Bury St Edmunds: MP in call for Osborne to reveal green plan

David Ruffley MP

David Ruffley MP - Credit: Archant

The green energy tax burden on households could get bigger if the Chancellor does not act now, Bury St Edmunds MP David Ruffley has claimed.

The Treasury select committee member warned that the £2.8bn cost of green policies this year was just the “tip of the iceberg” and called for a change in green policy.

During a briefing yesterday he urged George Osborne to set out which levies he will scrap in next month’s Autumn Statement.

Mr Ruffley, who is a member of the Free Enterprise Group, said that the current impact of green taxes was £2.8bn, but using Department for Energy and Climate Change forecast figures for measures including the feed-in tariffs, energy market reform and renewable obligations he suggested that the cost in the average energy bill will rise from its current £112 per household to £280 per household in 2020.

However, the Department for Energy and Climate Change argues that while the cost of policies will increase in order to support increasing low carbon investment, its policies would deliver increasing energy efficiency savings. and the impact of measures which could see more homes with better insulation, household dual fuel bills were estimated to rise by less than in the absence of policies and in 2020 households were estimated on average to save around 11% (or £166) on their energy bills compared to what they would have paid in that year.

Mr Ruffley said: “The current impact of green taxes this year on all 25.4million households that pay energy bills is £2.8bn. Green taxes’ are the costs that energy companies pass on to us in our energy bills for what the government makes them do: insulating low income householders’ homes; discounting poorer pensioners’ bills; paying more for electricity generated using the technology that the Government has guaranteed the price of – ie. wind, biomass, solar and so on.”

He made his claims at the Institute of Economic Affairs where members of the influential Free Enterprise Group of Conservative MPs also urged the Chancellor to scrap stamp duty on all homes worth less than £500,000 and suggested raising the earnings threshold for higher-rate income tax to £50,000 a year.

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He also hit out at the idea floated by the Liberal Democrats to switch the green levies from our energy bills to our income tax bills.

Mr Ruffley said: “So I want to see a statement of intent from the Chancellor at the Autumn Statement – outlining which green levies he believes should be scrapped. Just switching the cost of expensive green policy from our energy bills to our tax bills won’t wash.”

A DECC spokesperson said: “The Government is looking closely at the impact of green levies on consumer bills and how the measures they support are paid for.

“Details of the review will be announced in the Autumn Statement, providing clarity for long-term decision making by industry.”