Green en­ergy taxes to tre­ble in five years

The Daily Telegraph - - News - By Steven Swin­ford DEPUTY PO­LIT­I­CAL EDI­TOR

THE cost of green taxes on en­ergy bills will nearly tre­ble over the next five years, the of­fi­cial eco­nomic fore­caster has said.

The Of­fice for Bud­get Re­spon­si­bil­ity said the cost of the sub­si­dies, which are levied on house­hold and business en­ergy bills, is ex­pected to rise from £4.6bil­lion in 2015-16 to £13.5bil­lion in 2021-22. It comes af­ter Bri­tish Gas claimed that green taxes would cost house­holds £150 from next year as it blamed the Gov­ern­ment for a huge rise in elec­tric­ity bills.

Bri­tish Gas fore­cast that the cost of the sub­si­dies, used to fund re­new­able sources of en­ergy such as wind and so­lar, will hit £149 next year, hav­ing risen by two-thirds since 2014. It an­nounced that three mil­lion of its cus­tomers on a dual fuel stan­dard vari­able tar­iff would see an­nual bills rise by £76 on av­er­age to £1,120. It will add to mount­ing ten­sions in the Con­ser­va­tive Party over the push for re­new­able en­ergy.

Michael Gove, the En­vi­ron­ment Sec­re­tary, has sig­nalled that more wind farms may need to be built to power a new gen­er­a­tion of elec­tric cars un­der gov­ern­ment plans to ban the sale of diesel and petrol ve­hi­cles. How­ever, some Tory MPS have warned that the taxes are “re­gres­sive” and will pe­nalise those who can least af­ford it.

It comes af­ter Theresa May was forced to wa­ter down plans to cap en­ergy bills in the wake of the Con­ser­va­tives’ poor gen­eral elec­tion re­sults.

Be­fore the elec­tion, Mrs May pledged to cap ex­pen­sive stan­dard vari­able tar­iffs – de­liv­er­ing a sav­ing of up to £100 a year for 17mil­lion house­holds. But the pledge ap­pears to have been aban­doned, with the reg­u­la­tor Ofgem in­stead be­ing asked to come up with pro­tec­tion for “vul­ner­a­ble” cus­tomers.

The Gov­ern­ment in­sists, how­ever, that the pledge is “in no way off the ta­ble” and that it is “rul­ing noth­ing out”.

Bri­tish Gas said that the cost of green sub­si­dies levied on bills had cre­ated “sig­nif­i­cant pres­sures” and sug­gested that it had no choice but to raise prices.

Min­is­ters last night hit back and sug­gested that price rises were un­jus­ti­fied. Gov­ern­ment sources high­lighted the fact that Bri­tish Gas is also ax­ing a £15 dual fuel dis­count cur­rently en­joyed by 3.1 mil­lion cus­tomers from Septem­ber.

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