Page last updated at 13:34 GMT, Friday, 5 September 2008 14:34 UK

Benn denies fuel bill cave-in

Hilary Benn outlined steps being taken to help those on the lowest incomes

The government has denied "caving in" to the energy companies over cash rebates for households struggling with soaring fuel bills.

Ministers were accused by the unions of betraying poor families after they ruled out the one-off payments.

But Environment Secretary Hilary Benn said the energy-saving measures promised instead would offer a more long-term solution to rising prices.

The government also insisted a windfall tax was still an option.

Mr Benn told BBC News: ''Nobody's caved in to anybody.

"We are continuing to discuss with the energy companies what further help - I think it is only fair and right - that they should give to assist people with their energy bills this winter. And we will be making an announcement next week.

The clear message to deal with the energy companies is put the windfall tax on
Lindsay Hoyle
Labour MP

"The really important thing is that we do concentrate on helping people to get those bills down for the long term, permanently, and that makes a lot of sense."

He also refused to rule out a windfall tax on the energy industry.

'Big profits'

He told BBC Radio 4's The World at One: "I think it's only fair that the energy companies should make a further contribution.

"We're discussing with them what form that might take. But we really must not dismiss insulation measures because once you get those things done then it reduces your bills compared to what they would otherwise be."

More than 100 Labour MPs have backed calls for a windfall tax.

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Lindsay Hoyle, Labour MP for Chorley, said action had to be taken because the energy companies were putting prices up even though world gas prices were now falling.

He said: "The clear message to deal with the energy companies is put the windfall tax on. You want to make big profits. We are going to take it back off you.

"What we need to see is the price of energy dropping. People keep saying 'oh well, energy has got to go up' - no, it does not.''

'Greedy utilities'

The government's decision to rule out a one-off payment - in addition to the winter fuel payments for pensioners announced in March - provoked fury from the unions.

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Huge profits are trousered rather than being ploughed back into maintaining or improving services
Les, Southend

Tony Woodley, leader of the UK's biggest trade union, Unite, branded it a "downright disgrace".

He told BBC Radio 4's Today programme: "This is no longer about lagging the lofts, this is about looking after people who are going to be in very, very serious trouble to heat their homes."

He said the government should introduce a windfall tax on the energy giants or go "even further".

"We need to legislate to cap these price rises from these greedy utilities here so that we help the ordinary family in our country - if we don't do that then we would have betrayed our people and betrayed our party."

Labour backbencher Fabian Hamilton warned ministers they could lose support from people who needed help paying bills.

"The consequences for Gordon Brown and the government could be very serious indeed," he said.

"They could further lose support from those people who look to the government for the help that they need right now."

Mr Hamilton also said support from Labour's strongest backers "might fade away considerably".

'No gimmicks'

It comes as research found the "big six" energy suppliers increased their shareholder dividend payouts by 19% last year.

The suppliers paid 1.64bn in dividends in 2007, 257m more than the year before, a study commissioned by the Local Government Association said.

Acting LGA chairman Sir Jeremy Beecham said the report "torpedoes" the companies' argument against a windfall tax, which they claim would harm long-term investment.

But the Energy Retail Association - which represents the big suppliers - said that companies were at liberty to decide their dividends and that shareholder payouts did not affect investment plans.

In a speech on Thursday to the Scottish Confederation of British Industry, Prime Minister Gordon Brown said there would be no "short-term gimmicks or giveaways".

He said the government was working with utility firms "to address the problems caused by the impact of world oil prices on gas and electricity bills".

Mr Brown also said he was "cautiously optimistic" about the state of the economy.

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SEE ALSO
PM rules out one-off fuel payment
04 Sep 08 |  UK Politics
Windfall tax is 'still an option'
03 Sep 08 |  UK Politics
MPs call for energy windfall tax
26 Aug 08 |  UK Politics


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