Cameron's plan to "roll back" green charges could mean higher taxes, says Clegg
The Deputy PM suggests that the cost of green policies could be transferred from consumer bills to general taxation.
After David Cameron's surprise pledge at PMQs to "roll back" the "green regulations and charges that are putting up bills", Nick Clegg made little attempt to hide the extent of his disagreement with the Prime Minister this morning. He told the Today programme that he wasn't "fully expecting" Cameron's intervention (his office was given 30-minutes' notice) and that he didn't agree with the Tories that higher bills were "all the fault of us caring about the environment". He rightly pointed out that the majority of the green charges attacked by Cameron are actually energy efficiency measures designed to aid fuel-poor households, including the Energy Company Obligation (£50), the Warm Home Discount for pensioners (£11) and smart meters and better billing (£3).
But sounding a more conciliatory note, he promised that he and Cameron would "come up, as we always do in coalition, with a solution in the national interest and resolve our differences". What could that solution be? As I noted yesterday, one option would be to transfer the cost of some of these green measures from consumer bills to general taxation, as the SNP pledged to do last week. In his Today interview, Clegg suggested just this, stating that policies such as the Warm Home Discount could be paid for out of "government expenditure". If there is to be a coalition compromise, expect it to look something like this.
Whether this move would resolve Cameron's political troubles is doubtful; Labour would simply reply that the government is giving with one hand and taking with another. Owing to higher wholesale prices and profiteering by the big six, bills will continue to rise remorselessly. The public, 75% of whom don't believe that green taxes are to blame for steeper prices, will see no evidence that the government is prepared to side with them against the energy companies. Until that changes, Miliband's big freeze will continue to give him the edge.