07/06/2022

Billions of pounds awarded in tax credits for oil and gas exploration in Britain could have permanently cut the energy bills of two million homes by £342 a year if they had invested in insulation, according to an environmentally friendly think tank.

Last week, Rishi Sunak announced a 91% tax cut along with an unexpected tax on the huge profits of oil and gas companies. think tank E3G calculates that the tax credit will return between £2.5 billion and £5.7 billion over three years to oil companies, while a £3 billion energy efficiency program over the same period will result in an upgrade of 2.1 million homes, making them less Depending on the gas it will be.

Rising global gas prices are expected to more than double energy bills in the year to October and push a third of households into fuel poverty. Advocates of energy efficiency, including insulating the attic and walls, say it’s an unrepentant investment that lowers bills forever, lowers the carbon emissions that cause the climate crisis and creates jobs. The green groups said the chancellor’s grants to families, funded in part through the Windfall tax, are just “sticky tape”.

Another report released Tuesday by the Tony Blair Institute for Global Change (TBI) found that an annual investment of $4 billion “fixes the ceiling.”

The tax cut fits with official tariffs on fossil fuel subsidies, which the UK and other countries have pledged to phase out. It stimulates new oil and gas production, although a recent Guardian investigation found that the fossil fuel industry is already planning projects that would destroy the world’s chances of maintaining a livable climate.

Ewan Graham of E3G, who conducted the tax break analysis, said:[Sunak] Subsidies to oil and gas producers that harm the long-term energy transition. The government failed to understand what it would take to create a truly resilient and affordable energy system. Instead, it is willing to implement policies that support the interests of oil and gas companies rather than households in the UK.”

Ministers argue that more UK oil and gas supplies will increase energy security in the future, but the fuel is owned by companies and is mostly exported.

The Institute of Finance (IFS) has also criticized the tax exemption. “[It means] A heavily losing investment can be profitable after taxes. “It’s hard to see why the government should provide such massive tax support, even subsidizing economically unviable projects,” said IFS’s Stuart Adam.

The E3G analysis used investment estimates from the industry and data from the insulation plan backed by energy companies and corporations. Save £342 a year on renovated homes based on bills expected in October. The new tax exemption meets the support tariffs of the World Trade Organization and the International Monetary Fund, as well as the new legal definition of the United Kingdom.

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The TBI report calls for the creation of an independent “home energy service” that would provide every household with a simple, practical plan to reduce their bills and decarbonize, as well as interest-free loans. She said a 10-year plan would save bill payers a total of £100 billion compared to current prices, and similar approaches in Germany and Scotland are already working to lower bills.

“Short-term support, such as the measures announced last week, are important, but at a fraction of that amount annually [Sunak] “It could halve heating bills over the next decade and protect the UK from future economic shocks,” said TBI’s Daniel Newport. “He is currently distributing much needed raincoats – but very expensive. Now we have to fix the roof.”

Sam Hall, director of the Conservative Environment Network, which is backed by more than 100 Tory MPs, said: “It is disappointing that the chancellor has not announced any new measures to help those in the nearly 19 million poorly isolated households in the upgrade process. The Green Housing Grant scheme for England was launched in March 2021 and was judged by Parliament’s Budgets Committee as a “knockdown failure” after only about 47,500 of the 600,000 homes originally planned were upgraded.

The Ministry of Enterprise, Energy and Industrial Strategy was asked to comment.