PM and Clegg vow energy bills cut

David Cameron and Nick Clegg made a bid to blunt Labour’s attack over energy tonight by pledging to cut household bills by £50.

The Prime Minister and his Liberal Democrat deputy said they had a “credible” plan to reduce the burden on consumers by re-working green levies.

The cost of the Energy Company Obligation (ECO) scheme is set to be halved by giving power firms two years longer to hit targets, while other charges will be funded from general taxation in future.

But both men insisted that the shake-up will not compromise the Government’s environmental drive – saying people who buy new homes will be handed up to £1,000 to spend on energy-saving measures.

The announcement comes ahead of Chancellor George Osborne’s autumn statement on Thursday, where he is expected to give full details of the deal with the ‘Big Six’ companies.

There has been speculation that some of the suppliers will promise to freeze charges until 2015 – as long as wholesale market costs do not spike.

The coalition has been on the back foot over the energy issue since Ed Miliband said Labour would freeze prices for 20 months if he wins the election.

But in a joint article for the Sun on Sunday, Mr Cameron and Mr Clegg accused the Opposition leader of “taking people for fools”.

“Energy companies would hike up prices both before and after the freeze – so families would end up paying more.

“Not only that – by cutting investment in green energy, their freeze would threaten thousands of jobs.

“Labour’s con is the worst of all worlds. When an offer sounds too good to be true it usually is.”

They insisted the Government was putting forward “a serious and credible plan that actually works”.

“Later this week, we’ll announce further help: proposals that will be worth around £50 on average to energy bill-payers. We’re doing it without taking any help away from poor families or sacrificing our green commitments; and in a way that will keep Britain’s lights on in the long-term too.”

The pair added: “Alongside the Green Deal, when you buy a new home, you could get up to £1,000 from Government to spend on important energy-saving measures – equivalent to half the stamp duty on the average house – or even more for particularly expensive measures.

“It’s an all-round win: better insulation means cheaper bills; it’s how we cut carbon emissions; and it will boost British businesses who provide these services.”

Mr Cameron and Mr Clegg insisted no families on lower incomes would lose “a penny of help” with energy-saving measures.

Carbon reduction targets would also still be met under the new arrangements, they argued.

But shadow chancellor Ed Balls accused the Government of “half measures and panicky climbdowns”.

“After last year’s Budget, Chancellor George Osborne was forced into chaotic U-turns on the pasty tax, the caravan tax and the charities tax,” he wrote in the Sunday Mirror.

“This time the U-turns have started before he’s even made his speech.

“With four days until the autumn statement, we’ve already had panicky changes in government policy: on payday loans, cigarette packaging, energy subsidies and bank lending…

“On energy, the test for George Osborne is this: whatever he announces must both stop bills rising this winter and make the energy companies pay for it, not the taxpayer.

“We don’t need more half-measures and panicky climbdowns from the Omnishambles Chancellor. Only a price freeze will do.”

In an article for the Mail on Sunday, Tory backbencher Dominic Raab urged Mr Cameron to come up with “bold” policies to combat Mr Miliband’s offer in 2015.

“Conservatives should offer a triple-lock promise: to reduce the tax burden by 2020, not to increase personal taxes, and apply a one-in, one-out rule to any other new taxes,” he wrote. “To do so we must rein back further stubbornly high public spending.

“We can save £17.6 billion by steps including halving the number of Government departments and means testing more benefits such as winter fuel and bus passes.

“We should cut employers’ National Insurance and business rates to power job creation and level the high street’s playing field with online retailers.”

He added: “We should cut the basic and higher rates of income tax by a penny each. Long term, we should merge NI and income tax – and move to two rates at 15% and 35%, to boost UK competitiveness and reward hard work and ambition.”

EDF welcomed the move, and said it did not expect to raise prices again before 2015.

“EDF Energy’s decision to hold back the full impact of rising costs earlier this month has been validated by tonight’s confirmation that the Government will take action on energy charges,” the firm said in a statement.

“EDF Energy was the only major energy company to lessen the impact of higher charges in advance because it was confident that action could be taken to reduce costs.

“Following this news, EDF Energy expects to be able to maintain its lower price rise of 3.9%, as anticipated. That decision left customers with bills £80-96 lower than major competitors who had announced price increases.

“The company looks forward to hearing more detail from the Government, but does not anticipate that EDF Energy’s prices will rise again in 2014. Customers should expect other energy suppliers to follow EDF Energy’s lead by significantly lowering their prices.”

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PM and Clegg vow energy bills cut