An additional £6 billion will go into making Britain’s homes and buildings cosier and cheaper to heat from 2025, to slash demand in expensive gas.
Chancellor Jeremy Hunt said energy efficiency was “just as important” as a major acceleration of home-grown technologies such as offshore wind and nuclear to stop the UK being at the mercy of international gas prices.
But the new funding for measures such as insulation faced immediate criticism that it was “far too little and far too late”.
The Government has faced repeated calls from campaigners and even its own advisers to accelerate efforts to make homes and buildings more energy efficient to cut bills, tackle fuel poverty, improve health and cut climate emissions by reducing gas use to heat homes.
The number of measures – such as loft and wall insulation – being installed each year fell from 2.3 million a decade ago to fewer than 100,000 in 2021 in the wake of Government cuts to energy efficiency.
Mr Hunt told MPs in his autumn statement that the Government was already planning to invest £6.6 billion in this Parliament in energy efficiency, a figure lower than the £9.2 billion pledged in the 2019 Tory manifesto.
From 2025, a further £6 billion will be invested to help with energy efficiency, he said. The annual spend is set to rise from a little over £1 billion this year to £2.15 billion in 2025/26, the Treasury said.
The Chancellor said by 2030 the Government wants to reduce energy consumption from buildings and industry by 15%, adding this could – according to today’s prices – save £28 billion from the national energy bill or £450 off the average household bill.
Mr Hunt said: “There is only one way to stop ourselves being at the mercy of international gas prices: energy independence combined with energy efficiency.”
He added: “Our commitment to the British people is, over time, to remove this single biggest driver of inflation and volatility facing British businesses and consumers.”
Shadow chancellor Rachel Reeves said Labour had called for an energy efficiency programme to insulate two million homes more than 12 months ago, which she claimed would have saved them £1,000 a year every year.
She pointed out that installation rates for energy-saving measures were 20 times lower than in 2010, and the increased package would not come in until 2025, asking: “Why, when people are facing a bills crisis now?”.
Labour plans to spend £6 billion a year on energy efficiency.
Green Party MP Caroline Lucas said: “I welcome the Government’s belated recognition of the importance of home insulation in getting people’s fuel bills down and reducing emissions – but where’s the urgency?”
She called for new funding this Parliament, adding that it was completely affordable to do so.
Friends of the Earth’s head of policy Mike Childs said: “A nationwide energy efficiency drive is essential, but the Chancellor’s proposals are far too little and far too late.
“Kicking the can down the road on home insulation for another two years, means millions of people will continue to suffer cold homes and sky-high energy bills.”
He called for a £5 billion-a-year, street-by-street home insulation focusing on those most in need first.
Greenpeace UK political campaigner Ami McCarthy added: “A promise of more money in three years’ time helps no one.
“The Government should launch a nationwide warm homes programme now that can save households £10bn a year on energy bills and lift people out of fuel poverty.
“The sooner we get going, the sooner we’ll reap the rewards of more affordable bills, more energy security and more stable climate.”
Environmental Audit Committee chairman, Tory MP Philip Dunne welcomed the target to reduce energy demand by 15% by 2030, but said the taskforce being set up to deliver it had to engage properly with the industry to get a scheme that actually worked.
He warned tackling energy efficiency was “no easy feat”, with 19 million homes in need of upgrades, and said the Government’s approach up to now had been piecemeal and “nowhere near sufficient”, while numerous schemes could be confusing for consumers.
“This must end: the opportunity of a properly coordinated energy efficiency programme can boost jobs, skills and growth in local economies and get us on the path to net zero,” he said.