Government’s failure to insulate homes costs taxpayers £9bn a year – Lib Dems

The Liberal Democrats said upgrading houses would not only lower people’s energy bills in the long run, but also reduce the cost of the Government’s energy price guarantee.

The current Government support means the average household will pay £2,500 per year for gas and electricity, instead of Ofgem’s price cap of £4,279.

But the recent price cap rise will push up the cost of running the Government’s price freeze, adding to the massive strain faced by the public purse in coming months due to soaring gas prices.

Taxpayers will have to foot the bill for the difference between the Government’s energy guarantee and the cap.

Analysis by the Lib Dems shows the total cost of guaranteeing bills for the 13.4 million homes across the UK that have been given poor energy performance certificate (EPC) ratings of D-G is £33 billion.

These households pay an average of £1,143 more per year than band C properties.

If band D-G homes were insulated and upgraded to band C, the cost would be reduced by £9 billion to £24 billion a year, according to the Lib Dems’ figures.

The party’s climate and energy spokesperson Wera Hobhouse said: “The need to insulate our draughty homes has been blindly obvious for years. Home insulation has three vital benefits – it helps families keep their energy bills down, it improves the UK’s energy security and it helps to fight the climate crisis.

“But Conservative ministers have been sitting on their hands for years, leaving people with higher energy bills and now potentially stinging the taxpayer with a bill worth billions of pounds.

“The Government must urgently bring forward plans to insulate our cold and draughty homes and prevent struggling families from suffering unnecessarily any longer. This would not only lower people’s bills in the long term, it would significantly reduce the cost of the government’s own energy bills support scheme.”

Chancellor Jeremy Hunt announced an additional £6 billion for measures such as insulation in his autumn statement, but not until 2025.

The Government aims to improve all homes to band C by 2035, a target seen by critics as 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.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “Making homes more energy efficient is the best way to cut household energy use and energy bills. Thanks to government support, the number of homes with an energy efficiency rating of C or above is at 46% and rising, up from just 13% in 2010.

“In September we announced our Energy Company Obligation+ scheme which will run from spring 2023 to March 2026, to deliver new insulation to hundreds of thousands of homes, and an average saving of £310 per year.

“This will support people in the least energy efficient homes and the most vulnerable – reducing energy bills and fuel poverty.”