UK Prime Minister David Cameron has told members of the House of Commons that he wants to ‘roll back’ green taxes on energy firms, in a bid to stall increasing energy prices.

Speaking at Prime Minister's Questions earlier today (23 October), Cameron said that green taxes accounted for nine per cent of the average annual fuel bill, and could be reduced.

He said: "I can tell the House today that 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.

"I want more companies, I want better regulation, I want better deals for consumers. But yes, we also need to roll back the green charges that [Ed Miliband] put in place as energy secretary… we need to roll back the costs that have been imposed on people's energy bills".

The news followed an announcement from energy firm npower, one of the ‘Big Six’ energy firms, that it will increase it gas prices by 11.1 per cent and its electricity prices by 9.3 per cent. British Gas and SSE have also announced increased prices, with bills expected to increase by 9.2 per cent and 8.2 per cent respectively.

Labour Leader Ed Miliband lambasted the Prime Minister for changing his policy on a daily basis, adding that he was ‘weak’ for not standing up to pressure from energy companies. He said today that 60 per cent of the green taxes currently in place have been introduced by the current government.

Miliband added that his party has already pledged to ‘freeze’ energy prices if it were to come into power in 2015, by funding some green levies through tax rather than passing the cost on to households through bills. Cameron retorted by calling this plan a"cynical ploy from the Energy Secretary who wrecked the market in the first place".

Deputy Prime Minister Nick Clegg has reportedly agreed to a government review of the green energy measures, but has said he will not agree to any subsidy cuts aimed at relieving fuel poverty, encouraging more energy efficient home improvements, or boosting renewable energy.

‘Greed’ the real reason for energy bill hikes

Responding to the Prime Minister’s announcement, Joss Garman, Deputy Political Director at environmental campaigners Greenpeace, said: “When it is gas prices and the greed of the big six energy companies that is the real reason for energy bill hikes, the Prime Minister is wrong to pin the blame on clean energy.

“Investment in renewable energy can actually help families squeezed by rising bills by reducing consumers’ exposure to the roulette wheel of international gas prices – the main reason for price hikes.

“It was David Cameron himself who championed these green energy levies as opposition leader, and who joined with then Energy Secretary Ed Miliband to vote them into law. He owns these measures every bit as much as the Labour leader – and he should put customers interests before the Big Six energy giants."

REA Chief Executive, Dr Nina Skorupska added that the Prime Minister must now clarify which levies he is looking to 'roll back' and how, or 'risk severely undermining investor confidence at a time when this country desperately needs investment in new low carbon capacity'.

She added: "Renewables are the only low carbon options on the table to bridge the near term capacity crunch, which will bite well before new nuclear or shale gas come on-stream.

“Renewables policy makes up only three per cent of average bills overall and less than a third of the Government’s ‘green levies’, so politicians and the media are simply wrong to say that green energy is to blame for pushing up bills. It is the ever-increasing cost of gas which has been the main cause of rising bills in recent months and years. With more energy-efficient homes and more home-grown renewables we become less exposed to these volatile gas markets."

Renewable energy prices have been falling drastically over recent years, with several technologies now competing with gas in terms of price parity. Indeed, a 2011 report by Mott MacDonald for the Committee on Climate Change, ‘Costs of low-carbon generation technologies’, estimated that energy from onshore wind costs £83 per megawatt hour (MWh), while energy from the best hydro power locations came in at just £69/MWh. A report the year before by Parsons Brinckerhoff put power from natural gas turbines at £55-110/MWh.

Future of UK energy supply

The debate over the UK’s energy supply has been heating up recently, with electricity regulator Ofgem, saying last year that unless alternative electricity supplies are found to meet increasing demand, the UK could find itself facing blackouts by 2015.

Indeed, public concern over energy capacity is increasing, with a poll commissioned by The Energy Savings Trust (EST) – published this week­ – finding that 26 per cent of people thought it would be ‘difficult to supply enough energy to meet the UK’s needs by 2018’.

Further to this, the UK government has been criticised for relying on fossil fuels for the UK energy mix, and failing to bring forward a decarbonisation target for the sector. However, the House of Lords will be voting on the Energy Bill on Monday (28 October), and two prominent Lords – former Shell chairman Lord Oxburgh and former World Bank chief economist Lord Stern – have tabled a clean power amendment.

This summer, the Department of Energy and Climate Change (DECC) released statistics showing that the despite the rise in renewable energy consumption, across 2011 and 2012, the UK achieved an estimated average of 3.94 per cent, less than the 4.04 per cent target set out in the 2009 EU Renewable Directive.