Suspend £150 green taxes to slash soaring fuel bills, top energy firms demand
BRITAIN’S energy suppliers are urging the Government to suspend green taxes on energy bills over the winter to ease the financial pressure on households.
The taxes, most of which are added to electricity bills – increase bills by an average of £150 a year.
Intended to help fund the shift to lower-carbon heating in homes, they are now coinciding with huge rises in wholesale gas prices which could force up bills by as much as £800 a year.
Energy supplier Eon and renewable firms Octopus, Bulb and Ovo said a short-term solution would be to suspend green taxes this winter. The call came as Ministers pressed ahead with plans to shift some of the burden of the green taxes from electricity to gas bills.
The plans would cut the price of electricity over the next decade, while increasing gas bills by about £170 a year. Ministers want to move away from gas boilers and towards heat pumps, which suck in heat from the ground, water and air.
The shift would hit lower-income families the hardest because gas heating comprises a more significant proportion of their outgoings.
It was reported last night that Business Secretary Kwasi Kwarteng will ask Chancellor Rishi Sunak to provide funds to help the manufacturing industry. Mr Kwarteng met leaders from industries that use high levels of energy, including paper, glass, cement and steel manufacturers, and was warned that some factories were ‘days away’ from having to halt production.
Cabinet tensions are starting to rise over the issue of green levies ahead of the COP26 climate summit in Glasgow next month, with No10 noting Mr Sunak failed to mention the Government’s target of decarbonising the economy by 2050 in last week’s party conference speech.
The Chancellor was horrified by calculations from the independent Office For Budget Responsibility (OBR) putting the cost of making buildings net zero at £400billion.
Emma Young, of Bulb Energy, said: ‘The focus right now must be to protect consumers from high wholesale gas prices over the winter. We could accelerate the transition from gas boilers to heat pumps by shifting environmental and policy costs from electricity bills to general taxation. That would help keep costs down on electricity bills.’
Eon’s UK chief executive Michael Lewis called the Government’s plan to shift electricity taxes to gas bills ‘too simplistic and potentially regressive’. He said: ‘The quickest and most significant thing we can do to help reduce fuel bills over winter is remove these costs from electricity bills and instead fund them through government expenditure.’
Ofgem chief executive Jonathan Brearley warned that families face ‘significant rises’ when the energy price cap is reviewed.
A spokesman for the Department for Business, Energy and Industrial Strategy said the energy price cap was ‘the best safety net available to protect consumers’.
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Chancellor horrified by cost of going net zero