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
Sport
sportWWE latest including Sting vs Triple H, Brock Lesnar vs Roman Reigns and The Undertaker vs Bray Wyatt
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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: Junior Web Designer - Client Liaison

£6 per hour: Recruitment Genius: This is an exciting opportunity to join a gro...

Recruitment Genius: Service Delivery Manager

Negotiable: Recruitment Genius: A Service Delivery Manager is required to join...

Recruitment Genius: Massage Therapist / Sports Therapist

£12000 - £24000 per annum: Recruitment Genius: A opportunity has arisen for a ...

Ashdown Group: Practice Accountant - Bournemouth - £38,000

£32000 - £38000 per annum: Ashdown Group: A successful accountancy practice in...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor