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Clegg warns on green tax 'own goal'
Stripping green levies from energy bills would be an "own goal" which could cost jobs and reduce support for poor households, Nick Clegg has warned in the latest sign of division within the Coalition.
Prime Minister David Cameron announced a review of competition within the energy market yesterday and signalled that he wanted to "get to grips" with green charges which were driving up energy bills.
But Mr Clegg, who was given little notice of the Prime Minister's surprise announcement, said: "It wasn't something that I was fully expecting and it's not something that I fully agree with."
He did not accept that green levies were the main reason for price hikes, putting 60% of the increase down to rising wholesale costs in the energy market.
Mr Clegg, who also rejected Labour leader Ed Miliband's call for a price freeze as a "con" which would "see prices go up, jobs go down, investment go down", attacked the "new theory emerging on the right of British politics which says it's all the fault of us caring about the environment".
He told the BBC Radio 4 Today programme that he would hold talks with the Prime Minister to find a way forward, which would involve testing the various charges and could see some - such as the warm homes discount worth £135 to two million poor households - moved to general Government spending paid for through taxes.
But he added: "I'm not frankly entirely sure what rolling back green levies, if removing all green levies which help two million people on very low incomes, which help support thousands of jobs in our green renewable energy sector, if that is what is meant I think that would be an own goal."
Setting out the next stages Mr Clegg said the Government would see if its objectives could be "delivered in a more cost-effective way".
He said: "We will stress test all these different levies. If we can deliver those objectives of keeping the lights on, insulating people's homes, helping the fuel poor, supporting our green economy for less - of course I don't want to see an extra penny on people's bills than is actually necessary - that is what we will do, as we always do in the coalition whatever our differences, we resolve them."
Mr Clegg is reported to have only been told about Mr Cameron's decision to announce the plan at Prime Minister's Questions around 30 minutes before the Commons showdown with Mr Miliband, which was dominated by exchanges on energy policy.
The Deputy Prime Minister refused to go into detail of how he heard about the move through his office, saying: "I don't think that's the key thing here. The key thing is what do we do to strike this really difficult balance between getting bills down where we can and keeping the lights on, investing in green jobs and helping the fuel poor."
Mr Miliband will seek to capitalise on the row at the top of Government by accusing Mr Cameron of "losing control" over energy policy.
The Labour leader will claim that the PM is letting the "Big Six" energy suppliers off the hook by not forcing them to freeze bills while the energy market is reset.
Addressing an audience of small businesses in central London he will say: "Yesterday was the day David Cameron lost control of his government.
"In weakness and panic, he made up a policy on energy which means business as usual for the energy companies and which is already falling apart.
"There is no solution to the cost of living crisis which tiptoes around taking on the energy companies and reforming a broken market.
"But this Prime Minister is too weak to stand up for the consumer and he always takes the side of the Big Six companies.
" There are 27 million families and 2.4 million businesses which would benefit from Labour's price freeze.
"Sir John Major recognises that the job of government is to reform markets when they are failing and to protect people.
"This Prime Minister does not. It will take a Labour government to make the right decisions on behalf of the British people."
A Downing Street spokesman said discussions on how to "roll back" green levies from energy bills would take place within Government between now and the autumn statement on December 4.
The spokesman did not rule out the possibility that the burden of the levies - which add £112 to average annual energy bills - might be shifted on to general taxation or be paid for with reductions in spending elsewhere.
"What's clear is the Prime Minister's policy on this, which is to roll back some of the green levies, and to look at those in the work that's going on between now and the autumn statement," he told a Westminster media briefing. "Clearly the whole Government - the relevant parts - will be involved in the discussions."
Asked whether households could find themselves paying for the green measures through their taxes rather than their energy bills, the spokesman said: "The specifics of how this will go forward are going to be worked out in time for the autumn statement, and I'm not going to prejudge that.
"Clearly, there's a lot of work going on to help hard-pressed families with the issue of energy bills. What's going to be going on between now and the autumn statement is looking at how those components of the bills can be rolled back from the bills."
Asked whether the row over energy, coming hard on the heels of differences about the operation of free schools, meant that the Government was "unravelling", the spokesman said: "The coalition is intact."
Mr Cameron and Mr Clegg continue to work "highly effectively" together, he added.