Ed Miliband: Government's energy plan 'smoke and mirrors'

Ed Miliband Labour leader Ed Miliband says the changes are not enough

Labour leader Ed Miliband has accused ministers of using "smoke and mirrors" over its plan to cut the cost of energy bills by an average of £50 a year.

Chancellor George Osborne has said he will spread the cost of insulating homes and that government will take on some of the burden faced by customers.

But Mr Miliband told reporters on Monday that a "cosy deal" with firms would not keep bills down.

The government dismissed his comments as "nonsense".

Energy firms unveiled plans to pass on savings to customers on Monday.

British Gas owner Centrica said it would cut bills by £53 in January, two months after a £123 price rise for the average dual-fuel customer.

SSE also said it would pass on savings of around £50 and Npower plans a conditional price freeze until 2015.

This followed news the government was to move some subsidies for the poorest away from energy bills and into general taxation, while some green policy targets will also be slowed down.

Rising energy bills have become a major political issue in recent months, as the main political parties look to offer policies to reduce the squeeze on people's standard of living in the run-up to the next general election.

'Crisis'

Labour says it will freeze gas and electricity bills for 20 months if it wins the next general election, but the Conservatives and Liberal Democrats argue this is unrealistic because of the varying and unpredictable international costs of gas and other fuels.

In response to the government's announcement on Monday, Mr Miliband told reporters: "My only test is whether energy bills are rising for families this Christmas and on that crucial test, the government fails - that's because they've done a smoke and mirrors deal with the energy companies rather than standing up to them.

"Only a Labour government would stand up to the energy companies and freeze prices."

George Osborne: "We're not pretending that we can freeze the world gas price"

He added: "Frankly what's been announced today is not enough, not nearly enough... families are going to be worse off year after year under this government as they have been since it came to office. That's why we still need Labour's price freeze."

Prime Minister David Cameron said the Labour leader's criticism of his policy was "nonsense".

In an interview during his trip to China, he added: "I said we'd roll back the cost of green levies and charges, and I said we'd introduce more competition into the market to help get customers' bills down, and that's exactly what's going to happen."

On Sunday, Mr Osborne told BBC One's Andrew Marr Show his plans would "help families... we've been in discussions with the energy companies".

He added: "There's going to be an average of £50 off people's bills. We are absolutely insistent that this is going to be brought in."

Mr Osborne said the change would be part-funded by cracking down on tax avoidance. That would reduce annual bills by approximately £12, the BBC understands.

He attacked Labour leader Ed Miliband's promise of a price freeze as a "con", adding that the coalition had the "right approach" to cutting bills.

Energy price rise chart

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