Coalition rift as Tories push to scrap green taxes

Party leaders met with Prince Charles yesterday at the launch of a new youth campaign. Picture: Getty
Party leaders met with Prince Charles yesterday at the launch of a new youth campaign. Picture: Getty
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TORY ministers are pushing for green taxes to be ditched in Chancellor George Osborne’s Autumn Statement in a bid to bring down energy bill prices.

The move has opened a new rift in the coalition with Lib Dems insisting that they want to keep measures like the climate change levy.

But Lib Dem deputy prime minister Nick Clegg admitted that he is negotiating to save green levies after it was reported that Prime Minister David Cameron had ordered ministers to “drop the green crap”.

The Lib Dems hope to save the levies by moving from energy bills to general taxation similar to the proposal put forward by the SNP for an independent Scotland. It is understood that Mr Cameron and the Tories have bowed to pressure from the big energy companies and their own backbenches in trying to scrap them altogether.

The row has erupted after Mr Cameron announced in Prime Minister’s Questions last month that he wanted to remove the green taxes from energy bills.

It came after weeks of political pressure from Labour, which has promised a 20-month freeze in bills should it win power in 2015. Huge hikes in bills of between eight and 11 per cent by the energy companies have fuelled a cost-of-living crisis.

Mr Cameron’s solution of ditching green taxes has been heavily lobbied for by the big six energy companies led by Alistair Phillips-Davies, the chief executive of the Scottish-based Scottish and Southern Electricity.

Yesterday Downing Street denied that the Prime Minister had used the word “crap” but did not deny that he wants to get rid of the levies which account for an average £135 of household bills. A Whitehall source told The Scotsman: “Labour’s policy is a con but we have to find a way to respond which is why we are looking at these green taxes.”

The reported remarks by Mr Cameron led to a sharp response from Lib Dem Chief Treasury Secretary Danny Alexander who is also working on the Autumn Statement with Mr Osborne.

Mr Alexander insisted the environmental measures were helping to insulate homes for the poor, invest in clean energy, and creating thousands of jobs. “Anyone who thinks we should get rid of that is full of crap,” he said.

But on his LBC radio programme yesterday Mr Clegg admitted that negotiations are under way in the coalition on the future of the levies.

He said: “We’re looking at all these options to make sure that we reduce wherever we can the burden on people’s bills whilst keeping in place the objectives of these policies.”

Ahead of the 2010 general election, Mr Cameron highlighted his commitment to the environment with a trip to the Arctic Circle to view the impact of global warming, and told voters they could “Vote Blue, Go Green”.

Friends of the Earth’s policy and campaigns director Craig Bennett said: “It would come as little surprise if David Cameron did tell aides to ditch the ‘green crap’ – his government has been attacking environmental policies for years.”