David Cameron considers switching burden of energy bill cuts to the taxpayer

PM seeks to placate Lib Dems who oppose end of green levies

Taxpayers may fund the cuts in energy bills promised by David Cameron as he tries to deliver his pledge to “roll back” the green taxes which add £112 to the average annual charge.

Nick Clegg warned that he would block any moves by the Conservatives to scale back the element of the green levies which help people in fuel poverty, and fund home insulation grants and renewable energy like wind power.

But he opened the door to switching part of the £2.7bn cost from gas and electricity consumers to general taxation. He believes that would be progressive because a bigger share would be borne by the better off, and many poor people who face high energy bills do not pay tax.

But Labour claimed that the move would let the “big six” energy companies off the hook and some Tory MPs warned the Government would merely be “robbing Peter to Paul”.

The energy giants came under fire after it emerged that only one of the six, E.ON, will send its most senior executive to be grilled by the Commons Energy and Climate Change Select Committee next Tuesday. The other five will send more junior figures.

Ian Lavery, a Labour member of the committee, said: “It’s a disgrace that the same energy bosses who have imposed huge price rises are refusing to defend them in front of MPs.

“The energy bosses aren’t just turning their noses up at the House of Commons, they are also turning their noses up at millions of hard-pressed consumers who do not understand why they are facing even higher energy bills this winter.”

Pressure on Mr Cameron to act increased as Scottish Power announced that its dual fuel bills will rise by 8.6 per cent, only two days after it was ordered to pay customers £8.5m following an investigation by the regulator Ofgem into its doorstep and telephone selling.

Ed Davey, the Liberal Democrat Energy and Climate Change Secretary, criticised the increase and warned it would backfire as customers switched suppliers. “Companies like Scottish Power can no longer put up bills in this way with no consequences,” he said.

Although Tory ministers would prefer to rein back green levies without taxpayers picking up the bill, they may have to swallow that to secure a deal with their Coalition partners. Mr Clegg said: “I’m certainly not going to accept – I don’t think anyone would want us to accept – simply scrapping a whole system if levies, which, for instance, helps two million of the poorest households.”

He admitted the Coalition was split over green taxes but predicted it would reach agreement “about how we strike the right balance”.

Ed Miliband, whose pledge of a temporary price freeze has thrown Mr Cameron on to the defensive, said Mr Clegg’s plan would “shift the burden from ordinary [energy] bill payers to ordinary taxpayers.” Addressing the Federation of Small Businesses, Mr Miliband said: “The Government proposes a panicked wheeze paid for by taxpayers. We offer a real freeze paid for by the big energy companies.” He said annual energy bills paid by small firms have risen by an average of £10,000 since 2010.

Mark Reckless, a Tory MP, said: “I fear it may entrench those green levies in the long term by putting them on to general taxation.

“At least with electricity bills, it’s visible how much we’re getting ripped off by many of these green levies which are hugely expensive for very little reduction in carbon dioxide.

“I think putting those on to taxes is quite wrong when we’re paying enough tax already and we’re borrowing too much.”

Cold shoulder: Five bosses decline to answer MPs...

Sam Laidlaw

CEO, British Gas

Pay in 2012: £4.97m

Henri Proglio

CEO, EDF

Pay in 2012:  €1.6m

Alistair Phillips-Davies

CEO, SSE

Pay in 2012: Not disclosed

Keith Anderson

CCO, Scottish Power

Pay in 2012: £500,000+

Paul Massara

CEO, Npower

Pay in 2012: Not disclosed

... and one who will

Tony Cocker

CEO, E.ON

Pay in 2012: Not disclosed

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
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: Parts Advisor

£16500 - £18500 per annum: Recruitment Genius: One of the leading Mercedes-Ben...

Recruitment Genius: Software Developer

£27500 - £35000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Telemarketers / Sales - Home Based - OTE £23,500

£19500 - £23500 per annum: Recruitment Genius: Experienced B2B Telemarketer wa...

Recruitment Genius: Showroom Assistant

Negotiable: Recruitment Genius: This global company are looking for two Showro...

Day In a Page

Fifa corruption: The 161-page dossier that exposes the organisation's dark heart

The 161-page dossier that exposes Fifa's dark heart

How did a group of corrupt officials turn football’s governing body into what was, in essence, a criminal enterprise? Chris Green and David Connett reveal all
Mediterranean migrant crisis: 'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves,' says Tripoli PM

Exclusive interview with Tripoli PM Khalifa al-Ghweil

'If Europe thinks bombing boats will stop smuggling, it will not. We will defend ourselves'
Raymond Chandler's Los Angeles: How the author foretold the Californian water crisis

Raymond Chandler's Los Angeles

How the author foretold the Californian water crisis
Chinese artist who posted funny image of President Xi Jinping facing five years in prison as authorities crackdown on dissent in the arts

Art attack

Chinese artist who posted funny image of President Xi Jinping facing five years in prison
Marc Jacobs is putting Cher in the limelight as the face of his latest campaign

Cher is the new face of Marc Jacobs

Alexander Fury explains why designers are turning to august stars to front their lines
Parents of six-year-old who beat leukaemia plan to climb Ben Nevis for cancer charity

'I'm climbing Ben Nevis for my daughter'

Karen Attwood's young daughter Yasmin beat cancer. Now her family is about to take on a new challenge - scaling Ben Nevis to help other children
10 best wedding gift ideas

It's that time of year again... 10 best wedding gift ideas

Forget that fancy toaster, we've gone off-list to find memorable gifts that will last a lifetime
Paul Scholes column: With the Premier League over for another year, here are my end of season awards

Paul Scholes column

With the Premier League over for another year, here are my end of season awards
Heysel disaster 30th anniversary: Liverpool have seen too much tragedy to forget fateful day in Belgium

Liverpool have seen too much tragedy to forget Heysel

Thirty years ago, 39 fans waiting to watch a European Cup final died as a result of a fatal cocktail of circumstances. Ian Herbert looks at how a club dealt with this tragedy
Amir Khan vs Chris Algieri: Khan’s audition for Floyd Mayweather may turn into a no-win situation, says Frank Warren

Khan’s audition for Mayweather may turn into a no-win situation

The Bolton fighter could be damned if he dazzles and damned if he doesn’t against Algieri, the man last seen being decked six times by Pacquiao, says Frank Warren
Blundering Tony Blair quits as Middle East peace envoy – only Israel will miss him

Blundering Blair quits as Middle East peace envoy – only Israel will miss him

For Arabs – and for Britons who lost their loved ones in his shambolic war in Iraq – his appointment was an insult, says Robert Fisk
Fifa corruption arrests: All hail the Feds for riding to football's rescue

Fifa corruption arrests

All hail the Feds for riding to football's rescue, says Ian Herbert
Isis in Syria: The Kurdish enclave still resisting the tyranny of President Assad and militant fighters

The Kurdish enclave still resisting the tyranny of Assad and Isis

In Syrian Kurdish cantons along the Turkish border, the progressive aims of the 2011 uprising are being enacted despite the war. Patrick Cockburn returns to Amuda
How I survived Cambodia's Killing Fields: Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape the US

How I survived Cambodia's Killing Fields

Acclaimed surgeon SreyRam Kuy celebrates her mother's determination to escape to the US
Stephen Mangan interview: From posh buffoon to pregnant dad, the actor has quite a range

How Stephen Mangan got his range

Posh buffoon, hapless writer, pregnant dad - Mangan is certainly a versatile actor