Millions of households across the UK are set to receive a significant reduction in their energy costs, thanks to a major announcement in the Chancellor's Autumn Budget.
Budget Announcement Delivers Bill Relief
Chancellor Rachel Reeves has confirmed that the government will scrap the Energy Company Obligation (ECO) scheme, a move that will slash £150 from the average household energy bill starting in April 2026. The declaration was made during her statement to the House of Commons, marking a key pledge from the Labour government to address the cost of living.
Ms Reeves criticised the previous administration's policy, stating that the ECO scheme, initially designed to combat fuel poverty and reduce carbon emissions, had ultimately become a financial burden for the very people it was meant to help.
Why the ECO Scheme Was Scrapped
The Chancellor revealed that the scheme costs bill-payers a substantial £1.7 billion per year. She presented a damning assessment of its effectiveness, noting that for 97% of families in fuel poverty, the programme had actually cost them more money than it had saved.
"It is a failed scheme," Ms Reeves told MPs. "So, I am scrapping that scheme along with taking other legacy costs off bills. And as a result, I can tell you today that, for every family we are keeping our promise to get energy bills down and cut the cost of living."
Broader Budget Context and OBR Leak
The significant energy bill cut was a central feature of the Chancellor's second Budget, which also included announcements on a new mansion tax and the scrapping of the two-child benefit cap.
However, the day's events were partially overshadowed by a premature leak from the Office for Budget Responsibility (OBR). Its forecast was accidentally published online hours before the Chancellor's speech, causing disruption in both the Commons and the Lords. The OBR has since apologised, calling the incident a "technical error" and launching an investigation.
Despite this, the confirmation of the £150 energy bill cut stands as a clear policy shift, aiming to put money back into the pockets of working people and provide tangible relief from high living costs.
