Cut power payments by ditching Miliband’s renewables subsidies fairly than dropping VAT, Green strain group tells Reeves, as Tories launch new broadside towards Ed’s Net Zero drive
Rachel Reeves has been urged to slash energy bills by ditching Ed Miliband’s green levies instead of dropping VAT at the Budget.
The Green Alliance think tank has told the Chancellor that measures including scrapping renewables subsidies could reduce the average household fuel bill by £178 a year by 2030.
The Treasury is said to be eyeing up removing VAT from energy at the Budget later this month as Ms Reeves seeks to fill an economic black hole of up to £50billion.
Green Alliance said the Government must act immediately to lower bills, with the average household now paying £478 more for energy than they did four years ago.
However the environmental think tank has warned the Chancellor against cutting VAT – and urged her to instead take subsidies for solar and wind farms off household bills.
Green Alliance senior policy adviser Stuart Dossett said: ‘There are households up and down the country that are being battered by this, and many people, as we move into winter, will be unable to heat their homes to a comfortable temperature because bills are too high.’
While the Government has ‘rightly’ recognised the need to bring down costs, Mr Dossett warned that bringing VAT rates down to zero could immediately cut bills but would be a ‘forever more move’ and would be difficult to reverse.
The Green Alliance think tank has told the Chancellor that measures including scrapping renewables subsidies could reduce the average household fuel bill by £178 a year by 2030
Instead new research from the think tank urges Ms Reeves to use the £2.3billion it would cost the Treasury to scrap VAT to take renewables subsidies off household energy bills to bring costs down.
This would include tariffs on solar power and the ‘renewables obligation’ subsidies for wind farms, with Green Alliance arguing this move would offer the Government better value for money.
It comes as the Conservatives launched a new broadside against the Energy Secretary’s Net Zero drive, calling for Labour to scrap green levies to knock £165 off the average household bill.
Shadow energy secretary Claire Coutinho said: ‘Labour promised to cut energy bills by £300, but instead they are locking us into higher prices for decades…
‘We’ll axe the Carbon Tax, scrap Miliband’s rip-off subsidies, and cut every household’s electricity bill by 20 per cent instantly or £165 for the average family.’
A spokesperson for the Department for Energy Security and Net Zero (DESNZ) said the Government did not comment on speculation over tax changes.
But they added: ‘The Government’s clean energy mission is exactly how we will deliver cheaper power and bring down bills for good.
‘Our mission is relentlessly focused on delivering lower bills for the British people, to tackle the affordability crisis that has been driven by our dependence on fossil fuel markets.’
