Introducing carbon taxes linked to a major energy efficiency programme is one of the most successful ways to create jobs, boost the economy and tackle climate change according to a new report published by Consumer Focus.

The new report, Jobs, growth and warmer homes, predicts that up to 71,000 jobs could be created by implementing increased energy efficiency infrastructure investment. The job boost would not only help alleviate unemployment, but also boost GDP by 0.2 percent by 2015, it said.  

Consumer Focus also predicts that a boosted energy efficiency programme has the capability of alleviating fuel poverty in 90% of affected UK households by reducing energy bills by at least £200 a year.   

In a stark warning to the Treasury, Consumer Focus notes that a robust and well articulated energy efficiency programme could provide more jobs and greater economic growth than other governmental spending programmes including cuts to the VAT rate and fuel duty.

The report also highlights a number of hidden benefits of investing in energy efficiency. For example, the industry relies on workers in the construction sector which has been heavily hit by the economic downturn. Significant investment in energy efficiency will help stimulate much-needed sustainable work for the sector. Interestingly, the report also notes that it would also reduce NHS expenditure on treating cold-related illnesses such as respiratory and coronary diseases.

Mike O’Connor, Chief Executive at Consumer Focus, said: “We need to make heating our homes more affordable, cut carbon emissions and achieve economic growth. Using carbon taxes to ensure our homes leak less energy represents a triple-whammy. This would simultaneously improve the quality of life of millions of people, slash carbon emissions and generate greater economic growth than other measures. Consumers will be paying these taxes through their bills. They can and should feel the benefit.

“Fuel poverty leaves millions of households having to cut back on essentials like food and heating to make ends meet. The Government’s current energy efficiency and fuel poverty plans will only touch the tip of this iceberg. However, Government has the opportunity to use the large and stable revenues from carbon taxes to deliver the most breathtaking and transformative energy efficiency scheme that we have ever seen.’

The potential of energy efficiency investment to tackle fuel poverty remains crucial. Currently six million UK households are affected by Fuel Poverty and, with fuel bills rising, that number is predicted to reach over nine million – more than one in three homes.

Consumer Focus has joined forces with a number of other organisations to form ‘The Energy Bill Revolution’ campaign. The coalition of organisations argues that a set amount of funds raised through carbon taxes should be set aside to support an energy efficiency drive. The paper notes that a range of different funding scenarios, from 35% to 95% of carbon tax revenue, could help dramatically slash fuel poverty by 75% to 87%. Consumer Focus is urging government to take a detailed look at its new research and seriously consider the proposals outlined.  

Ed Matthew, Director of the Energy Bill Revolution, concluded: “The Energy Bill Revolution is the biggest fuel poverty alliance that has ever been formed in the UK. We are united by our conviction that there is a financial solution which can end the suffering and generate more jobs than any equivalent investment. This is the Marshall Plan the UK needs to slash the energy bills of the most vulnerable and re-build the economy.”