Downing Street today defended plans to hit homeowners with the return of green energy taxes that will cost £170 a year despite the fragile state of the economy.

Eco-levies that were temporarily removed from household electricity bills as they rocketed last year will return from next month, more than a year ahead of schedule.

No10 today defended the move, which is included in the new energy price cap, saying that the average bill had fallen £430 since they were removed last autumn. 

However, critics have called for the charges to be removed or suspended again due to the cost of living crisis, which has seen massive food price inflation and soaring mortgage rates. 

Energy Secretary Grant Shapps told The Telegraph on Saturday he did not want to ‘see people’s household bills unnecessarily bashed’ by the drive to net zero.

And on Sunday Treasury Chief Secretary John Glen said the Government was ‘looking carefully’ at the issues. 

But today the Prime Minister’s official spokesman said: ‘As we said from the start, the price cap has fallen below the energy price guarantee discount. 

‘Customers will pay the energy rate as normal and that cap includes the green levies and of course the crucial point is that the levies not only help bring down energy bills over time because they drive investment in renewables, but they also help the public, those most hardest hit.’

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Ofgem will cut its price cap from £3,280 to £2,074 from July 1 following tumbling wholesale prices

Grant Shapps said over the weekend that he did not want to ‘see people’s household bills unnecessarily bashed’ by the drive to net zero as the cost of living crisis continues

Ofgem cap details show that social and environmental levies make up around £170 of the average annual dual fuel bill – although the Government currently subsidises bills    

He pointed out that some of the money is used to fund schemes like the £150 Warm Homes Discount for pensioners and those on low income.

The green levies have been temporarily funded by the Treasury as part of the Government’s Energy Price Guarantee (EPG), which limited annual energy costs to £2,500 for the average household.

But the Exchequer will no longer subsidise people’s energy bills – including covering the cost of the green levies – when the Ofgem price cap falls to below the EPG level.

The regulator will cut its price cap from £3,280 to £2,074 from July 1 following tumbling wholesale prices.

Former Cabinet minister Jacob Rees-Mogg told the Sunday Telegraph: ‘Green levies are part of the problem behind the UK’s particularly high electricity prices.

‘They ought to be abolished but should fall on general taxation until that can happen. The ambition for net zero must not make us cold and poor. Any new or re-imposed charge ought to be announced to Parliament first and not slipped through slyly.’