UK premier signals green tax cut

UK: Prime minister David Cameron has said that the government will review green energy taxes with a view to cutting them.

Prime minister David Cameron

Speaking at Prime Minister's Questions, Cameron said: "We need to roll back some of the green regulations and charges," when challenged on recent rises in energy bills.

According to government figures, the green levies add £112 to a typical annual household bill. This money is used to pay for subsidies for renewable energy projects. According to the Department of Energy and Climate Change's own figures, only £30 of this goes towards renewables.

There was no indication whether this would lead to a reduction in the strike price paid for electricity generated from wind farms.

The review will be carried out by the Office of Fair Trading and the Competition and Markets Authority and will be officially announced in the annual energy statement next week.

The Conservative prime minister's coalition allies the Liberal Democrats have consistently defended the levy, which is added to consumers' bills. DECC headed by Liberal Democrat Ed Davie is expected to comment this afternoon on Cameron's announcement.

Cameron's own party have been pushing for a more hard-line stance on renewables, with many blaming bill increases on the higher cost of wind energy.

Three of the major energy firms have announced price rises of between 8% and 10% over the last weeks and have also blamed the move on the added cost of renewable energy.