Energy bills could be cut by £50 a year in next week’s autumn statement by watering down “green levies” and moving them on to general taxation, under plans being discussed by ministers.
The changes will mean that energy companies’ spending on homes in fuel poverty in England will fall by 62% over this parliament, from £626m in 2010/11 to £237m in 2014/15. That would leave spending to help people insulate their homes at the lowest level in over a decade.
David Cameron has promised to “get rid of the green crap” on bills, according to newspaper reports, but the Guardian understands that ministers’ decisions will see green schemes diluted and funded by other means rather than axed entirely.
However, uncertainty over one scheme funded by the levies has already led to the scrapping of a £500,000 project to insulate 100 homes.
The only scheme that requires the big six energy firms to reduce customers’ energy bills, the £1.4bn-a-year energy companies obligation (ECO), will be watered-down by delaying the deadline for the companies’ targets.
In documents sent to the energy companies and seen by the Guardian, the government proposes extending the deadline from 2015 to 2017, without increasing the number of homes that companies must fit with insulation and new boilers.
Fears that the ECO would be scrapped entirely were unfounded, a Whitehall source told the Guardian. “Scaremongering about the ECO being scrapped is wide of the mark,” the source said.