Energy price-freezes are more popular than green tax-reductions – but there is broad support for changing the way green levies are funded
On Wednesday the Prime Minister announced his aims to roll back green taxes on energy bills, after weeks of pressure to match Labour’s pledge to freeze energy prices for 20 months if elected. Currently the green levies add £112 to a typical yearly household bill, and fund rebates for poorer pensioners, improvements to energy efficiency in homes and allowances for companies to be more environmentally friendly. Cameron wants some of these reduced, and others paid for through taxes, rather than bills.
When voters are asked to choose one preferred policy for reducing energy bills, Ed Miliband’s is the most popular. 39% would most like to see energy prices frozen for 20 months from May 2015, while reviewing the regulation of energy companies.
In contrast, 28% would most like to see the green taxes which make up part of people’s gas and electricity bills reduced. 23% would prefer a new tax on the profits of energy companies to help the elderly with bills, a policy suggested by John Major which could become Conservative policy if Ofgem find evidence of excess profits among the energy companies next spring.
All of the proposals are popular when given a free choice, however. 72% support the price freeze, 73% the tax on energy companies, and 64% the reduction of green taxes.
And when asked specifically about the green taxes, there is strong support for changing Britain’s stance. 39% agree with the government’s probable course of action: the money currently raised through green levies on energy bills should continue to be spent on the same schemes, but should be funded through taxes instead. Only 15% say the money should continue to be spent on the schemes and funded by energy bills. 34% say the money should no longer be spent on the green schemes at all.
Voters from all parties seem unsatisfied with the green schemes being paid for through bills, and there is broader support for funding the schemes through taxes, though more Conservative and UKIP voters are in favour of scrapping funding for the schemes altogether.
Nick Clegg has warned that moving the funding for green schemes from energy bills to general taxation could push up taxes, and scrapping the schemes altogether would hit “the vulnerable hardest”. Liberal Democrats accused the Prime Minister of a “panicky U-turn” for his surprise announcement on Wednesday, while Ed Miliband reminded him of his ambition to lead the “greenest government” ever.