Carbon tax to put extra £17 on electric bills

Households will be hit by an average £17 rise in electricity bills as a result of green measures in the Budget, it emerged today.

Official documents predict bills will be four per cent higher by 2016 because of George Osborne's decision to drive investment in renewable energy by charging fossil-fuel burning power suppliers a minimum price for carbon emissions from 2013.

The Budget "red book" said 40 per cent of the cost would fall on households, leading to an immediate one per cent rise in electricity bills that will grow by 2016.

It said the pain would be felt hardest by the poor, single parents and the elderly with a risk that fuel poverty will get worse.

The "red book" claims energy prices will start to fall by the 2020s, but a Taxpayers Alliance spokesman said: "This is a Budget which will substantially raise energy prices."