Jonny Marshall

The Government is reportedly drawing up plans to overhaul car taxation in the upcoming Budget. This is welcome and long overdue – transport taxes have failed to keep up with the switch from Internal Combustion Engines (ICEs) to Electric Vehicles (EVs). 🧵

buff.ly/nGl374z

This sounds promising: grappling with a big long-term tax issue. Though the suggested scale would be similar to the £200 EV VED rise that happened this April. And if the VAT 'pavement tax' were abolished at the same time, that might offset most of this cost for drivers without home chargers.

Through successive governments a shadow tax and benefits system has emerged in energy bills worth £7bn. New report out today says government should fix this system, and reduce energy bills for households. www.resolutionfoundation.org/app/uploads/...

Splitting the bill • Resolution Foundation This note looks at the factors behind stubbornly high energy bills and how ministers could act to ease pressure on households. It considers how change can be enacted to work for vulnerable families an...

Much more in our report here 8/8 www.resolutionfoundation.org/publications...

By spreading the costs of these policies over the general tax base, nearly three-in-four British households would be better off. We would also spur on the net zero transition by making electricity cheaper, and avoid landing HMT with an unmanageable bill 7/

Taxpayers and billpayers are of course the same people. But the distributional consequences of raising money through bills or taxes is very different 6/

We think that the costs of welfare policies and (some) energy policies should be moved from bill payers to taxpayers – and carbon taxes that have served their purpose should be cut. 5/

And Government should be looking to act as energy bills are where the cost-of-living crisis continues to hit family budgets.

Bills are 25% higher in real terms than they were before the energy crisis and they represent one of the biggest costs families face 4/

We should look to change these stealth taxes. But any changes here need to work for vulnerable households, for the net zero transition, and be realistic within the Government’s fiscal rules 3/

Energy bills are too high, and one of the main drivers of this is the ~£7 billion cost of policies that land on them. This is, in effect, a secret tax-and-benefit system – but one funded badly 2/

Splitting the bill • Resolution Foundation This note looks at the factors behind stubbornly high energy bills and how ministers could act to ease pressure on households. It considers how change can be enacted to work for vulnerable families an...

💡💡💡 New @resfoundation.bsky.social note out today on cutting energy bills – and how paying for some costs on bills differently will see the poorest households more than £100 per year better off 💡💡💡 1/

www.resolutionfoundation.org/publications...

The Plan aims to address the twin challenges of reducing energy bills while also driving decarbonisation of home heating. The Government is pledging £13 billion to make homes cleaner and cheaper to heat – but not enough to overhaul the entire housing stock. This means that some prioritisation is needed. The ''who, how, and what,'' are all key considerations.

Poorer households will get a greater living standards boost from energy efficiency improvements. While no more likely to live in badly insulated homes, these households spend twice as much of their budgets on energy bills - 10 per cent for the poorest quintile compared to 5 per cent for the richest. So capital spending should be focussed on them.

Almost all low income households could be made eligible through a system based on incomes, three times more than through welfare passporting or based on area. Grants should target measures with the biggest impact: loft insulation, filling cavity walls, solar panels. These would lock in permanent energy bill savings of 14 per cent for those in the poorest fifth of households (in homes with an EPC rating of D or lower).

The Government has to balance spending on insulation and clean heating. Acting to reduce bills will mean less to spend on rolling out heat pumps. But this doesn’t mean giving up on clean heat, far from it. Ministers should be bolder with regulations to accelerate the roll out of heat pumps.

The Government has allocated £13 billion to the Warm Homes Plan. But what should it do with the money?

Priority should be given to the poorest households who spend twice as much of their family budgets on energy bills as the richest households.

Read more👉 buff.ly/PGjbi38

Interesting energy consumption stats out today - electric cars and domestic heat pumps now account for more than 5% of total electricity use www.gov.uk/government/s...

If govt wants lower bills, especially for lower income households, it needs to pay for it through tax rises right now. Fiddling around with standing charges is deck chair rearrangement - and people who end up with higher bills will make more noise than those who get a cut from this.

