Northamptonshire climate action calls for caution about parts of 'Net Zero Scrutiny' letter signed by MP Andrew Lewer

While slashing VAT found support there are other policies that garnered more concern

Tuesday, 4th January 2022, 5:40 pm
Updated Tuesday, 4th January 2022, 5:42 pm

A Northamptonshire climate action group has called for caution after MP Andrew Lewer appeared alongside 19 other MPs and peers proposed to cut taxes on the UKs energy bills, among other proposals.

Members of the newly-formed 'Net Zero Scrutiny Group', including Andrew Lewer, said that VAT on energy bills should be removed to combat rising costs nationwide.

They argued that, while a sharp rise in wholesale gas prices globally has contributed to the problem, the UK is causing prices to rise 'faster than any other competitive country' through 'taxation and environmental levies'.

Sign up to our daily newsletter

The i newsletter cut through the noise

The letter focused its concern on the savings that could be made by 'the lowest paid'.

Other environmental levies, used to fund renewable energy subsidy schemes, would also be axed under the proposal, reportedly knocking 23 percent off people's electricity bills and saving them £200 per year.

While many support an easing of quickly rising costs, some activists have warned the proposals go too far.

Jane Wood, chair of Climate Action – West Northamptonshire (CA-WN), said: "Many people will share the concerns the letter expresses about rising energy prices and the impact this is having on living costs and fuel poverty.

"The proposal to cut VAT on fuel bills is certainly one the government could consider. The Labour Party called for a similar VAT cut in October.

"However, removal of the Climate Change Levy on commercial fuel bills is much more complicated, because of the signals this would send about whether the government is genuinely committed to cutting emissions.

"The argument that this tax reduction would automatically result in lower costs to consumers is also questionable, with many variables which could affect whether individual businesses choose to pass on the benefit to their customers."

The CA-WN chair also pulled away when it came to other proposals made in the letter.

In particular she rejected the group's suggestion that the UK should increase its acquisitions of fossil fuels domestically, to avoid what they termed 'the risks of reliance on other countries for our energy needs, especially those hostile to us'.

Jane said: "What is really worrying is that the headline-grabbing message about energy costs is then used to justify calls ‘to expand North Sea exploration and for shale gas extraction to be supported’.

"This isn’t a solution to the high fuel prices people are struggling with right now, and since gas prices in the UK are driven by global markets, there’s absolutely no guarantee it would lower prices in the long term either.

"More importantly, undertaking new fossil fuel exploration would make it immensely challenging for the UK government to meet its legally binding net zero target and drive further rises in global temperatures.

The chair suggested that funds should instead be committed to helping constituents reduce the demand for energy by boosting efficiency and moving away from fossil fuels where possible.

In particular, she said a good policy would be to subsidise the energy efficiency of homes through improved insulation, and renewable forms of energy such as solar panels and heat pumps.

Alongside this, she suggested that the government should provide 'in-depth, independent information' for landlords and householders who want to make their homes more energy efficient.

In the meantime, Kwasi Kwarteng, the Business Secretary, continues to hold talks with major suppliers who are struggling to cope with record gas prices and the collapse of two dozen smaller companies.