Futures Forum: "Levies, Damned Levies, and Statistics": Green levies and energy bills: What are the figures and what do people think?
has become even more political of late:
'Get rid of all this green crap'
- report claimed Prime Minister David Cameron told aides
Thursday, November 21, 2013
Downing Street has denied that David Cameron is ditching his commitment to the environment, after a report claimed he had told aides to “get rid of all this green crap”. The Sun reported that the Prime Minister was making a major U-turn on environmental issues, and ordering aides to strip out green levies which push up energy bills. It quoted an unnamed senior Tory source as saying: “The Prime Minister is going round Number 10 saying ’We have got to get rid of all this green crap’. He is totally focussed on it. “We used to say ’Vote Blue, Go Green’, now it’s ’Vote Blue, Get Real’.” But a senior Downing Street source told the Press Association: “We do not recognise this phrase that they are using on their front page.”
Ahead of the 2010 general election, Mr Cameron highlighted his commitment to the environment with a trip to the Arctic Circle to view the impact of global warming, and told voters they could “Vote Blue, Go Green”. He has regularly stated his determination to lead the “greenest government ever”.
But he dismayed some environmentalists by telling the House of Commons last month that he wanted to “roll back” the green levies which add an average £112 a year to households’ energy bills to fund renewable power subsidies and programmes to insulate homes.
Downing Street told PA that this did not mean the PM had abandoned his commitment to the environment. “He has been quite clear about rolling back the impact of levies on energy bills, but only last week in Sri Lanka he was talking about the importance of tackling climate change,” said the Number 10 source.
Mr Cameron made clear during that Sri Lanka visit that he believed the evidence of global warming was “growing” and thought it was right to take “preventative and mitigating steps” in response. Responding to speculation that man-made climate change may be to blame for the devastating typhoon in the Philippines, the PM said then: “I’ll leave the scientists to speak for themselves about the link between severe weather events and climate change. But the evidence seems to me to be growing. As a practical politician, I think the sensible thing is to say let’s take preventative and mitigating steps given the chances this might be the case.“
Cut the green c**p! Cameron's private view of energy taxation will horrify environmental campaigners | Mail Online
David Cameron orders aides to cut green taxes | The Sun |News|Politics
Video: Clegg: Green levies are not all crap - Telegraph
See also:
Futures Forum: "Vote blue to go green" revisited...
Futures Forum: "...trying to use Typhoon Haiyan as an excuse to justify more concerted global action to 'combat climate change'... "
And the politics continues. But how to interpret the latest measures proposed by the government. It's all a bit confusing...
Ministers to keep green levies in energy bill cut plan
28 November 2013 Last updated at 09:11
A free home insulation scheme for poorer households will be kept but implemented more slowly as part of a package of measures to cut fuel bills, the BBC has learned.
Ministers hope this move - and others - will cut annual bills by £50.
It comes in the wake of Labour's promise to freeze energy bills. The Tories and Lib Dems have yet to agree all the details but expect to have a deal before the chancellor's autumn financial statement next week.
Ministers want to implement the Energy Companies Obligation (ECO) scheme that gives free home insulation to low income households more slowly, over four years instead of two. This would cut the annual cost by half.
They plan to fund another levy, the warm homes discount, out of tax rather than customers' energy bills.
Regulations could also be changed so the the cost of transmitting energy, which makes up about 20% of an average bill, could be cut.
Sources say they hope a reduction in bills will show that the government has made a substantial cut to the element of energy bills over which they have some control. Officials say this figure is not designed to match Labour's planned saving from its pledge to freeze energy prices for 20 months if it is elected in 2015, which is about £72 per year. They say they will not make the comparison because they do not accept that Labour's price freeze would save this amount of money.
Sources also expect the big energy firms to say how much they will be cutting their bills on the same day that the government announces the changes.
The average price of gas and electricity paid by UK households has risen by about 18% and 9% in real terms since 2010 and by about 41% and 20% in real terms since 2007. A series of recent energy price hikes by the major suppliers has continued to put the issue at the centre of political debate.
'Defensive measure'
The Conservatives and the Lib Dems have been keen to avoid their discussions becoming a big coalition row. Both sides describe the plans as a "defensive measure" designed to take the heat out of the cost of living debate. One Conservative source said: "Nick Clegg realises that he doesn't want the Lib Dems to be the party on the side of high bills." But there are some outstanding areas of disagreement. The Lib Dems are pushing to ensure that there is no watering down of the government's carbon targets and are pushing for some kind of compensation for slowing down ECO.
