PM slammed over fuel cash 'cave-in'

6:29pm Friday 5th September 2008

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Ministers have denied caving in to the energy companies after Gordon Brown ruled out one-off payments to help families struggling to pay soaring energy bills.

The Prime Minister faced an angry backlash after he used a keynote speech on Thursday night to make clear that there would be no "short-term gimmicks or giveaways" when the Government unveils its much-vaunted energy plan next week.

Trade unions and Labour MPs responded by launching fresh demands for a windfall tax on the profits of the energy companies.

Environment Secretary Hilary Benn rejected claims that the Government had buckled in the face of pressure from the energy companies. "Nobody has caved in to anybody," he said.

He said that discussions with the companies were continuing and that the Government still expected them to make a "contribution". He refused to be drawn on whether a windfall tax had been ruled out.

Unite general secretary Tony Woodley warned that voters would punish the Government unless it showed that it was prepared to stand up for "the ordinary people in our country".

"Our party will say to this Prime Minister... if you don't turn round now and stand up against vested interests and work for ordinary people, then don't be surprised when this country fights back, and in the Labour case sees them go into opposition or in the Tory case doesn't even see them go into power," he said.

The issuing of fuel vouchers worth between £50 and £100 to up to seven million of the poorest households had been expected to form the centrepiece of next week's energy package. Mr Brown, however, made clear that the announcement would concentrate instead on measures to improve energy efficiency.

The Prime Minister's spokesman defended the approach, saying: "This is the most effective and sustainable way to reduce energy bills in the long-term."

But Age Concern director general Gordon Lishman said that people urgently needed help with their payments this winter. "Pensioners up and down the country will be devastated if extra help for those struggling to afford their bills is rejected. This would usher in a winter of discontent for the one in three pensioners likely to be in fuel poverty," he said.

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