The green levy is here to stay

We thought we may have to wait until the Chancellor’s autumn statement to learn the fate of the green levies but it seems an agreement has already been struck. The ECO bill, which forms 50% of the green tax currently placed on energy companies, is set to stay but will be implemented more slowly and over a greater time period in order to cut energy bills.


It is hoped the ‘slowing down’ of the ECO (energy companies obligation) charge will reduce the average annual household bill by around £50 next year.  It has recently come under fire from the Prime Minister, who saw scrapping the green subsidies a way to alleviate the pressure on the energy companies and therefore take the financial strain away from the consumer.  While this may have reduced the annual household bill, many argued that it was ‘one step forwards and two steps back’, Nick Clegg referring to it as an ‘own goal’, hampering our pursuit of renewable energy and carbon emission targets.  This announcement comes after the PM received an open letter from academics, landlords and local authorities with hundreds of petitioners outlining the undeniable benefits of the green levies, and how critical they were for the economy and our future.


clegg cameronThe ECO scheme was initially being rolled out over 2 years, and is aimed at providing poorer households with insulation and other means of making their homes more energy efficient.  It is now proposed that it will take 4 years instead, cutting the costs in half so the saving can be passed directly onto the consumer.  In order to counteract this slowing of progress, the Tories and Lib Dems are currently in talks over a Warm Homes Discount, which will be funded through general taxation rather than adding to the big six’s burden.  Details of the Warm Home Discount are yet to be revealed but it’s likely that this will be a scheme similar to that of ECO, moving the country’s homes toward a more energy efficient future.


Naturally, many are comparing this move by the Coalition to Labour’s proposed plan of freezing energy bills for 20 months if they are elected in.  Labour have stated that this would save an average of £72 annually for each household, although the current Government don’t agree with the figures.


The Lib Dems are working tirelessly it seems to ensure that the Government’s green schemes and their work to meet carbon emission targets is not watered down and carries on regardless. The Warm Homes Discount is likely to be a compromise of the two parties and will hopefully be announced in the coming weeks in order to give homeowners some light at the end of the tunnel.