One area being looked at is whether new incentives could be offered to encourage people to take up the Green Deal scheme, under which the government lends householders money to pay for energy saving improvements.that he doesn't want the Lib Dems to be the party on the side of high bills." But there are some outstanding areas of disagreement. The Lib Dems are pushing to ensure that there is no watering down of the government's carbon targets and are pushing for some kind of compensation for slowing down ECO.
The householder pays the money back over many years through their energy bill during which, in theory, the consequent lower energy costs help offset the loan.
On Wednesday, the Climate Change Minister Greg Barker told BBC Newsnight he wanted to "marry up" ECO and the Green Deal which has thus far had a very poor take up.
State aid?
The ECO scheme began this year and obliges energy firms to pay for low income households to make their homes more energy efficient. The cost of this is transferred directly to everyone's energy bills. ECO is a two year project that will expire in March 2015. But under the government plans, it would be extended until 2017. This would halve the amount that energy firms have to spend each year and that saving would then be passed on to consumers.
Further savings are expected to come by reducing the cost of ECO, which vary wildly from company to company.
The Department of Energy estimates it adds an average £47 a year to the average household bill. The government is expected to act to bear down on the costs of the scheme so that the cheaper forms of insulation are used - such as lagging - rather than more expensive forms of solid wall insulation.
The warm homes discount helps people in the most vulnerable, low income households by taking £135 off their annual energy bills. The costs are borne by the energy firms who pass them onto their customers. The energy department estimates that the warm homes discount adds £11 a year to the average fuel bill and the government is planning to transfer the cost of this away from bills to general taxation.
There are questions about whether this would amount to a state aid to energy firms - something that is banned under EU law - and about how the government would choose to distribute the money. But sources say that transferring the warm homes discount to taxation is far easier than doing the same with ECO.
BBC News - Ministers to keep green levies in energy bill cut plan
Green levies face being watered down as ministers move to cut consumer bills | Environment | The Guardian
Hundreds of homes lose out amid ECO reform uncertainty | Environment | theguardian.com
In tomorrow's Sun on Sunday the Prime Minister and his Deputy will be outlining their proposals - and the politics is over whose proposals will benefit the poor better:
Government outlines plans to reduce energy bills
30 November 2013 Last updated at 21:06
The coalition government has outlined its plans to reduce energy bills in the wake of rising costs.
David Cameron and Nick Clegg said their proposals would reduce bills by an average of £50, in an article in the Sun on Sunday. They said the government would pay for some measures currently included in bills and the cost of insulating homes would be spread over a longer period.
Labour has called the government's energy policy a "shambles". Its leader Ed Miliband has said that should his party win the next election, it would freeze gas and electricity bills for 20 months.
Discounts for poorest
But in the Sun on Sunday article, Mr Cameron and Mr Clegg also attacked Labour's energy plans, saying they would reduce energy bills "without taking any help away from poor families or sacrificing our green commitments." They said that the "two million poorest families who currently receive a discount on gas and electricity will continue to do so", but the government would pay for the discount, instead of it being included on energy bills.
That will reduce annual bills by approximately £12, the BBC understands.
The money to pay for the discount would be paid for from extra tax money brought in from cracking down on tax avoidance, they wrote.
And they confirmed a BBC report from earlier this week, that the cost to energy firms of insulating homes - "apart from in the worst off homes" - will be spread over a longer time period - thought to now be increased from two years to four, up to 2017.
They said the proposal would reduce people's bills, but did not specify by how much.
Representatives of the insulation industry have told the BBC that they fear this will mean significant job losses. The Association for the Conservation of Energy said from what it has seen of the government plans it anticipates around 10,000 jobs will be lost because they believe the change represents a halving of the budget for the work they carry out.
Government 'hoodwinked'
Andrew Warren from the Association for Conservation of Energy told the BBC: "It beggars belief that the government is trying to cut energy bills by delaying a scheme that itself cuts energy bills. The government has been hoodwinked by the Big Six energy firms who don't want to insulate people's homes because it means less profits for them."
Mr Cameron and Mr Clegg said the government would also pay for new incentives for people to insulate their homes. They wrote: "Alongside the Green Deal, when you buy a new home, you could get up to £1000 from Government to spend on important energy-saving measures - equivalent to half the stamp duty on the average house - or even more for particularly expensive measures. It's an all-round win: better insulation means cheaper bills; it's how we cut carbon emissions; and it will boost British businesses who provide these services."
In addition, landlords will be offered cash incentives to insulate their least energy-efficient properties between old tenants leaving and new ones moving in.
