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Taxpayers to pay for PM's £910m winter fuel package
Nicholas Cecil, Chief Political Correspondent12.09.08
Taxpayers are to foot the bill for a large share of the £910 million fuelsaving package agreed by energy giants, it emerged today.
The revelation is likely to heighten anger among Labour MPs over Gordon Brown's refusal to impose a windfall tax on energy companies making big profits.
The Prime Minister unveiled the home insulation deal yesterday as part of his economic recovery plan.
But serious doubts were quickly raised after one energy chief admitted that part of its cost was likely to be passed on to consumers in higher bills.
Today the Financial Times revealed the taxpayer will also be hit by the agreement between the Government and energy firms as they will be able to offset the cost of lagging homes against corporation tax. The package includes free cavity wall and loft insulation for pensioners and poor households, and increasing cold weather payments from £8.50 to £25 a day to those eligible if temperatures drop below zero for seven days.
But shadow chancellor George Osborne accused Mr Brown of exaggerating the scale of the benefits to cash-strapped households while Help the Aged called them "flimsy."
Mr Brown stressed yesterday that he did not expect the cost of the scheme to be passed on to consumers.
However, David Porter, chief executive of the Association of Electricity Producers, suggested that his wish was likely to be ignored.
He said: "Whenever people impose costs on an industry like ours, or any industry, the bill to some extent always ends up with the customer."
Reader views (9)
Nu Labor should go! We can now see clearly the damages and the lack of execution they provide.
- Jacqueline, Hampstead, London
This gov. could help reduce fuel bills in one stroke.
Remove the 5% Vat that they charge on fuel bills?
Will it happen - I think not. They are so cash-strapped
they will look every were else, other than out of their pockets.
- P C, Rainham. England.
No other government in history has sold this country out like new Labour has.This government has allowed an Indian firm TO take over steel making here,for how long it will survive and the orders go to India no one knows.The Power companies are mostly German or French,no English share holders here and with the other English firms New Labour allows them to charge what they like.It is only a short time before manufacturing jobs will go due to their obscene greed. In the future i wonder how many people will die of cold related illness because they cannot afford the bills?
- Stan White, leeds
All energy suppliers could calculate a “Reasonable Usage Threshold” and charge a low unit rate for the first “N” units for both gas & electricity. If a user goes above this threshold the unit rate would ramp up either on a sliding scale, or in steps. This will encourage more efficient use of our national energy resources by educating people through their wallet.
At present all energy unit cost bands operate in reverse with HIGH unit costs for the “Primary” units and lower unit costs for subsequent usage, so there is no incentive for the consumer to save. This policy would penalise the energy waster & reward the economiser in both the domestic and commercial sectors.
- Richard, Thame
Where else was the "government money" going to come from if not the taxpayer? Like the NHS - it ain't free!
- Rogan, DFW TX
Ron, Maggie
Did you vote Tory in 80's and 90's?? Coming home to roost now isn't it!!!???
- Simon, Newcastle
Why are we still stressing about profits made by the power companies? Any profits declared in the UK attract Corporation Tax at 40%, which goes back to the treasury. The dividends paid to shareholders either go to fund our pensions (paying tax when we retire) or to funds or individuals who pay capital gains tax. Surely this means that most of the profits are skimmed off in taxation anyway? Unless I've got it completely wrong...
- Phil, Derby, UK
what a strange setup the tax payer gets shafted and the power gians still reap obscene profits
Nationlise part of it and control the greed Nationlise allof it let the country have the profit not the stock market gamblers
- Ron Sealey, Croydon England
Cap the prices and make a windfall tax now. What is wrong with Gordon Brown? He is not fit to govern Britain, he does not look after the British peoples interest, only big foreign businesses.
- Maggie, London
