Is the energy package enough?

September 11, 2008

EnergyGordon Brown has unveiled an energy package designed to give some relief to householders struggling with ever-rising gas and electricity bills.

The six major energy suppliers will contribute to a one billion pound, three-year energy-saving initiative — but will not face a windfall tax on their profits.

Pensioners and people on low incomes or benefits will receive free loft and cavity wall insulation, while others will receive a 50 percent discount. The government says 12 million elderly households will benefit from the plan this Winter. 

Other measures include:

* A freeze on this year’s bills for 500,000 poor customers

* Partial reversal of the cut to the warm front programme giving free central heating to poorest pensioners

* Cold weather payments to go up from £8.50 a week to £25 a week for pensioners, the disabled and families with children under five – if temperatures drop below zero for seven consecutive days

Do you think it is enough? Would a windfall tax have been better? 
 

29 comments

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A windfall tax would send out the wrong signals to an already fragile economy; make too much profit and we will clobber you later!

However, I do think the competitions and monopolies commission should investigate why none of the energy companies are breaking ranks and undercutting one another. It smells like a conspiracy to form a cartel, which is illegal.

Instead of returning such obscene amounts of money to their shareholders, I would have liked to see the energy industry plough much more money into alternative fuels.

How many wind farms could have been built instead?

Posted by Fred | Report as abusive

Not worth the paper its printed on! Nu Labour again falling short of the mark! As a middle income earner these proposals do nothing for my wife and I. Once again we are forgotten by this Government the layabout bums get all the concessions whilst we work ourselves to the bone paying the extra bills. As the oil prices has come down why are we still paying top dollar for electrics and petrol! Rip off Britain at its finest!

Posted by Charles Johnston | Report as abusive

Despit the recent fall in the price of crude there has been no discernible reduction in the cost of fuels supplied to the domestic consumer. Why don’t the government introduce legislation linking the indexed cost of crude oil directly to the price paid at the pump or for delivery to a residence in the case of heating oil. The current lag between advertised crude prices and retail prices provides the energy suppliers with an entirely unjustified profit for which we have all to pay.

Get a move on Brown and do this.

Posted by Peter Kaye | Report as abusive

This is typical of new Labour, the cost of implementing this will cost more than the benefits it delivers. Why don’t they just put a capping system on prices governed by the price of oil on the market and allowing for fluctuations for rises as well as falls. When have we ever seen energy prices fall in comparison to the price of oil falling on a percentage basis. All we hear is cap all pay increases. This is nothing but common sense which seems lacking at all levels in Labour

Posted by R Francis | Report as abusive

I think its a good move for a change, especially given how hard times are becoming. The opposition are playing politics at a time when people are struggling and that is really sad. People need help not political games and i think this is where Mr Brown has actually redeemed himself here. I think he’s doing the right thing.

Posted by Nathan | Report as abusive

This energy package is already in place, its just not something the government try and make as public as they have done now. This is just another ploy by Gordon Brown to try and get back in Britains good books, it better not work.

Posted by Richard Rimmer | Report as abusive

Typical New Labour. Throw even more money at people to reduce the incentive to get a job even further. These benefits should only be offered to OAPs and incapacitated (and i don’t mean the million+ work shy individuals who are on invalidity benefits because of a “bad back”).

Posted by Nick | Report as abusive

I don’t understand why the energy companies are giving away £1 Billion, If they can afford to do that then why have they just announced price rises to cover their losses!! That is completely illogical.

Posted by Scott | Report as abusive

i have come to the conclusion that this joke of a goverment is incapable of sorting anything out. however, energy price control is out of governments hands, but they could lower the rate of tax on fuel, particularly on gas, coal and heating oil. whatever happens, always remember that the millions of working citizens will be lumbered with the bill. for gods sake, why can’t we get them out now ?

Posted by m crafts | Report as abusive

My only gripe with this is that whilst I have paid taxes all my life and worked hard to get to a resonable standard of life I now find that I will receive NO help at all from the government although we’ve recently had a baby and so my fuel costs will increase substantially.

The 50% discount for insulation will basically mean that I will get a discount but only if I take up the offer from my current fuel supplier who no doubt will mark up the cost of insulation in order to make more money out of me.

The windfall tax would only benefit the government and not individuals themselves so at least someone will get direct help through this method but frankly, whether it’s Labour or Conservatives, the individual tax payer NEVER benefits.

Oil cartels, including the fuel companies, get rich, manipulate the supply so they can charge higher prices and you and I pay for everyone else getting richer.

Great society…..

Posted by Charlie | Report as abusive

In response to Scott’s comment, fuel companies are required to put away some of the money they earn to a fund for these particular types of events and therefore it is no hardship on them at all. They have already received this money from us the customer and now they will benefit from a tax credit as they’ve got to give the money away… money that’s gone from our pockets to theirs and will now end up in the pockets of pensioners and the poor. I’m glad someone benefits but if I’m having to be charitable then where is my tax benefit for making a charitable donation?

Posted by Charlie | Report as abusive

The bottom line is that the consumer suffers each time the gment makes such decisions. They are letting energy companies get away with murder, so what is the point of this entire exercise? No Brownie point for Brown here!

Posted by Meredith | Report as abusive

I am disgusted by Brown. Just yet another move to promote himself as a public loving politician, yet he chooses not to impose a windfall tax on these energy companies, when that is clearly the order of the day. Sad, sad times.

Posted by Peter J | Report as abusive

What about those who are relatively low waged, have no families, and are therefore ineligibel to claim WTC or CTC? They go cold, do they? Another example of New Labour heterosexism…

Posted by david | Report as abusive

If the French can cap energy prices why are we unable to do the same?

