Britain Adjusts Energy Bill Structure: Taxpayer Shift Sparks Debate

The UK is set to remove £150 a year from energy bills by transferring costs to general taxation and cutting the Energy Company Obligation. This move has attracted criticism for potentially exacerbating fuel poverty. Additional budget adjustments include funding shifts for renewable electricity, as outlined by Finance Minister Rachel Reeves.

The UK government announced changes to its energy billing structure, aiming to reduce the average bill by £150 annually. This will be achieved by transferring certain costs to general taxation and terminating the Energy Company Obligation (ECO) in April 2026, stated Finance Minister Rachel Reeves. The ECO programme, which previously mandated energy companies to fund insulation and heating for low-income households, faced criticism for its alleged inefficiencies.

The decision to eliminate the ECO scheme sparked concern among environmental groups, who argued that it could leave millions in fuel poverty. Greenpeace UK's head of politics, Ami McCarthy, notably criticized the plan, emphasizing the risks of leaving households in inadequately heated homes.

Additional measures include a 75% cost shift of the Renewables Obligation to general taxation. This adjustment comes as energy prices continue to rise, with the Ofgem regulator forecasting a significant increase in the price cap. Without the government's intervention, energy bills were expected to jump by about 12% early next year.

(With inputs from agencies.)