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Energy levy cuts may increase fuel poverty

By Western Morning News  |  Posted: December 04, 2013

Comments (6)

The Government's shake-up of energy levies, worth an average saving of £50 for British householders, risks pushing more Westcountry households into fuel poverty, it has been warned.

Chancellor George Osborne has confirmed that the cost of some energy efficiency and social schemes will be rolled back in tomorrow's Autumn Statement. The cuts include the cost of the energy company obligation (ECO), an insulation scheme delivered by major energy suppliers, in a move that is expected to reduce bills by an average of £30-£35 next year.

But Community Energy Plus, a social enterprise based in Camborne, West Cornwall, said the measures could do long-term damage in Devon and Cornwall, with cuts to a scheme which insulates homes with solid walls.

Chief executive Tim Jones said: "The announcement is yet another example of the Government making knee-jerk London-centric policy changes that will see householders in Cornwall missing out on vital funding to help them future-proof their homes against rising energy prices." He added: "Reducing the Carbon Emissions Reduction Obligation element of ECO by a third is counterintuitive as it will significantly reduce the number of households that will get help to insulate the solid walls of their home, which is the single most effective way of reducing their heating bills over the longer term.

"In Cornwall, where 35% of homes already face higher heating costs from living in buildings with solid walls which are difficult to keep warm, and where we are more reliant on expensive forms of heating due to limited access to mains gas, this announcement is most certainly not welcome as it has the potential to push many more households into fuel poverty.

"We're all likely to enjoy a short-term gain, but we must not lose sight of the fact that many will face longer-term pain as the problem of inefficient homes leaking heat is not being addressed – the first significant programme to offer insulation solutions for solid wall homes is being severely compromised.

"While energy suppliers have quite rightly faced a barrage of criticism over recent energy price rises, a reduction in the impact of the social programmes is not the magic bullet to cure the ills of the industry – it is instead letting the suppliers of the hook."

An estimated 43,000 households in Devon and Cornwall are classed as being in fuel poverty – where more than 10% of income is spent on domestic fuel.

Energy companies, which recently announced major hikes in prices, have pledged to pass on the savings.

EDF welcomed the move, and said it did not expect to raise prices again before 2015. The firm said: "EDF Energy was the only major energy company to lessen the impact of higher charges in advance because it was confident that action could be taken to reduce costs.

"Following this news, EDF Energy expects to be able to maintain its lower price rise of 3.9%, as anticipated. That decision left customers with bills £80-96 lower than major competitors who had announced price increases.

"The company looks forward to hearing more detail from the Government, but does not anticipate that EDF Energy's prices will rise again in 2014. Customers should expect other energy suppliers to follow EDF Energy's lead by significantly lowering their prices."

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6 comments

  • BrixhamDes  |  December 04 2013, 2:23PM

    If this Lilly Livered Coalition Government had the "Guts" they would act directly against the Big 6 Energy companies to prevent them from inventing an artificially high "Wholesale Price" which they then pay to themselves and charge to us in order to make massive profits. Why are they not being reported to the Monopolies Commission?, maybe because most of them have their fingers in the Pot? I'd hate to have 28,500 deaths due to MY greed on my hands or mind.

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  • BobToronto  |  December 04 2013, 1:59PM

    If I buy a house with solid walls, I should expect the government - my friends and neighbors - to pay part of my extra fuel bills. Somebody explain the reasoning

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  • nickthompson  |  December 04 2013, 1:49PM

    Pink_Diesel: what was that, Last year 28,500 of our elderly died from the cold, or cold related illness. Pink_Diesel, Is this whst you meant to say in your comment? -------------- British Gas revealed today it made £23 every second from its customers in the first six months of 2013 and hinted at more price rises. After raising its prices just before last year's record-breaking cold winter, the energy giant raked in a £356million profit from households during the first half of this year - up 3.2 per cent on 2012.

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  • nickthompson  |  December 04 2013, 1:31PM

    Meanwhile let us rejoice at the way our hard earned tax is being spent.------- George Osborne gives £30million and his seal of approval to London's Garden Bridge.

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  • nickthompson  |  December 04 2013, 9:20AM

    Pink_Diesel: OR GREED.

    Rate   14
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  • Pink_Diesel  |  December 04 2013, 8:57AM

    Energy prices are about the same in Europe. It is he global price for gas and oil that determine UK energy prices - not some small addition on the cost for social and green measures.

    Rate   -21
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