What could the UK government do to support people now?
Although it is difficult for the UK government to tackle the root causes of high energy bills, it must step in now to ease the pain of high bills for consumers.
It can do this in a number of ways, such as additional support payments to reflect higher bills (potentially paid for with new windfall taxes on oil and gas company high profits), a temporary reduction in VAT on utility bills. energy, the generalization of social and green tax levies, an “energy leave scheme” or a temporary renationalisation of energy companies that cannot offer bill reductions.
What about a one-off tax on big business that produces our oil and gas?
The previously announced windfall tax on energy producers will help cover the £400 reduction in household energy bills. It is also being used to help eight million low-income households, who will receive a one-off payment of £650, as well as increased support for pensioners this winter and a one-off payment of £150 for people with disabilities.
However, since the windfall tax was announced, price cap estimates have risen dramatically, so the money from the tax is now considered insufficient to help households cope with rising costs. costs.
The government could in future increase the exceptional tax on these companies to further support households.
What is the “green tax” on energy bills?
“Green” levies refer to the costs of social and environmental policies that form part of our energy bills. These policies support investments in renewable energy, help solve social problems such as energy poverty, or both. For example, the Energy Company Obligation, which supports home insulation to reduce bills, is funded by green levies.
It is essential that these levies are not removed completely as they play an important role in supporting vulnerable households by providing energy efficiency measures and investing in renewable energy. They could be transferred from bills to taxation to ease the pressure on short-term energy bills.
Will reducing VAT on energy bills help lower costs?
Although a temporary reduction in VAT on energy bills will reduce much-needed pressure on bills, it alone will not be enough to help all households. A much larger support set is needed.
Are energy providers charging us more for our bills just because they can?
No, the wholesale price of gas on the world market is driving the price increase.
What is the long-term solution to this crisis?
The best way for the government to cut bills is to reduce our dependence on fossil fuels.
We ask them to invest more in renewable energy, which is significantly cheaper than gas, and to provide national support to insulate our homes.