Laura Sharman 05 December 2013

AS2013: Government cuts green levies

Chancellor George Osborne has confirmed the Government is rolling back energy levies and charges, in a move that will reduce the average household energy bill by £50 a year.

Mr Osborne said the announcement would not add a penny to the taxpayers’ bill showing ‘going green does not need to cost the earth’.

The announcement includes the reduction of the Energy Companies Obligation's (ECO) target by 30%, meaning energy companies will be able to install cavity wall and loft insulation into hard to treat homes rather than solid wall insulation.

Since the announcement was first made earlier this week, energy companies have confirmed reductions to bills including British Gas pledging to reduce gas and electricity prices by 3.2%.

However, the insulation industry has warned that the move will risk both jobs in the industry and hit the poorest households the hardest. Managing director of Sto, Tim Deathridge, said the move was a ‘cruel blow’ to the poorest communities as solid wall insulation had reduced energy bills by 50% in some cases.

Mr Deathridge said: ‘This politically-motivated decision could scupper a potential 60,000 new jobs in the insulation industry and cuts short the hopes of young people wanting to learn new skills as apprentices.

‘Our industry has spent millions gearing up to deliver the Government’s flagship green initiatives – Green Deal and Eco and it has been devastated before it has even begun.’

Environment charity Friends of the Earth has also warned the policy is short-sighted’ and could have a disastrous impact on jobs.

Friends of the Earth’s economics campaigner, David Powell, said: ‘Earlier this week MPs slammed Osborne for subsidising fossil fuels and nuclear power - while bending over backwards to axe household insulation schemes, which will threaten people’s health and jeopardise jobs.

‘Building a strong economy and protecting the environment are two sides of the same coin. George Osborne should throw his weight behind the economic goldmine of limitless, carbon-free energy from the wind, waves and sun.’

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