Use energy tax windfall to relieve fuel poverty, urges charity

The government’s £150 million VAT windfall from recent energy bill increases should be used immediately to help low income families, according to fuel poverty charity National Energy Action.

“Treasury could gain around £150 million additional VAT revenue as a direct result of our higher energy prices this winter. We want to see this money used immediately to support existing energy efficiency schemes, especially in England,” said an NEA spokesman.

“We, along with over a hundred other organisations, also want to see revenue from other carbon and environmental taxes to be used to support all households in the UK suffering from fuel poverty,” he added.

More than 90 per cent of fuel poor households will get no help to improve the energy efficiency of their properties this winter further into the future, according to the charity.

“Whilst existing programmes can help those that are eligible receive some level of support, the vast majority of fuel poor households (over 90 per cent), will not receive any help improving the energy efficiency of their properties this winter, next or even further into the future.

NEA was commenting on the recently unveiled Annual Energy Statement. In the statement the government claimed: “The UK pays some of the lowest prices in Europe,” and insisted “helping to alleviate the impacts of billing increases for many of the most vulnerable households is an important priority.” It said the Energy Company Obligation was an “essential part of the government package to tackle fuel poverty”. Fewer than 200,000 measures have been installed under ECO since its launch.

Fuel poverty in the UK currently stands at about 5 million people – nearly 20 per cent of all households – with only Estonia showing a poorer record, according to recent study.  Research by charity AgeUK found that 200 people were expected to die from cold each day during this coming winter.

“We urgently need the Coalition Government to set out exactly how they intend to support a much more ambitious national energy efficiency scheme,” said the NEA spokesman. “Radically improving the fabric of UK homes is the most cost effective long-term solution for tackling high energy bills and fuel poverty.”

Recent research by the Association for the Conservation Energy found that better home insulation in the rest of Europe offset higher energy bills, reducing fuel poverty.