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Spend & Save

Simon Read: Clegg's plan to make us pay to help the needy is lacking detail


What's the Government's latest solution to the growing energy crisis? You know, the shameful fact that millions of people can't afford to adequately heat their homes because of soaring gas and electricity bills? Little Nick Clegg announced it proudly on Wednesday, throwing around big figures to prove the Coalition's commitment to helping the poorest.

At least £1.3bn will be provided every year to support energy efficiency, the Deputy Prime Minister proudly pronounced. And, even better, at least £540m will be used to fund energy-saving improvements in the worst-off homes.

Clegg says that cash will help 180,000 poor households. That means each home will benefit from £3,000-worth of home improvements. That's not too shabby a deal. Until you realise that the actual cost of that will be paid by us.

The Government's new Green Deal obliges energy companies to pay for the home improvements but allows them to claim the cash back through all our bills. By my calculations, helping 180,000 hard-up households will add around £25 to all our bills.

Personally I don't mind that, as long as the cash does get to the right people. But the figures prepared by Clegg's PR folk are a little woolly. The 180,000 homes he refers to are, presumably, those in extreme difficulty. But how is he proposing to identify them?

And what about those on the edge: families which won't qualify for the help, yet are effectively in fuel poverty? As Clegg proposes spending our cash, we need more details of where it's going and more real solutions to help the millions facing fuel poverty.

Some worried former clients of stockbroker Pritchard contacted me this week. It was closed down in February by the Financial Services Authority amid accusations of fund misappropriation. Shares owned by investors who used the firm were then transferred to a rival stockbroker, WH Ireland, while, at the beginning of March, administrators from the accountancy firm Mazars were brought in to sort out what remained of the cash assets.

The process has been one of the first to be brought under the new special administration regime, which was introduced last year as a result of the Lehman Brothers collapse. The Treasury introduced the new measures for investment firms "to ensure there is minimum disruption to financial markets as a result of their failure".

But what about the victims? They have already been forced to wait almost two months, and it won't be until May that the administrators will report. And then begins the potentially long process of claiming through the Financial Services Compensation Scheme.

The whole system falls down if innocent victims are forced to wait months for their cash. That can make them victims all over again. The Treasury must revisit this process and put investors at the heart of it, not financial markets.