Should The UK Government Cut VAT And Green Levies On Energy Bills?

This topic has been a forum of discussion in the UK. Before analyzing the decision of whether cutting VAT and Green Levies on energy bills is a good option, one should have a good idea about the definition of VAT and Green Levies. VAT refers to Value Added Tax that is given by the producers to the government. This is an indirect tax that we pay on the goods and services we receive.

What are Green Levies?

Green levies are broadly defined as policies made for the betterment of the environment. They stand for social and environmental policies. It has warned the environmental analyst that if the UK government decided to cut VAT and Green levies on electricity bills, it might store issues for the future. The houses that function on high energy and the dream of net zero emissions of carbon will be hampered.

If there is an energy bill crisis, it should be tackled by stopping energy wastage and investing in clean energy rather than cutting VAT and Green levies. If anyone does not agree to this, then they are only making the public addicted to fuels and gas that would cause environmental damage.

Importance of Green Levies

The green levies support renewable energy and encourage energy efficiency measures. This method has saved about £11.7 bn on the bills of poor houses and has given efficient energy worth £1bn a year, but now the danger of cutting the green levies awaits. The cost of green levies that support energy efficiency is falling from £172 last year to £153 currently.

One of the directors of the Regulatory Assistance Project, Jan Rosenow, said that the green levies have helped to reduce energy bills, and cutting them now will end up in people paying more afterwards. The then Prime Minister David Cameron asked to cut the green levies before, which resulted in it increasing the domestic Energy bills to about £2.5 bn a year. Even if the poor decision of Cameron resulted in a loss, it also saved energy bills of about £1000 a year. This shows the potential of green levies.

In recent years, the cost of renewable energy has drastically reduced, along with the cost of wind turbines and solar panels. Although the cost of gas is touching the sky, the companies producing renewable energy have made valuable contributions to the reduced electricity bills in the UK. The Chief Representative of the UK's Wind Industry agrees that cutting green levies on energy bills is a bad option and the misconception that renewable resources are responsible for the high energy prices needs to be corrected.

It is important that the UK should give up fossil fuels and provide security to energy consumers by making them a renewable generation that understands the importance of renewable energy. The soaring high and uncontrollable gas prices can be saved by investing in renewable energy and moving towards a green future. Green energy involves power generation at a very low cost. The Ofgem published a report that said that gas prices should be held responsible for increasing energy bills rather than renewable energy sources.

The production of gas from fossil fuels in the North Sea is not the solution you should look for. The production of gas would not reduce the prices of energy bills in the UK as there is huge competition and demand for gas in the international market. Hence it is important to clear out the misconception about renewable energy and green levies.

Conclusion

Green levies have helped to reduce energy bills, so cutting them out would not solve the issue of soaring high energy bills in households.