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/

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

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

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