Homeowners set to be hit with new eco tax on gas as ministers plot to cut use in favour of electricity created using green methods to cut UK’s emissions

• Taxes on domestic electricity axed and new payments added to gas instead
• Plan to to entice people to replace their central heating boilers and cookers
• They want to encourage the take up of heat pumps, other electric alternatives 

Homeowners are set to be hit with a new environmental tax on gas as ministers try to force them to abandon the fuel in favour of green alternatives.

Climate change levies currently added to domestic electricity, which average £159 per year, will be axed and new payments added to gas to entice people to replace their central heating boilers and cookers.

They want to encourage the take up of heat pumps and other electric alternatives as they seek to make the UK net zero for carbon emissions by 2050, the Financial Times reported.

Ministers believe the change will mean no overall increase to bills and could help increase the take-up of electric cars as it become cheaper to charge them at home.

However the change, expected to be unveiled next month, comes at a time when UK gas prices have hot a record high. The price cap on domestic bills will rise next month to take in the surge and could rise further next April. 

Climate change levies currently added to domestic electricity, which average £159 per year, will be axed and new payments added to gas to entice people to replace their central heating boilers and cookers. 

 They want to encourage the take up of heat pumps and other electric alternatives using power generated in an eco-friendly manner as they seek to make the UK net zero for carbon emissions by 2050

There are also concerns about the cost of green alternatives. A new gas-fired boiler costs about £1,500 with installation, compared to up to £11,000 for an air source heat pump. Ministers expect these to come down in price as technology develops.   

But as it is, it remains a hefty outlay for families at a time when there are signs of a cost of living crisis expanding. 

The Department for Business, Energy and Industrial Strategy said: ‘We want to encourage people to take up technologies such as heat pumps and electric vehicles. 

‘Affordability for consumers and taxpayers will be at the heart of our approach.’

The money raised by the gas levy could be used to give subsidies to firms to increase the generation of green electricity from renewable sources like wind turbines, wave and tidal power, the FT reported.

It came as Chancellor Rishi Sunak today unveiled a £500million ‘household support fund’ as ministers scramble to head off a backlash over the end of furlough and the universal credit uplift.

The Chancellor said the funding would provide a ‘lifeline’ as the country faces a cost of living crisis over the winter, with supply chain chaos sending inflation and energy bills into overdrive. 

Councils will be given money to distribute to struggling families, so they can afford ‘essentials’ such as heating, food and clothes over the coming months.  

But the initiative was immediate slammed by Labour as an ‘inadequate sticking plaster’ designed to give the Tories cover as they kick off their party conference this weekend. 

Ministers have admitted that jobs will be lost after the furlough scheme ends today, although they insisted there are ‘opportunities’ with huge numbers of vacancies in the economy.

The £20 a week universal credit uplift is also ending – and by comparison was far bigger, costing the taxpayer the equivalent of £6billion a year.

The stamp duty holiday and the VAT holiday for hospitality businesses are closing as well.

The country faces a cost of living crisis over the winter, with supply chain chaos sparking petrol panic buying and sending inflation and energy bills into overdrive

Meanwhile, the energy price cap coming in on 1 October is going to push energy bills up by £140 on average, just as the supply chain crisis is sending food prices higher.

The government has always insisted that extra money and tax breaks were temporary during the pandemic, and pointed out it would require significant tax rises to raise that kind of revenue. 

Mr Sunak said: ‘Everyone should be able to afford the essentials, and we are committed to ensuring that is the case.

‘Our new Household Support Fund will provide a lifeline for those at risk of struggling to keep up with their bills over the winter, adding to the support the government is already providing to help people with the cost of living.’

The new fund will be in place in England over the winter, with people urged to contact their local council for access.

Source: Read Full Article