Householders will no doubt be cheered by news of the UK government’s action to cut energy bills. But the cheers will become more muted when they discover that bills are still rising and that the energy companies are interpreting how to implement it rather differently.
The reduction is being made by removing some of the green levies applied to bills to pay for policies designed to either reduce energy use or to encourage renewable energy development. These levies add between 6 to 11 per cent to household bills, depending on gas and electricity consumption.
David Cameron plans to make changes to two of these levies, the Energy Company Obligation, which commits energy firms to assisting with the costs and installation of better insulation, and the Warm Home Discount, which cuts bills for consumers over 75. The idea is to transfer some of the money raised to pay from these schemes to general taxation so the taxpayer rather than the energy consumer foots the bill.
This, says Ed Davey, the energy and climate change secretary, should reduce bills by about £50 a year, an assessment with which ScottishPower and SSE agree and have said they will pass on. Mr Davey has also said that homebuyers will also become eligible for a £1,000 contribution to insulation they put into their new home, paid via a corresponding reduction in the stamp duty paid on the purchase price.
That’s the good news. The less good news is that £50 represents just 3.6 per cent of the average annual household bill of £1,385 and is rather less than the average increase of about £120 which the energy firms have piled on in the last year. Some suppliers, such as British Gas, have said they will pass on the reduction in January, so cutting bills when they are at their highest. But others, such as SSE, have suggested it will not happen for their customers until April when the weather will be getting milder and bills lower.
Those who think that green energy is greatly over-valued will scoff that the government is just shifting the burden from one set of people to another. Those who think that more green energy and greening measures are needed will complain that this does little to achieve either.
Householders who are in neither camp but just want some relief from relentlessly increasing pressure on their budgets, may be unimpressed when they discover that their bills next year are still higher than they were at the start of this year.
The government may then discover that little of the credit it presumably hopes to gain from this announcement will be reflected at the ballot boxes.
What the move might do, however, is to cause the energy companies and the government to be more transparent about exactly what makes up electricity and gas bills, and hopefully be more sensitive to that information, and in this way it may deliver a bonus for bill-payers in the longer term.
Glasgow’s strength in adversity
Tears and talking cannot fully express the anguished emotions of the relatives of those who were killed and seriously injured in the police helicopter crash on top of the Clutha Bar next to the River Clyde on Friday night. Their pain underlines the fact that while a mechanical or functional failure may ultimately be discovered to be the cause of the helicopter falling from the sky, this remains a very human tragedy.
The pain is all the deeper because this has been, unlike a car or train crash, such a rare and unfamiliar kind of accident. No-one could possibly have imagined that doing something so ordinary as going to the pub for a drink with friends and to listen to some music could end in death and injury in such a manner. It is not something which can be
The extraordinary nature of the tragedy makes it all the harder for those who have lost relatives or friends to come to terms with it. Yesterday Glasgow continued to show its remarkable warmth and generosity of spirit to those affected. Among other offers of help, the announcement by the city council that a hardship fund will be opened was met with particular appreciation.
The helicopter has now been removed and work can begin on trying to establish the cause of the crash. Whatever happened, it seems to have been sudden and catastrophic, giving the pilot no time to make a MayDay call or to glide the aircraft to a less disastrous impact point. Knowledge of what happened may eventually ease relatives’ grief and shock. For the moment, it is to be hoped that the blanket of a city’s open-heartedness and compassion which has been thrown around them will be of some comfort.