Rishi Sunak should reject proposal to quadruple tax on heating homes

London, 3 December: Net Zero Watch has called on the Chancellor Rishi Sunak to reject the Climate Change Committee (CCC) proposal to quadruple the tax on gas heating.

The Climate Change Committee (CCC) yesterday published its review of the COP26 conference and the key outcomes of the Glasgow Climate Pact.

It latches on to the agreement's wording that countries should “phase-out of inefficient fossil fuel subsidies,” recommending that the UK Treasury should increase VAT from 5% to 20% on natural gas for home heating and hot water.

Reduced rates of taxation are a perfectly legitimate means to reduce the cost of living and encourage economic growth. In this sense they are not only “efficient” but compassionate and humane.

They are quite different from the real subsidies consumer have to pay via their energy bills and which are given to wind farm investors and other renewable investors, now costing consumers £10 billion per year.

Since the CCC’s proposal for an increase in taxation on natural gas would be applied to the household bill after the imposition of other climate related levies, the overall effect on the cost of warmth and hot water to households would be severe.

The fuel poverty charity National Energy Action has warned that average domestic energy bills have already soared by over £230 per customer compared to last winter. It warns that the government's plan to further raise the so-called price cap in April could see the average combined domestic energy bill increase by a further £550 per year.

Dr John Constable, the Net Zero Watch energy editor, said:

It has long been clear that Lord Deben and his Climate Change Committee give too little thought to the cost implications of green policies, but this proposal for a huge increase in the cost of household heating and hot water suggests a degree of indifference bordering on cruelty.

It would also be, of course, politically suicidal. No government would long survive the imposition of this new heating tax.”

Dr Benny Peiser, Net Zero Watch director, said:

The Climate Change Committee's proposal to quadruple the tax on gas heating is deeply concerning for people across the country, adding insult to injury for millions of families who are already struggling to keep their homes warm this winter.

Rishi Sunak should reject this ill-conceived plan and make every possible effort to reduce the burden of energy costs at this difficult time."