David Cameron has reached out to modernising Tories by saying in private that he will argue in favour of the economic benefits of renewable energy in the New Year after George Osborne has "cauterised" public angst over green levies in his autumn statement.
As the chancellor prepares to announce on Thursday that he will fund some of the green charges through general taxation, allowing for cuts to energy bills, the prime minister has told Tory modernisers that he will happily talk about green jobs once "public angst" has been addressed.
One senior Tory told the Guardian: "Come the New Year the prime minister wants every conversation about green to be about growth, green tech and green jobs. But before you do that you have got to cauterise the public angst there is about green levies."
The changes on green energy charges, which will be one of the main measures in the autumn statement, have been the subject of intense wrangling between the government and the big six energy companies.
Government officials have been pushing energy companies not to raise prices until after the next election in return for taking £50 of green levies off gas and electricity bills, several industry sources have told the Guardian.
The sources confirmed a BBC report that firms are under the impression that they have been asked to keep down gas and electricity prices for an extended period, unless there were changes in international fuel prices – a claim that was dismissed by Downing Street yesterday as "utterly misleading".
One source at an energy company said between £20 and £25 could be saved by making changes to the energy company obligation (Eco) – a programme to cut energy usage for the most vulnerable households. Another £12 could be saved by shifting the warm home discount, giving poorer households money off their electricity bills, into general taxation.
Network companies are also being asked to find some modest savings. Last night, the BBC also reported that targets on cutting energy usage under the Eco scheme will be cut by 30%. It said it had seen a letter also revealing a plan to spread the programme over four years rather than two.
The autumn statement will be Osborne's first financial statement of the parliament to be delivered amid a backdrop of encouraging economic news. In addition to his announcement on energy bills the chancellor will explain how he will pay for the introduction of a transferable marriage tax allowance.
He will also announce how he will fund the provision of universal free school meals for infants – a concession demanded by the Nick Clegg as the price for not causing trouble on the marriage tax allowance.
Tory modernisers confronted Cameron in private last week after a minister told the Daily Mail and the Sun that the prime minister wanted to "get rid of all this green crap". It is understood that the minister has been told that his remarks were unhelpul because they "made the prime minister look like a hypocrite", in the words of one Cameron ally.
Cameron has told the modernisers that he regards the autumn statement as a key moment in clearing the air. One Tory said: "Downing Street doesn't want to be talking about green crap, they don't want to be talking about green luvvies. They just want to focus on the cost of living."
The prime minister made clear that he wants to avoid a public confrontation between the "vote-blue-go-green" modernisers and climate-change sceptics just before a general election.
One Tory said: "The [modernising] agenda is not being junked. It just feels unnourished. You don't want to have a war about what it means to be a Conservative just at the point when we are reaching escape velocity in the economy."
In his autumn statement the chancellor will please the prime minister and delight the Tory right in the autumn statement as he announces through clenched teeth how he will fund a transferable marriage tax allowance.
As one of the most socially liberal MPs Osborne is no fan of the idea. Osborne is prepared to have a dig at Clegg when he explains how he will fund the provision of universal free school meals for infant school children announced by Nick Clegg at the Lib Dem conference .
The chancellor is understood to be tempted to out that the free school meals idea was proposed in a report written by the Leon restaurant founders, Henry Dimbleby and John Vincent, which was commissioned by Michael Gove in consultation with Osborne.
In his autumn statement the chancellor may try to outstrip Clegg, who recently called for the personal tax allowance to be increased to £10,500 by April 2015, by saying that it should be raised by an even higher amount. Osborne will also look at extending the business rate relief which is due to stop at the end of March.
There are currently intense negotiations between the Department for Energy and Climate Change and the energy companies over the cost of gas and electricity, as bills are due to hit a record of more than £1,400 a year when all the recent price rises come into effect.
The BBC said the government was demanding a price freeze until mid-2015 as part of a wider deal on environmental levies. It is understood there has not been a ministerial letter to this effect but officials are putting pressure on the companies not to announce any more price rises for another 18 months.
Sources said some companies are more receptive to this than others, with one claiming a year-long freeze is possible but waiting until after the next election would not be feasible.
There are also fears that they would then not be able to raise prices for an even longer period if Labour wins the next election, as Ed Miliband has promised a bill freeze for almost two years after that.
Cameron's official spokesman insisted no request for a price freeze had been made during negotiations over the green levies, with Downing Street sources blaming it on a possible misunderstanding.
"The story is utterly misleading. The government has not asked for a price freeze. People should wait for us to announce our plans," the spokesman said. However, Ed Miliband, the Labour leader, seized on the confusion to say Cameron looked like a "weak and flailing prime minister".
"What we now know is that while David Cameron has in public been opposing an energy price freeze, in private he has been pleading with the energy companies to get him off the hook.
"What Britain needs is Labour's strong, credible plan that we're publishing today to freeze energy prices until 2017 and reform a broken energy market so it properly works for business and families."
Earlier, Miliband pledged to "reset the broken energy market", promising that all energy bills will be simplified and use the same method to explain the cost of energy per unit and the precise standing charges.
He laid out the idea in a green paper on energy, which included the implementation of its plan for a price freeze, and for how energy profits and trading can be made more transparent.
