Consumer Futures, the UK watchdog for electricity consumers, has backed the call by MPs to the Prime Minister to shift ‘green tax levies’ from households to general income tax.
Last Week, Sir Robert Smith, Chairman of the House of Commons Energy Select Committee, wrote directly to Prime Minister David Cameron on this very point.
Speculative reports in some London-based newspapers have suggested recently that Cameron is ‘keen to cut the green crap’ as party of his party’s political response to the proposal by Labour leader Ed Milliband to impose a price-freeze on domestic energy bills.
Commenting on the ‘Help to Heat’ report from the IPPR think-tank, Adam Scorer, Director, Consumer Futures, said; “Consumers cannot afford to be piggy in the middle of this particular political storm.
“The truth is there is no simple choice between short term and long term measures. We need to invest in energy-efficiency for the long term and we need to pay for it in the fairest way we can.
“What’s being missed is that billions of pounds in carbon taxation will go from our bills straight to the Treasury. We could invest that in the one part of our infrastructure where we know we can make the most difference; our leaking, wasteful homes.”
Government will receive £4bn per annum from carbon taxes, which works out at about £67 on the average annual fuel bill.
Scorer added: “Investing this to make homes more energy efficient would reduce the £200bn required to overhaul our aging energy infrastructure.
“It would reduce the average annual fuel bill of those receiving help by around £570. It would reduce the estimated £1.3bn per annum cost to the National Health Service of treating the symptoms of fuel poverty.
“And it would simultaneously improve the quality of life of millions of people, slash carbon emissions and generate proportionately greater economic growth.
“We are going to pay around 8 times the cost of ECO in carbon taxation which will provide no benefit whatsoever to consumers. Let’s pick the right target. If consumers are going to pay carbon taxes on their bills, they need to feel the benefit
“ECO could be much more effective if it was delivered not by energy firms but by local organisations on a street by street basis, as IPPR* recommend. Transferring the funding of ECO, some £1.3 bn per year, away from consumers to the taxpayer would make ECO fairer. But the £540 million per annum that is currently spent as part of ECO on tackling fuel poverty is completely inadequate for the scale of the task.
- There will be a debate on fuel poverty in the House of Commons on 4 December.