Energy bills expected to fall £50 a year following cuts to green levies

November 30, 2013 by  
Filed under Green Energy News

The levies include support for renewable energy, and “social” levies to fund
insulation and subsidies for poorer households. Industry sources said that
ministers were preparing to reduce the impact of “social” costs on bills
with immediate effect.

A “warm homes” levy that costs households £12 a year will be funded through
taxes instead of bills. Fees imposed on companies for using power
distribution networks will be reduced, taking another £5 off bills.

Further cuts will come from reforms of the energy companies’ obligation, a
complex set of requirements for firms to reduce carbon emissions by
insulating customers’ homes.

The 2015 deadline for meeting that obligation will be delayed. Other energy
efficiency levies will also be reduced.

Sources said that the combined changes could be enough for suppliers to
promise that the average bill will be around £50 lower.

While ministers will present any reductions as real help for households, a £50
fall would not fully offset increases announced by many of the big suppliers
earlier this year.

Those rises have added an estimated £107 to the average dual fuel bill this
year, taking it to almost £1,300.

But speaking at an EU summit in Lithuania, Mr Cameron insisted that the
Government would deliver on his promise.

“I want to help households and families by getting sustainably low energy
prices. Now, the only way you can do that is by increasing competition and
eroding the costs of some of the levies on people’s bills,” he said. “I said
that’s what we were going to do, that is what we are going to do.” The
comments come as ministers denied reports that the Government had asked
companies to freeze bills until the election in 2015.

Ed Miliband has promised that a Labour government under his leadership would
change the law to freeze energy bills until 2017, a plan ministers have
dismissed as a “con”. Yesterday he said that Mr Cameron was “flailing” over
energy prices, accusing the Coalition of failing to act on the cost of

Nick Clegg, the Deputy Prime Minister, said that the Government had an
“absolute duty” to reduce the bills.

But he insisted that the Coalition would not cut subsidies for renewable
energy sources such as wind farms, or help for poorer households. Ministers
will “continue to safeguard and maintain our environmental objectives,” Mr
Clegg said.

Sophie Neuburg, a fuel poverty campaigner at Friends of the Earth, said it
would be “appalling” if big energy firms were allowed to dilute their

She said ministers should increase funding for energy efficiency if they were
committed to reducing bills.

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