Tax blitz will cut energy bills by £50 - Osborne

A fresh crackdown on tax avoidance will fund £1,000 eco-handouts for homebuyers, George Osborne insisted yesterday. Mr Osborne said his Autumn Statement on Thursday would stick to the delivery of a “responsible recovery”. Despite signs of a sharp upturn in growth, he said there were still “lots of risks” and increasing borrowing would be “disastrous”.

Chancellor George Osborne: 'Money will come from dealing with tax avoidance'. Picture: Getty

Asked how grants to improve energy efficiency and cuts to environmental levies would be funded, he replied: “The money will come from additional taxes that we will raise from dealing with tax avoidance.”

Chief Secretary to the Treasury Danny Alexander said he hoped the coalition’s proposal would persuade Labour to drop its “barmy idea to con the public” with a 20-month energy bill freeze, should it win the 2015 general election. Mr Alexander said: “We are just doing it differently. So, rather than saying that bill payers should pay all these costs for other people to insulate their homes, we’re saying instead that tax dodgers should pay that because we’re going to use the taxpayer to pick up some of those costs and use that money to give people extra financial incentives.”

But shadow chancellor Ed Balls claimed the coalition’s new energy announcement would “not last 24 hours”, adding that the lack of answers from Nick Clegg and David Cameron made them look “a bit naked today”.

The package of changes to green levies will see the Energy Company Obligation (ECO) scheme halved by giving the “Big Six” power firms two years longer to hit targets.

EDF has welcomed the move – expected to trim average bills by £50 a year – and indicated it was not likely to hike prices again before 2015. In addition, anyone buying a home will be eligible for the £1,000 grant for energy efficiency measures. Mr Osborne dismissed the idea that energy companies will pocket the reduction in government levies without bringing down bills. He refused to give details of the tax avoidance crackdown but said people were wrong to be sceptical about whether such action really raised revenue.

The chancellor attacked Labour’s pledge of a 20-month freeze on energy prices if they win the election.

“We are doing it in the way that government can do it, which is controlling the costs that families incur because of government policies,” he said.

Ramsay Dunning, Co-operative Energy’s group general manager said: “We welcome the government’s decision to take some of the costs off customers’ bills, and to change the ECO scheme to help more people than previously.

“This is great news for customers who are struggling to pay their bills but it will also ensure that there is still investment in energy-saving improvements for homes and bills are reduced even further.”