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David Cameron to review green energy taxes Cameron 'panicking' over energy taxes, say Lib Dems
(about 1 hour later)
David Cameron has announced a review of green energy taxes after saying they had helped push up household bills to "unacceptable" levels. The Liberal Democrats have accused David Cameron of making a "panicky U-turn" after he announced a review of green energy taxes.
The prime minister told MPs he wanted to "roll back" environmental regulations and charges which he blamed on the last Labour government. The prime minister said household bills were at "unacceptable levels" and promised to "roll back" regulations introduced by Labour.
A new competition test for suppliers would also be established, he added. But a senior Lib Dem source said Mr Cameron had got "cold feet" on environmental policy promises.
But Labour leader Ed Miliband said the PM was "changing his policy every day" and what was needed was a price freeze. Labour also criticised the PM, but he promised to help cut people's bills.
Conservative MP Zac Goldsmith criticised both leaders, calling them "Muppets" over their attitude towards energy policy. Conservative MP Zac Goldsmith said Mr Cameron and Labour leader Ed Miliband were "Muppets" in their attitude to energy policy.
'Better deals' Three of the "big six" energy firms have announced price rises of between 8% and 10% in recent weeks and Mr Cameron has come under pressure to act, with Mr Miliband pledging to freeze tariffs if his party wins the next general election.
Mr Cameron and Mr Miliband argued about what to do about rising prices for the third consecutive week after former Prime Minister Sir John Major called for a windfall tax on excess profits made by the largest energy companies. On Tuesday, former Conservative Prime Minister Sir John Major called for a windfall tax on excess profits made by the largest suppliers.
Three have announced price rises of between 8% and 10% and others are expected to follow. 'Better regulation'
Mr Cameron said he agreed with his predecessor that current charges were "completely unacceptable" and said the government was already intervening in the market to force firms to put customers on the lowest tariff. During Prime Minister's Questions on Wednesday, Mr Cameron said he agreed with his predecessor that charges were "completely unacceptable" and said the government was already intervening in the market to force firms to put customers on the lowest tariff.
Rather than trying to dictate prices or influence the global cost of energy, he said the government's focus was on dealing with the aspects of energy bills it could control. But, rather than trying to dictate prices or influence the global cost of energy, he said the government's focus was on dealing with the aspects of energy bills it could control. Green taxes, he said, accounted for £112 of the average annual dual fuel bill and should be reduced.
Green taxes, he said, accounted for £112 of the average annual dual fuel bill and should be reduced.
"We need to help people pay their bill and we need to help to get bills down," he told MPs. "We need to roll back some of the green regulations and charges that are putting up bills.""We need to help people pay their bill and we need to help to get bills down," he told MPs. "We need to roll back some of the green regulations and charges that are putting up bills."
The review would be followed by a new competition test for the energy market to establish how it was functioning. The review would be followed by a competition test for the energy market to establish how it was functioning.
He added: "I want more companies. I want better regulation. I want better deals for consumers. But yes, we also need to roll back the green charges that he [Mr Miliband] put in place as energy secretary [under Gordon Brown]." Mr Cameron added: "I want more companies. I want better regulation. I want better deals for consumers. But yes, we also need to roll back the green charges that he [Mr Miliband] put in place as energy secretary [under Gordon Brown]."
But Mr Miliband said 60% of green taxes had been introduced by the current government and reminded the prime minister of his stated ambition to lead the "greenest government" ever. Downing Street said that Lib Dem Energy Secretary Ed Davey would set out details of the competition review next week.
But the Lib Dems, governing in coalition with the Conservatives, are keen to keep green taxes, arguing that they are essential to creating a sustainable and environmentally friendly energy supply for the UK.
A senior source told the BBC: "Everybody knows the Tories are getting cold feet on the environment. The Tories have put no properly worked-up policies in front of us.
"But we will not allow a panicky U-turn during PMQs to dictate government policy. The way to provide stable fuel bills now and in the future is not to make policy up on the hoof."
