Taxpayers could end up shouldering the cost of David Cameron’s pledge to lower fuel bills, Nick Clegg indicated today.
The Deputy Prime Minister warned he would not accept the Tory leader’s plan to “roll back” green levies that add £112 to energy bills if it cost jobs or meant less help for poorer people.
In a round of interviews, Mr Clegg repeatedly said that one option would be to move part of the £2.7 billion costs onto general expenditure rather than scrap the levies altogether.
His proposal would help to reduce fuel bills but leave Chancellor George Osborne to find the money from cuts, taxes or borrowing.
Mr Clegg said: “Of course I’m certainly not going to accept — I don’t think anyone would want us to accept — simply scrapping a whole system of levies, which for instance help two million of the poorest households.”
Labour leader Ed Miliband called the proposal a “panicked wheeze” that would let the energy firms off the hook.
Mr Clegg confirmed that he learned of Mr Cameron’s announcement, made at Question Time yesterday, just minutes beforehand from aides, saying: “It wasn’t something that I was fully expecting.”
And he was candid about the rift in the Coalition over the issue, saying: “We will find agreement...about how we strike the right balance.”
Mr Miliband said in a speech Mr Clegg’s plan would merely “shift the burden from ordinary bill payers...to ordinary taxpayers”.
Labour’s fuel bill freeze would be paid for by the gas and electricity companies, he went on. “They want you to pick up the tab for their failure to stand up to the energy companies.”
He continued: “They propose a panicked wheeze paid for by taxpayers. We offer a real freeze paid for by the big energy companies.”
Downing Street said Mr Clegg’s proposal was one option among many and discussions were “ongoing”.
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Hitting back at Mr Miliband, an aide said green levies supported by Labour would add £80 more to average energy bills between now and 2020.
Green levies are added to bills to fund schemes such as free home insulation for old and poorer people, which help to lower their bills and generate jobs.
Conservative MP and environmentalist Zac Goldsmith said it was “embarrassing” that political leaders were retreating from green commitments.
“Just three years ago, party leaders were falling over themselves to take credit for green policies and to be seen as the greenest,” he said.
“That was also the basis on which they went to the polls in 2010. Today, they are blaming each other for those same policies.
“Regardless of peoples’ views on the green agenda, the politics of this is embarrassing, with promises being dropped, policies being casually reversed, and kindergarten ‘you started it’ exchanges in this, the mother of Parliaments.”
