New blow to government’s plan to help fuel-poor
Posted on: September 5th, 2008 by Jenson Brayshaw
Prime Minister Gordon Brown’s plans on helping 5 million fuel-poor households by extracting money from big energy companies have hit a serious roadblock. The companies have warned that if the government goes ahead with its plan, the companies will cancel their planned investment of £10bn in renewable energy and nuclear power generation.
The government has been hoping that energy companies would provide funds for its drive to improve energy efficiency and home insulation. Assuming price rise of energy to be permanent, the government sees its initiative as the only long-term solution to help the fuel-poor.
Lady Vadera, the business minister, and a strong supporter of Gordon Brown, is busy holding private meetings with energy companies. She is seeking to get their agreement to a 3 year programme of helping with the insulation drive.
After suspending stamp duty on certain house purchases, Gordon Brown is keen to announce the final decision on the above issue by next week as his latest step towards economic recovery.
Downing Street has also been toying with the idea of imposing a windfall tax on energy companies to fund its insulation drive. However, Chancellor Alistair Darling and John Hutton, the business secretary are opposing the measure. They feel that it will adversely affect investment plans of energy companies and also hit business confidence.
A majority of Labour backbenchers are in favour of windfall tax. These include Tony Lloyd, chairman of its parliamentary party. With TUC scheduled for next week, the government is under pressure to resolve the issue quickly.
