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Gordon Brown today presented £1 billion of measures to help British households cut their energy bills - and joined a chorus of disapproval at a power company executive's 'inappropriate' remark that a cold winter would be good for business.
The measures, part of a wider political relaunch for the Prime Minister ahead of the party conference season, will see up to 11 million households offered free loft and cavity wall insulation in the next few years and others a grant covering 50 per cent of the cost.
In addition, 600,000 of the poorest families will, after a deal with energy suppliers, have lower "social tariffs" by the end of the year. There will also be action to ensure that households on pre-payment meters do not face higher tariffs and, in the event of "severe" weather, a rise in cold weather payments from £8.50 to £25 a week.
Mr Brown told his regularly monthly Downing Street press conference that the package was designed to deliver "a real and lasting change in the way we all use energy".
The package will be largely funded by the six major energy suppliers, who, in return, will not be hit by a windfall tax on their profits, as unionists and Labour leftwingers have demanded.
But the initiative was partially upstaged by a row over a remark from an industry executive, apparently gloating that high oil prices and the prospect of a cold winter leave the large energy companies in a win-win situation.
Asked how a bitter winter would affect already high energy prices, Mark Owen-Lloyd, head of power trading for E.ON UK, told an Ofgen seminar yesterday: “It will make more money for us."
Roger Godsiff, the Labour MP for Birmingham Sparkbrook and Small Heath, described the joke as a very cynical comment that merely shows the contempt that major energy companies have for the general public". A spokesman for the charity Help The Aged added:“Fuel poverty is no laughing matter."
E.ON, which last month raised electricity prices by 16 per cent and gas prices by 26 per cent, was quick to apologise and hint at disciplinary action against the executive. “We are aware of our customers’ difficulties with rising fuel prices and completely understand why people wouldn’t find it funny,” a spokesman said.
The Prime Minister agreed."These were totally inappropriate remarks," he said. "Everyone is aghast at people making remarks like that."
Mr Brown said the Government had considered introducing a windfall tax but decided against it.
He said: “We looked at all possible options of both raising money and the action that we could take and that has been an inquiry that we had over the summer months. Instead of a windfall tax, this is the better way of moving forward.
“The special payments will be made, as a result of laws that we will pass in the House of Commons, by the energy suppliers. For the first time the energy generators will be paying as well as the distributors. The total amount of money raised will be £910 million.
He added: “We want to keep energy bills as low as possible and I do not expect the £910 million that we raise to be passed on to the consumer by the energy companies. I think that’s a very important point to make."
Mr Brown said that he expected six million households to receive free loft or cavity wall insulation under the scheme by 2011. The Government's wider aim is to have all households in the country properly insulated by 2020.
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Now the loft insulation and cavity wall companies will see falling sales as everyone waits to see if they qualify, I was in the process of arranging my loft insulation, I will now wait and see if I can get a discount, funny the property market also suffred simularly over the stamp duty fiasco!
Patik, Northampton,
There has been a consistent failure to ensure suppliers put in adequate investment into gas storage.
Government has been incompetent in its failure to address the ageing nuclear infrastructure.
There has been a failure of governance when it comes to generation capacity.
Government should resign
Dave, Chorley,
And the sad thing is that this Labour Party will not kick their leader out (who would take his place) because the country would not accept another Labour leader-by-proxy. That would mean a General Election - and By Bye Labour. So this bunch of incompetants will hang on the gravytrain for dear-life
Hugh Colgan, Buckfastleigh, England
What about those who live in older Park Homes?
There are no cavity walls or lofts to be insulated, but the heating bills will still be going up and up.
Jeff. Hickling.
Nottingham. UK
Jeff, Notingham, UK
Once a king of France said words similar "let them eat cake "
All the aristocrcy involved in the depression of the masses were beheaded and you had the seed of communisim sown securely in the French state.
The same will happen in this country unless the captalists distribute the capital. Morally
Peter Kavanagh, London ,
Labour always to you money out of your pocket so they can waste it.
steve tea, manchester, cheshire
Unfortunate as it is, why do people assume cheap energy is a god given right? No-one seems to care about how the country is going to generate energy for the future generations! If you got a cash lump sum this year, how would it help next year?
Paul, London, UK
I lived for three years in a 1986 built row house in Cupar, Fife. It had virtually no insulation in the walls and far too little in the attic. By comparison, our house here, also built in 1986, had insulation values of R-41 in the ceilings and R-36 in the walls. The UK wastes so much heat !
