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How Labour’s Energy Price Freeze Gave Tories The Shivers

James Forsyth, Mail on Sunday

Just after noon in Manchester on Wednesday, David Cameron tucked into a pint.

This wasn’t an attempt to imitate Ukip leader Nigel Farage but the Conservative leader’s traditional post-conference-speech Guinness.

Cameron’s speech marked the end of conference season. These three weeks have changed the political landscape. Ed Miliband is no longer a leader lacking in policies, but a man with an eye-catching pledge to freeze energy prices.

‘It’s made him relevant,’ one Downing Street source concedes.  

Miliband’s promise might be bad economics, but it is popular. It has also shifted attention away from the economy, where the Tory poll lead is growing rapidly as the recovery sets in, and on to the cost of living, where Labour is marginally ahead. 

One Tory involved in the fight-back says: ‘It is remarkable the extent to which No 10 has been discombobulated by Miliband’s energy announcement.’ 

However, the Tory leadership has decided how to respond. In George Osborne’s Autumn Statement, it wants to remove some of the seven green taxes and levies that are pushing up energy bills. 

Not only would this reduce the appeal of Miliband’s price freeze, but it would put the Labour leader in a difficult position. As Energy Secretary, he imposed some of these charges.

Standing between Osborne and this act of political jiu-jitsu are the Liberal Democrats and, in particular, the Energy and Climate Change Secretary Ed Davey.

Davey is convinced that climate change is one of the great issues of our time.

By contrast, the Chancellor has long been a sceptic of green levies. He had a team in the Treasury working on which of them could be removed before Miliband committed to a price freeze. 

But this work has been given extra urgency by the Labour leader’s gambit. An influential No 10 figure tells me: ‘There’s a pressing need for us to have our own offer on this.’

‘It’s war’: Ed Davey, left and George Osborne, right disagree on green tax levies

The result: it’s going to be tin-hat time in Whitehall for the next few weeks as the Tories try to persuade the Lib Dems to junk some of these green measures.

One Lib Dem says: ‘It’s war in the Department of Energy and Climate Change every day.’  Inside Government, there’s an expectation that this row will go to the Quad, the Coalition’s senior decision-making body, to be resolved.

One Coalition insider predicts Osborne will win over Davey, though at the cost of concessions elsewhere.

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