MINISTERS are poised to ditch a new green tax that would make bills more expensive, the Sun on Sunday understands.
Plans for a Hydrogen Levy are set to be scrapped for fear of a Tory rebellion and public backlash.
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Energy Secretary Grant Shapps is said to have got “cold feet”, according to government sources.
The charge was announced as a way of funding further hydrogen production as ministers look to reduce the reliance on fossil fuels.
It is not due to kick in until 2025, by which time it is hoped energy prices will have stabilised after soaring prices following Russia’s invasion.
But fears the levy could still add £118 onto annual bills could now see it dropped when the legislation returns to a Commons vote.
One insider said: “It’s looking like the levy in its current form is going to have to. Too many MPs think it’s just too toxic when families are already struggling with bills.”
Recent analysis about the impact on people’s pockets by a centre-right think tank is said to have set alarm bells ringing in government.
Onward said households would shoulder an extra £3.5billion a year via the levy for ministers to meet their target of reaching 10GW of hydrogen production every year by 2030.
Jack Richardson, head of energy and climate change at the think tank, said last night: “It’s crucial that Ministers back the hydrogen industry, but it shouldn’t make households foot the bill.
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“Ditching the hydrogen levy would be a welcome move.”
A Government spokesperson said: “We’ve taken unprecedented action to drive down people’s energy bills, including covering around half of the typical household’s bill.
“Our plans will ensure access to cleaner, cheaper and more secure energy sources and we will consult on the detailed design before introducing any levy.”
