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Energy firms cool on Brown's fuel aid bid
Joe Murphy, Political Editor3 Sep 2008
Gordon Brown's hopes of persuading energy firms to give £100 to needy families were fading today.
The Prime Minister wants cash handouts for heating bills to drive the next stage of his political fightback - a package to tackle fuel poverty.
However, the energy industry is holding out against ministerial pressure to stump up the bill for a rescue.
The lack of agreement is understood to be behind the postponement of the package from a planned launch tomorrow until next week.
A less ambitious deal is now expected, with a focus on longer-term aids to help families install energy efficiency measures, like better insulation, lightbulbs and boilers, rather than cash.
The danger for Mr Brown is that after a summer of speculation about dramatic moves, like a windfall tax on the energy giants who have raised prices steeply in recent months, it may turn out to be a damp squib.
It is already government policy to promote energy efficiency measure in people's homes as a way of tackling long-term fuel poverty.
Government officials are not ruling out a windfall tax but the Treasury is cool on the idea.
The Prime Minister woke this morning to largely dismissive reviews of the first stage of his political fightback - yesterday's package of housing measures including the stamp duty cut. It was also overshadowed by a warning from the OECD that Britain is probably already in recession.
Chancellor Alistair Darling last night sounded a warning about calls for the Government to underwrite a £50 billion rescue for the mortgage market.
A proposal to risk taxpayers' money to free up the market is expected to be recommended by banker James Crosby in a report within weeks. Downing Street is thought to be keen on the idea but the Bank of England governor, Mervyn King, called it "dangerous".
Speaking on Newsnight, Mr Darling said: "James Crosby is looking at the options and he will advise me. To close your mind to options at this stage could be wrong.
"But I also have to be mindful of the risk and whether any risk you assume is worth it in terms of the reward."
Housing industry experts say the shortage of mortgage loans, caused by the credit crunch, is the underlying problem in the property market.
Reader views (1)
Energy firms thrive on others' misery, they are nasty immorally greedy sharks who are the cancer of planet earth... may that energy they cling so fast to burn them high and dry...
- Nabil H, London, UK, 03/09/2008 21:48
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