Russ Young, Santa Fe, New Mexico, USA
Clive Burghard - Well said, you hit the problem on the nail. Greed in society have led us to where we are. The Capitalist Model is tettering on the edge - and the fatcats are stuffing their pockets whilst they can. Thieves and Scumbags - that sums this bunch of 'loser' politicians.
Hugh Colgan, Buckfastleigh, England
What a complete waste of time
Paul Farmer, LONDON, uk
I am a pensioner and some years ago, for my own comfort, ensured my home had the highest standard of insulation. The benefit? I am now paying 60% more for gas this year even though market price is the same as in 2003, 40% more for electric and double the price for heating oil.
Brown's economics!!
A.M. Williams, Stafford,
Still all spin, he does not know what to do and never will.
Just go and let someone else get us out of this mess.
Pathetic to watch a drowning man
Alan, Southampton, England
Providing insulation to cut people's heating bills and reduce overall fuel consumption is a reasonable idea but the government seem to assume that no-one has an insulated house. For the many households that are already properly insulated, there will be no help whatsoever for their fuel bills
Nick, Shropshire, UK
so now we have to pay even higher fuel bills to pay for Brown's incompetence. the guy is a useless idiot who should go now.
tone, cambridge,
Humm - lets think... If Papa Brown had stopped house prices rising so fast we would be able to bulldoze the worst houses and build eco friendly ones instead...
Who on earth does it help to have to pay £200K + for some of the crappiest houses on earth?
Tony, Derby, England
Owen-Lloyd should be given the Hank Rearden Medal for straight talking. There are too many fawning toadies around pretending to be businessmen, doing the politicians' job for them by promoting the idea that it's evil to make money, hoping to be thrown a few scraps as the politicians devour us.
Sam B, Bristol,
we never get severe weather for seven days or more that why he put it up to £25.00! I would like to know how many people got the payment last year .Even with loft and cavity wall insulation and double glazing you still need your heating on just the same .Poor getting poorer rich getting richer .
Ron, ST.albans, England
they say that society is only 3 meals from revolution... frankly i think its a damn site closer....
Mark J, Hereford, UK
Brown belongs in a library studying books and writing reports. He is too naive to be a leader. Our energy industry fails to be rigorously regulated. Energy price increases are disproportionate at a time when they are on the way down. Insulation of older properties will take a decade. Go Mr. Brown.
Dr. Jimmy, Nottingham, England
I have a new house with insulation levels way above normal; my heating bills are 1/2 average. Do I get a retrospective rebate? Yeah right! Will I subsidise part of the £1BN package? You bet your life! Even if you make the initial investment, you get stuffed whatever. £1BN has to come from somewhere.
axel, Wych Cross,
The utilities that were sold off by the Government, did not belong to them, they belong to the British People and should be returned immediately, those responsible should be charged with theft, and those who purchased them, should be charged with receiving stolen property.
Clive Burghard, Lancing, ENGLAND
I'm over 70, on an income of £10,000 pa and paid for my own loft insulation last year. My house is listed,has sash windows and no cavity walls. Nothing here for me.then? The usual Brown spin and disinformation.
The Old Girl, Bungay, England
Having just switched from B.Gas following a fat cat's two jumpers comment I now find the energy supplier I have switched to, E-On also has a fat cat in the Fagin style. Mark double barrelled should face the real thing. I hope the disciplinary action leaves him out inthe cold - literally.
R.F.Ruth, Brentwood, UK
Youve bankrupted the country Gordon. You have NO money, and you spin and spin and spin. And spin.
Go. And take rest of the muppett show with you.
ronnie, bucks, UK
I note that Greedy Gordon didn't suggest taking the VAT off the fuel bills?
Then again 5% of a lot is more than 5% of a little and so his 'consultant' chums can once again feed at the trough....
What a disgusting cabal.
Pu Li, Guangxi, PRC
Wholesale energy costs have gone up by upto 25%, but that is only part of the equation. The rest of the company costs have not gone up by that much, so how come the billed cost has? Profiteering, that's how!
Ron, Milton Keynes, UK
What are people on low incomes in rented properties supposed to do? Pay the 50% to improve the landlord's property? Or can we demand that the landlord has loft and cavity wall insulation installed - for no further increase in the already astronomical rent?
Leon, Oxford,
Under HEES (Home Energy Efficiency Scheme) you have been able to get free insulation for your loft, draught-stripping for windows if you're UB40 or a pension, for at least 20 years. On certain benefits you can also get free cavity wall insulation! How is Brown's offer new if you can already have it?
