Windfall tax on energy firms planned

A windfall tax on energy companies to tackle fuel poverty appears a step closer after the Business Secretary, John Hutton, yesterday confirmed the Government would present proposals "in due course".

As revealed by The Independent earlier this week, the idea forms part of Gordon Brown's political fightback, which involves a series of fresh measures designed to see off the charge that his government is stalling.

Mr Hutton said that the decision on the tax, which he is said privately to oppose, would be "very difficult" but revealed that the Government would "come forward with proposals".

Meanwhile the Chancellor, Alistair Darling, is said to be examining ways to tackle fuel poverty in the wake of soaring prices. Struggling families have already faced one round of punitive energy bill increases this year – about 15 per cent in January – and now face further rises, while Centrica, the parent company of British Gas, has made profits of almost £1bn in the first half of this year.

Mr Brown, who said last weekend that the latest price rises were "unacceptable", has been urged to introduce the tax by a group of MPs calling for "fundamental" reforms to cut fuel poverty.

On Monday, the Business and Enterprise Select Committee published a report which said that given "the extreme need of many households, there is compelling rationale for a ... one-off top-slicing of these gains to help fund action to reduce the energy bills of vulnerable families in the long term."