Rishi Sunak to hit households with £170 net zero green levy

Written by Edward Malnick on June 29, 2023. Posted in Current News

UK households will pay a £170-a-year green levy on energy bills in the coming days, with Rishi Sunak and Jeremy Hunt accused of “slyly” shifting costs back to consumers

The Telegraph has learned that the two-year suspension of green levies announced last autumn is to end from the beginning of July, after just nine months.

The cost of the levies was shifted from consumer bills to be funded instead by the Government, following a year-long campaign by energy firms and MPs amid spiraling gas, electricity and food prices last year.

It will again be imposed on consumers, although there has been no formal announcement. Sir Jacob Rees-Mogg, who was business and energy secretary when the costs were taken away from consumers last year, said:

“Green levies are part of the problem behind the UK’s particularly high electricity prices. They ought to be abolished but should fall on general taxation until that can happen.

The ambition for net zero must not make us cold and poor.

Any new or re-imposed charge ought to be announced to Parliament first and not slipped through slyly.”

The decision to fund the green levies via general taxation, as opposed to consumer bill payments, was announced by Kwasi Kwarteng, the then chancellor, when he unveiled the energy bailout used by the Government to subsidise consumer bills since its creation in October.

At the time, the Government said:

“Schemes previously funded by green levies will also continue to be funded by the Government during this two-year period to ensure the UK’s investment in home-grown, secure renewable technologies continues.”

But the Treasury will stop funding the cost – which has risen from £150 last year to £170 now – from July, meaning that it will be borne by consumers once again.

A Treasury source insisted that the move was “not an active decision of this administration”.

Due to the way the Energy Price Guarantee (EPG), the government bailout, was designed, it covered the green levies on bills, the source said. From July, when EPG subsidies will end for most bill-payers, so will Treasury funding of the green levies.

The disclosure prompted astonishment among senior Tories – particularly after Grant Shapps, the Net Zero Secretary, told The Telegraph on Saturday:

“We know we need to fund this transition, but we don’t want to do it through household levies

I don’t want to see people’s household bills unnecessarily bashed by this.”

Mr Shapps said he wanted to scrap plans for a new £120-a-year levy to fund the hydrogen industry. However, days after his remarks, consumers will once again be saddled with the £170-a-year cost of levies that fund other “green” schemes, ranging from the installation of home insulation, to historical contracts with wind farm developers.

Tory parliamentarians and Government figures consulted by The Telegraph said they had expected the charges to be borne by the Treasury for at least the two-year period announced in September.

Critics of the levies had expected a public debate about whether the charges should then be reimposed on consumers, either in part or in full, or scrapped altogether.

A Government spokesman said:

“The Government pledged to provide £150 to covering green levies included in energy bills for two years through the Energy Price Guarantee.

By the end of June, this Guarantee will have saved a typical household in Great Britain around £1,100 in total, which includes the £150 we committed to.

However, the EPG will no longer be in effect from July 2023 as Ofgem’s price cap will be set below the EPG’s discount level, meaning customers will pay energy rates in full, including for green levies.

Levies more than pay for themselves by driving investment in renewables and other generation technology and have saved consumers money on their energy bills overall over the past 10 years.”

Energy firms began calling for the charges to be funded from general taxation in September 2021, when Michael Lewis, the chief executive of Eon UK, described the levies as “a regressive tax” that “would be better in the overall tax base.”

Centrica, the owner of British Gas, supported its rival’s call. Robert Halfon, now an education minister, was a prominent backbench proponent of the move.

Andrew Montford, director of the Net Zero Watch campaign group, said:

“Shuffling costs from consumers to taxpayers and back to consumers again is a waste of everyone’s time and money.

Green levies need to be cut, to give relief to the UK economy as a whole.”

Ofgem, the energy regulator, did not respond to requests for comment.

See more here msn.com

Header image: Times of India

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