Draft Electricity and Gas (Energy Company Obligation) (Amendment) (Specified Period) Order 2026

Greg Smith Excerpts

Monday 23rd March 2026 General Committees

[Greg Smith (Mid Buckinghamshire) (Con)]

It is a pleasure, as ever, to serve under your chairmanship, Mrs Barker.

Energy efficiency in the home sits at the heart of our ability as a country to support those struggling with energy bills, protect consumers from volatile energy bills and maintain the skilled retrofit workforce that this country will need in the years ahead. Since 2013, the energy company obligation has delivered around 4.4 million measures in 2.6 million properties. Under ECO4 alone, around 949,800 measures have been installed in approximately 281,000 households. Whatever its imperfections, it has been a lifeline for millions of low-income families, and the supply chain that grew around it employs tens of thousands of people across the country.

As the Minister said, this statutory instrument will extend the ECO4 end date by nine months to 31 December 2026. The stated purpose is to allow suppliers additional time to meet existing targets, remediate non-compliant installations and avoid a cliff edge in delivery before any successor arrangements are in place. The Opposition support this extension. It is responsible and the right thing to do and we will not stand in its way this afternoon. However, support for the principle of orderly transition does not mean that the Government escape scrutiny and there are several questions that I would be grateful if the Minister could answer clearly.

On cost, the Chancellor was emphatic in her Budget statement last year that ECO costs households £1.7 billion a year through levies on their bills and that ending the scheme would save the average household £59 annually. She described it as a failed scheme and said that she was scrapping it. However, this nine-month extension means that the levy continues on bills for longer than households were led to expect. Ministers must set out plainly how much consumers will pay during this extended period, and whether that figure of a £59 saving remains accurate. As the shadow Secretary of State for Energy Security and Net Zero, my right hon. Friend the Member for East Surrey (Claire Coutinho), has rightly observed, moving costs from energy bills to general taxation is not the saving it appears on paper. Households are still paying; they are just paying from a different pocket.

On the issue of quality, a National Audit Office report published in October 2025 found that many of the home improvements funded under ECO were carried out to a poor standard, particularly those involving external wall insulation. Families have been left with damp, mould and homes made worse by interventions that were supposed to help them. That is not an abstract concern and my hon. Friend the Member for West Aberdeenshire and Kincardine (Andrew Bowie) has raised those failures directly in the House. The Opposition have committed to working cross-party to ensure that affected households receive proper remediation—and we stand by that commitment. However, the Government must confirm that Ofgem’s oversight is fully resourced, that installers and not consumers are funding that repair work, and that further audits will be carried out without delay.

Finally, on the supply chain, the Government’s own rationale for this extension acknowledges the need to protect the supply chain and jobs while continuing support for low-income households. That language reflects a real anxiety in the sector. Anna Moore, chief executive of retrofit company Domna, put it plainly when she warned that suddenly removing £1.3 billion of funding was “chaotic” and had

“created a cliff edge for thousands of low-income households in fuel poverty as well as SMEs employing some 10,000 people.”

Joel Pearson of Net Zero Renewables made the same plea directly to the Chancellor. These are not abstract economic arguments; they are real firms, jobs and communities that depend on this sector continuing to function.

The extension buys a little time, but time alone is not a strategy. The Chancellor has announced that there will be no successor to ECO4, and that future support will come through the warm homes plan—£15 billion over five years, funded through general taxation. The Opposition do not oppose the principle of that shift, but the warm homes plan remains, at this stage, more promise than programme. It has not yet been finalised, piloted or mobilised. This extension exists in part precisely because the replacement is not ready. This is an honest admission and we welcome it, but it underlines that the instrument is a holding measure, not a solution. ECO4 is also estimated to deliver carbon savings of around 0.38 metric tonnes of carbon dioxide equivalent per year once all measures are installed. Whatever replaces it must be designed to match and exceed that ambition—not simply to fill a political gap.

I would therefore be grateful if the Minister could address three specific points. Can he confirm the precise additional cost to bill payers during the nine-month extension period? Can he provide a full update on the remediation programme for substandard installations and give this Committee confidence that affected households will not be left waiting indefinitely? Finally, can he set out a clear timetable for the warm homes plan so that the supply chain can plan with confidence, rather than continuing to operate under uncertainty?

The households who have relied on the ECO scheme deserve an efficient transition, not the chaotic cliff edge that the Government are presenting; the retrofit workforce that will be central to this Government’s own climate ambitions deserve certainty, not managed decline; and taxpayers deserve full transparency about what this extension will cost them. We support this instrument, but the Government must use the time it buys wisely.