The party also developed its idea for a new energy security board, which would be responsible for ensuring the UK's energy resources do not run out. It would take over the current responsibility from the National Grid and the current regulator.
theguardian.com
As the chancellor prepares to announce on Thursday that he will fund some of the green charges through general taxation, allowing for cuts to energy bills, the prime minister has told Tory modernisers that he will happily talk about green jobs once "public angst" has been addressed.
One senior Tory told the Guardian: "Come the New Year the prime minister wants every conversation about green to be about growth, green tech and green jobs. But before you do that you have got to cauterise the public angst there is about green levies."
The changes on green energy charges, which will be one of the main measures in the autumn statement, have been the subject of intense wrangling between the government and the big six energy companies.
Government officials have been pushing energy companies not to raise prices until after the next election in return for taking £50 of green levies off gas and electricity bills, several industry sources have told the Guardian.
The sources confirmed a BBC report that firms are under the impression that they have been asked to keep down gas and electricity prices for an extended period, unless there were changes in international fuel prices – a claim that was dismissed by Downing Street yesterday as "utterly misleading".
One source at an energy company said between £20 and £25 could be saved by making changes to the energy company obligation (Eco) – a programme to cut energy usage for the most vulnerable households. Another £12 could be saved by shifting the warm home discount, giving poorer households money off their electricity bills, into general taxation.
Network companies are also being asked to find some modest savings. Last night, the BBC also reported that targets on cutting energy usage under the Eco scheme will be cut by 30%. It said it had seen a letter also revealing a plan to spread the programme over four years rather than two.
The autumn statement will be Osborne's first financial statement of the parliament to be delivered amid a backdrop of encouraging economic news. In addition to his announcement on energy bills the chancellor will explain how he will pay for the introduction of a transferable marriage tax allowance.
He will also announce how he will fund the provision of universal free school meals for infants – a concession demanded by the Nick Clegg as the price for not causing trouble on the marriage tax allowance.
Tory modernisers confronted Cameron in private last week after a minister told the Daily Mail and the Sun that the prime minister wanted to "get rid of all this green crap". It is understood that the minister has been told that his remarks were unhelpul because they "made the prime minister look like a hypocrite", in the words of one Cameron ally.
Cameron has told the modernisers that he regards the autumn statement as a key moment in clearing the air. One Tory said: "Downing Street doesn't want to be talking about green crap, they don't want to be talking about green luvvies. They just want to focus on the cost of living."
The prime minister made clear that he wants to avoid a public confrontation between the "vote-blue-go-green" modernisers and climate-change sceptics just before a general election.
One Tory said: "The [modernising] agenda is not being junked. It just feels unnourished. You don't want to have a war about what it means to be a Conservative just at the point when we are reaching escape velocity in the economy."
In his autumn statement the chancellor will please the prime minister and delight the Tory right in the autumn statement as he announces through clenched teeth how he will fund a transferable marriage tax allowance.
As one of the most socially liberal MPs Osborne is no fan of the idea. Osborne is prepared to have a dig at Clegg when he explains how he will fund the provision of universal free school meals for infant school children announced by Nick Clegg at the Lib Dem conference .
The chancellor is understood to be tempted to out that the free school meals idea was proposed in a report written by the Leon restaurant founders, Henry Dimbleby and John Vincent, which was commissioned by Michael Gove in consultation with Osborne.
In his autumn statement the chancellor may try to outstrip Clegg, who recently called for the personal tax allowance to be increased to £10,500 by April 2015, by saying that it should be raised by an even higher amount. Osborne will also look at extending the business rate relief which is due to stop at the end of March.
There are currently intense negotiations between the Department for Energy and Climate Change and the energy companies over the cost of gas and electricity, as bills are due to hit a record of more than £1,400 a year when all the recent price rises come into effect.
The BBC said the government was demanding a price freeze until mid-2015 as part of a wider deal on environmental levies. It is understood there has not been a ministerial letter to this effect but officials are putting pressure on the companies not to announce any more price rises for another 18 months.
Sources said some companies are more receptive to this than others, with one claiming a year-long freeze is possible but waiting until after the next election would not be feasible.
There are also fears that they would then not be able to raise prices for an even longer period if Labour wins the next election, as Ed Miliband has promised a bill freeze for almost two years after that.
Cameron's official spokesman insisted no request for a price freeze had been made during negotiations over the green levies, with Downing Street sources blaming it on a possible misunderstanding.
"The story is utterly misleading. The government has not asked for a price freeze. People should wait for us to announce our plans," the spokesman said. However, Ed Miliband, the Labour leader, seized on the confusion to say Cameron looked like a "weak and flailing prime minister".
"What we now know is that while David Cameron has in public been opposing an energy price freeze, in private he has been pleading with the energy companies to get him off the hook.
"What Britain needs is Labour's strong, credible plan that we're publishing today to freeze energy prices until 2017 and reform a broken energy market so it properly works for business and families."
Earlier, Miliband pledged to "reset the broken energy market", promising that all energy bills will be simplified and use the same method to explain the cost of energy per unit and the precise standing charges.
He laid out the idea in a green paper on energy, which included the implementation of its plan for a price freeze, and for how energy profits and trading can be made more transparent.
The party also developed its idea for a new energy security board, which would be responsible for ensuring the UK's energy resources do not run out. It would take over the current responsibility from the National Grid and the current regulator.
theguardian.com
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