As the Government frantically searches for a solution to the energy crisis currently hitting the UK, plans remain up in the air and unclear.
Speculation first began surrounding the idea of a windfall tax on energy companies that would provide help for the millions of fuel poor. However, Gordon Brown has decided to shelve such plans amid fears that gas and electricity
providers would pass the tax on to consumers.
Nevertheless, reports from The Times today claim that the Government is using the threat of a windfall tax to ensure that the big energy companies do not pass on the costs soon to be incurred by a new energy efficiency scheme aimed at permanently reducing fuel bills.
According to The Times, Brown wants energy companies to pledge £300million each year for the next three years in order to help the neediest households become energy efficient and combat the rising prices.
In addition to energy suppliers, it is rumoured that Brown is considering forcing the involvement of energy generators such as British Energy. According to reports, the Government has given up on the idea of a voluntary agreement and is considering turning to legislation to get the energy companies to cough up.
And, if the energy companies attempt to pass the costs of the new scheme on to consumers, a windfall tax will come back onto the Government's agenda, reports today have revealed.
Commenting on the ongoing talks being held between the Government and energy companies and measures already in place, chief executive of the Energy Retail Association, Garry Felgate, said:
"Energy companies are fully committed to helping customers who are struggling with their bills and do so in a number of different ways: through energy efficiency measures via the £1.4billion CERT programme, financial assistance through social tariffs, winter rebates and price freezes, benefits entitlement checks and help with bills, and other voluntary assistance worth £275million. No other industry provides as much direct help to their most vulnerable customers."
As yet, any solid decisions and plans have not been officially announced as energy companies refuse to be walked over as they are already spending billions on the existing CERT programme and other measures. More light is hoped to be shed during tomorrow's TUC meeting, where it is thought that Brown's windfall tax threats will be made.
However, according to reports, the gas and electricity providers
are unlikely to take the orders lying down as they have been lobbying all weekend arguing that they are seeing their profits fall and that they already provide enough assistance to those who need it.
Despite the apparent falls in profit for energy companies, Centrica, parent to British Gas, still made a profit of £1billion for the first half of 2008 and its chief executive is expected to receive a pay rise to the tune of £1million this year.
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