THE BLOG
04/07/2013 11:42 BST | Updated 03/09/2013 06:12 BST

Stop the Energy Swindle

How to tackle the rising cost of living will be a key dividing line at the next election. Most people are feeling the pinch, whether it's the cost of filling up the car or picking up the weekly shop. This is particularly acute with stagnant wages being outstripped by inflation.

But the top concern for most families is the ever-growing cost of heating and lighting their home. And unfortunately, the mainstream parties support policies that are increasing energy bills.

Most people will not even have heard of the some of the taxes and regulations that make their bills more expensive. There's the EU Emissions Trading System, for instance. Then there are renewable energy subsidies, in particular financial support for offshore wind turbines - much like the one David Cameron and Ed Davey visited today in Kent. Once you add on Value Added Tax, things get even more expensive.

According to energy regulator Ofgem, those taxes - VAT and environmental charges - already add account for 11 per cent of a typical family's gas bill. They also make up 16 per cent of their electricity bill. It all means that energy taxes cost a typical family nearly £200 a year.

Analysts at Liberum Capital estimate that £160.6 billion in capital expenditure is needed in the energy sector between 2012 and 2020 to meet Government targets. Another £215.4 billion is then needed between 2021 and 2030.

By 2020, Liberum Capital estimates that meeting those targets will mean total power costs rising by 29 per cent above inflation by 2020 and 100 per cent above inflation by 2030.

There are alternatives. For instance, the United States is enjoying cheap energy thanks to the expansion of shale gas. We could enjoy similar benefits here. A report by the Institute of Directors found that our dependence on gas imports could be reduced from 76 per cent to 37 per cent in 2030.

We should also copy the other European countries that are cutting subsidies for expensive sources of energy like wind turbines and solar panels. Furthermore, we need to scrap the carbon price floor for the EU Emissions Trading System. British families and businesses shouldn't have to pay a premium to move emissions to other countries. That does nothing to help the environment. But it does hurt our companies and increase energy bills.

Politicians like people to think that they back consumers and stand up to the energy companies. But their policies actually mean hard-pressed families have bigger bills while energy companies make even bigger profits.

That's why the TaxPayers' Alliance has today launched Stop the Energy Swindle. You can use our tool to find out how much of your energy bill is tax and then let your MP know how you feel about high energy taxes at energyswindle.org.