Post Haste: We need to talk about the carbon levy

Britain has successfully built an ambitious clean electricity system, yet it retains a tax that helps make electricity over four times as expensive as gas—the very fuel we need to replace. The Carbon Price Support (CPS), introduced in 2013 to make coal uneconomical, levies a tax on fossil fuels used for generation.

Because gas remains the marginal generator for most of the time, this tax gets embedded into the wholesale cost of every megawatt hour of electricity sold, including clean power generated by wind and solar. In 2024, the CPS raised £440 million for the Treasury, but cost consumers around £1.6 billion on their bills.

This inflated electricity price directly sabotages electrification. It wipes out the efficiency advantages of heat pumps over gas boilers and creates friction at every point where electricity competes with fossil fuels. Abolishing the CPS is a fiscally efficient way to lower bills and accelerate the transition to clean energy.