By Paul Homewood

London, 22 January — Net Zero Watch has welcomed the government’s apparent decision to remove green levies from energy bills, providing direct relief to hard-hit households and also to industrial and commercial consumers

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According to a report in the Times, “ministers have been considering scrapping green levies from energy bills. However officials have concluded that because the government is contractually obliged to pay them they would simply be moved from energy bills to general taxation.”

Direct subsidies for renewable energy investors – via the Renewables Obligation, the Feed-in Tariff and the Contracts for Difference systems – run to £10 billion a year, but there is a further £2 billion from the high system costs renewables bring to the grid.

Net Zero Watch has repeatedly called on ministers to remove these renewable energy subsidies from energy bills to help reduce mounting pressure on the general cost of living.

Cutting green levies from energy bills will also allow the Treasury, in the medium-term, to buy back these subsidy entitlements at a discount, and eventually cease to provide green energy subsidies in any form.

Steve Baker MP said,

Thank goodness we now seem to be making progress towards better energy policy. Setting out to make the public poorer and colder never seemed likely to survive contact with electors. We can only hope ministers now accelerate down the path to a policy which is socially, economically and politically viable.”

Dr Benny Peiser, Net Zero Watch director said:

It would appear that Rishi Sunak and his advisers in the Treasury are realising that billions in subsidies for renewable energy is no longer compatible in its present form, threatening the welfare of millions of households and undermining economic and political stability. Sooner or later, the Government will have to consider terminating all energy subsidies that are increasing costs and pain to consumers and businesses.”

If the Times Report is true, this is a step in the right direction. Going right back to Tony Blair’s government, a deliberate decision was made to force energy users to pay the cost of government climate policy.

Now it appears that government will have to take back the cost. If that means spending cuts elsewhere, so be it. If this had been done  before, the Treasury would probably have put the brakes on green subsidies  years ago.

But the real solution is to do away with them altogether.

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January 22, 2022 at 06:33AM