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MPs warn Brown as he loses fight with power firms
Joe Murphy, Political Editor5 Sep 2008
Gordon Brown faced fresh Labour unrest today after losing a battle to make energy firms give cash help to needy families.
The Prime Minister had to abandon the plan for vouchers for up to £100 off the heating bills of 10 million households after power companies refused point blank to fund it.
One Labour MP said support for Mr Brown would "fade away" if he failed to make a stand. Fabian Hamilton added that the consequences for ministers of letting the firms off the hook would be "very serious indeed".
The Leeds MP said: "They could lose support from those that look to the Government for the help they need right now. People like me - strong supporters of Gordon Brown and the Government - our support might fade away considerably."
The latest setback to Mr Brown's political fightback came as weeks of heated private negotiations between ministers and the industry spilled out into a public showdown. There was dismay among MPs that No 10 allowed speculation about the cash vouchers scheme to carry on to the last minute.
The retreat means next week's longawaited policy proposals to help those struggling with sky-high heating bills will be watered down to focus on help with home insulation and a push for energy-efficient light bulbs and boilers.
Mr Brown put the best gloss on it by telling the Scottish CBI that energy efficiency was a better long-term form of help. "Not short-term gimmicks or giveaways - but firm steps towards making every home in Britain more energy efficient, reducing bills not just temporarily, but permanently."
Left-leaning pressure group Compass, whose call for a windfall tax was backed by 90 Labour MPs, said there would be "outrage" in the party and unions.
Compass chairman Neal Lawson said: "What people want is the warm glow of knowing the Government is on their side. They are not getting it." Tony Woodley, joint head of trade union Unite, said: "If you do not stand up now against vested interests and work for ordinary people, don't be surprised if Labour goes into opposition."
The fuel policy launch was due to be unveiled yesterday but was postponed to next week as the wrangling went to the wire. Downing Street attempted to force the energy firms' hands by threatening a windfall tax.
The firms countered by threatening to cut planned £100billion investment in cleaner energy or pass any tax to consumers.
The energy sector's hand was strengthened by French-based EDF being locked in talks about buying British Energy for £12 billion - a deal that would give a cash windfall to the Government and smooth the path for new nuclear power plants.
Chancellor Alistair Darling appears markedly cool on the idea of a windfall tax while Business Secretary John Hutton is against, on the grounds it could undermine foreign investment.
Reader views (3)
The only way Gordon Brown can subsidise fuel costs is by robbing more money from the 'coping class' - one way or another.
I will not be robbed any more by Clown-Brown in order for him to buy votes from the so-called 'poor'
- David, Gatwick, West Sussex, 05/09/2008 14:32
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Hello London,
Have we a man or a mouse in Downing Street?
Please if its the latter where is the Number 10s cat, oh its not bothered to chase the mouse its to FAT?
Enough said.
- John L., Scarborough N.YKS., 05/09/2008 14:30
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A windfall tax levied in this manor is a very bad idea: - It assumes the Government can use the money better than the energy companies (which given this Government’s track record is doubtful); it will dissuade companies from investing in the UK (and the energy sector desperately requires investment) and may even encourage more UK companies to leave; It ignores the fact the bulk of profits paid in dividends end up in the pension funds, and so an additional tax burden will result in lower pension annuities, and finally it will only encourage energy companies to increase their prices to compensate for the tax.
- Jeremy E, London, 05/09/2008 12:21
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