A daily blog on the thrills, spills, and frequent absurdities of the world's one and only 'non-imperial empire' - as Barroso himself called it - the European Union.

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Monday, 28 November 2011

David Cameron Should Copy the Latvians on Fuel Poverty

Cutting tax for energy companies may not be a popular solution. But it will save thousands of older people.

If the coalition is really committed to keeping the elderly and the impoverished warm this winter, it should look to Latvia. The country's one-hundred member parliament, the Saeima, has just voted 84-0 to scrap the excise tax on natural gas. The move will cost the government some seven million euros - substantially more than it sounds for the tiny Baltic nation - but at least it can rest assured that poorer famileis and pensioners will no longer be faced with crippling heating bills as the winter weather rolls in.

Can we say the same here? Three million pensioner households are already living 'in fuel poverty' according to the National Pensioners Convention, and last winter twenty-six thousand elderly people died due to the freezing conditions. The system intended to stop it all is at crisis point. The government has cut the basic amount to £300, on the premise that there is no money left (they still find billions for Spain, though, don't they? Or infrastructure in sub-Saharan Africa) and there are more expat Britons claiming it than ever before. The coalition has so far refused to pursue the most logical and effective option - a cap on fuel bills - on the grounds of promoting 'green' energy use (pensioners, you see, are famed for their flash sports cars and widescreen TVs).

So what else is there to do, but follow the Latvian example, and cut taxes on energy and energy production? I realise that many green activists and protestors may not like the idea of cutting taxes on 'big business,' but this will save lives. If energy companies can indulge their customers with lower prices, they will do - there's little else that they can do, in terms of competitive advantage, and expensive utilities is one area where the cheapest usually wins. All other considerations - customer service, satisfaction, etc. - aren't as important compared with the prospect of saving a few hundred quid.

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