Billions of pounds worth of green levies could be taken off bills, the energy secretary has said, as the government investigates funding green infrastructure through taxes instead. Miatta Fahnbulleh is looking at how green projects are funded, including varying levies between customers and funding them all through general taxation. Such a move could save customers an average of £120 a year, but could involve putting up taxes by as much as £3bn.
With households facing a predicted rise in electricity bills next year of more than £400 largely because of the Iran war, ministers are looking for ways to bring down costs in the short term. Paying for schemes such as windfarms, solar panels and home insulation through taxation however would either mean cuts elsewhere or raising taxes. Fahnbulleh told the Guardian’s Politics Weekly podcast: “There is a question that needs to be answered … we have to think about the costs and how we recover it in the most fair way.
So we have to ask that question. Every other country is asking that question, and ultimately we’ve got to come to a fair deal.” Campaigners have long argued that Britain’s model of paying for its energy transition through bills is unfair compared with systems in other countries that spread the cost among taxpayers, with repayment based on how much a person earns. Analysis by the MCS Foundation, a green energy charity, recently found such a move would save about £120 a year on bills but would cost the Treasury a little more than £3bn a year.
Fahnbulleh said she would cut bills, but did not recommit to her predecessor Ed Miliband’s pledge to bring them down by £300 a year.
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