Carbon Floor Price
The government’s new carbon levy is effectively a “stealth poll tax” that will only work to put up household electricity bills and hand a windfall to old nuclear plants, the head of energy giant E.ON has warned. The Treasury’s “carbon price floor” comes into effect on Monday and official estimates say it will add £5 to household bills this year, rising to about £50 by 2020. The tax is intended to provide an incentive to invest in new wind farms and nuclear plants by making it more expensive to run coal and gas plants that emit carbon. Tony Cocker, chief executive of E.ON UK, attacked the policy on the eve of its implementation, arguing that it simply “pushes up the price for electricity” and should be scrapped. He told The Sunday Telegraph: “The carbon price floor is a tax and it’s pretty close to a stealth poll tax. It’s not based on ability to pay, it’s based on the requirement to keep warm and light your house. It was put in place with the stated objective of encouraging investment in low-carbon energy but it certainly doesn’t achieve that objective – it’s just a tax for the Exchequer.” The carbon tax would also provide an unintended “windfall” subsidy for existing old nuclear and hydro plants, which is “completely unnecessary because it’s already been paid for”, he said. The Daily Telegraph revealed that newly appointed energy minister Michael Fallon had called the tax “absurd”. Mr Fallon has taken on a new role, as joint energy and business minister, working across the departments of Business and Energy in the hope of creating a unified approach.