Chancellor’s green tax cull risks harming the vulnerable and will fail to stop never-ending heating bill rises

November 26th, 2013

George Osborne’s plans to cut energy bills risk harming the vulnerable and will fail to halt the relentless rise in the cost of heating our homes, campaigners warn today.


Ninety-four of the UK’s biggest charities and businesses including Barnado’s, Age UK, Scope, WWF, and Carillion, have written to the Chancellor saying that axing green taxes must not come at the expense of help to better-insulate our homes.


The businesses and charities have written to the Chancellor ahead of figures tomorrow which will show that thousands of people died inBritainlast year from the cold.


The Excess Winter Death statistics, released by the ONS, will confirm Britain’s humiliating position as one of the worst countries in Europe for cold homes and fuel poverty. On average 24,000 people die every year from the cold with many of these deaths caused because the UK has the worst insulated housing stock in western Europe.Finland has half the rate of excess winter deaths as the UK despite having much colder and longer winters. Homes in Finland are three times more energy efficiency than in those in the UK.


The Chancellor is considering using his Autumn Statement next week to slash green taxes on energy bills in a desperate dash to keep energy bills down this winter.


The UK’s leading charities today call on George Osborne to increase funding for energy efficiency measures as the most effective long term solution to drive down energy bills and the only solution to end fuel poverty. They warn the Chancellor that if he reduces annual funding for energy efficiency measures then he will make fuel poverty worse.  There are 5 million households in the UK in fuel poverty needing to spend 10% or more of their income on energy to keep warm.


The green tax at greatest risk of facing the axe is the Energy Company Obligation (ECO), the only scheme which provides a subsidy to households to insulate their homes.


Fuel poverty is getting worse in the UK. The Energy Bill Revolution has found that the Government cut funding for energy efficiency measures for the fuel poor by over 50% before the last long, bitter winter and that total funding for the fuel poor will have been reduced by 20% over the course of this Parliament. The Energy Bill Revolution research found that making an average family home well insulated could save £530 on its energy bill every year.


Writing to the George Osborne today, businesses and charities call on him to make super-energy efficiency forBritain’s homes an infrastructure priority.


Ed Matthew, director of the Energy Bill Revolution, said:


“The slogan used to be ‘vote blue, go green’, but if the Chancellor cuts funding for insulation it will be ‘vote blue, go blue’ for millions of UK families who can’t afford to heat their homes this winter. The stark truth is that cutting funding for energy efficiency will condemn people to death this winter. It is madness that the Chancellor is considering cutting back funding for energy efficiency, the only long term to solution to cold homes and fuel poverty. What we need is an insulation programme that is far more ambitious. It must be the UK’s number 1 infrastructure priority.”


George Osborne’s plans to cut green taxes threaten David Cameron’s ambition to make theUK“the most energy efficient country inEurope”, which he touted in a speech earlier this year.


Recent figures reveal the dismal failings on both of the Government’s flagship energy efficiency policies.


The Green Deal, which gives home owners Government-backed loans with an interest rate of 7.8% to upgrade their properties, has been taken up by a meagre 219 households in its first year. In contrast in Germany their loan scheme offers a 1% interest rate and is taken out by over 250,000 households every year. It is so successful it generates three times more income for the German finance ministry than the cost of the scheme due to higher tax receipts.


The Government’s embarrassment is compounded by figures released last week showing that most energy companies are falling far short of their obligations to install energy efficiency measures for their customers under the Energy Companies Obligation. The Energy Company Obligation funding pot is already so small that it is estimated by DECC that it will only remove 250,000 homes from fuel poverty over the next 10 years. Yet it is estimated that 300,000 households fell into fuel poverty last winter alone due to rising energy bills.


The Energy Bill Revolution estimate that the ECO will only provide one eighth of the spending necessary to end the scourge of fuel poverty inBritain, and it is one of the green taxes slated for scrapping in the Chancellor’s Autumn Statement next week.


The Energy Bill Revolution alliance, which represents over 150 British businesses, charities, energy companies and unions, says 600,000 homes a year could be super-insulated by recycling Carbon Tax, which over the next 15 years will swell treasury coffers by an average of £4bn a year.  A report by Cambridge Econometrics last year found that this would create more jobs and growth than any alternative investment or tax break the UK could make.


The Energy Bill Revolution wants to make UK homes as well insulated as new homes built today. They want home energy efficiency to be made the UK’s number one infrastructure priority.


You can see our letter from the Alliance to the Chancellor here

MPs supporting the campaign
The only permanent solution to drive down energy bills and end fuel poverty.