'Stress test'
The source added that Lib Dems in the coalition would not "allow the Tories to undermine our commitment to the environment, hurt the fuel poor, or destroy our renewable energy industry".
"Nick Clegg has always said that we should stress-test every policy to make sure that there isn't a penny more on bills than necessary," they said. "Of course, we will look at the specific details of what the Tories propose. That is coalition government."
In the Commons, Mr Miliband said 60% of green taxes had been introduced by the current government and reminded the prime minister of his stated ambition to lead the "greenest government" ever.
"He really is changing his policy every day of the week. His energy secretary says it is nothing to do with green taxes. And who is the man who said 'Vote blue to go green'? It was him.""He really is changing his policy every day of the week. His energy secretary says it is nothing to do with green taxes. And who is the man who said 'Vote blue to go green'? It was him."
According to government figures, environmental obligations account for 9% of the average £1,267 dual fuel bill, of which carbon taxes make up 2%. The cost of buying energy on wholesale markets makes up the largest proportion. at 47%.According to government figures, environmental obligations account for 9% of the average £1,267 dual fuel bill, of which carbon taxes make up 2%. The cost of buying energy on wholesale markets makes up the largest proportion. at 47%.
Energy firms say profits account for about 5% of an average bill.Energy firms say profits account for about 5% of an average bill.
Downing Street said details of the competition review would be set out next week in the annual energy statement to the Commons by Energy Secretary Ed Davey. Asked whether the Lib Dems were signed up to a review, Conservative Party chairman Grant Shapps told the BBC that they were "pragmatic" and wanted to see bills coming down.
The prime minister's official spokesman declined to give any detail of sanctions suppliers might face as a result, but said: "It would be wrong at this stage to rule anything out in terms of how we get more competition into the market." During a boisterous Prime Minister's Questions session, Mr Cameron was ticked off by Commons Speaker John Bercow for twice describing Mr Miliband as a "con man" in reference to his pledge to freeze bills for 20 months if Labour was elected.
BBC political editor Nick Robinson said he expected further details of the green review to be announced by Chancellor George Osborne in December's Autumn Statement.
However, he suggested one cabinet minister had told him earlier on Wednesday that such a review would not happen and that it seemed to be a case of "policy being made up on the hoof".
Asked whether the Lib Dems - strong supporters of de-carbonisation measures - were signed up to a review, Tory Party chairman Grant Shapps told the BBC that they were "pragmatic" and wanted to see bills coming down.
During a boisterous session, Mr Cameron was ticked off by Commons Speaker John Bercow for twice describing Mr Miliband as a "con man" in reference to his pledge to freeze bills for 20 months if Labour was elected.
Firstly, he contrasted the Labour leader with the former Conservative prime minister, claiming: "Sir John Major is a good man. You are acting like a con man."Firstly, he contrasted the Labour leader with the former Conservative prime minister, claiming: "Sir John Major is a good man. You are acting like a con man."
And in response to a question from Conservative MP Brian Binley, he said: "It simply is the politics of the con man to pretend that you can freeze prices when you're not in control of global energy prices, but the proper approach is to look at what's driving up bills and deal with it."And in response to a question from Conservative MP Brian Binley, he said: "It simply is the politics of the con man to pretend that you can freeze prices when you're not in control of global energy prices, but the proper approach is to look at what's driving up bills and deal with it."
The Speaker said this was "unparliamentary" language and "a bit below the level" expected of a prime minister.The Speaker said this was "unparliamentary" language and "a bit below the level" expected of a prime minister.
Conservative MP and environmentalist Zac Goldsmith criticised both Mr Cameron and Mr Miliband, writing on Twitter: "In 2010, leaders fought to prove they were the greenest. Three years on, they're desperately blaming their own policies on the other. Muppets."Conservative MP and environmentalist Zac Goldsmith criticised both Mr Cameron and Mr Miliband, writing on Twitter: "In 2010, leaders fought to prove they were the greenest. Three years on, they're desperately blaming their own policies on the other. Muppets."