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’Green’ Budget 2009 fails both the poor and the climate 22.04.09

Consumer Focus today slammed the 2009 so called ’Green’ budget as failing to effectively tackle energy poverty, nor create green jobs and on top of it all push more poor people into fuel poverty.

Ed Mayo, Chief Executive of Consumer Focus, said: "Today’s ‘Green Budget’ will leave the millions of people struggling in fuel poverty feeling blue. Not only are Government’s promises on ending fuel poverty unachievable through the pitiful energy efficiency measures announced, the cost of meeting the important new climate change targets could push almost two million more pensioners and families into fuel poverty.

“Of course there are spending pressures and limits, but it is a nonsense to neglect energy efficiency and fuel poverty in a Budget so focussed on climate change. Introducing radical energy efficiency measures would have simultaneously helped lift millions of the poorest customers out of fuel poverty, reduced carbon emissions and created thousands of green jobs.”

Energy efficiency funding

The £435 million announced today to improve energy efficiency is split across three sectors – housing, business and public buildings. At least five times this amount is needed per year for housing improvements alone. There are huge problems with the effectiveness both of the major Government energy efficiency schemes – CERT and Warm Front - which are failing to adequately target the poorest households and hardest to heat homes. Top-up fees for the Warm Front scheme caused by an inadequate maximum grant are leaving many of the poorest households losing out. We are disappointed that an increase to the grant and overall funding have not been announced by the Chancellor.

Climate change target

Whilst it is right to set this target the Government has yet to take the action needed to achieve its binding target to end fuel poverty. Much of the funds for climate change prevention measures is likely to be raised through a levy on consumers’ energy bills. Without radical energy efficiency measures the poorest homes will continue to be hardest hit by such price rises. This will cause even greater hardship for the 5.4 million households currently living in fuel poverty and could push a further 1.8 million households2 into fuel poverty by 2022.

Action to end unfair energy pricing

We are disappointed that the Government has not committed today to helping millions of the poorest energy customers, particularly those paying by cash or cheque, who continue to pay more for their energy. The Government must ensure that Ofgem’s proposals to end unfair pricing translate into real benefits for vulnerable consumers and legislate to ensure social tariffs are the cheapest deals on offer to fuel poor households.

More sensible tax treatment of energy efficiency products

VAT reductions for energy efficient products would have provided an easy, cheap way for Government to help incentivize consumers to make their homes more energy efficient.

Green skills

We would like to see some of the funding promised for younger people to be retrained in sectors with strong future demand to be invested in developing green building skills. Providing the workforce with skills needed to make homes more energy efficient, would, as part of a major energy efficiency scheme, benefit consumers by reducing energy bills.

Peter Shield

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