Posted by Peter Kaye | Report as abusive

A bit stupid. Much of this package is to be “paid for” by the energy companies so guess what that means? Yes – you and I will pay for it by way of our energy bills. Trouble is, we’ll ALL pay – not just the poor and needy who have already been done over by losing the 10p tax band but the ordinary middle earner who will receive nothing from this package.

The very least Gordon Clown could have done was scrap the VAT on energy bills. That would have been fairer to us all.

Posted by Dane | Report as abusive

I am curious to know how many folks like myself will benefit. We are a married couple with no kids. We live near Inverness in a privately rented estate property. It has absolutely no insulation and is not considered a suitable proberty for installing said insulation. Double glazing and decent draught proofing are but a dream, not to mention the dampness especially during the winter. We have a £12 a bag coal fire (people seem to have overlooked the way domestic coal prices have risen) that heats only one room and the water. Using the governments 10% of income guideline we become victims of fuel poverty just trying to keep our living room warm, let alone the rest of the house. Heat in the other rooms requires the use of convector heaters. Thick ice on the inside of our upstairs windows is a regular occurrence. Yet in the last six years I can only recall receiving two cold weather payments. On top of this due to my having a serious and potentially life threatening heart problem my wife can only work part time so we are on income support that brings us to the Government minimum income of £121 a week. I qualify for the mobility component of DLA, which helps a bit. We have to have a car as we are two miles from the nearest bus stop and the best part of ten miles from Inverness. So the cost of petrol is a significant issue. This is not a post bleating about my living conditions but a statement on how many people in this country have to live.

What you going to do for folks like us Gordon?

Posted by L A Mac | Report as abusive

This is a good question to ask, and quite easy to answer as most ppl will agree that the energy package is just an extra burden on us consumers, with no respite for us in times of extra costs. The energy companies will conveniently transfer the billion pound deal burden to us by hiking prices yet again. Capped deals seem to be the only way to avoid this but there arent that many such offers in the market.

Posted by Aviva | Report as abusive

Great, just another cost to add to the already long list of expenses for households. What good is this going to do for low-income earners who do not have the capacity to pay for these services at the time being itself, let alone higher rates in the future?

Posted by comet23 | Report as abusive

How can the package be enough if it’s going to dip into our pockets even further, and make us pay for their supposed package….ridiculous

Posted by metrika | Report as abusive

I’m fed up with these hand-wringers moaning about ‘low income families’.

The UK has one of the most generous benifits packages in the World, and the country’s (relative) poor already get massive state hand-outs. Look at the Government’s balance sheet and debt figures for evidence.

Why is it, when external shocks hit people, and their finances, everyone clamours for a government bail out? What happened to personal responsibility and accountability? What happened to the free market? If you are alarmed by high corporate profits, buy shares in the companies!

The solution is simple; economise, reduce your consumption, waste less money. Just as these well balanced proposals suggest.

Posted by moonmountainwolf | Report as abusive

…one more thing, the price of oil has hardly moved in terms of GBP. The pound is falling (fast) against the dollar, mainly because of the shocking state of the UK economy, so those who expect price falls at the pump are deluding themselves.

Posted by moonmountainwolf | Report as abusive

I am curious moonmountainwolf where you get the idea that we get massive state handouts. You obviously haven’t the slightest idea about living on a limited budget. Maybe you should tell all of us who have to manage on a low income how we afford these shares. It has been claimed recently that the gulf between the have and the have-nots in the UK is the widest in Europe. I take it you’re not one of the have-nots so you are probably one of the greedy graspers raking in the dividends from the other greedy grasping companies, energy or otherwise. One thing is for sure you are well nicknamed as you certainly aren’t living in the real world.

My apologies to the nice folks out there this post is aimed pretty much at the moonywoof and his like.

As a footnote why is it always the people who can afford not to worry about price rises that think they can tell the less well off how to manage their budgets.

Posted by L A Mac | Report as abusive

If Gordon Brown wants to help us with the increase in gas and electricity prices, he could scrap the VAT on it, that would help everyone and after all it is now a necessity like food and not a luxury. As for petrol he could also scrap some of the tax on that, after all he is raking it in with the extra VAT on the increases we have had, and it looks like the petrol companies are not going to give us the benefit of the reduction in oil. Come on Gordon you could raise your profile at a stroke!!!

Posted by Susan Hummerston | Report as abusive

In answer to moon mountainwolf, the benefits people get are not “massive” I should know I am a benefit adviser and unless you are disabled you get barely enough to live on, ok some people get their rent and council tax paid for them, but what’s left is not a lot! Don’t take any notice of the claims in the newspapers most are exaggerated.

Posted by S H | Report as abusive

PS I am not saying disabled people are better off as such, they need all the help they can get to live a reasonable life! Apologies to anyone in this situation!!

Posted by S H | Report as abusive

Brown’s energy package, or should I be saying proposed actions that he expects the individual to take up, are all about future energy savings when what is needed is the ability of the less well-off to pay current bills and those that will arrive over the next few months. A case of “cake tomorrow or maybe I won’t care as I will have been slung out and on a good pension, along with the rest of the New Labour Party, by the time that comes round”.

Posted by Jim xxxx | Report as abusive

Is the energy package enough? How can one trust Gordon Brown knowing full well his past records, having done nothing else since he became Chancelor exept taxing everything and anything, Mister Brown has prooven to be a disaster for the economy of this great country

Posted by Lec Neli | Report as abusive

The kind of energy solution we need in the UK is this -

1. Free Solar Panels for water heating and electricity installed in every home

2. Free House wind turbine on every house.

Do that over a 10 year period, that way every one gets cheaper bills. Yes I also realise it’s us the tax payer that will be funding this, but hey if we have to fund loft and cavity installation we might as well go the whole hog.

Posted by Pete E | Report as abusive