A green levy on energy bills that covers the cost of insulation for the poorest households could be cut amid concern about rising gas prices.
The Times has been told that the Treasury is reviewing the Energy Company Obligation (ECO), a £1 billion levy on energy bills that helps about 200,000 households a year.
The levy, which pays for insulation and new boilers, adds £29 to the average annual energy bill and is viewed as an important part of the government’s attempt to hit net zero.
One government source said that the Department for Business, Energy and Industrial Strategy is opposed to cutting the levy, which it believes would be a “retrograde” step.
“Cutting it would be short-termist,” the source said. “Ultimately this is about