Energy bills Q&A: How the Coalition can strike a deal

Q. How will David Cameron fulfil his pledge to cut energy bills by the time George Osborne makes his Autumn Statement on 4 December?

A. He doesn’t know yet. He has promised to “roll back” green levies, which make up £112 (9 per cent) of the £1,267 average household bill. But he needs to that with the Liberal Democrats, who do not want to drop funding for renewable energy and home insulation or cut help for people in fuel poverty.

Q. How might the Coalition reach a compromise?

A. Nick Clegg argues that switching part of the cost on to general taxation would be fairer as the better-off would pay more. But Labour claims that would not touch the “Big Six” energy companies, which are accused of profiteering.

Q. How will Cameron make sure that his changes to green levies are passed on to energy customers in the form of lower bills?

A. That is a key question. He will be anxious to avoid any suggestion that energy firms will benefit financially from his proposals.

Q. What are the other options?

A. A shake-up of the Energy Companies Obligation, which funds energy-saving measures for people on benefits without cutting their cash support.