Scrapping green levies on energy bills could harm region's jobs market and fuel poor, former Minister says

Scrapping green levies on energy bills that help keep Yorkshire and the north warm would be a “knee jerk” response that could cause “long term pain” to the region’s investments and fuel poor, a former minister has said.

Some politicians and industry figures are calling for the taxes - which make up a portion of our monthly energy bills - to be suspended or cut in response to soaring gas prices around the globe.

However, the funds are helping to promote green investment in the north, bringing jobs and redevelopment, and helping to keep homes with poor insulation across the northern regions warm Conservative Chris Skidmore has told The Yorkshire Post.

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He explained: “The green levies are helping to support jobs, whether it’s looking on the Humber where you’ve obviously got an offshore wind industry that has been developed, thanks to investment by Siemens, and various other international companies coming to the UK.”

File photo dated 31/07/18 of a smart meter next to an energy billFile photo dated 31/07/18 of a smart meter next to an energy bill
File photo dated 31/07/18 of a smart meter next to an energy bill

In his opinion, commitment to the taxes “signals to the market and private industry” the UK’s commitment to the green agenda, and removing them “would send a very strong negative signal to those companies that are investing in the UK, that actually the UK isn’t putting money where its mouth is.”

However, the funds bring additional benefits, Mr Skidmore said, providing money to help make homes more efficient, and therefore warmer.

“Actually it’s in the north, where the majority of those houses have poor insulation and where those fuel poor households are,” Mr Skidmore added.

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“So actually, in a way, green levies disproportionately benefit areas such as Yorkshire and the North, this is a levy that is actually being funnelled into investment in the northeast and North and Yorkshire regions.”

Household energy bills are set to soar in the coming months, with a review to the price cap due this April expected to ramp up the costs.

Mr Skidmore, MP for Kingswood added: “Something does need to be done, I just think we’ve got to be careful we don’t make a knee jerk response and throw out investments that actually could have been a benefit to everyone in our economy in the longer term.

“It would potentially be long term pain. It’s going to make things a lot worse if we decide to do a u-turn effectively on green leadership.”

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It is thought that Chancellor and Yorkshire MP Rishi Sunak is considering making direct payments of up to £500 to struggling families as the cost of energy bills are set to soar.

But Business Secretary Kwasi Kwarteng told ITV’s Good Morning Britain that billpayers will have to wait until the Spring Statement in March to find out what extra support might be available.

“Lots and lots of things have been discussed, and I’m sure that’s one of the things that we’ve been talking about,” he said.

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“My officials in the department speak to Treasury officials, and ministers speak to each other all the time.”

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A Government spokesperson said :“We recognise people are facing pressures around the rise in energy prices and we are committed to extending the Energy Company Obligation from 2022 to 2026,​ boosting its value to £1billion a year. This will help an extra 305,000 families with green measures such as insulation, with average energy bill savings of around £300 a year.

“We are also accelerating our progress in upgrading the energy efficiency of England’s homes by investing over £6.6bn billion to decarbonise homes and buildings and bringing in higher minimum performance standards to ensure all homes meet EPC Band C by 2035. We are also insulating millions of consumers from high global gas prices through the Energy Price Cap.”

Shadow Climate Change Minister and Sheffield Hallam MP Oliva Blake said: “The Government continues to sit on its hands whilst working people struggle with the cost of living crisis.

“Oil and gas companies have made billions from soaring energy prices, yet the government opposes a windfall tax saying these firms are “struggling”. They’re wrong. It’s time to help those really struggling - Britain’s families - with a windfall tax to help reduce energy bills.”

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Henri Murison, director of the Northern Powerhouse Partnership said: “Scrapping green subsidies makes no sense for the economy, for consumers, for the environment.

“Green investment is a long-term solution to the problem. In the short-term, we should cut VAT on low carbon electricity to reduce bills in the here and now as well as a package targeted at the poorest being hit hardest from April.”