Cameron And Clegg Vow Energy Bills Cut

Homebuyers are set to be handed £1,000 to spend on energy-saving measures, the Government has announced.

The grants are part of a shake-up of green levies designed to cut bills for consumers and blunt Labour's attack on the key cost-of-living issue.

In a joint article for the Sun on Sunday, David Cameron and Nick Clegg confirmed that funding of insulation and other efficiency techniques for vulnerable households was being reworked.

The cost of the Energy Company Obligation (ECO) scheme could be halved by giving power firms two years longer to hit targets, while other charges will be funded from general taxation in future.

EDF welcomed the move - expected to cut average bills by £50 a year - and indicated that it was not now likely to hike prices again before 2015.

But the Prime Minister and his Liberal Democrat deputy stressed that the reforms would not compromise the Government's environmental drive.

"Later this week, we'll announce further help: proposals that will be worth around £50 on average to energy bill-payers," they wrote.

"We're doing it without taking any help away from poor families or sacrificing our green commitments; and in a way that will keep Britain's lights on in the long-term too."

The pair added: "Alongside the Green Deal, when you buy a new home, you could get up to £1,000 from Government to spend on important energy-saving measures - equivalent to half the stamp duty on the average house - or even more for particularly expensive measures.

"It's an all-round win: better insulation means cheaper bills; it's how we cut carbon emissions; and it will boost British businesses who provide these services."

Downing Street sources indicated the grants would be available for purchases of new-build or older housing stock, with the amount depending on the property's energy efficiency and how much work needs to be done.

Chancellor George Osborne is due to give full details of the deal struck with the 'Big Six' energy companies in his Autumn Statement on Thursday.

The intervention by Mr Cameron and Mr Clegg marks a concerted effort to regain the initiative on the energy issue, which has dominated the political agenda since Ed Miliband promised to freeze prices for 20 months if he wins the general election.

The coalition leaders accused Mr Miliband of "taking people for fools".

"Energy companies would hike up prices both before and after the freeze - so families would end up paying more," they wrote.

"Not only that - by cutting investment in green energy, their freeze would threaten thousands of jobs.

"Labour's con is the worst of all worlds. When an offer sounds too good to be true it usually is."

They insisted the Government was putting forward "a serious and credible plan that actually works".

EDF said its "decision to hold back the full impact of rising costs" earlier this month by implementing a lower rise than competitors had been "validated by tonight's confirmation that the Government will take action on energy charges".

"EDF Energy was the only major energy company to lessen the impact of higher charges in advance because it was confident that action could be taken to reduce costs," it said in a statement.

"Following this news, EDF Energy expects to be able to maintain its lower price rise of 3.9%, as anticipated. That decision left customers with bills £80-96 lower than major competitors who had announced price increases.

"The company looks forward to hearing more detail from the Government, but does not anticipate that EDF Energy's prices will rise again in 2014.

"Customers should expect other energy suppliers to follow EDF Energy's lead by significantly lowering their prices."

However, shadow chancellor Ed Balls accused the Government of "half measures and panicky climbdowns".

"After last year's Budget, Chancellor George Osborne was forced into chaotic U-turns on the pasty tax, the caravan tax and the charities tax," he wrote in the Sunday Mirror.

"This time the U-turns have started before he's even made his speech.

"With four days until the Autumn Statement, we've already had panicky changes in Government policy: on payday loans, cigarette packaging, energy subsidies and bank lending...

"On energy, the test for George Osborne is this: whatever he announces must both stop bills rising this winter and make the energy companies pay for it, not the taxpayer.

"We don't need more half-measures and panicky climbdowns from the Omnishambles Chancellor. Only a price freeze will do."

Shadow energy secretary Caroline Flint said: "Energy bills are going up by £120 this winter alone, so the Government are dealing with less than half this year's increase, never mind the £300 that bills have gone up by since they got into power.

"It's no surprise with this Government that they're not asking the energy companies to pay for it. David Cameron always stands up for a privileged few. This shows why only a price freeze will do.

"Labour's price freeze would save money for 27 million households and 2.4 million businesses and our plans to reset the energy market would stop these companies from overcharging people in the future."

On Saturday, Downing Street denied that it had requested a freeze on energy prices.

Mr Balls, speaking on the Andrew Marr Show on BBC One, said of the Chancellor's plans: "I set two tests for George - one, would he stop bills rising? Secondly, would the energy companies pay?

"If David Cameron and Nick Clegg are right, he fails both tests. I would say to George, while the Prime Minister is in China, get back to the drawing board, come up with a policy, we've had lots of u-turns already, do another one, freeze the bills, take Ed Miliband's policy - that would be wise."

Questioned if Labour's policy could result in energy companies driving up bills before and after a price freeze, Mr Balls said: "They are the Government. I think they should get a grip.

"Why do David Cameron and George Osborne run scared in the face of energy companies who have been putting up bills month by month, year by year?

"If energy companies came together as a cartel to push up prices to try and pre-empt a government action that would be a total abuse of market power and any sensible regulator would step in and stop it happening. I don't think they (energy companies) are going to do that although they are putting their bills up now."

Mr Balls has often been seen making a flat-lining gesture with his hand to taunt the Chancellor over the lack of growth in the economy.

Asked if he had a new gesture given the improvements in the economic situation, Mr Balls said: "If I had known flat-lining would last three years I might have thought twice about doing the gesture in the first place."

The shadow chancellor also dismissed claims Labour's future financial plans, which are said to be close to French President Francois Hollande's, would result in the UK enduring similar struggles as the French.

He said: "France is in the single currency, the euro, which rightly back in 2001 we decided not to join - a very, very good decision.

"America and Germany though - Germany in the euro, America not - are both well above where they were in 2007."

Told the UK is doing better than those two countries at the moment, Mr Balls said: "But we are still 2.5% below our pre-crisis peak. We've got so much to catch up and it's got to translate to working people."