Use carbon taxes to slash fuel poverty

Money from carbon taxes should be used to retrofit the most vulnerable's homes

November 13, 2012

Almost 90% of at risk households could avoid fuel poverty by 2016 if funds raised through carbon taxes are used to install energy efficiency measures. According to the report commissioned by Consumer Focus, if the revenue from carbon taxes is fully utilised it could remove 87% of the 9.1 million people currently projected to be in fuel poverty by 2016. The report estimates that the government will receive £63 billion from carbon taxes over the next 25 years.

The report also suggested that using the revenue in this way would create up to 71,000 jobs by 2015 and up to 130,000 jobs by 2027.

‘The results suggest investing in such a programme generates greater macroeconomic benefits – more jobs and greater growth – than the same injection of spending through other government spending programmes or cuts in VAT or fuel duty,’ the report said.

‘The modelling outcomes therefore suggest that investment in the UK housing stock is one of the best investments possible in terms of boosting short-term employment and economic activity, and it also improves medium to long-term economic efficiency by reducing the economy’s dependency on imported gas.’