Gordon Brown today faced a backlash from the Labour movement after signalling that the government will not be making cash payments to low-income families to help them with the cost of rising fuel bills. Tony Woodley, the joint leader of the Unite union, said that the prime minister ought to be forcing energy companies to contribute to a subsidy programme because people were going to be in "very, very serious trouble" when they had to pay the bills to heat their homes in the winter. And Fabian Hamilton, one of the Labour MPs campaigning for a windfall tax on energy companies, said that the consequences could be "very serious indeed" for Labour. Ministers have been negotiating with the energy companies in the hope of getting them to subsidise extra help for those on low incomes and in the summer there were reports that there could be one-off payments worth up to £150 to help people with their bills. But last night, in a speech to the Scottish CBI, Brown signalled that this was no longer an option. In an interview on BBC Radio 4's Today programme this morning, Woodley said that Brown had to stand up to "vested interests" and help ordinary people. He said: "This is about the society we live in. Are we going to see market forces rule? Or is the Labour party going … to stand up for the ordinary people in our country that are going to struggle? "This is no longer about lagging the lofts, this is about looking after people who are going to be in very, very serious trouble to heat their homes here." The government ought to go further than implementing a windfall tax, Woodley said. "We need to legislate to cap these price rises from these greedy utilities so that we help the ordinary family in our country. "If we don't do that then we would have betrayed our people and we would have betrayed our country." On Newsnight last night, Hamilton, the Labour MP for Leeds North East, said Labour could be damaged if it was not seen to be helping those who have most to lose from the rising cost of energy. "And I think that people like me - who are strong supporters of Gordon Brown and the current government as it's constituted - I think that our support might fade away considerably if we don't see the very people that we are trying to help supported by Labour," he said. Brown's speech last night followed reports that ministers are failing to persuade the energy companies to contribute voluntarily to the cost of one-off payments. Officially the government has not ruled out extracting money from them using a windfall tax. But ministers worry that this could backfire, because the cost could be passed on to customers, and the companies do not appear to be taking the threat of it very seriously. The government's package to help people deal with rising fuel prices will instead centre on extra financial help from electricity producers to pay for home efficiency measures, targeted at low-income households. Brown is still hoping to tout the programme as worth £1bn. But Downing Street is concerned that the package will disappoint Labour backbenchers eager to see a big windfall tax on the electricity firms. Last night Brown said he was working up proposals with the utility companies. He told the Scottish CBI: "Not short-term gimmicks, or giveaways, but firm steps towards making every home in Britain more energy efficient, thus reducing bills not just temporarily, but permanently. You cannot address a long-term problem — the supply and demand for oil — with a short-term gimmick." Government sources said all the additional direct government help to soften the impact of fuel bills had already been set out in the March budget when increases in the winter fuel allowance had been announced. Ministers are instead focusing on extracting extra funding from the energy companies for the carbon emissions reduction target programme, a £1.5bn, three-year obligation on energy suppliers to install home-based energy efficiency measures for people on low incomes, those with disabilities and those aged over 70. But talks with the energy firms are incomplete. Richard Lambert, the CBI director general, warned against a windfall tax, saying the worst way to assist the fuel-poor "would be to impose an arbitrary and unfair tax on the energy industry, just at a moment when we want those same companies to be preparing for vastly increased investment in our energy infrastructure". But the Local Government Association claimed the big six electricity producers had boosted dividend payments to shareholders by £257m over the last year, suggesting they were not ploughing their profits into investment. Brown said he was "cautiously optimistic about the long-term resilience and underlying strengths of the British economy." He said: "At root our economy is better placed to weather any global economic storm than it was the 70s, 80s or early 90s". After chancellor Alistair Darling's more gloomy forecasts in his recent Guardian interview, Brown said he rested his cautious optimism on continued historically low interest rates, subdued wage pressures, fast-growing productivity, continued low levels of public debt as a proportion of national income, and the "most robust independent competition regime anywhere in the world". The government would not let down hard-working families on modest and middle income families: "We will ensure that no one who is prepared to work hard and adapt to change will lose out as a result of global forces." But Britain could not pull up the drawbridge, or be immunised against the first great financial crisis of the global age, a crisis allied to a "global credit crunch and global rises in commodity prices". The shadow chancellor, George Osborne, said: "The prime minister is in denial about both the crisis of confidence in his leadership and the economic crisis facing the country. His speech is totally at odds with the bleak assessment given by his chancellor just five days ago. "At a time when Britain needs strong and united leadership with a clear sense of direction, we have a Labour government descending into civil war and a chancellor and a prime minister who publicly disagree on the severity of the problems we face."
Gordon Brown faces backlash over fuel bills for poor
PM suffers backlash from Labour movement after signalling that government will not be making cash payments to low-income families
Friday, 5 September 2008
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