From the TUC

£11bn in green taxes: is the Treasury milking the green economy?

21 Jul 2011, by in Environment

£11bn in revenues from carbon taxes must be urgently redirected to tackle fuel poverty and domestic energy efficiency. With fuel poverty now affecting 5.5 million households, this was the central message of a joint letter this week from FoE, Consumer Focus, Unison, the TUC and many others. The Warm Front scheme ends in 2013, the first time in over 30 years the UK has been without a publicly funded energy efficiency programme. It should be restored, using the massive revenues now accruing to the Treasury.

HMT will receive £7.7bn in receipts from the EU Emissions Trading Scheme by 2015-2016, and a further £3.2bn from the carbon tax, or Carbon Price Floor. These sums are, of course, deeply overshadowed by the £14bn in City bonuses for a single year, just announced, which in itself points to the amount of wealth available in the UK to deal with fundamental social issues such as fuel poverty and climate change.

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Total

EU ETS receipts

0.4

0.3

0.7

2.0

2.1

2.2

7.7

Carbon floor price

0

0

0

0.74

1.07

1.41

3.22

Domestic energy consumption in the UK increased by one-fifth between 1970 and 2009, from 37 to 44 million tonnes of oil equivalent. Around 60% of energy was consumed for heating purposes. This energy use shapes the total domestic energy consumption trend and makes it sensitive to year–on–year winter temperature fluctuations.

The government’s energy bill will set up the energy company obligation to tackle fuel poverty. It should be focused on vulnerable and low-income households and communities. But even with this focus it is likely to be insufficient. Exchequer revenues, including from carbon taxes, must be urgently considered to increase the scale of the scheme. Those in and vulnerable to fuel poverty must not fear the coming winter. The Warm Home Discount, currently restricted to pensioners, must be expanded to include low-income families and those with a disability or long-term health condition.

These policies will not end fuel poverty; the government needs to develop a full roadmap to do that. They will, however, mark a shift from the current course, which will see ever greater numbers of households unable to afford to heat their homes as fuel prices rise. The co-signatories to the appeal believe it is time for a new start to end fuel poverty, and that doing so will bring dramatic social, economic and environmental benefits

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Total

EU ETS receipts

0.4

0.3

0.7

2.0

2.1

2.2

7.7

Carbon floor price

0

0

0

0.74

1.07

1.41

3.22

Total

0.4

0.3

0.7

2.74

3.17

3.61

10.92