David Cameron attacked by all sides over ‘panic’ pledge to cut green energy taxes

Prime Minister accused by both Liberal Democrats and Labour of sacrificing green credentials he won in opposition

The Coalition is at war after David Cameron pledged to cut the £112 of "green taxes" on the average annual household energy bill.

The Prime Minister was accused by both the Liberal Democrats and Labour of sacrificing the green credentials he won in opposition because he is in a "panic" over soaring gas and electricity bills.

Mr Cameron rushed out two announcements while he was on the ropes at Prime Minister's Questions over Sir John Major's called for a windfall profits tax on the "big six" energy companies and Ed Miliband's pledge to freeze prices for 20 months. Mr Cameron promised to "roll back" green levies and taxes on energy bills and said the energy giants will face an annual "competition test".

The green tax review provoked a major row inside the Coalition. The Prime Minister's spokesman said he was determined to reduce green taxes "one way or another"-probably by next year. An announcement is expected in the Chancellor George Osborne's autumn statement on December 4.

Cameron allies insisted the review would take account of the need to safeguard investment in the energy industry and to protect vulnerable people. The green taxes include help for those in fuel poverty and with home insulation. Any move to reduce these would be highly controversial, especially as Sir John warned that many people would have to "choose between keeping warm and eating" this winter.

The Lib Dems threatened to veto any cuts to green taxes. "There is only one way this Government decides policy-with both Coalition parties agreeing," said a senior Lib Dem source. "We are not going to allow a panic U-turn in the middle of Prime Minister's Questions to change government policy. We are happy to stress test the need for every penny that goes on to energy bills. But we will not damage the environment; reduce help for people in fuel poverty or damage our renewables industry."

All options will be considered, including switching some green taxes from energy consumers to general taxation. Their £112 annual cost is due to rise to £194 by 2010, about 14 per cent of the average energy bill.

Mr Cameron's move undermined his pledge to head "the greenest government ever." Zac Goldsmith, the Tory MP and environmentalist, said: "In 2010, leaders fought to prove they were the greenest. Three years on, they're desperately blaming their own policies on the other. Muppets."

The "big six" will feel the heat in an annual review that will see other regulators brought in alongside Ofgem, whose performance has been criticised. The Office of Fair Trading and the Competition and Markets Authority will join forces with Ofcom. Their agenda will include the companies' profits as well as their prices; how they treat their customers and barriers to new firms entering the energy market.

Details will be unveiled next week by Ed Davey, the Lib Dem Energy and Climate Change Secretary, in his annual energy statement to the Commons.

Labour insisted that 60 per cent of the current green taxes were as a result of Mr Cameron's policies and denied his claim they were imposed by Mr Miliband when he was Energy Secretary.

In a speech in London on Thursday, Mr Miliband will claim Mr Cameron has lost control of his Government. "In weakness and panic, he made up a policy on energy, which means business as usual for the energy companies and which is already falling apart," the Labour leader will say. "This Prime Minister is too weak to stand up for the consumer and he always takes the side of the 'big six' companies."

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Bookkeeper / Office Co-ordinator

£9 per hour: Recruitment Genius: This role is based within a small family run ...

Recruitment Genius: Designer - Print & Digital

£28000 - £32000 per annum: Recruitment Genius: This Design and marketing agenc...

Recruitment Genius: Quantity Surveyor

£46000 per annum: Recruitment Genius: This property investment firm are lookin...

Recruitment Genius: Telesales / Telemarketing Executive - OTE £30k / £35k plus

£18000 - £35000 per annum: Recruitment Genius: This company specialises provid...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003
Barbara Woodward: Britain's first female ambassador to China intends to forge strong links with the growing economic superpower

Our woman in Beijing builds a new relationship

Britain's first female ambassador to China intends to forge strong links with growing economic power
Courage is rare. True humility is even rarer. But the only British soldier to be awarded the Victoria Cross in Afghanistan has both

Courage is rare. True humility is even rarer

Beware of imitations, but the words of the soldier awarded the Victoria Cross were the real thing, says DJ Taylor