Talking Point: Save your energy

Written by on 6 November 2013

With the prospect of low-income households being unable to afford to heat their homes this winter, you can’t take a high and mighty approach to energy bills.

Every penny counts and any government has the moral responsibility to ensure when cold weather bites, it is not only the wealthy who can afford to switch the heating on.

After yet more hikes in energy prices, and even an intervention from the last Conservative PM, John Major, Prime Minister David Cameron told parliament he was rolling back environmental measures to take the sting out of fuel bills.

But while his pledge could reduce them by £112 a year, the composite of measures, lumped together as ‘green levies’, is just nine per cent of a fuel bill, a drop in the ocean compared to nearly 50 per cent which goes on wholesale energy costs.

While the green proportion is due to rise to about 20 per cent in 2020, the environmental stuff is still not the underlying cause of high prices. According to DECC earlier this year “the biggest driver in higher bills” was global energy prices .

Yet the illusion continues that green subsidies keep bills artificially high and the push for renewable energy forces families into fuel poverty.

These green measures are not all wind-turbine subsidies either – £47 of the £112 is a levy added to ensure energy companies deliver energy-efficiency measures to its poorest customers – ensuring they use less energy without risking their health in the process.

While there have been problems, undoubtedly, with the way these initiatives have been rolled out, scrapping the whole lot to cut bills is a populist but foolhardy move and is at the expense of shoring up homes for the future.

The SNP’s alternative (with the huge proviso that it would only be done under independence) is to do both.
Nicola Sturgeon confirmed to her party’s conference she hoped to increase direct government funding for fuel poverty measures from around the £70m mark to £200m while cutting fuel bills in Scotland by about £70 per year.

It was a clever plan, and well received, particularly after Ed Miliband’s promise that Labour would freeze fuel bills appeared to have fallen flat.

It seems there is no surer way to win hearts and minds – and indeed voters – than cutting bills. No matter how it is done.

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