Energy companies to pass costs to consumers

The UK government’s much vaunted energy package of £1 billion has been called into question. The energy companies have stated that most of the expenditure which they have to bear as per the energy package will get passed on to their customers. As if that was not bad enough, the industry sources have claimed that less than 150,000 more homes can be practically insulated before the coming winter with the amount of money being made available.

That is not all. Government has committed to increase funding for its ‘Warm Front’ programme by another £74 million over the next two years. But the amount that will be made available this year will be less than £55 million that was cut from the programme last year.

But the real trouble for Brown’s government is going to remain the energy companies. He had backed out of imposing a windfall tax on them for the fear that they might charge their customers to make good the extra expenditure. But that is exactly what they are going to do anyway. As far as they are concerned, forced expenditure, by any other name, is still a forced expenditure. And somebody has to pay for it. In a competitive market, it is always the customer who pays.

Some Labour MPs and Trade Unions still don’t seem to get it. They are continuing to hanker for a windfall tax.

The government is going to bring about legislation, forcing the energy companies to commit nearly £910 million, over and above an existing £2.8 billion obligation, towards improving energy efficiency of poor households.