Other ways of cutting bills (such as nil-rating VAT) are seemingly being discussed in Government too, but we’ll have a @resfoundation.bsky.social note out next month on how to cut bills in a way that works both distributionally and environmentally

And those that do save would see smaller average savings than those who lose out - £67 per year compared with £90 per year.

Any potential benefits wouldn’t be focussed on lower income families – just 18 per cent of the poorest fifth of households could save £100 or more from a low standing charge tariff, a similar proportion to the richest fifth

The regulator can’t wish costs away: lower standing charges mean higher unit costs – penalising those with high energy demand and actively working against the net zero transition by making electric cars and heat pumps more expensive to run

Lower standing charges aren’t the answer to high energy bills: a tariff with a 50% cut in standing charges would only see one in six families save more than £100 on energy bills – 43 per cent would see bills increase

Unit prices relatively unchanged, but still way higher than pre-crisis levels. Higher unit prices are a big deal as we head into winter when families use most of their energy

Most of this change in energy bills being driven by an increase in standing charges, which are up for both gas and for electricity into Q4

The Plan aims to address the twin challenges of reducing energy bills while also driving decarbonisation of home heating. The Government is pledging £13 billion to make homes cleaner and cheaper to heat – but not enough to overhaul the entire housing stock. This means that some prioritisation is needed. The ''who, how, and what,'' are all key considerations.

Poorer households will get a greater living standards boost from energy efficiency improvements. While no more likely to live in badly insulated homes, these households spend twice as much of their budgets on energy bills - 10 per cent for the poorest quintile compared to 5 per cent for the richest. So capital spending should be focussed on them.

Almost all low income households could be made eligible through a system based on incomes, three times more than through welfare passporting or based on area. Grants should target measures with the biggest impact: loft insulation, filling cavity walls, solar panels. These would lock in permanent energy bill savings of 14 per cent for those in the poorest fifth of households (in homes with an EPC rating of D or lower).

The Government has to balance spending on insulation and clean heating. Acting to reduce bills will mean less to spend on rolling out heat pumps. But this doesn’t mean giving up on clean heat, far from it. Ministers should be bolder with regulations to accelerate the roll out of heat pumps.

How should the Government prioritise its £13 billion Warm Homes Plan budget?

Priority should be given to the poorest households who spend twice as much of family budgets on energy bills as the richest households.

Read more: buff.ly/PGjbi38

Great to see Guardian cover our research today - it's flats and smaller houses that are most at risk of overheating, so should be no surprise that vulnerable families will be more at risk.

Important to think about cooling homes as well as warming them!

No country for cold homes • Resolution Foundation The Government’s imminent Warm Homes Plan aims to overhaul England’s housing stock so homes are cheaper and cleaner to keep warm. This note sets out how it can best work to improve living standards fo...

Full report here www.resolutionfoundation.org/publications...

Instead they can be effective at helping those on higher incomes bridge credit constraints that are currently holding back efforts to decarbonise homes

And at the Spending Review it was confirmed that £5bn of funding would be loans. Loans are good for meeting fiscal rules but less useful for poorer families than grants

Turning up the heat • Resolution Foundation Decarbonising home heating is one of the knottiest parts of the net zero transition, with big implications on families’ finances and behaviour. This report examines progress so far and discusses what ...

This doesn’t mean giving up on clean heat, far from it. Ministers should be bolder with regulations to shift the upfront costs of the heating transition away from the Exchequer (more on this in www.resolutionfoundation.org/publications...)

What – The Government has to balance spending on insulation and clean heating. These don’t have the same implications for living standards: some are far better at cutting bills and some much better at reducing emissions

How – The Government is toying with three approaches to ensuring grants reach vulnerable households. We find that one based on household incomes performs far better than using benefit eligibility or area-based eligibility

Who – while poorer households are no more likely to live in badly insulated homes, they will get a greater living standards boost from energy efficiency improvements. This means capital spending should be focussed on them