Nick Clegg to thwart Tory plans to cut energy bills through chopping green taxes

George Osborne is under pressure after Labour pledge to freeze gas and electricity bills for 20 months if party wins election

Political Editor

Nick Clegg will block Conservative plans to cut energy bills through big reductions in green taxes before the 2015 general election.

The Deputy Prime Minister has agreed to a government review of the green energy measures the Tories blame for rising gas and electricity bills. But he will not allow them to cut subsidies to relieve fuel poverty, encourage householders to insulate their homes or boost renewable energy like wind power.

George Osborne is under pressure to respond to Ed Miliband's pledge to freeze gas and electricity bills for 20 months if Labour wins the election. The Chancellor may try to reduce bills for small firms but any significant pledge to reduce environmental taxes might have to wait until the Tories issue their election manifesto.

Mr Osborne was rebuffed by Mr Clegg when green taxes were discussed after Mr Miliband's promise by the Coalition's most powerful body, "the Quad", which also includes David Cameron and Danny Alexander, the Lib Dem Chief Treasury Secretary.

A senior Liberal Democrat source told The Independent today: "It's completely misleading for the Conservative right to blame rising energy bills on green taxes, which make up a very small proportion of the total bill. The point that Nick Clegg has repeatedly made in both public and private that if you want to keep the lights on; help those in fuel poverty; and insulate homes, it has to be paid for. You can do that through taxation or through bills but there is no free lunch to be had."

He added: "Of course, it would be irrational not to look at these policies, to stress test them but it is irresponsible to suggest they could be scrapped. The result in the long term would be higher bills, more people in fuel poverty and fewer homes with proper insulation."

Lib Dems believe their Tory coalition partners are raising "false hopes" that green taxes can be reduced. Chris Huhne, the former Lib Dem Energy and Climate Change Secretary, has accused Mr Osborne of "hypocrisy" because he has used the carbon floor price, a tax on fossil fuels used to generate electricity, to raise revenue. Lib Dem MPs claim the Tories have been rattled by Mr Miliband's pledge, which both Coalition parties have dubbed "a con", given the uncertainty over wholesale energy prices.

But the pressure on the Government to act increased yesterday when npower became the third of the "big six" energy firms to increase their prices. The company's 11.1 per cent hike for gas and   9.3 per cent rise in electricity charges are bigger than the 9.2 per cent increase announced by British Gas and 8.2 per cent rise posted by SSE.

Paul Massara, chief executive at RWE npower, denied his firm is profiteering. "We only aim to make around 5p in every pound in our retail business which we feel is a fair return for delivering reliable energy to consumers and for the risks that we bear", he said. "Although the Labour Party's proposed price freeze may appear superficially attractive it will not lead to lower sustainable prices going forward because it doesn't cut the growing costs of supplying energy."

Mr Miliband said: "It's another day, another 10 per cent price rise in energy. We've got a Prime Minister who is standing up for the energy companies, not hard pressed families. That's why we need Labour's price freeze. The reason prices are going up is because you've got a broken market and you've got companies that are overcharging people. "

Ed Davey, the Lib Dem Energy and Climate Change Secretary, described the npower increases as "extremely disappointing" but said Labour's "fixed price con" showed the party's "economic illiteracy" because energy firms could go bust if they were unable to raise charges when wholesale prices increased.

Start your day with The Independent, sign up for daily news emails
News
people
News
A survey carried out by Sainsbury's Finance found 20% of new university students have never washed their own clothes, while 14% cannot even boil an egg
science...and the results are not as pointless as that sounds
News
politicsIs David Cameron trying to prove he's down with the kids?
News
Cumberbatch was speaking on US television when he made the comment (Getty)
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Negotiable: Recruitment Genius: One of the world's leading suppliers and manuf...

Tradewind Recruitment: Science Teacher

Negotiable: Tradewind Recruitment: We require a teacher of Science in this com...

Recruitment Genius: Business Development Manager

£20000 - £30000 per annum: Recruitment Genius: This leading provider of waste ...

Recruitment Genius: Sales Representative

£18000 - £20000 per annum: Recruitment Genius: To promote and sell the Company...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea