Robert Buckley, Head of Relationship Development at Cornwall Insight said:
“The Spring Statement came against the backdrop of the tragic events in the Ukraine, which on top of causing untold human suffering, has left European energy markets and subsequently UK households exposed to significantly volatile pricing.
“While the government reinforced its pledge to provide typical households with up to £350 of support to help with April’s price rises, it is very likely that the increases in the Default Tariff Cap will be significantly greater than this come the Autumn. There will be growing pressure for more support, particularly for those who will not gain from the increase in the National Insurance threshold.
“But it is important to remember that providing financial support to help fund increasing bills is not the only lever available to shield households from high energy prices. The demand side announcements to remove VAT on domestic energy saving measures, such as insulation, solar panels, and heat pumps, could increase over time the number of households able to reduce their exposure to high energy costs from the public system, providing they have the wherewithal to pay for these services of course.
“While cuts to the costs of retrofitting could bring many benefits to consumers and the environment alike, it is important that the measures are matched by a government communication strategy, to encourage greater participation in the schemes.
“The Spring Statement did also provide more details on the government’s commitment to renewables. Policies including VAT being removed from wind and water turbines, the bringing forwards of green reliefs for business rates, as well as 100% relief for eligible low-carbon heat networks, are hopefully symbolic of the direction of thinking on net zero.
“We await the government’s energy security strategy, which we hope will work to ensure a secure energy supply, improve market efficiency and provide a mechanism to deliver net zero. The strategy needs to reinstate energy stability in the UK and reassure households and businesses that energy policy is working for them. The government must not underestimate its importance.”
Notes to Editors
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About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.