Energy is a huge political and household issue. The dual fuel bill for an average household is £1315 per year, and that’s before the current round of price increases.
What we’ve learned this week is that Secretary of State Ed Davey wears a jumper to keep warm at home, and that British Gas is increasing its prices by 9.2%. We also learned from the Scottish Nationalists that if Scotland voted for independence and if they were to be in Government, they would cut prices by removing the social and environmental obligations on energy suppliers, and instead pay for fuel poverty programmes with the proceeds from carbon taxes.
These carbon taxes come in two forms, and are levied on the industries emitting the largest amount of greenhouse gasses, principally carbon dioxide. The idea is to push these industries into using non-polluting energy – energy generated from wind and tides and other renewables, and from nuclear sources. The EU Emissions Trading Scheme is one of the carbon taxes and applies to all members of the EU, though the revenues go to the national governments.
The Carbon Floor Price is a British initiative which started modestly in April this year, and will be ramped up over time. Soon, these combined tax receipts will be delivering £4bn a year to the Treasury. Some Governments? In other European states? Yes – Governments in other European states and elsewhere have proposed to use some or all of these revenues to fund fuel poverty programmes, as the SNP are promising in Scotland.
The energy companies agree are massive users of fossil energy and pay a large part of these carbon taxes, which of course then get passed on to all of us as energy customers through our household bills. It seems only fair to use the revenues accruing to help people in fuel poverty to improve the energy efficiency of their homes, so that they have the opportunity to keep adequately warm at an affordable cost.
An impressively large coalition of organisations (including Age UK) called the Energy Bill Revolution is arguing precisely for this. So far the Chancellor has been deaf to this call, and instead the Government policy is to drive forward energy efficiency programmes with other levies on the energy companies, which also, in turn, feed into the household bills we all pay.
So one of the questions at the heart of the political fight over energy policies (and there are many big questions) is whether this strategy – to levy carbon taxes which drive price rises with no benefit to fuel poor consumers – (not sure which strategy is being referred to?) is fair and equitable. Not being able to keep properly warm and making choices to go without food or other essentials is a desperate situation, but one facing millions of households, and their number is set to rise as prices for energy climb remorselessly upwards.
This winter 24,000 older people could die from the cold – that’s 200 deaths a day that could be prevented. Find out more about Age UK’s Spread the Warmth campaign to help keep older people keep warm and well in winter.