Millions of households are paying £170 more for energy due to Tory subsidy cuts | Energetic efficiency
Millions of households are paying £170 more in bills due to cuts in subsidies for measures such as home insulation, according to an analysis which comes amid an impasse over the government’s energy strategy.
A cabinet source said that was now probably the strategy – designed to cope with rising bills and bolster energy security – reportedly not ready this week, amid cabinet splits over nuclear funding and loosening planning rules over wind earthly.
On Sunday, a cabinet minister suggested the government was seriously considering offering homeowners energy discounts if they lived near new wind farms or nuclear power stations.
“We have seen great examples from other people where if they build a nuclear power station, within a certain radius of that power station they get free electricity,” Education Secretary Nadhim Zahawi said.
Campaigners said the strategy should include new measures to make homes more energy efficient, in addition to the announcement last week that VAT would be reduced on materials used for measures such as the installation of solar panels and heat pumps.
Analysis highlighted by Labor found a drop in home insulation rates since 2012, when many subsidies were scrapped, meaning at least 9million households were now paying £170 more a year in electricity bills.
The party has called for a nationwide home insulation program, which Shadow Climate Change Secretary Ed Miliband said would reduce energy use enough to offset the amount of gas imported from Russia.
Installations averaged 40,000 per month in 2012 under the previous government’s Insulation Schemes, Carbon Emissions Reduction Target (CERT) and Community Energy Conservation Scheme (CESP) . But these came to an end at the end of 2012 and were replaced by other mechanisms, including a loan system which was little used.
Analysis by the Energy and Climate Intelligence Unit suggests that insulation rates then fell by 92%. Nine million additional homes would likely have benefited from the energy-saving measures if they had been maintained at pre-2012 levels.
Labor has pledged £60billion in public investment to bring all homes up to Energy Performance Certificate (EPC) Band C rating over 10 years, saying it will save each family £400 sterling a year on their energy bills and reduce domestic gas imports by up to 15%. The average E-rated home is expected to require an extra £320 a year for energy bills compared to a C-rated property.
“The chancellor’s disastrous spring declaration is unraveling because he failed to address the cost of living crisis facing working people,” Miliband said. “The government’s energy stimulus will have no credibility unless it finally achieves energy efficiency – the best and most effective way to cut energy bills, reduce our demand for fossil fuels and reduce carbon emissions.”
Sunak is expected to come under fire at Monday’s Treasury select committee hearing after a furious response to the spring statement widely seen as not doing enough to ease the cost of living crisis.
Johnson is expected to try to reconcile senior cabinet ministers this week amid fallout from the spring statement and resolve tensions over energy strategy.
A government source has confirmed reports in the Sunday Times that Downing Street is considering preliminary proposals for a new council tax refund in the autumn as consumers face the possibility of a further rise in the bill for fuel in October. On Friday, the energy price cap will rise by nearly £700 to £1,971 – and it could reach around £2,500 by October 2022 for the average dual fuel bill.
Meanwhile, Zahawi hinted the government could do more to help tackle the cost of living crisis. “I think that he [Rishi Sunak, the chancellor] will continue to keep an eye on that, that’s right,” he said. “It’s irresponsible for me to say ‘job done’ because energy prices are volatile, inflation remains high, so it would be absolutely irresponsible to say ‘job done’. But I think £22bn sterling, in a year, aid when you’ve just spent £400 billion is the right thing to do.
Shadow Work and Pensions Secretary Jonathan Ashworth said Sunak had “played games” by announcing a future 1p income tax cut in the statement as people struggled this year.
“Rishi Sunak absolutely had more leeway in this spring statement and mini budget, but rather than acting in the interests of the British people, he was playing games,” Ashworth said. “He was acting in his own interest because he thinks that by offering an income tax cut in two years it will help him politically with Tory MPs if there is a leadership race or it will match to the Conservatives’ electoral grid.”
As well as a major expansion of energy efficiency measures, Labor has called on the Chancellor to cut VAT on energy bills and impose a windfall tax on the profits of oil and gas companies, as well as reversing the planned hike national insurance from April .