Government warned not to drop energy commitments to poor households

House of Commons blurbIn a report published by the Environmental Audit Committee, the Government has been warned not to weaken its commitment to ‘eliminate’ fuel poverty, as it prepares to make changes to ‘green levies’ that fund energy efficiency improvements for the poorest bill payers and redefines the amount of people who can be counted as ‘fuel-poor’ – reducing the number of households from 3.2 million to 2.4 million overnight.

Chair of the Committee, Joan Walley MP said:

“The Government is shifting the goal-posts on fuel poverty so that official statistics record far fewer households as fuel-poor. The changes to the fuel poverty definition and target, in part being made through amendments to the Energy Bill, should be stopped unless the Government is prepared to make a public commitment to end fuel poverty altogether.

“A short-term bid to cut bills must not throw energy and climate change policy off-course. In the longer term green levies could actually keep bills down if they drive energy efficiency improvements that cut the cost of heating our homes. Insulating homes and supporting green technologies is vital to help the fuel poor and cut the emissions causing climate change.”

Energy subsidies play an important and justified role in alleviating fuel poverty, a new report from the Environmental Audit Committee points out. The Government’s proposed change of definition of ‘fuel poverty’ and weakening of the legislative commitment—to ‘address’ it rather than ‘eliminate’ it—will place a greater imperative on the Government to demonstrate that it is committed to making fuel poverty ‘a thing of the past’, according to MPs.

The Committee also argues that the Government should use the Autumn Statement as an opportunity to provide a clear and comprehensive analysis of energy subsidies in the UK. This would bring much needed transparency and provide a basis for an overdue debate on the rationale for energy subsidies in the UK. To reinforce the need to cut the emissions causing climate change, the MPs call on the Government to reduce the proportion of overall energy subsidies that support fossil fuels.

She said:

“At the Rio+20 Summit and the G20, the Government committed itself to phasing out fossil fuel subsidies that encourage wasteful consumption and contribute to greenhouse gas emissions. The Government must set a target to reduce subsidies to harmful fossil fuels.”

The report also looks at whether Government support for the new nuclear power station at Hinkley Point constitutes a subsidy and concludes that it does, despite the Government’s assurance otherwise. The  Government’s policy of ‘no public subsidy for new nuclear’ requires it to provide only ‘similar’ support to that provided to other types of energy, but even on that basis the deal for Hinkley Point C is ‘dissimilar’, notably on support for decommissioning and waste.

Joan Walley MP observed:

“New nuclear is being subsidised and the Coalition should come clean and admit it. The Government cannot escape that clear fact by talking about ‘support mechanisms’ and ‘insurance policies’ instead of ‘subsidies’.”





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