Energy crisis: UK squanders opportunity to slash bills by £342 for 2 million homes

Rishi Sunak explains why energy rebate is paid per household

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

A green think tank has estimated that the UK has squandered a major opportunity to slash household energy bills by offering a major tax break for oil and gas exploitation. Alongside imposing a windfall tax on the bumper profits gained by energy companies, Mr Sunak offered a 91 percent tax break for oil and gas exploration.

The think tank believes that the tax break has led to the UK missing out on billions in revenue, which could have been used to permanently slash the energy bills of two million households in the UK through home insulation measures.

Experts at E3G calculate that the tax break would hand these companies anywhere between £2.5bilion and £5.7billion over three years.

Meanwhile, they argue that an energy efficiency programme that cost about £3billion over the same period would significantly reduce the heating expenses of 2.1 million households by about £342 each.

By boosting insulation, these households would use less gas to keep warm, and thus save on heating bills.

Over the past year, UK households have faced a massive energy crisis, with industry regulator Ofgem last week that many UK households will face energy bills of around £2,800 a year.

Jonathan Brearley, the chief executive of Ofgem warned that around 12 million Britons will face fuel poverty as a result of this price increase, where energy bills eat up a significant share of their income.

As a result of the April increase to £1,971 a year, there are 6.5 million people in fuel poverty.

Campaigners have since argued that boosting energy efficiency with Government support is the key to getting out of this crisis.

They say that home efficiency measures like loft and wall insulation will result in lowering energy bills for good while cutting carbon emissions driving climate change and boosting jobs.

The £342 figure that was estimated by the think tank has been calculated using the data from the latest price cap increase.

Euan Graham, at E3G, who conducted the tax break analysis, told the Guardian: “[Mr Sunak] is providing a subsidy to oil and gas producers which will do long-term harm to the energy transition.

“The government has not grasped what is needed in order to deliver a genuinely resilient and affordable energy system.

DON’T MISS: 
US takes on UK to launch nuclear fusion rocket for ‘next gen’ travel [INSIGHT] 
Energy crisis: UK faced with new hurdle as record wind forced turbines [REPORT] 
Tech billionaire warns Russian cyberattack could ‘destroy society’ [REVEAL]

“Instead, it is willing to implement policies that support the interests of oil and gas companies instead of British households.”

Stuart Adam of the Institute of Fiscal Studies (IFS) also criticised the tax break saying: “[It means] a massively loss-making investment could still be profitable after tax.

“It is hard to see why the government should provide such huge tax subsidies and thereby incentivise even economically unviable projects.”

Source: Read Full Article