Ed Miliband is hatching a plan to shift £4.8 billion in green levies from electricity to gas bills — a move that would push up the average gas bill by £120 a year to subsidise heat pumps. The Telegraph has the details.
Government ministers and Ofgem, the industry regulator, have spoken positively about the plans, which experts calculate would add 15% to the cost of gas. …
Officials are likely to argue that the average household, which uses a mix of gas and electricity, would face no increase in overall bills as a result.
That is because the levies would simply be shifted from their electric bill to their gas bill, with the cost balancing itself out overall.
Homes with heat pumps would benefit most, saving £420 a year, but families who are heavily reliant on gas boilers and cookers could end up worse off.
The Telegraph also reports that Labour is plotting a ‘family bathtime tax’ that would force those with larger family homes and gardens to pay more. Here’s an excerpt:
Some firms are also pushing for a move to a seasonal pricing system, which would mean it costs more to use water in the summer than the winter.
Combined, the changes would disproportionately hit the bills of families with children and of households with gardens and swimming pools.
The Tories said the “punitive” plans would hit young parents hardest, accusing Labour of allowing a “tax on bathtime” and “waging war on family homes”. …
Under the system, also known as rising block tariffs, the rate people are charged per litre increases at intervals in line with their usage. Such a system would have to be underpinned by the rollout of smart meters to all homes so that companies could monitor their water usage in real time.
Around 60% of homes in England are currently metered, but the vast majority of those have a conventional meter from which periodic readings are taken. The Government estimates that only 12% have smart meters, which are connected to the internet and provide data directly to the utility company. …
Thames Water, which last week was fined almost £123 million for breaking sewage spilling rules, is leading calls to introduce progressive charging.
The heavily indebted company, which recently saw its executives’ bonuses blocked by ministers, plans a “wider rollout” of the scheme from 2027. It is set to trial a three-tier tariff, as well as an “excessive” use surcharge, with the extra revenue used to subsidise the bills of the poorest families.
Thames Water has said the plans would reduce bills for three-quarters of households by an average of 9% and encourage lower usage.
But the Tories called them “class war in action” and said water charges were set to be used “as a means of social engineering”. …
Four water companies – Severn Trent, South West Water, Affinity Water and South Staffs Water – are currently trialling progressive tariffs or will do so shortly.
Anglian Water, meanwhile, is trialling two seasonal tariffs for residents of Norwich, Lincoln, Northampton and Colchester.
Ofwat said all companies would launch trials of new pricing structures by 2030. …
Under the current system metered homes pay a fixed annual levy, called a standing charge, and a flat fee per litre for the amount of water they use. Meanwhile, bills for unmetered homes are usually calculated either based on their rental value or a size-based assessment of how much water they use.
In both cases, larger families and homes with gardens and swimming pools already pay higher bills in direct correspondence to their heavier usage.
Under the proposed new system, those households would face a disproportionate increase in costs on the extra water they use.
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