George Osborne has played down the prospect of dramatic tax cuts or extra spending commitments in his Autumn Statement this week as he promised a “responsible recovery”.
The chancellor insisted the coalition would keep the public finances under tight control, saying moves to cut energy bills and give home buyers £1,000 grants for insulation would be funded through a crackdown on tax dodgers.
The comments came as ministers made a concerted bid to blunt the Labour attack on cost of living. The coalition has been on the back foot over energy bills ever since Ed Miliband pledged to freeze prices for 20 months if he wins in 2015, with public fury greeting news that suppliers were hiking prices by up to 10%.
“In the Autumn Statement I will say the job is not yet done because we have got to make sure we go on taking the difficult decisions to secure the recovery,” Mr Osborne said.
Mr Osborne endorsed the Bank of England’s action last week to cool the housing market by limiting its Funding for Lending scheme to supporting businesses rather than mortgages.
The changes to environmental levies will see the cost of the Energy Company Obligation (ECO) scheme halved by giving the “Big Six” power firms two years longer to hit targets.
Other policy charges will be funded from general taxation in future.
To ensure carbon emissions do not rise as a result of the deal, anyone buying a home will be eligible for the £1,000 grant for energy efficiency measures.
Mr Osborne refused to give details of the new drive against tax avoidance.
The chancellor attacked Labour’s policy of an enforced freeze, saying ministers could not control international energy markets.
Liberal Democrat and Chief Secretary to the Treasury Danny Alexander said the measures would be paid for by “tax dodgers” and would “not sacrifice a single gram of carbon”.
But shadow chancellor Ed Balls insisted the government should “get a grip” and impose a freeze at the expense of the energy companies, rather than transferring costs to general taxation.