Government sources have not given a detailed breakdown of the figures, saying specific details will be announced by the chancellor in his Autumn Statement in Parliament on Thursday.
Mr Cameron and Mr Clegg also strongly criticised Labour in the article, saying the opposition's plan to freeze energy bills is "taking people for fools. Energy companies would hike up prices both before and after the freeze - so families would end up paying more. Not only that - by cutting investment in green energy, their freeze would threaten thousands of jobs," they wrote.
But what are other countries doing about the soaring cost of energy and keeping warm? For example:
Futures Forum: Norway's price structuring for energy bills... no standing charges and higher price-bands for higher use
And another example, from today's Telegraph:
The Swedes don’t feel the cold like we do in Britain
It's not the price of energy that is the problem in Britain but the poor insulation of our homes - which means we use more fuel to heat them
It’s all in the insulation: Sweden is much colder, but we have four times their percentage of people in fuel poverty, though our gas is half the price
9:02PM GMT 29 Nov 2013
66 Comments
Energy bills escalate. More and more people struggle to heat their homes, and increasing numbers of the neediest die of cold. So let’s slash the one programme that enables poor people permanently to reduce their heating costs.
Spot the logical flaw? If so, could you point it out to the Chancellor? For that counterproductive cut is precisely what he seems likely to announce in next week’s Autumn Statement.
That would be the craziest move yet in a topsy-turvy couple of months, when the once dull domain of energy policy has commanded the peak of the political agenda. It began of course, with Ed Miliband’s populist pledge to freeze energy prices. He piled on the pressure again yesterday, announcing proposals designed to break the companies’ hold on the energy market.
The Government has responded, as we report today, with a series of bill-cutting wheezes of its own. But it seems alarmingly clear that it has the wrong targets in mind.
Taking on the big energy firms is certainly something the public will cheer to the rafters – not least given recent accounts of how they have greatly exaggerated rises in the wholesale price of gas, amassed £2 billion through overpayments of direct debits, and – according to a competitor – overcharged customers by a staggering £3.7 billion a year.
The most scandalous statistic came last week, just two days after the revelation that the companies’ profits had risen fivefold in just four years. Some 31,000 people, the Office for National Statistics announced, died unnecessarily from the cold last winter, 29 per cent up on the year before, a third through lack of heating at home. More than five million households live in fuel poverty; by one comparison, a higher proportion of Britons have to spend too much of their income on energy than in any EU country except Estonia.
And yet, despite all the furore, energy prices are not the principal problem. Even though they have soared, EC figures show British gas prices to be the lowest in Europe. But our bills are among the highest, because we use a lot of fuel – since our homes are among the least energy efficient.
Compare us to Sweden, with an almost identical per capita income, but a much colder climate. We have four times their percentage of people in fuel poverty, though we pay only half as much for gas. As our homes are poorly insulated, they lose three times as much heat through their walls.
The answer should be a no-brainer – insulate. And there have been a series of, admittedly inadequate, programmes to help the poor to do so, culminating in the current Energy Company Obligation (ECO), under which suppliers are required to carry out efficiency measures. It is this that Mr Osborne is intent on cutting, by spreading its two-year programme over four. If he does so, spending on energy efficiency in England will have dropped by 62 per cent since the Coalition took office.
More than 140 organisations – ranging from Barnardo’s to confused.com, from AgeUK to the TUC – have written to him in ECO’s defence. Insulating houses saves families an average £400 a year. It is job-intensive, now employing some 136,000 people. It provides one of the highest returns on investment; £350 million spent under ECO will save a total of £4.2 billion. And it helps avoid energy shortages. No wonder David Cameron this year hailed it as “right for the economy”, pledging “to make Britain the most energy efficient country in Europe”.
Who could possibly be against it? Most energy companies, because it depresses their sales.
Energy-saving measures carried out since 2005 have cut household consumption by a quarter. The companies have long campaigned against ECO, falsely claiming that it and other “green taxes” were behind their steep price rises, and fingering it as the main culprit. Now the Chancellor looks like capitulating. If he cuts the programme as expected, calculates the Association for the Conservation of Energy, the Big Six will avoid spending £1.3 billion on ECO measures, and sell £360 million worth of extra fuel to the uninsulated houses. Six hundred thousand families will pay hundreds of pounds extra annually, and at least 10,000 jobs will be lost. All for some £50 off the average bill of nearly £1,300.
If Mr Osborne wants to cut “green taxes”, he should axe the expensive carbon floor price, which hugely disadvantages British industry. If he must keep it, he could use its revenue to super-insulate housing, creating more jobs and growth – studies show – than any almost any other way. He won’t, because the Treasury milks it as a cash cow.
