Shale Taxes May Be Used To Pay For Cut In Green Taxes Under Tory Plans
Household energy bills are to be cut using a “tax bonanza” from fracking to strip out green levies, under Conservative plans.
With 40 new fracking sites due to be set up in the next two years, ministers want to use the tax revenue from operators to reduce bills for hard-pressed households.
Green taxes, which help pay for onshore wind farms, currently account for about 10 per cent of the average energy bill, and the proportion is expected to rise to a third by 2020.
However, George Osborne has indicated that he is looking for ways to reduce the burden on households of environmental levies, and ministers believe that fracking may provide a solution.
Any savings for consumers would be designed to counter Ed Miliband’s pledge to freeze energy prices for 20 months if he wins the next election. The average household energy bill is now more than £1,300, almost twice what it was a decade ago.
One Cabinet minister said: “Fracking should deliver major tax revenues, so one idea is to rely on that money to fill the gap left by reductions in the environmental levies.”