British Gas has responded to recent accusations of profiteering — blaming the government's supposed green agenda for pushing up household bills. The company has reported profits of more than £500million for 2011. Chief executive Sam Laidlaw tried to pass the buck, saying green levies and taxes now account for 15% of every home's power bills. He claimed environmental costs could reach as much as £160 per household per year by 2015, saying "Is that right in the current climate?"

His predictable comments came as British Gas-owner CENTRICA reported annual profits of £2.4billion — up 1 per cent. British Gas itself made £522million, down 30% on 2010 because a milder winter has meant less residential gas consumption.

Laidlaw argued that British Gas is at the mercy of government attempts to appear green. He said ministers should slow down initiatives including the ramping up of a scheme where subsidies on energy providers pay for homes to receive free insulation.

Although British Gas cut electricity bills by 5 per cent in January they raised gas and electricity rates by 18 per cent and 16 per cent respectively last August.

Meanwhile a new campaign to help households reduce their energy bills and make their homes warmer has just been launched by the Association for the Conservation of Energy and others.

The Energy Bill Revolution Campaign calls on government to invest the money it receives from carbon taxes into improving the energy efficiency of our homes.

From 2013 Government will receive a huge increase in revenue from two key carbon taxes - the sale of allowances in the EU Emissions Trading Scheme and the new Carbon Floor Price. Research commissioned by the Campaign has calculated these revenues will be on average £4bn a year.

If invested in the housing stock, this money could remove 9 out of 10 households from fuel poverty, with up to 600,000 households receiving £6,500 for green refurbishment and energy efficiency works a year. It could produce four times the carbon savings achieved by Green Deal and ECO together and could create between 30,000 and 50,000 direct jobs and up to 200,000 indirect jobs in the wider economy.

ACE is particularly angry that when the government opted for a new generation of nuclear power plants, it did so without assessing long term electricity consumption. The organisation say spending huge sums on new generating capacity cannot be justified in the light of estimates that the cost of maximising the energy efficiency of UK homes would be £2.2 trillion less over the next 40 years than the cost of 10 new nuclear reactors.

As well as saving money this would result in the government meeting it's carbon reduction targets without the need for any new nukes at all.