Power failure: The Prime Minister is in a bind over energy prices, but cutting green levies is no way out

Mr Cameron has sounded the death knell of his once-vaunted green Conservatism


Few prime ministers enjoy their weekly session of parliamentary questioning, and David Cameron in particular has a pronounced tendency towards red-faced, Flashman-esque rages. Of his many appearances, though, yesterday’s pasting over energy prices ranks as one of the worst.

More than a month on from Ed Miliband’s pledge to freeze bills, Mr Cameron made up for his incoherence by lambasting his opponent as a “con man” – for which “unparliamentary language” he was reprimanded by the Speaker.

It may be true that the Prime Minister is in the invidious position of feeling pressed to match a proposal that, while superficially appealing, is both ineffectual and outright damaging. Nor was he helped by John Major’s surprise recommendation of a windfall tax, a plan hardly less harmful than Labour’s. Even so, Mr Cameron’s was a deeply unimpressive performance.

Worst of all, he responded by dropping a half-formed policy bombshell of his own. In this, sad to say, he has some form. At PMQs a year ago, almost to the day, the Prime Minister stated his intention to force utilities to put customers on the best possible tariff – a plan that was both news to the Energy Secretary and soon revealed as merely an appropriation of existing policy exaggerated beyond recognition (and reality). This time around, the incarnadine Mr Cameron sounded the death knell of his once-vaunted green Conservatism and announced a review of the environmental levies added to energy bills. Expect the promised “roll back” in the Chancellor’s Autumn Statement in early December.

In fairness, the call for a competition inquiry, unscripted or not, is to be welcomed. Utilities are rapidly overtaking the banks as our most vilified industry, yet there is little evidence – from, say, profit margins – that they are as exploitatively dominant as critics claim. On green levies, though, Mr Cameron is wrong on every count.

He is wrong to blame Labour for the levies’ existence. Not only did the Tories vote in favour of those created by the previous government; half of them were put in place subsequently, by the Coalition.

He is also wrong to buckle under the pressure of Mr Miliband’s populist agenda-setting. Without green levies Britain will struggle to fund the renewables infrastructure needed to meet legally enshrined carbon-reduction targets. Much-needed efforts to upgrade draughty and inefficient housing stock will also suffer. Neither is desirable; and neither is affordable.

Finally, the Prime Minister should not be setting out any policy before it has been thought through, let alone one so sure to prove contentious with his Coalition colleagues. If Nick Clegg’s recent remarks on free schools were a somewhat synthetic attempt at differentiation, this is the real deal. Having backed down on tuition fees and lost the argument on constitutional reform, the green agenda is the Liberal Democrats’ final shibboleth.

All of which adds up to a thorough-going horlicks. More than anything, stable energy bills rely on stable energy policy. Mr Cameron should know that.

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