Carbon tax freeze could see consumers protected from future energy price hikes
British consumers could be shielded from future price hikes on their energy bills later this year, if Chancellor of the Exchequer George Osborne identifies that he will remove carbon tax levied on energy providers during tomorrowís Budget, a number of consumer organisations have argued.
The Carbon Price Floor, was instigated last April, and was created in order to bolster the levels of green energy investment in the country and to financially penalise providers who incurred heavy pollution levels from their energy generation.
It has been an area of controversy thus far, as a multitude of consumer groups have argued that the costs of the tax are simply being passed onto bill payers, and there is now a growing consensus that Mr Osborne will announce a freeze on the Carbon Price Floor this Wednesday, in a move that could save consumers £50 each year on their bills.
Amongst the groups who have publically issued their support for a freeze in the Carbon Price Floor are the CBI, providers and consumer groups, Which? and manufacturing companies that are part of the EEF.
All have reiterated the sentiment that the tax is an ëunnecessary burdení on bill payers who are already having their wages ësqueezedí to the brink by the rising cost of living, and have called for the tax to be scrapped altogether.
However, many environmental groups have issued their support for the tax, arguing that any substantial reduction in its value could detrimentally affect the number of renewable power sources that are constructed in the future.
ëShould be scrappedí
It was estimated last year that an average of £5 was added onto consumer energy bills due to the presence of the Carbon Price Floor, which is far more than European energy companies have to pay as part of the continental initiative to tax carbon pollution.
The issue which consumer groups have taken to the most is that the tax is set to rise substantially over the next few years, which will inevitably be passed onto struggling households bills.
Consumer groups have now called for the tax to be scrapped altogether, arguing that the wellbeing of bill payers outstrips the importance of reducing carbon pollution levels.
"The Carbon Price Floor is set to become a bigger and unnecessary burden on struggling consumers in coming years and we think it should be scrapped," said Richard Lloyd, the executive director of Which?
ëCost of living crisisí
The rising prices of energy were an area of huge contention during the Winter this year, where many consumer groups publically criticised suppliers for raising bill costs in the midst of a ëcost of living crisisí.
A BBC study recently revealed that energy prices were the most worried about commodity by consumers, with food and fuel coming in second and third.
The survey was issued by ComRes, and emphatically found that the majority of people were far more apprehensive about their future energy bill payments than any other area of their outgoings, including important priority payments such as council tax.
Even more worryingly, just 280 out of 1000 people optimistically forecasted that they would be better off financially in a yearís time, with 190 predicting that it would get worst for them over the next 12 months and a monumental 510 identifying that they believe there financial situation will remain the same.
The findings will concretise Labourís criticisms towards the coalition government in recent times, with the party arguing that a ëbroken linkí between economic growth and living standards has arisen, that has meant that peoples wages have not picked up at the same rate as the UKís GDP has.
The Bank of England estimated that the economy will grow by 2.8% this year, though official forecasts for wages have been far more pessimistic, as they are set to continue to rise at a rate slower than inflation over the course of 2014.
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