Friday 9 July 2021 7:48 am

Payouts may be given to families to offset higher gas bills under new green government plan

Families may be provided with cash payouts to offset the cost of higher gas bills under a new green government plan.

Whitehall advisors have been discussing plans to compensate households for the more expensive gas bills which will arise from the government push to reduce carbon emissions.

The proposals will be aimed at encouraging households to switch to greener energy, according to reports.

In the plan, low and middle-income families could be paid a set amount each year – determined by how much the government raised from new carbon taxes, The Times reports.

The payments would be made regardless of a household’s emissions. Those who continued to use gas would have any increase to their bill covered by the payment – while those who switched to cheaper green energy could save the difference.

The proposed plan forms part of the Prime Minister’s pledge to reach net-zero without incurring more costs from taxpayers, and is based on a successful initiative introduced in Canada in 2018.

Boris Johnson has insisted that he does not want to see increased bills for households even while his government is working to achieve the UK goal of net zero emissions.

“We’ve got to make sure that when we embark on this programme that we have a solution that is affordable, and that works for people. This government is determined to keep bills low and that is a priority,” he told MPs this week.

The news follows reports by Britain’s fiscal watchdog that the cost of the UK reaching net zero by 2050 could be as high as £1.4 trillion.

The UK economy will require over £1 trillion in investment over the next three decades to hit the government’s target of making Britain carbon neutral, estimates included in the Office for Budget Responsibility’s latest Fiscal Risks report revealed. 

The fiscal impact of achieving net zero in an early action scenario would add 21 per cent of GDP
to public sector net debt by 2050-51, over £450bn in today’s terms.