Page last updated at 17:13 GMT, Tuesday, 28 October 2008

Brown warning over energy bills

Gordon Brown urges energy firms to cut household bills

Gordon Brown has urged energy firms to reduce petrol prices and household fuel bills to reflect the sharp fall in global oil prices in recent weeks.

The prime minister said some petrol retailers had cut prices in recent days but others must now follow.

Mr Brown also called for substantial extra support for countries worst hit by the global credit crisis.

In Paris later, Mr Brown praised President Nicolas Sarkozy's leadership of the EU during the financial crisis.

Earlier Mr Brown said major oil producers in the Middle East and Asia should contribute more to the International Monetary Fund's $250bn "bailout fund" to prevent the risk of the global downturn destabilising more countries.

It is in every nation's interest that financial contagion does not spread
Gordon Brown

Iceland, Pakistan, Ukraine and Hungary have all requested emergency loans from the IMF in recent days.

"We need this for the crisis we face now," Mr Brown said of his call for extra financial assistance.

"It is in every nation's interest that financial contagion does not spread."

Mr Brown did not rule out the UK providing extra help but said the emphasis would be on the largest oil producers and confirmed he would be travelling to the Gulf region on Saturday to press his case.

Mr Brown also said he was "determined" to see petrol prices come down across the board to reflect the fall in global energy prices.

'Pigs in a trough'

BP said on Tuesday that it made a 6.4bn profit in the three months to the end of September as oil prices soared, sparking renewed calls for a windfall tax on the profits on energy firms.

Tony Woodley, general secretary of the Unite union, compared energy firms to "pigs in a trough" and said a windfall tax was justified to help millions of people struggling to heat their homes this winter.

The government has rejected the idea of a windfall tax, saying it would deter investment in new energy sources, although the prime minister's spokesman said earlier that the Treasury and regulator Ofgem were monitoring utility prices closely.

Shadow chancellor George Osborne said it would be a "scandal" if BP did not swiftly cut pump prices while the Lib Dems said the news would be a "bitter pill" for families struggling to cope with higher bills this winter.

Scottish First Minister Alex Salmond called on ministers to scrap VAT on fuel bills and to raise the winter fuel allowance for pensioners to stop rising costs "driving people into fuel poverty".

At a joint press conference with President Sarkozy - who currently holds the EU rotating presidency - ahead of talks, Mr Brown said the European Union was fortunate to have someone of Mr Sarkozy's "status" leading it "in this very difficult time".

He said they would be discussing ways to stop "contagion" spreading to eastern Europe's emerging economies, to get banks lending again and lessons to be learnt from the sub-prime crisis.

He also said they would discuss ways to reform international institutions, to create "early warning systems" and "crisis prevention mechanisms" and to supervise the global economy. "This is a defining moment for how countries can work together," said Mr Brown.

Mr Brown will meet German Chancellor Angela Merkel on Thursday ahead of a summit of EU leaders next week.

The prime minister has won plaudits in Europe for his rescue plan for the banking system.

However, differences are still likely to arise between him and Mr Sarkozy over the role the EU should play in dealing with the crisis.

The two leaders are seeking to agree a common position ahead of the EU summit on 7 November, itself a precursor to a meeting of world leaders in Washington about the financial situation a week later.

Brown defends higher borrowing
27 Oct 08 |  UK Politics
MPs call for energy windfall tax
26 Aug 08 |  UK Politics
Recession fear as economy shrinks
24 Oct 08 |  Business
Sarkozy moves to limit job cuts
28 Oct 08 |  Europe

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