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Trade associations call on government to tackle energy crisis

Chancellor Sunak is unveiling his Spring Statement to the House of Commons on Wednesday 23 March.

Chancellor Sunak is unveiling his Spring Statement to the House of Commons on Wednesday 23 March.

The Association for Renewable Energy and Clean Technology (REA) and the Electrical Contractors' Association have urged the government to take greater action to tackle the energy crisis.

Together with 25 charities and organisations, the trade associations have written to Chancellor Rishi Sunak asking him to provide immediate relief for households, as bill are set to surge in April when the price cap jumps 54%.

The letter – whose signatories include Octopus Energy, Ecotricity, Good Energy, BEAMA and the Energy Saving Trust – lays out a number of measures the government could bring in to help manage the rising cost of energy.

These include moving green levies into general taxation, a step the energy sector has been increasingly calling for and which MPs were said to be considering in 2021. It is crucial that the equivalent value of the levies are ring fenced during such a switch though, the letter adds.

VAT on energy bills should be suspended, saving households £100 a year, the letter continues, and the Warm Homes Discount should be expanded and increased, offering support for nine million households as fuel poverty increases.

Beyond this, VAT on domestic renewable and clean technologies should also be reduced, helping household and local authorities move away from fossil fuels. Solar Energy UK – one of the letters signatories – has been particularly vocal in calling for the move.

The government should establish an effective home insulation scheme to ensure all houses have an EPC rating of C as a minimum where technically feasible by 2024/25. This follows the closure of the Green Homes Grant scheme last year, which was designed to offer support for insulation along with technologies like heat pumps, but struggled with delays and administration issues.

Finally, the letter calls for an ambitious domestic heat decarbonisation policy to be delivered, including the expansion of the Boiler Upgrade Scheme so that it covers the installation of millions of low carbon heating devices.

“The Government must take action before it is too late. That is why, in parallel with increasing support for households being pushed towards the poverty line, the Government must urgently reduce the UK’s dependency on gas and other fossil fuels,” Dr Nina Skorupska CBE, CEO of REA said.

“That means boosting home insulation, replacing gas boilers with green alternatives, and ramping up the installation of renewables and clean tech. This would support the transition to Net Zero, deliver new jobs and investment and protect consumers from volatile energy prices.”

The letter is the latest in a list of calls from charities, companies and political parties, asking the government to take action against rising energy bills.

Over the last month, power prices have become very volatile following the Russian invasion of Ukraine. They were already at record high levels due to high gas prices driven by a shortage across Europe together with a number of factors over the latter half of 2021, and are now expected to grow still further.

As such, analysts are predicting that the price cap could be increased again to over £3,000 in October, with this jump leaving 14 million people in Britain unable to pay their bills.

Chancellor Sunak is unveiling his Spring Statement to the House of Commons on Wednesday 23 March.

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