By Paul Homewood
As well as the better known green taxes, which pay for subsidies to renewables, there is also the much more surreptitious emissions trading scheme, which is effectively a carbon tax:
The Net Zero Scrutiny Group’s letter said the UK’s carbon emissions trading scheme was ‘a hidden tax during a cost-of-living crisis’
A “hidden tax” adding up to £84 on energy bills must be slashed to help struggling households, Tory MPs have said.
Companies which produce energy by burning gas to create electricity are charged for every tonne of carbon they produce, under a government decarbonisation policy aimed at helping the country reach its “net zero” goal.
The cost is passed down to households through their energy provider, potentially imposing up to £84 a year at current rates, according to analysis in a letter signed by 33 Tory MPs and peers calling for carbon costs to be reformed.
The new figures come as Rishi Sunak faces pressure to help households struggling with rocketing mortgage rates, stubbornly high energy costs and an inflationary spiral pushing up prices.
The letter, coordinated by Craig Mackinlay, the chair of the Net Zero Scrutiny Group, says the UK’s carbon emissions trading scheme “could annually be adding as much as £84 to household bills; a hidden tax during a cost-of-living crisis.”
Mr Mackinlay said that carbon costs had to come down as the current policy was doing “nothing to improve our environment”.
On Sunday, the Telegraph revealed that the Government would reintroduce green levies, which add £170 to annual household energy bills and include costs of insulation schemes and older wind farm contracts, from July.
The day before, Grant Shapps, the Energy Security Secretary, told the Telegraph that households will be spared a levy on their energy bills to fund the hydrogen industry.
Sir Jacob Rees-Mogg, the former energy secretary and Sir Iain Duncan-Smith, the former Conservative leader, were among signatories to the letter, which said that power generators who create electricity from gas were passing down the carbon costs imposed on them by the Government to households.
“While the ETS was intended to encourage industry to decarbonise, costs have spiralled in an unsustainable way,” they warned.
Sir John Redwood, an environment secretary under Theresa May, who also signed the letter, said carbon costs should be suspended until the energy burden on households and businesses comes down.
“Carbon dioxide is a world issue, not a national issue,” he said. “We import things that require a lot of CO2 and claim that it’s nothing to do with us.”