Source: BBC Radio 4: Six O'Clock News
Date: 23/11/2011
EventDerek Lickorish warns about the cost of anti-climate change measures
Attribution: BBC Radio 4

  • Simon Gompertz: BBC personal finance correspondent
  • Derek Lickorish: Head of UK Government's Fuel Poverty Advisory Group

Female newsreader: The government says climate change policies, such as insulating homes and supporting renewable energy will add £280 to the average energy bill by 2020. However, the Energy Secretary Chris Huhne said that energy saving measures would eventually absorb the increase by reducing consumption and would, in the end, push bills down. Our personal finance correspondent Simon Gompertz reports.

Simon Gompertz: Measures to economise on energy and switch away from coal power stations are being paid for out of everyone's energy bills. They include free insulation for some, and subsidies for wind and solar power. But Chris Huhne says that by 2020, because of initiatives to promote energy efficiency, including insulating millions of homes, the overall impact will be a reduction of £94 on the average annual gas and electricity bill. Even so, a government advisor on fuel poverty, Derek Lickorish, points out that the cost of anti-climate change measures will bear heavily on low-income families.

Derek Lickorish: They spend disproportionately more of their income on energy than a better-off household. And it's exacerbated further because some of these levies are charged on a per-household basis, and very often the fuel-poor don't tend to use a lot of energy.

Simon Gompertz: A key element of the government's energy plan, the Green Deal, starting later next year, could help redress the balance, because suppliers will have to spend £1.3 billion a year upgrading poorer homes and those which are hard to heat. For most houeholds, the Green Deal will provide a way to have insulation installed without paying the upfront cost. Instead, the cost will be covered through their regular bills, out of the savings from using less energy.