Jay , Stockport,, England
It probably hasn't occurred to Brown that most of the poorest people in this country don't own their own property and so won't be helped by these measures in any way. This PM is so out of touch with ordinary people it's unbelievable. Or perhaps he simply doesn't care.
trevor dunn, edinburgh,
I already have very good loft and cavity wall insulation, all my windows and doors are double-glazed. My energy costs have gone up nearly 60% this year. How does this proposal possibly help me?
However, I can expect even higher prices from the energy companies next year to pay for this!
Stuart Tunstead, Plymouth, UK
It's good to know that Gordon has such a good grip on reality, and knows the facts before he opens his mouth.
Peter Fordham, Pego, Spain
The contempt that the energy companies are showing for the public, is no different from the contempt that the government(s) have shown the public.
Mark, Yorkshire,
And what assurances are there that the energy companies will not then raise prices to cover the cost of these "improvements"?
Hassan Azam, Banbury , England
I know of a water utility (non UK) that raised prices when widespread water saving was adopted - said they could not operate, let alone profit
Mike, London,
Free cavity wall and loft insulation for over 70s has been avaiable for some time now but was not made public by rhis government at the time (presumably hoping nobody would find out) and grants were already available to other sections of the public especially to those receiving benefits.
Ron Lomax, Spalding, England
If you get your supply from EON - switch. Millions of customers switching will give them a severe administrative burden. All the other suppliers charge the same or as near as in this fixed market so you won't lose.
David Smith, Stourbridge, UK
I think the elderly should have free fuel. I aggree that people in poverty should be helped out. But what about the working family who does not rely on subsidies and pays their own way - why should they suffer - they dont get get any help and this government wont listen - as always. WHY answer me?
mark, measham,
Surely a high proportion of the 600,000 lowest earners will be in housing schemes anyway, and therefore having such measures taken care for them anyway?
David, Oxford, United Kingdom
After Brown's announcement Frank Field said we have been waiting all summer for this announcement and when it comes its the size of a mouse. The total package amounts to about £1 per household including offering a 50% subsidy on insulation how are people going to pay the other 50% ,fresh air?
john, swindon,
Labour just won the next election.
Nick, London, UK
It's not the remark itself that's so offensive - it's the truth behind it!
Peter, Oxford, UK
So why exactally are we punishing the one Truthful guy in the business?
Antony, London, England
I'm not poor but have seen an erosion of the value of my wages in terms of spending power under Labour for many years now. with the world crises piling up, the time has come to improve my home insulation. The question is 'Am I entitled to the 50% assistance ?' I have seen confilicting statements.
Ron, Christchurch, England
So, Gordon Brown twists the arms of the energy companies to pay for a scheme that is clearly the responsibility of the government.
What next ?
Will he perhaps get the car companies to pay for us to have better garages, so our cars last longer, thereby reducing the demand for resources ?
Clive, Surrey,
I am on sickness benifits this will not affect me in any way unless the temporature drops below zero for seven days straight thank you very much gordon
also thanks for the ten increase in benifits along with hike in road tax what a brilliant government we have
Dave green, st helens, england
How will spending money I don't have to buy discounted insulation help me pay my gas bills this winter. I will doubtless earn too much to qualify for anything free and yet I do not earn enough to save any spare cash and if I did I would not need the assistance in the first place.
Oliver Kershaw, Brighton,
Millions of houses in this country were built before cavity walls were invented! Double glazing isn't allowed in listed buildings or conservation areas and many lofts are unsuitable for insulation, due to access problems.
Cameo, Berkhamsted, uk
And what assurances are there that the energy companies will not then raise prices to cover the cost of these "improvements"?
Hassan Azam, Banbury , England
It's not the remark itself that's so offensive - it's the truth behind it!
Peter, Oxford, UK
Economic reality - High fuel prices and high demand mean higher margins and higher profit for energy companies - so why the outrage and shock when someone in the business actually makes this statement of obvious - does Gordon Brown have such a weak grasp of economics he is unaware of this?
Peter, London,
Oh this makes all the difference, along with the stamp duty assistance and bailing out my bank I'm so made up with this government. Please please please can we have a general election now ? You've won me over Gordie !
Nick, Bedford, UK
The only people who matter to Labour, the jobless and people visiting from other countries. I applaud the extra assistance to pensioners, but its wrapped up in so many caveats it hardly seems more than window dressing. And once again, a BILLION pounds up in smoke. Tax the struggling classes more!
Chris, Nottingham,
What use is this to me?
I have cavity wall insulation,loft insulation and double glazing.
The cavity walls and the loft were installed in 1984 when the house was a new build and we changed the windows a few years ago.
As usual nothing from the government to help the majority of people.
Brian, oxford, United Kingdom