The “most energy efficient country in Europe”? Dream on.
The Swedes don’t feel the cold like we do in Britain - TelegraphAnd an article in today's Guardian makes similar comparisons:
Britain's damp, leaky homes among Europe's most costly to heat
Spiralling levels of fuel poverty make government plans to cut home insulation programme perverse, says adviser
UK homes are some of the most expensive to heat in Europe because of poor maintenance and insulation, according to new figures from the EU compiled for the Guardian.
The analysis of official EU data also found that the UK has the highest levels of fuel poverty of a dozen comparable EU nations, as well as one of the worst proportions of homes in a poor state of repair. Over 10m British families live in a home with a leaking roof, damp walls or rotting windows.
The expense of heating leaky homes means government plans to cut a programme that insulates properties in an attempt to trim energy bills is "unforgivably perverse", according to the government's fuel poverty adviser, Derek Lickorish. He condemned the intention signalled by ministers to cut the energy company obligation (ECO) in George Osborne's autumn statement next Thursday. "ECO is a life-saving measure for some and we should be actually doing more. No one should be dying because they cannot afford to heat their home."
Andrew Warren, director of the Association for the Conservation of Energy, who speaks frequently to ministers, said: "It is absolutely disgraceful that the big energy companies have orchestrated this unscrupulous campaign, that appears to be succeeding in blackmailing the UK government into cutting by half its established policy to help customers stop wasting money by wasting fuel."
Ed Matthew, director of campaign group Energy Bill Revolution, an alliance of over 160 organisations including the TUC, IKEA, Asda and Shelter, said: "It is a national disgrace that thousands of people are dying unnecessarily every year, lives that could be saved by something as simple as better insulation. If Osborne cuts the total energy efficiency budget, as many fear, he will be condemning people to death."
The new figures, compiled by the Association for the Conservation of Energy from official EU data, compares the UK with other EU states with similar climates and income levels, including Germany, France and the Benelux countries. The UK ranks bottom of the 12 for fuel poverty, 11th for the proportion of income spent on energy bills and 9th for homes in a poor state of repair.
Other data, from the Buildings Performance Institute Europe, shows that UK has the oldest houses in the EU, with over half built before 1960 and just over 10% built since 1991. Older UK homes require at least double the energy to stay warm compared with many countries, even those with colder climates such as Sweden.
The political row over energy bills and the ECO levy has intensified ahead of the autumn statement, which will reveal the changes promised when David Cameron pledged to "roll back" green and social levies. The proposed changes to ECO would mean spending to help people insulate their homes was at the lowest level in over a decade. In February the prime minister said: "We are putting energy efficiency where it should be, at the heart of our energy policy. I want … to make Britain the most energy efficient country in Europe."
Paul King, chief executive of the UK Green Building Council, said: "We have some of the oldest and leakiest houses in western Europe, that is for sure. We have been very complacent about energy use for a very long time." King also criticised the government's plans for ECO, which comprises 3.7% or £47 a year of the average bill: "Ministers have been spending too much time finding something that works for the energy companies, not consumers."
Warren said: "There has simply never been a concerted effort to tackle energy efficiency. The government's green deal programme was supposed to do it but that has failed for many reasons." The green deal, a loan scheme for retrofitting homes was intended to tackle 14m homes by 2020 but has managed just 219 in its first year. "Any home built before the mid-1980s was built without any requirements at all for insulation, windows and so on," said Warren. Building standards are better now, he said. "But even now, most homes built do not comply with the standards and government proposals to tackle that have been kicked into the long grass."
Lickorish, who chairs the government's fuel poverty advisory group, said: "It is unforgivably perverse that ECO – the only thing that can reduce the bills of consumers permanently – is the only thing the government is focusing on."
On Tuesday, the Office for National Statistics reported 31,100 excess winter deaths in England and Wales in 2012, up by almost a third on the previous winter. "Not all winter deaths are due to fuel poverty but we understand very clearly the links between cardiovascular and other diseases and cold, damp homes," said Lickorish, calling the level of deaths "morally unforgiveable". He said: "The chancellor is prepared to insulate big business from [green levies] but not to insulate the homes of the fuel poor. The government is not protecting the vulnerable."
On Thursday the energy secretary, Ed Davey, told the political magazine House he would not agree to cuts in ECO. "There's no way as a Liberal Democrat, as a minister, I can cut the average person's bills on the back of the poorest. [I'm] just not going there."
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