Response to the Treasury’s invitation for feedback on the interim report of its net zero review
The Treasury has been reviewing the costs associated with moving to a net zero economy by 2050, and how these may be distributed. It published an interim report in December 2020, on which it invited feedback. This is our response, which makes 6 core recommendations:
Recommendation 1: the Government should move more of the burden of policy costs from bill levies to general taxation.
Recommendation 2: rebalancing policy costs between electricity and gas would be environmentally progressive but may be socially regressive. We encourage the Government to think through the distributional implications carefully before considering such an option.
Recommendation 3: we encourage the Government to make quick progress on removing small supplier exemptions from participating in the ECO and WHD schemes.
Recommendation 4: per meter cost recovery is more regressive than per unit, and should be avoided. The Government should make a binding commitment that the Green Gas Levy should be recovered on a per unit basis from introduction.
Recommendation 5: the Government should re-introduce regular reporting of the cumulative impact of energy policies on consumer bills. This should be sufficiently detailed to allow for public understanding of the distributional impacts of policies, and whether they are offering value for money.
Recommendation 6: achieving the net zero emissions target will only be possible if we inform, protect and support people with the changes that we all have to make to our homes. The Government should make consumers a Net Zero Homes Guarantee that delivers this.