Union fury over fuel payment U-turn

1:53pm Friday 5th September 2008

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The decision to rule out cash handouts for households struggling with soaring fuel bills has been blasted by unions as a "downright disgrace".

Ministers were expected to unveil plans to give each household up to £100 following in-depth discussions with power companies.

But Whitehall sources confirmed that the Government will instead focus on long-term proposals, including support for energy efficiency measures.

The Unite union said "greedy" fuel companies have won out over struggling consumers and people need an "immediate respite" from rising energy costs.

Left-leaning pressure group Compass said the real disappointment will be felt by the "fuel poor who will go cold this winter".

In a speech to the Scottish CBI in Glasgow, Gordon Brown had insisted there will be no "short-term gimmicks or giveaways".

Mr Brown said: "You cannot address a long-term problem - the supply and demand for oil - with a short-term gimmick like a fuel duty stabiliser."

Ministers will now announce an assistance package for those affected by rising energy bills next week, following the £1 billion package of support for the housing market announced on Tuesday.

The scrapping of proposed one-off payments is likely to upset more than 70 Labour backbenchers, who last month signed a petition calling for the introduction of a windfall tax on energy companies to help hard-pressed families.

Tony Woodley, joint leader of Unite, said: "There must be a re-think and cash assistance for every needy household in the land. It cannot be right that big business is allowed to bank their obscene profits while ordinary people will shiver this winter."

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