Energy and eco-handouts funded by tax avoidance crackdown, says Osborne

Moves to cut energy bills by £50 and energy efficiency grants of £1,000 for homebuyers to come in autumn statement

A fresh crackdown on tax avoidance will fund £1,000 grants for homebuyers to improve energy efficiency, George Osborne has said.

The chancellor said the coalition would keep the public finances under tight control as he gave details of a shake-up of green levies that could see £50 shaved off energy bills.

He said on the BBC's Andrew Marr Show that his autumn statement on Thursday would stick to the task of delivering a "responsible recovery". Despite signs of a sharp upturn in growth, he said there were still "lots of risks" for the economy and increasing borrowing would be "disastrous".

Asked how the energy efficiency grants and cuts to environmental levies on bills would be funded, Osborne replied: "The money will come from additional taxes that we will raise from dealing with tax avoidance."

Danny Alexander, the chief secretary to the Treasury, said he hoped the coalition's proposal would persuade Labour to drop its "barmy idea to con the public" with a 20-month energy bill freeze should it win the 2015 general election.

He said the new measures paid for by "tax dodgers" would also "not sacrifice a single gram of carbon" that the coalition was already aiming to save.

Speaking on Pienaar's Politics on BBC Radio 5 Live, Alexander said: "We are just doing it differently. So, rather than saying that billpayers should pay all these costs for other people to insulate their homes, we're saying instead that tax dodgers should pay that because we're going to use the taxpayer to pick up some of those costs and use that money to give people extra financial incentives.

"So, if you like, we're helping to take money off people's bills through the energy companies and we're paying people to take action to cut their own bills further."

But the shadow chancellor, Ed Balls, claimed the coalition's new energy announcement would not last 24 hours, and said the lack of answers from Nick Clegg and David Cameron made them look "a bit naked today".

He told 5 Live: "I think by Thursday George Osborne will have to come up with something more but this is not going to be good enough."

Balls added: "What's happened today is David Cameron and Nick Clegg, in a rather bizarre joint article in the Sun, have decided they're going to try and engage Ed Miliband on Labour's territory – pointing out the cost of living crisis, the failure of action on energy prices, the fact that most people are worse off not better off compared to 2010.

"But they've raised the issue and they've not got an answer and therefore … I think David Cameron and Nick Clegg both look together a bit naked today."

To laughter, Balls added: "That was not intended to be more than a metaphor."

As part of the package of changes to green levies, the energy company obligation (ECO) scheme will be halved by giving the big six power firms two years longer to hit targets. Other policy charges will be funded from general taxation in future.

EDF welcomed the move – expected to trim average bills by £50 a year – and indicated that it was not now likely to hike prices again before 2015.

In addition, anyone buying a home will be eligible for the £1,000 grant for energy efficiency measures, such as installing insulation or replacing the boiler. The sum could be even higher if the property needs a great deal of work.

Osborne dismissed the idea that energy companies would pocket the reduction in government levies without bringing down bills. "We are absolutely insistent that this is passed on … I am pretty clear with you that it is going to happen," he said.

He refused to give details of the tax avoidance crackdown but said people were wrong to be sceptical about whether such action really raised revenue. "This government has taken step after step and the amount of tax we collect from people who were previously avoiding their tax goes up by billions of pounds over this parliament," he said.

The chancellor attacked Labour's energy price freeze pledge, which has been dominating the political agenda since Miliband announced it in September.

"We are doing it in the way that government can do it, which is controlling the costs that families incur because of government policies," he said. "We are also doing it in the way that is not going to damage the environment or in any way reduce our commitment to dealing with climate change."

He went on: "It is all about providing people with carrots not sticks and I think that is the right way for this country to go green. By taking these additional measures we can afford to help the vast majority of people who do pay their taxes, have expensive electricity and gas bills and therefore want to have relief from the government."

Article Source : http://www.guardian.co.uk
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