David Cameron today confirmed that green levies will be cut to reduce family energy bills in next week’s Autumn Statement.
The Prime Minister said the cost of environmental obligations would be “rolled back”, which experts think could trim £50 from an average bill.
The Government denied reports that it had asked the Big Six energy firms to rule out price rises until after the general election in an attempt to counter Ed Miliband’s popular pledge to freeze gas and power bills.
Treasury sources said the claims were “nonsense”, but they confirmed that George Osborne has sought guidance about the impact on household bills of possible announcements in next week’s statement.
Mr Cameron said: “I’ve said all along I want households and families to have sustainably low energy prices — now the only way you can do that is by increasing competition and rolling back some of the costs of some of the levies.”
He dismissed Mr Miliband’s idea of a 20-month freeze, saying: “That is a con, we’re talking about real policy.”
But Labour’s Caroline Flint accused him of resorting to “begging” companies to stop raising prices.
“David Cameron is desperately now running around the energy companies asking them to impose a price freeze when he has spent two months saying that the price freeze that Ed Miliband announced at our party conference is a con,” she said.
She added: “The truth is that only by legislating for a freeze can we guarantee that it will happen. David Cameron won’t do that because he’s not prepared to stand up to the big energy companies.”
Mr Miliband has announced more details of his plan to reform the gas and electricity market. Measures include a new regulator and an independent body to secure costly new infrastructure.
Launching the party’s energy green paper at Manchester Town Hall, he said: “In the past three years it has become clear to everyone but this government that the energy market is broken. Prices are rising year on year without justification. And Britain is not getting the investment in energy we need to secure supplies for the future.”
Energy industry spokesman Angela Knight today said the Big Six only controlled a fifth of people’s bills. “If you look at an average energy bill, only about half of it is energy. Then it’s made up of other things such as getting that energy to your house, there’s the levies that come through on to the bills, there’s some tax in there as well,” she said.
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“The only piece that actually sits within the control of the energy company themselves is the 18 per cent to 20 per cent of the bill for operating costs and so forth.”
