CBI urges government to prioritise ECO4 legislation

The CBI has urged the government to prioritise passing the legislation for the delayed fourth and latest phase of the Energy Company Obligation (ECO) scheme before Parliament breaks for its summer recess.

The industry funded ECO4 scheme, which will provide around £1 billion worth of energy efficiency and heat upgrades for fuel poor households, was originally due to run from April this year until 2026.

The government announced earlier this year that this timetable had slipped but has yet to present the new rules governing the scheme for Parliament’s approval, leaving the energy efficiency supply chain in limbo as it awaits details about how it will work.

If the legislation is not introduced until after Parliament’s summer recess, the Energy and Climate Information Unit recently estimated that up to 56,250 households could miss out on energy efficiency improvements funded by the scheme.

Giving the keynote opening speech at his organisation’s annual net zero conference in London on Tuesday (7 June), CBI director-general Tony Danker called for the government to legislate for ECO 4 scheme before the summer recess.

He warned the conference that energy prices are likely to be higher for “longer” than imagined and that reforming supply to further reduce fossil fuel use will take “years not months”.

“This is a long-term crisis that needs a long-term solution, but people need a fix now.”

Despite continued public support for policies to tackle climate change, business and government cannot afford to be “complacent” about the risk that the current crisis could fuel a “backlash” against the drive, the CBI chief said: “Business and government must take this seriously. We must show decarbonisation is the solution, not the problem, or we’ll lose that support. We must show now how it delivers lower bills, better jobs, and brighter economic prospects.”

He criticised the government’s failure to “say anything” about cutting demand in its recently published energy security strategy.

Danker said the government must fulfil the commitments in its own 2019 election manifesto to close the current energy efficiency investment gap, while learning lessons from previous “failed” policies like the Green Homes Grant.

He urged the government to prioritise passing the legislation for ECO4 before the summer recess and commit an additional £1 billion of government support annually through a new ECO+ scheme that will help more households.

He said: “We can get started really fast. The ECO scheme has outlasted others. It supports fuel poor households to save through energy efficiency measures. As such, it’s the fastest tool we have to get thousands more homes upgraded before the winter.

“It’s time to get serious about energy demand. There’s nothing libertarian about asking people to wait decades for government to fix supply. Let’s do something now to give people the power they need – literally – to manage the cost of living.

“What we’ve set out on energy demand and supply side, will allow government to stop acting like a pressure cooker – forever responding to events when they boil over.”

Danker also called on ministers to accelerate the planning regime for both offshore and onshore wind projects.

The comments at the CBI conference follow criticism by former energy minister Jesse Norman of the government’s failure to even begin to “get to grips with the need for greater security and resilience in a number of policy areas” because “sensible planning has been replaced by empty rhetoric”.

As an example, the ex-minister wrote in a letter to prime minister Boris Johnson ahead of Monday’s Conservative leadership confidence vote that there is “zero chance” the government will build one nuclear power station a year during the next decade as suggested in the energy security strategy.