The fuel poor are being hit hard by the cost of climate change policies and seeing little benefit - warns the Government's Fuel Poverty Advisory Group in its eighth annual report.
While recognising that investment in energy infrastructure and measures to reduce greenhouse gas emissions are essential, the group highlights that energy bills could rise by up to a further 50 per cent on top of the 125 per cent rise in the last six years as the cost of these schemes will be largely, if not wholly, passed on to energy customers.
The advisory group says this policy is regressive, and has a disproportionate impact on those on low incomes. At the same time, the future of grants to tackle fuel poverty, under the Warm Front scheme, is uncertain.
The group warns that the Government's Green Deal - mainly based on paying for energy efficiency measures through bill savings - will not deliver for the poorest energy customers.
Although potentially a very good initiative for many consumers, the Fuel Poverty Advisory Group says it is unsuitable for the majority of fuel poor households who already under-heat their homes to cut costs, and would therefore be unlikely to make the bill savings required to pay for the measures.
Commenting on the Fuel Poverty Advisory Group’s announcement, Ann Robinson, Director of Consumer Policy at
uSwitch.com, says: "Environmental levies are going to account for a growing and substantial part of our bills and will in turn play a growing and substantial part in pushing the cost of our energy up.
“If consumers are to be expected to meet these costs then there has to be clarity over what these ‘hidden taxes' are for, a cap set on how much consumers will end up paying and transparency over how the levies are being applied.
"Consumers are already concerned - 44 per cent say that the commitment to cutting carbon emissions and moving to greener energy sources has to be balanced with the impact on people's bills, while almost a quarter say that affordable energy has to be the priority.
“Arguably lower income households and the fuel poor have more to fear than most as these charges will account for a disproportionately higher amount of their already limited energy spend.
"It is absolutely right that the Fuel Poverty Advisory Group raises this issue now. These levies currently amount to £84 or seven per cent of the average household bill and look set to more than double. Before this happens the Government has to be shown the full picture so that it can see the potentially devastating impact this could have on the fuel poor."
uSwitch.com key stats:
- Hidden tax: £84 or 7 per cent a year already added onto household energy bills to meet cost of combating climate change
- Policies launched under previous Government expected to add a further 6 per cent or £72 in levies over the next decade- hidden tax on our energy bills will add up to £156 a year
- New proposed levy on electricity supplies could add a further £10 - £20 onto the average household energy bill - hidden tax could more than double to £176 a year
- More to come? According to Ernst & Young, investment in Britain's energy supplies will cost over £230 billion - potentially adding £548 to household energy bills over the next 15 years
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