Energy review fails to cut green taxes despite rising household bills
GREEN taxes – which are blamed for adding up to £150 to every power bill – will not be cut as the result of a government review of rising energy bills announced today.
Dieter Helm, an Oxford academic and critic of wind and solar power, has been hired to lead the official review of energy bills – but has been told he cannot suggest any “detailed” changes to green taxes.
Last week British Gas blamed the taxes for a huge rise in electricity bills for three million of its customers. Prices will increase by 12.5 per cent, adding £76 to the typical annual bill from next month. The company said the cost of green subsidies levied on bills has created “significant pressures” and suggested that it had no choice but to respond by raising prices.
The UK is legally obliged to reduce greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050.
The Tories have repeatedly threatened to take action to curb the costs of these environmental taxes, which were reportedly branded “green cr-p” by David Cameron in 2013. Theresa May pledged to cap price rises for 17 million households during the election. The Government said the review will deliver on its commitment “to consider how to keep energy costs as low as possible”.
The terms of reference of the review “will consider the key factors affecting energy bills, including but not limited to energy and carbon pricing, energy efficiency, distributed generation, regulation of the networks, innovation and R&D”. But it added: “The review will not propose tax changes.”
Will Hodson, co-founder of consumer collective The Big Deal, which focuses on bringing down energy bills, said: “Energy prices are an urgent prob- lem for British households right now. With this review, the Government is simply kicking the can down the road.”
Alex Neill, managing director of home products and services for Which?, said: “It is right to look at how to keep costs down, but yet another review is going to be cold comfort to the millions overpaying on their energy bills right now.”
Prof Helm, an economist at Oxford University, defended the review, saying: “My review will be independent and sort out the facts from the myths about the cost of energy, and make recommendations about how to more ef- fectively achieve the overall objectives.”
Prof Helm has previously been highly sceptical that green energy can do enough to cut emissions.
Greg Clark, the Energy Secretary, said: “We want to ensure we continue to find the opportunities to keep energy costs as low as possible, while meeting our climate change targets, as part of the Industrial Strategy.”
A source said the department disputed British Gas’s claim about the cost of green levies on bills, saying “we don’t recognise their figures” and adding that the costs were only a “small proportion of household energy bills”.