Green taxes will cost households almost £150 from next year, British Gas has claimed as it blamed the Government for a huge rise in electricity bills for three million of its customers.
Britain’s biggest supplier announced that from September electricity prices will increase by 12.5 per cent, adding £76 to the typical annual bill.
The company said that the cost of green subsidies levied on bills has created “significant pressures” and suggested that it had no choice but to respond by raising prices.
However the ministers last night hit back by suggesting that the price rises are unjustified as it told the regulator to do more to safeguard vulnerable customers.
Government sources highlighted the fact that British Gas is also axing a £15 dual fuel discount currently enjoyed by 3.1 million of its customers from September.
Michael Gove, the Environment Secretary, has signalled that more wind farms may need to be built to power a new generation of electric cars under Government plans to ban the sale of diesel and petrol vehicles.
His plans are opposed by some Tory MPs, who accused the Government of punishing hard-working families with green taxes.
Owen Paterson, a Tory MP and former Environment Secretary, said: “It is the most regressive form of taxation since the Sherriff of Nottingham, transferring money from those who are the least well off to wealthy landowners and businesses. It’s robbing the poor to pay the rich.
“We are getting less and less competitive with countries like America, where lower energy prices mean that whole industries are coming back.
“We are going in the opposite direction. We should have a free market in technology. It would be very much mistaken to continue increasing subsidies to failed forms of renewables like wind.”
British Gas forecast that the cost of the subsidies, which are used to fund renewable sources of energy such as wind and solar, will hit £149 next year having risen by by two-thirds since 2014.
The Office for Budget responsibility, the fiscal watchdog, has forecast that environmental levies will rise from £4.6billion in 2015-16 to £13.5billion by 2022.
British Gas also said that the cost of delivering energy to people’s homes will have increased by £25, equivalent to almost a fifth, by 2018. One senior Tory claimed that transmission costs have increased partly because wind farms and other renewable energy sources are located so far from where people live.