Ministers have decided not to cut Labour’s landmark £13.2bn fund to fix draughty homes and install heat pumps and solar panels in next week’s spending review, it has emerged.
A government source confirmed Rachel Reeves, the chancellor, would not be making cuts to the flagship warm homes plan. The decision, which was first reported by the Daily Telegraph, marks a victory for Ed Miliband in his negotiations with the Treasury over the Department for Energy Security and Net Zero’s budget.
Labour pledged in its manifesto to spend an extra £6.6bn on household energy efficiency projects by the end of the current parliament in 2029. This doubled the amount already committed by the Conservatives, to reach a total £13.2bn.
But there had been reports in recent weeks that Reeves was considering cutting the scheme after the Treasury declined to guarantee Labour’s £6.6bn pledge would be met as part of the spending review. Reeves allocated £3.4bn over three years to the plan in the October budget.
The warm homes plan offers grants and low-interest loans for improved insulation and other energy-saving measures such as solar panels, batteries and low-carbon heating. Ministers have said the money would insulate an extra 5m homes across the UK during the parliament. The UK’s housing stock is among the least energy-efficient in Europe.
Any reduction or delay in funding for the warm homes scheme would have hampered the UK’s progress towards its net zero targets and make it more difficult for the government to meet its pledge to bring down energy bills by £300 by 2030.
Charities, campaigners and businesses have urged the government to protect the plan as part of the spending review. There have been warnings that any cuts could lead to job losses, counteract the impact of the government’s U-turn over winter fuel payments and put greater pressure on the health service.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Cold, damp housing is making people sick and the government was elected on a manifesto promise to deliver warmer homes and reduce energy bills. Recent polling shows that the public would not stand for Labour backing down on this pledge.”
In an Opinium poll last month, 46% of Labour voters said that cuts to funding to insulate homes would damage their trust in the party. Speaking in Rochdale on Wednesday, Reeves said that Labour’s manifesto promises would be met in the spending review next week.
The Guardian reported on Wednesday that three Whitehall departments were still to agree their multi-year budgets with the Treasury. Miliband, the energy secretary; Yvette Cooper, the home secretary; and Angela Rayner, the housing secretary, are those yet to settle.
Some departments, including environment and education, settled early this week. Others said to be facing the biggest cuts include the Foreign Office and the Department for Culture, Media and Sport.
