November 10, 2013 4:18 pm George Osborne weighs option to cut energy levy By Jim Pickard, Chief Political Correspondent George Osborne©PA UK chancellor George Osborne The coalition is looking for ways to find £1.6bn a year through either tax rises or spending cuts to fund measures to cut household energy bills. George Osborne is considering shifting the cost of government-backed insulation schemes away from bills in a move that would reduce household energy prices by up to £75 a year. But any decision to take the Energy Companies Obligation (Eco) and the smaller Warm Home Discount off bills will mean finding £1.6bn a year to pay for the switch. An announcement on the issue is expected in George Osborne’s Autumn Statement in early December. The coalition is under pressure to find ways to cut household bills after Ed Miliband’s pledge to freeze energy prices if Labour wins the next election. Yet government aides are still trying to work out where to find funding for the measures under consideration. Fresh revenues could come from a mooted housing tax, which could involve charging capital gains tax on foreign property owners. However, the proceeds of any such levy would almost certainly be earmarked to pay for coalition pledges during the conference season on school meals and a married couples allowance. As a result ministers are looking for other ways to fund cuts in energy levies, for example through underspending by Whitehall departments. Attempts to shift green charges away from bills have been under discussion since Mr Miliband announced his energy price freeze plan in September. The average gas and electricity bill has reached £1,415 with many suppliers announcing increases of about 10 per cent this autumn. Green levies make up less than a tenth of the average electricity bill but that proportion is set to rise sharply as subsidies for wind and nuclear power are ramped up from £2bn a year to nearly £8bn in the next decade. The Eco requires the big six energy suppliers to reduce fuel poverty by upgrading insulation in homes. Npower has estimated the policy accounts for £69 of the average bill. Ed Davey, Liberal Democrat energy secretary, supports the idea of central government funding a shift in green levies away from bills. But he vowed to resist any attempt by Conservatives to cut the Eco scheme altogether. “There is no way I could support any move which undermined our effort on either energy efficiency or fuel poverty,” he told the Sunday Telegraph
Posted on: Sun, 10 Nov 2013 16:33:03 +0000
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