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Report argues for carbon tax to combat fuel poverty

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A report published today has suggested taxes from energy providers should be invested into a major government energy efficiency programme

Jobs, growth and warmer homes, published by statutory consumer organisation Consumer Focus argues that money raised from carbon taxes should be pumped into a nationwide efficiency programme to boost jobs and combat fuel poverty.

At present energy providers have to pay a carbon tax to government for any carbon which they emit. It is these taxes, which the study estimates could be as much as £63 billion between 2012 and 2027, which the report suggests should be used to provide energy efficiency improvements.

Findings suggested that greater economic growth could be provided through energy efficiency programmes than by equivalent investment in other government spending programmes, or by cuts in VAT or fuel duty.

Fuel poverty currently affects around 5million UK households, with this number set to increase alongside rising energy prices. Significant government investment in energy efficiency could help to lift ninety per cent of homes out of fuel poverty, reducing energy bills in all treated homes by at least £200 annually.

The report also suggests that this investment could benefit the other government schemes, such as the Green Deal and the Energy Company Obligation.

Mike O’Connor of Consumer Focus said: ‘We need to make heating our homes more affordable, cut carbon emissions and achieve economic growth. Using carbon taxes to ensure our homes leak less energy represents a triple-whammy.

‘This would simultaneously improve the quality of life of millions of people, slash carbon emissions and generate greater economic growth than other measures. Consumers will be paying these taxes through their bills. They can and should feel the benefit.

‘Fuel poverty leaves millions of households having to cut back on essentials like food and heating to make ends meet. The Government’s current energy efficiency and fuel poverty plans will only touch the tip of this iceberg. However, Government has the opportunity to use the large and stable revenues from carbon taxes to deliver the most breath taking and transformative energy efficiency scheme that we have ever seen.’ 


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