UK Carbon Tax to Raise £4 Billion, Could Reduce Fuel Poverty by 87 Per Cent

According to a release by the Press Association (PA), ongoing research into the "energy bill revolution" has revealed that a staggering 6.4 million homes are facing fuel poverty in the UK. Worse still, this figure is expected to rise by 40 per cent, to 9.1 million, by 2016. This means that one in three homes will suffer from fuel poverty, by the aforementioned date.

Fuel poverty is a term commonly used in the UK to refer to a household that cannot, for differing financial reasons, afford to pay for heating bills. This can be a particularly difficult situation, especially in the middle of the winter season and households are forced to spend up to 10 per cent of their income in keeping the houses warm.

A "carbon tax" is tax levied on the carbon content of fuels. Essentially, as we burn fuels, we release carbon dioxide (CO2) into the atmosphere; the higher the level of CO2, the faster the rate of global warming. The Fuel Duty Escalator of 1993 and Climate Change Levy of 2001, introduced by the UK government, details the rules of the "carbon tax".

Estimates from the Express and the Independent, as well as other reports, suggest the government will raise up to £4 billion over the next 15 years and, if used properly, that amount could be used to lift 87 per cent of the nation's household out of fuel poverty. A union of 50 charitable organisations and businesses has urged the government to do just that.

The study by energy efficiency experts Camco suggests the funding could allow 600,000 homes a year to receive grants averaging £6,500 to install insulation and take other steps to make them more efficient. The move could create 30,000 to 50,000 new jobs directly, and up to 200,000 in the wider economy, cut £310 from household bills, and deliver up to four times the carbon reductions of the Government's planned energy efficiency programmes, according to the PA report.

"More people die every year in the UK from living in a cold home than die on our roads. Millions more struggle to make ends meet in the face of high energy bills. This is nothing short of a national scandal. Recycling carbon tax revenue to make homes super energy efficient is a fair and permanent financial solution to end the suffering," Ed Matthew, Director of Transform UK, was quoted as saying by the Express.