Michael

Chief Executive

The Centre for Sustainable Energy is a national charity that supports people and organisations across the UK to tackle the climate emergency and end the suffering caused by cold homes. For over 45 years we have been working with householders, communities and local authorities and delivering practical solutions to address fuel poverty and cut carbon emissions. Our latest Impact Report provides more detail of our work.