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Labour has been warned against 鈥渞ipping up鈥� the Green Deal and starting from scratch, after the party announced that it would replace the government鈥檚 flagship retrofit scheme and its sister scheme the Energy Companies Obligation if elected to government in 2015.

In a policy document published at its party conference this week, L Green Deal and the ECO and replace it with a new 鈥楨nergy Save鈥� scheme.

that the party wanted to devise a new scheme that would 鈥渂etter support retrofit鈥� with the party to launch a consultation in the coming weeks.

鈥淭he Green Deal is obviously not working so we will be consulting on what to replace it with,鈥� the source said.

It is understood that Labour remains committed to a scheme where a loan for energy efficiency measures is attached to a property and is paid off through the householder鈥檚 energy bill, as is the case with the Green Deal, but wants to refocus the scheme on the potential energy and financial savings, rather than the 鈥榞reen鈥� element.

Labour also wants to find ways to reduce the interest rate, which is considered prohibitively high, as well as develop greater incentives to drive uptake for the scheme, after the latest figures showed j

Paul King, chief executive of the UK Green 好色先生TV Council, said Labour risked creating further uncertainty. 鈥淚t鈥檚 no secret that the Green Deal is off to a tough start, but talk about 鈥榬eplacing鈥� it risks causing further confusion and lack of confidence,鈥� he said.

鈥淏usinesses need reassurance that this is more about improvement and continuity.鈥�

Steven Heath, external affairs director at insulation giant Knauf, said Labour must focus on improving the current scheme rather than 鈥渞ipping it up and starting again鈥�.

鈥淭here is a good deal somewhere in the Green Deal that is fighting to get out,鈥� he said.

鈥淏ut people need to be given a reason to take it out 鈥� but they musn鈥檛 throw the baby out with the bath water. That is the real danger.鈥�

Heath added that Labour needed to clarify is position 鈥渁s soon as possible鈥� in order avoid creating further uncertainty.

Andrew Warren, director of the Association for the Conservation of Energy, said if Labour is only proposing an 鈥渙verhaul鈥� of the scheme that was 鈥渇ine鈥�.

鈥淓veryone agrees the Green Deal needs an overhaul. But it would be a critical mistake to tear it up and start again. The industry cannot afford for that to happen again as we鈥檝e seen the damage that it can do,鈥� he said.

鈥淭here鈥檚 no reason why the Green Deal cannot succeed, but it does need extra stimuli and if that is what Labour is offering then that is good news.鈥�

In a statement in response to Labour鈥檚 announcement, the Green Deal Finance Company said: 鈥淭he UK has legally binding EU obligations to reduce carbon emissions. A step change in the energy efficiency of UK housing stock is central to meeting this goal.

鈥淭he Green Deal is a sensible and cost effective way of meeting our EU obligations and protecting households against rising energy costs.

鈥淚n a period of public spending restraint it is hard to see how those targets can be met without the Green Deal, or a scheme that looks almost the same.

鈥淲e have had a constructive discussion with Labour about how our APRs and payment plans represent very good value for people.

鈥淲e are obviously keen to maintain a dialogue with Labour as their policy thinking develops.鈥