Grant Shapps said he doesn't want households to “unnecessarily suffer from this.” Photo: Jamie Lorriman for The Telegraph. Grant Shapps told The Telegraph they are exempt from tax on their energy bills to fund the hydrogen industry.
The Energy Security Minister said instead of imposing the expected £120 price increase on families, he prefers other means of raising funds for the government's Net Zero initiative.
This is because persistently high inflation is putting increasing pressure on household finances.
On Friday, Chancellor Jeremy Hunt announced additional measures to give mortgage holders more flexibility to cope with rising borrowing costs.
Mr Hunt and Rishi Sunak ruled out direct household bailouts after the Bank of England raised interest rates for the 13th consecutive time, raising them to 5% earlier this week as inflation remains at 8.7 %.
Last year, the government intervened to address the surge in electricity prices by freezing average household electricity bills at £2,500 a year.
In an interview with The Telegraph in which he laid out his plans for cleaner energy, Mr. Shapps said: “I don't want people's household bills to suffer because of this.”
Interview with Grant Shapps < p> Hydrogen is a gas that does not contain carbon and methane. In Whitehall, its use is seen as critical to help the UK move away from more polluting forms of energy in the fight against global warming.
Ministers are considering financial support for the hydrogen industry through the applicable tax. directly into electricity bills, as has been done for years with support for renewables.
However, Conservative MPs have expressed concern in recent months given how much electricity bills have risen in the past year following Russia's invasion to Ukraine, and amid the broader strain of high inflation.
In an interview, Mr. Shapps said the government wants to support the hydrogen industry, but he opposed a direct levy from households to fund it.
“What we need to do is make sure, A, that we can get our hydrogen industry going. Very, very important, huge export opportunities, great way to store energy, great way to power heavy industry and all that stuff,” he said.
“And, B, I don’t want household bills because of this, they were unnecessarily reduced.”
2105 Generation of electricity for the transition to zero balance
An energy bill going through parliament gives the government the power to introduce hydrogen, but Mr Shapps said the wording of the law made it clear that such a move would not apply directly to the bills.
He added: that there was a clause in the energy law that [introduce a fee for hydrogen], although it does not actually pass legislation.
“But I'm going to make sure that whatever this clause is, it makes it clear that this is not a collection directly from households. The method of financing must be higher up the chain. That's where we are.”
Discussions between Mr. Shapps' department, No. 10, and the Treasury are ongoing to finalize the new approach, and it is hoped that an alternative scheme will be agreed before the summer recess in Parliament in end of next month and send for consultation.
0409 Suggested hydrogen
A report from think tank Onward earlier this year estimated that the hydrogen tax could add £118 to annual household energy bills by 2030.
The report says the money saved by the Treasury from Instead, a system that will come into effect in 2026 can be used instead.
Any attempt to raise funds from a higher point in the energy distribution system could still result in higher prices, albeit in a less direct way. Whatever new funding approach is adopted, it should not be implemented until 2025.
This comes after Mr. Sunak admitted on Thursday that soaring interest rates and inflation may have “filled many with some anxiety and anxiety. …for you and your families.”
On Friday, Mr. Hunt announced that people would be able to extend their mortgages or move to interest-only payments within six months without impacting their credit score. , and forced withdrawals will be banned for a year.
But the Treasury remains resistant to new bailouts for those impacted by Bank of England interest rate hikes due to fears such moves will fuel inflation.
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Mr Hunt said ministers would be “totally determined and unwavering” in their quest to halve inflation this year, but the Liberal Democrats called the new measures a “sticky band-aid.”
Held A poll earlier this week found that 82% of voters said the government is doing a poor job of keeping inflation down – one of Mr. Sunak's five key promises.
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