Energy deal 'good news' - Cameron

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A deal to spare households the full impact of energy bill rises is "good news for British families", David Cameron has insisted.

The Prime Minister said the package of measures will mean bills around £50 lower than they would otherwise have been.

But Labour said the plans would mean h ouseholds still paying £70 more than last year and environmental campaigners claimed the Government had "crumbled" in the face of opposition from the Big Six energy firms by agreeing to cut green measures.

British Gas will cut dual-fuel bills by an average of £53 from January 1, but this is still less than half the increase imposed on customers last month.

Other energy firms made similar announcements, with SSE expecting a dual-fuel saving of around 4% before the end of March, equivalent to around £50. Npower does not plan to increase energy prices before spring 2015, unless there are increases in wholesale costs or network charges.

Speaking during his trade mission to China Mr Cameron said: " I said we would roll back the costs of green levies and charges and I said we would introduce more competition into the market to help get customers' bills down and that is exactly what is going to happen.

"All customers in Britain are going to see an average of £50 coming off their bills. That's good news for British families, good news for the cost of living and I think that should be welcomed."

The agreement, which followed negotiations between the coalition parties and energy companies that one Government source described as "particularly fraught" was the last element of the Autumn Statement package to be signed off ahead of George Osborne's statement on Thursday.

The rising cost of energy has dominated the domestic political agenda since Labour leader Ed Miliband's pledge to freeze energy prices for 20 months if he wins the 2015 general election.

But Deputy Prime Minister Nick Clegg dismissed the Labour plan as a "con" which would result in price hikes both before and after it was introduced.

Although there had been "tweaking" of green measures, Mr Clegg said the package was carbon neutral "so that we don't abandon our commitment to the environment".

The Government said from early in the New Year it will cut the cost of the energy company obligation (ECO), an insulation scheme delivered by major energy suppliers, in a move that should shave £30-£35 off bills, on average, next year.

There will be a taxpayer-funded £600 million rebate on the warm homes discount, which helps those in fuel poverty. This will save the average customer £12 on their bill for the next two years.

The electricity Distribution Network Operators will take voluntary action to reduce network costs in 2014/15, which would enable suppliers to pass on an average one-off £5 reduction on domestic electricity bills.

Homebuyers will be able to claim up to £1000 from the Government to spend on energy-saving measures in their new property - equivalent to half the stamp duty on the average house - with £4,000 available in some cases for the most expensive schemes.

Energy Secretary Ed Davey told MPs that the Big Six firms had agreed there would be no price increases in 2014 - unless wholesale costs increased.

He said: "All of the major energy suppliers have confirmed that they will pass the benefits of this package on to their customers.

"The reduction in individual household bills will depend on the energy supplier. Some companies have not yet announced price rises for 2014 or have limited their rises until the Government's review of green levies has concluded.

"Others who have announced prices have indicated that they will reduce their customers' bills as a result of these changes.

"Energy companies will now make final detailed decisions about how to apply these measures but these cost reductions will ensure that average energy bills are lower in 2014 than they otherwise would have been - on average by £50 per household.

"As the major energy companies have now confirmed there will be no need for price rises in 2014 unless of course there is a major change in wholesale or network costs."

Labour leader Ed Miliband accused the Government of a "smoke and mirrors" ploy and his shadow energy secretary Caroline Flint said only a price freeze would guarantee protection for customers.

She added that the "sum total" of spending £600 million of taxpayers' money and weakening the obligation on power firms to fund efficiency measures was that "the energy companies will still be allowed to put up people's bills this winter".

A consumer watchdog said the deal would "not make a substantial difference" to millions of people living in fuel poverty.

Consumer Futures d irector Adam Scorer added: "We need to ensure that the limited support available is targeted at households that need it most. It is not clear these changes will do this."

Friends of the Earth's Sophie Neuburg said: "The effect of all the measures announced today is that funding for energy efficiency has fallen by over £700 million, condemning thousands of people to shiver in heat-leaking homes.

"If ministers were serious about tackling fuel bills, they would introduce a comprehensive energy-efficiency programme and take urgent steps to wean our economy off increasingly costly fossil fuels - the real driving force behind rocketing fuel bills."

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