Government takes aim at green levies, denies seeking energy price freeze

By William James and Sarah Young

LONDON (Reuters) – British Prime Minister David Cameron pledged on Friday to cut energy bills by reducing green levies but denied a BBC report that he had asked the country’s biggest gas and energy companies to hold prices steady until the 2015 election.

In an unusually sharp reprimand for the publicly funded British Broadcasting Corporation, a spokesman for Cameron’s office said the report which cited unidentified industry sources was utterly misleading.

The cost of everything from heating to rail tickets is the central focus of British domestic politics after the opposition Labour party tried to shift voters’ attention away from the return of economic growth onto a fall in their real incomes.

Details of a review of green levies, which include obligatory insulation for poor families and help with their bills, will be unveiled by Chancellor George Osborne in his December 5 Autumn Statement, a government spokesman said.

“I want to help households and families by getting sustainably low energy prices,” Cameron told reporters on the sidelines of a European Union summit in Lithuania on Friday.

“The only way you can do that is by increasing competition and rolling back the costs of some of the levies on people’s bills,” Cameron said. “That is what we are going to do.”

Some of the cost of those measures could be shifted to general taxation, Liberal Democrat Energy Secretary Ed Davey has said. Another possibility reported in local media is to extend the lifespan of the government’s energy efficiency scheme to reduce its annual cost to consumers.

Britain’s “big six” energy companies – British Gas owner Centrica, SSE, RWE’s npower, Iberdrola’s Scottish Power, EDF Energy and E.ON – supply 98 percent of the country’s homes.

Five out of Britain’s big six suppliers have this winter hiked their charges by an average of 8 percent, more than three times the rate of inflation.

In an attempt to appeal to voters struggling with rising prices and stagnant wages, Labour leader Ed Miliband has promised to freeze gas and electricity prices for 20 months if he wins power.

Cameron has called the pledge a gimmick and a con so a BBC report saying ministers had chosen a similar path – albeit in a more conciliatory tone – initially appeared to be major change in government policy.

“The government has not asked for a price freeze,” Cameron’s official spokesman told reporters. A second spokesman said the story was utterly misleading.

“People should wait for the autumn statement when we will spell out our plans to roll back the impact of levies on people’s energy bills,” the second spokesman said.

The BBC reported that ministers had asked the companies to keep bills on hold so long as there is no significant move in global wholesale energy prices. It continued to report that after the denial, which was also reported.

The BBC, which is funded by an annual 145.50 pound license fee on all British householders with a colour television, did not immediately respond to an email requesting comment.

“While David Cameron has in public been opposing an energy price freeze, in private he has been pleading with the energy companies to get him off the hook,” Miliband said. “We will freeze prices until 2017.”

A spokesman for RWE nPower said discussions were ongoing with the government on ways to reduce legislative and regulatory costs on energy bills.

(Additional reporting by Karolin Schaps; Writing by Guy Faulconbridge; Editing by Dale Hudson)

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Government takes aim at green levies, denies seeking energy price freeze