'Greedy' energy companies blasted over fuel bill cash U-turn » Housing » 24dash.com

The decision to rule out cash handouts for households struggling with soaring fuel bills was blasted by unions as a "downright disgrace".

Ministers were expected to unveil plans to give each household up to £100 following in-depth discussions with power companies.

But Whitehall sources confirmed last night that the Government would instead focus on long-term proposals including support for energy efficiency measures.

The Unite union said "greedy" fuel companies had won out over struggling consumers and people needed an "immediate respite" from rising energy costs.

Left-leaning pressure group Compass said the real disappointment would be felt by the "fuel poor who will go cold this winter".

In a speech to the Scottish CBI in Glasgow last night, Gordon Brown insisted there would be no "short-term gimmicks or giveaways".

The Prime Minister said ministers were currently "working up proposals" with utility companies but these would be focused on reducing bills in the long term.

Mr Brown said: "Not short-term gimmicks or giveaways - but firm steps towards making every home in Britain more energy efficient, thus reducing bills not just temporarily, but permanently.

"Because you cannot address a long term problem - the supply and demand for oil - with a short term gimmick like a fuel duty stabiliser."

He added: "At the heart of our approach must be a revolution in the way we think about and use resources; reducing our dependence on oil and by creating a low carbon economy achieving both greater security of energy supply and greater efficiency of energy use."

Ministers will now announce an assistance package for those affected by rising energy bills next week, following the £1 billion package of support for the housing market announced on Tuesday.

A spokeswoman for the Department for Business, Enterprise and Regulatory Reform (BERR) said ministers had been "working hard" with energy companies to find "long-term" solutions.

She said: "We are committed to responding to the concerns that hard-pressed families are currently facing."

Cabinet Office Minister Phil Hope had earlier told Channel 4 News that "long-term efficiency" was the way forward.

"Greater fuel efficiency - which means that people spend less on their bills - not only means people cope better because there's cash in their pockets but also the environment gets improved as well," he said.

"That's the long-term approach which could be a great benefit to the country as well as individual pockets."

The scrapping of proposed one-off payments is likely to upset more than 70 Labour backbenchers, who last month signed a petition calling for the introduction of a windfall tax on energy companies to help hard-pressed families.

Tony Woodley, joint leader of Unite, said: "At this moment in time people need immediate respite from the struggle to pay their gas and electricity bills.

"There must be a rethink and cash assistance for every needy household in the land. It cannot be right that big business is allowed to bank their obscene profits while ordinary people will shiver this winter."

Neal Lawson, chairman of Compass, said: "It is not a short-term gimmick to heat the homes of the poor and vulnerable.

"What people want is the warm glow of knowing the Government is on their side, they are not getting it. Just like the 10p tax issue - this decision can and must be turned round."

Labour MP Fabian Hamilton said the consequences for Labour ministers could be "very serious indeed".

He told BBC 2's Newsnight: "They could further lose support from those people that look to the Government for the help that they need right now.

"And I think that people like me - who are strong supporters of Gordon Brown and the current government as it's constituted - I think that our support might fade away considerably if we don't see the very people that we are trying to help supported by Labour."

Mr Woodley said the Government had not yet ruled out a windfall tax and called for legislation to cap energy price rises.

Gordon Brown had to stand up to "vested interests" and help ordinary people, he said.

He told BBC Radio 4's Today: "This is about the society we live in. Are we going to see market forces rule? Or is the Labour Party going...to stand up for the ordinary people in our country that are going to struggle?

"This is no longer about lagging the lofts - this is about looking after people who are going to be in very, very serious trouble to heat their homes here."

The Government should go further than implementing a windfall tax: "We need to legislate to cap these price rises from these greedy utilities so that we help the ordinary family in our country.

"If we don't do that then we would have betrayed our people and we would have betrayed our country."

Asked what his message to the Government was if all that was on offer was "lagging the loft" Mr Woodley said: "Our party will say to this Prime Minister...if you don't turn round now and stand up against vested interests and work for ordinary people, then don't be surprised when this country fights back and in the Labour case sees them go into opposition or in the Tory case doesn't even see them go into power.

"This is far bigger than Mr Brown, it is far bigger than Mr (Charles) Clarke's rantings. It is about fairness in society and in our country."

Gordon Lishman, director general of Age Concern, said emergency measures were "desperately needed" to help the most vulnerable households.

He said: "Pensioners up and down the country will be devastated if extra help for those struggling to afford their bills is rejected. This would usher in a winter of discontent for the one in three pensioners likely to be in fuel poverty.

"Energy efficiency measures would help to reduce bills in the long-term. However, they must be introduced alongside pricing reforms to ensure the poorest households get the lowest energy rates."

The Prime Minister's spokesman said that discussions with the energy companies were continuing.

He defended the Government's approach, insisting that promoting energy efficiency measures was the best way of cutting bills in the long term.

"The focus of the discussions with the energy companies is on how we can reduce people's bills not simply for one year but every year," he said.

"This is the most effective and sustainable way to reduce energy bills in the long-term."