ard-pressed house owners won't need to pay extra on their power payments to fund manufacturing of hydrogen, Grant Shapps has indicated.

An annual levy was anticipated to be launched in 2025, by way of the Government’s Energy Bill going by way of Parliament, to cowl the associated fee hole between producing low-carbon hydrogen and polluting fossil fuels.

But signalling a coming U-turn, the Energy Security Secretary stated he opposed a direct cost on the payments of power customers, already saddled with hefty prices.

I don’t need to see folks’s family payments unnecessarily bashed by this

It comes amid persistently excessive inflation and after a shock rate of interest hike threatened extra ache for struggling households.

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Mr Shapps advised the Telegraph: “What we need to do is make sure that, A, we can get our hydrogen industry up and running. Really, really important, massive export opportunities, great way to store energy, great way to power heavy industry and what have you.

“And, B, I don’t want to see people’s household bills unnecessarily bashed by this.”

The Onward suppose tank has estimated {that a} hydrogen levy would elevate power payments by round £118 per 12 months for the typical twin gasoline family.

The Cabinet minister stated he favoured different methods of funding the transfer in the direction of cleaner power and internet zero.

He stated he didn't need to see a “levy directly on households”.

“The way that’s funded will have to be further up the chain.”

This may probably embody touchdown the trade with the prices or normal taxation.

The newspaper reported that talks are ongoing between Mr Shapps’s Department for Energy Security and Net Zero, No 10 and the Treasury to agree an alternate, with hopes the brand new scheme will probably be put out to session earlier than the tip of July.

Government plans for a hydrogen levy have prompted a backlash from Conservative and opposition MPs who warned in opposition to growing power payments that soared within the wake of Russia’s invasion on Ukraine and amid a cost-of-living disaster.

Labour stated the about-turn is an effort to swerve a rebel by Tory backbenchers.

Shadow power minister Alan Whitehead stated: “This is yet another humiliating U-turn for Rishi Sunak, showing that his Government is completely out of touch with reality.

“During a cost-of-living crisis, millions of families are already struggling to make ends meet and yet the Government have been doggedly pursuing these regressive levies for months, only to finally back down over fears of a rebellion from their own backbenches.

“Labour will continue to stand up for the millions of families across the country that are paying the cost for Tory failure. We will reform our broken energy system to we deliver the green transition we so desperately need, energy security, and bills that are affordable.”