PM Vows To Roll Back Green Taxes On Energy

The Lib Dems have accused David Cameron of a "panicky U-turn" after he pledged to roll back green taxes blamed for driving up energy bills.

During another bitter row about energy policy with Ed Miliband at Prime Minister's Questions, Mr Cameron said he wanted to "get a grip" on green regulations.

The levies have been criticised by suppliers in recent weeks as they started to unveil a string of price hikes in household bills ahead of the winter.

Mr Cameron also told MPs the Government is to launch an annual audit of competition in the energy industry to see if the market can be improved.

The announcements came as he was mocked by the Labour leader over former Tory prime minister Sir John Major's shock call for a windfall tax on energy firms.

Upper hand: Ed Miliband and Ed Balls both mocked the PM

But they sparked deep coalition divisions to be laid bare as the Lib Dems, who oppose any change to green taxes, stressed their commitment to the environment.

A party source said: "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."

At PMQs, Mr Miliband claimed Sir John's intervention on Tuesday had exposed the Prime Minister's unwillingness to stand up to energy firms.

"Many people face the choice this winter between heating and eating. These are the ordinary people of this country who this Prime Minister will never meet and whose lives he will never understand," he said.

Mr Cameron replied: "I can tell the House today that we will be having a proper competition test carried out over the next year to get to the bottom of whether this market can be made more competitive.

"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 put in place as energy secretary."

Amid heated exchanges, Mr Cameron lashed out at the Labour leader, telling him: "Sir John Major is a good man, you are acting like a conman."

He said: "He left us a market with just six players, we have already seen seven new energy companies come into that market.

"So we need an annual audit of competition to make this market more competitive, something he never did when in office.

"And we need to roll back the costs that have been imposed on people's energy bills, part of which he was responsible for."

Tory Zac Goldsmith called party leaders "muppets"

After coming off worse in the bout with the Labour leader, Mr Cameron was also reprimanded by the Commons Speaker for repeating "conman" later in the session.

John Bercow said he had let it slide once but later told the Prime Minister the word was "frankly unparliamentary".

He said: "The Prime Minister is a man of great versatility in the use of language - it's a bit below the level. We'll leave it there, it's a bit below the level."

Downing Street sources said Mr Cameron had discussed his plans to roll back green levies with the Lib Dems in recent weeks.

More details are expected in the Chancellor's Autumn Statement in December.

According to Number 10, green levies will rise from £112 to £194 - or 14% of the typical household bill - by 2020 if there is no policy change.

The Lib Dems promised any detailed proposals would be examined but added that they would not let the Conservatives "undermine" their green credentials.

Details of the competition review will also be set out next week in the Energy Secretary's annual statement to the Commons.

It will be conducted by watchdog Ofgem, the Office of Fair Trading and the new Competition and Markets Authority.

The first review, which will look at prices, profit levels and any barriers to new suppliers trying to enter the market, is due to start within weeks and report next year.

Sir John's call for an "excess profits tax" on energy firms if there is a severe winter and vulnerable people were suffering has already been dismissed by Downing Street.

Officials say there are "no plans" for such a move, but Labour were delighted by the comments as they claimed the former PM was making their case for them.

Energy has now become central to the row over the cost-of-living and is unlikely to fade for weeks to come as the "Big Six" energy suppliers continue to unveil price hikes.

A Labour source suggested David Cameron's response to the issue was "panicked and totally inadequate".

Tory MP and keen environmentalist Zac Goldsmith also branded the party leaders "muppets" for their approach.

He wrote 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."

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