Clegg Says Energy, Schools Rift Won’t Break U.K. Coalition

Deputy Prime Minister Nick Clegg played down divisions in Britain’s coalition government after public disagreements over energy bills and schools.

He said today he will work out a deal with Prime Minister David Cameron after rejecting his plan to “roll back” environmental charges on electricity and gas bills and questioning rules that allow untrained teachers in schools.

“The prime minister and I will resolve our differences in the national interest, keeping bills as low as we can and keeping the lights on,” Clegg told BBC television. “I’m not going to accept simply scrapping a whole system of levies that help 2 million of the poorest households in this country and supports the green economy.”

Cameron sought yesterday to regain the initiative in a political dispute over soaring energy bills by announcing a probe into competition in the sector and pledging to cut green levies that push up costs. Clegg, who heads Cameron’s Liberal Democrat coalition partners, was told about the policy only a half-hour before it was announced.

Clegg said a solution might be to pass the cost of the green levies, which provide investment for renewable energy and help to insulate the homes of people on low incomes, to the government so they no longer appear on consumers’ bills.

Labour leader Ed Miliband, who has promised to freeze gas and electricity prices if he wins the 2015 general election, accused Cameron of making up energy policy in a panicked response to public anger at inflation-busting price increases.

‘Made Up’

“Yesterday in weakness and panic, the government made up a new policy on energy,” Miliband said in a speech in London today. “There is no solution to the cost-of-living crisis which tiptoes around taking on the energy companies and reforming a broken market.”

Four of the “Big Six” companies that dominate Britain’s energy market have announced gas and electricity price increases of about 10 percent over the past two weeks, almost four times the rate of inflation. Iberdrola SA’s Scottish Power Ltd. said today it will raise gas prices by an average of 8.5 percent and electricity by 9 percent with effect from Dec. 6.

The move is “disappointing,” Cameron’s spokesman, Scot Marchbank, told reporters in London. He reiterated the prime minister’s advice for consumers to shop around for the best deal.

Windfall Tax

One of Cameron’s Conservative predecessors as prime minister, John Major, called on the government this week to impose a windfall tax on their profits if it needs to spend more money this winter helping the elderly and needy with higher fuel costs.

Miliband pledged to freeze energy prices for 20 months at Labour’s annual conference last month. The party also announced plans to break up the Big Six -- Centrica Plc, SSE Plc, EDF Energy Plc, EON SE, Scottish Power and RWE AG’s Npower unit -- and force them to trade all their electricity on the open market.

In clashes in the House of Commons yesterday, Cameron accused Miliband of being a “con man” over the proposals. Speaker John Bercow rebuked the premier for his use of the words.

‘Better Regulation’

“We will be having a proper competition test carried out over the next year to get to the bottom of whether this market can be made more competitive,” Cameron said. “I want more companies, I want better regulation, I want better deals for consumers.” He said there’s also a “need to roll back” green levies that suppliers have said contribute to higher costs.

Cameron’s Conservatives argue that if there is no policy change by 2020, green levies may rise to 194 pounds ($313) a year from the current 112 pounds -- or 14 percent of the typical household bill. Labour said that of the 112 pounds, 67 pounds of levies had been introduced under the current government.

Clegg said his party hasn’t yet seen any concrete proposals on green levies and confirmed that he was only told of the policy “shortly” before Cameron announced it to lawmakers.

He played down a rift with Cameron over free schools, which are independent of local-government control and are a flagship Tory policy. He has called for all teachers in them to be qualified and for the schools to meet national standards. He said today those proposals are aimed at improving the schools, not reversing the policy.

Labour said today it will force a vote in Parliament next week demanding teachers are qualified as it seeks to emphasise the differences in the coalition.

“For Nick Clegg it’s always ‘believe what I say, not what I do,’” Labour education spokesman Tristram Hunt said in an e-mail. “Time and again his actions have shown that the Lib Dems cannot be trusted, so let’s see where he stands when we put him on the spot.”

Before it's here, it's on the Bloomberg Terminal.