‘Stop the green levies’ Iain Duncan Smith’s cost-cutting masterplan to avoid ‘disaster’

Iain Duncan Smith demands urgent action on cost of living crisis

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In an exclusive interview with Express.co.uk, the former leader of the Conservative Party suggested the extra taxes on people’s bills used to finance things like renewable projects should be scrapped. The green levy is made up of a number of taxes that help fund investment in low-carbon projects, including solar, nuclear and wind farms. They are also used to pay energy companies to insulate homes for poorer households.

But Mr Duncan Smith has claimed that knocking these extra costs off energy bills will stop them from rising further.

He said: “Suspend the green levies that people have to pay.

“Whatever your views are about green energy, the truth is, we have to keep the economy moving.

“That means, for the moment, we have to suspend those levies so for the next 12 months or so, the public will find that the cost no longer rises.”

Mr Duncan Smith has not been the only voice calling for this measure as bills continue to soar along with rising inflation.

The deepening cost-of-living crisis has prompted calls for swift Government intervention – but the green levies on bills still remain.

Robert Halfon, a Conservative MP and a member of the Net Zero Scrutiny Group, has claimed that green levies make up 25 percent of energy bills.

He told BBC Radio 4’s World At One programme: “The Government must do what they can to reduce energy bills – of course reducing VAT would help and it is an important gesture.

“But there is an elephant in the room, and that is the so-called energy tax green levies which amount to 25 percent of the electricity bill that we all pay.”

He added that this green tax should at least be cut while global gas prices are high.

But it was later revealed by industry regulator Ofgem that green levies only make up 9-12 percent of energy bills.

And analysts have warned that cutting the tax would be “self-defeating”.

Ed Matthew, campaigns director at the E3G thinktank, said: “Cutting green levies to tackle the energy bills crisis would be utterly self-defeating.

“It would only keep the UK addicted to gas for longer. The only cure is to ramp up clean energy investment and eliminate energy waste.

“That is the permanent solution to bring down energy bills. Any politician working against that is directly undermining the interests of their constituents and likely to be in the pocket of the fossil fuel lobby.”

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Jess Ralston, a senior analyst at the Energy and Climate Intelligence Unit, said cheap renewables funded through the Contracts for Difference green levy have softened the blow of rising gas prices.

She said: “They are actively helping to limit electricity price increases by reducing the need to import expensive gas from places like Russia and essentially funding Putin’s war.”

And in April, Prime Minister Boris Johnson said he would not scrap the green levy on electricity bills, rejecting calls from a number of Tory MPs.

He said: “I want to do everything we can to alleviate the cost of living, but there’s a lot of prejudice against the green agenda.”

Mr Johnson added: “Actually green technology, green, sustainable electricity can help to reduce bills.

“Overall, if you look at what we have done with renewables it has helped to reduce bills over the last few years and will continue to do so.”

Mr Duncan Smith did not agree, and the Conservative MP for Chingford and Woodford Green wanted to see other taxes slashed too to help with the cost-of-living crisis.

He told Express.co.uk: “Get taxation down on people, particularly on basic rate income tax – get that down because it’s too high.

“All our taxes are too high at the moment and lowering those taxes would help keep the economy moving, which is very important while we have high inflation. What we can’t do is have recession because that would be an utter disaster.”

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