Prime Minister David Cameron split the coalition government yesterday by announcing surprise plans for a review of the green taxes which push up energy bills.
The Conservative leader responded to weeks of headlines over fuel prices by pledging to “get to grips” with levies costing consumers an average of £122.
But the Liberal Democrats immediately moved to distance themselves from the plans, with Chief Treasury Secretary Danny Alexander insisting there was “no commitment” to roll back on the taxes.
Today, Labour leader Ed Miliband will use a speech to claim Mr Cameron has “lost control” of his government, saying the review was made up in “weakness and panic”.
The issue of energy costs has dominated Westminster politics since Mr Miliband announced last month that he intended to freeze consumer bills.
The move was followed by steep price hikes by three of the six main suppliers, and this week Sir John Major intervened, calling for a windfall tax on the profits of the “big six”.
Quizzed about the former Tory prime minister’s suggestion in the Commons yesterday, Mr Cameron responded: “I want more companies, I want better regulation, I want better deals for consumers. But yes, we also need to roll back the green charges that he (Ed Miliband) put in place as energy secretary.”
If there was no policy change, green levies could rise from the current £112 to £194, or 14% of the typical household bill, by 2020.
But Labour said that £67 of the £112 levies were accounted for by measures introduced by the coalition. The money goes towards renewable schemes, energy-efficiency measures and cutting costs for poorer homes, as well as moves to lower the carbon output.
A Number 10 source said that the prime minister’s ambition to “roll back” green levies had been discussed with Lib Dems in recent weeks, and details would be released in Chancellor George Osborne’s Autumn Statement on December 4.
Mr Alexander, Lib Dem MP for Inverness, said: “There is no commitment to roll back environmental levies, quite the contrary, it is a very important part of our long-term strategy to tackle climate change and the security of our energy supply.”
Deputy First Minister Nicola Sturgeon said that if the SNP is returned to power at the next Holyrood election in 2016, the government would cover the levies for tackling fuel power and improving energy efficiency currently imposed on people’s bills.
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