Brown energy package 'too little, too late'

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Indy Politics

Gordon Brown ran into a fresh onslaught of criticism today as his much-anticipated energy package was derided.

Moves to help people cope with soaring fuel bills were dismissed as inadequate and failed to end demands for a windfall tax on energy firms' massive profits.

The Prime Minister's pledge that the companies would stump up £910 million towards the package - without adding it to customers' bills - was also immediately undermined.

An industry spokesman warned that "the bill to some extent always ends up with the customer", while ministers admitted they were powerless to stop companies passing the cost.

The row threatens to overshadow Labour's annual conference this month as the party's MPs joined the attack and unions vowed to hoist it to the top of the agenda.

As part of a package that has been heavily-trailed by Downing Street, six million low income and pensioner households are to get free loft and cavity insulation.

Another five million homes will get half-price energy-saving measures.

Mr Brown said there would be "immediate help for those who need it most" but stressed that the moves were focused on reducing energy consumption.

"Our objective is nothing less than a sea-change in energy efficiency and consumption, at the same time as helping the most vulnerable households this winter," he told a Downing Street press conference.

Mr Brown said the Government would be legislating to ensure that energy suppliers and electricity producers would provide £910 million in funding for the measures.

There would also be action to ensure that households on pre-payment meters do not face higher tariffs, he said, while 600,000 low-income households will have lower social tariffs by the end of the year.

In the event of "severe" weather this winter, cold weather payments will increase from £8.50 to £25 a week.

Mr Brown rejected calls for a windfall tax but said £910 million would be raised towards the package from energy suppliers and electricity generators.

He added: "We want to keep energy bills as low as possible and I do not expect the £910 million that we raise to be passed on to the consumer by the energy companies."

But that appeared to be contradicted by the Association of Electricity Producers, whose chief executive, David Porter, suggested Mr Brown had been "too sweeping" in his claim.

"They will try to contain this because they have to, but it remains to be seen just how much of it ends up on the customers' bill in the longer run," Mr Porter said.

"Whenever people impose costs on an industry like ours - or indeed just about any other industry - the bill to some extent always ends up with the customer.

"But the energy retailing business and indeed energy wholesaling that I represent is competitive so you can't simply pass through the entire cost."

Business Secretary John Hutton said: "Of course they are able to (pass on the cost to customers), the question is whether they are going to."

Meanwhile, the Government faced a barrage of criticism from consumer and pressure groups, who said the moves were a small step in the right direction but not enough.

Mervyn Kohler, special adviser at Help the Aged, said: "This is a flimsy and failing package which does little to help older people struggling to cope with soaring fuel bills."

Gordon Lishman, director general of Age Concern, said: "This package will leave millions of the poorest pensioners wondering how they will afford their bills this winter."

Gas and electricity watchdog Energywatch criticised the Government's response to the growing fuel poverty crisis as being "too little, too late".

Chief executive Allan Asher said: "The lack of political will to tackle fuel poverty is not just disappointing, it approaches negligence.

"While Government has now woken up to the scale of the challenge and is becoming alert to the need for some action, the sense of urgency is lacking.

"The elements that are sensible and welcome are sadly overshadowed by what is lacking."

Save the Children said: "Children living in poverty are going to be cold this winter and their families are having to make tough choices between having the heating on and having a hot meal.

"This package only scratches the surface of what is needed to help children in fuel poverty."

Tony Woodley, joint leader of the Unite union, said the moves were not enough and vowed to make the issue a central theme of this month's Labour conference.

"The measures unveiled today are inching in the direction of social justice but they need to take far bigger steps to avert fuel poverty hitting thousands of needy people this winter," he said.

Mr Woodley said that only a windfall tax would provide the necessary help for people this winter, adding: "Unite will fight on for fuel justice.

"We'll be taking the case to the Labour Party conference, turning up the volume until government puts the public interest over the vested interests of big business."

Labour MP and former minister Frank Field added: "The Government has spent all summer roaring about the package it will produce and now out pops a mouse of a proposal that will probably do very little for many of the poorest pensioners meeting this year's winter fuel bills."

Shadow business secretary Alan Duncan said it was "not clear how this announcement will help the millions of people who will struggle to heat their homes this winter".

Liberal Democrat leader Nick Clegg said: "While these measures are baby steps in the right direction, the Government should have compelled the energy companies to go much further."