Green taxes which are blamed for adding up to £150 to every power bill will not be cut as the result of a government review of rising energy bills announced today.
Dieter Helm, an Oxford academic and critic of wind and solar power, has been hired to lead the official review of energy bills – but has been told he cannot suggest any “detailed” changes to green taxes.
Prof Dieter Helm will lead the review
The company said the cost of green subsidies levied on bills has created “significant pressures” and suggested that it had no choice but to respond by raising prices.
The UK is legally obliged to reduce greenhouse gas emissions by at least 80 per cent from 1990 levels by 2050.
Green levies on bills are used to pay for loft insulation schemes and subsidies for renewable energy projects.
The Tories have repeatedly threatened to take action to curb the costs of these environmental taxes, which were reportedly branded “green cr*p” by former Prime Minister David Cameron in 2013.
Theresa May, the Prime Minister, pledged to cap energy price rises for 17 million households during the election.
The Government said the review “will deliver on Government’s commitment to consider how to keep energy costs as low as possible”.
The terms of reference of the review “will consider the key factors affecting energy bills, including but not limited to energy and carbon pricing, energy efficiency, distributed generation, regulation of the networks, innovation and R&D”.
But it added: “The review will not propose tax changes.”
The review also said that the Government’s “carbon targets need to be met, while concurrently ensuring security of supplies of energy, in the most cost effective way”.
But it said its recommendations had to be on “how these objectives can be met in the power sector at minimum cost and without imposing further costs on the Exchequer”.
Alex Neill, managing director of home products and services for Which?, said: “It is right to look at how to keep costs down, but yet another review is going to be cold comfort to the millions overpaying on their energy bills right now.
“Consumers need to see urgent action from the Government and regulator to tackle the lack of competition in the market and to ensure they are getting a good deal.”
Will Hodson, co-founder of consumer collective The Big Deal which focuses on bringing down energy bills, added: “Energy prices are an urgent problem for British households right now.
“With this review, the Government is simply kicking the can down the road.”