Wind farm tax hurts the poor

Details of a green fuel stealth tax - designed to encourage more wind farms and nuclear power - are emerging. But such a tax could hit poorer households harder. Think-tank Institute for Public Policy Research (IPPR) estimates 60,000 households could be pushed into fuel poverty by the move.

Good intentions

Designed to encourage more low carbon energy investment, this new tax commences in 2013 based on the 'floor price' of carbon emission permits. This floor price will begin at £16 but rise to £30 by 2020 - but the cost of this tax will, naturally, be passed onto consumers rather than the power companies absorbing them.

The IPPR even believes such a move could lead to lower prices elsewhere - some other European countries may not follow with their own similar programs - and, crucially, may not cut the amount of carbon emitted.

Switched on?

"The carbon price support scheme risks giving energy and climate change policy a bad name because it will do nothing to reduce carbon emissions, while piling more cost on to the shoulders of already hard-pressed consumers in the UK," claims Andrew Pendleton, IPPR associate director.

Pendleton wants the carbon floor lowered and he wants David Cameron to lobby other EU countries to insist they take similar measures. However, the EU is currently scrapping about what happens when new efficiency targets get met, meaning more unused carbon permits. Which will consequently push down the price of carbon!

So its a bit of a mess. And a real worry for those - the UK's poorest - who will spend proportionately much more on their fuel bills as a consequence in future.
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