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Brown warned over fuel bill anger Benn denies fuel bill cave-in
(about 2 hours later)
The government has been warned it faces a backlash over its decision to rule out handouts to households struggling with soaring fuel bills. The government has denied "caving in" to the energy companies over cash rebates for households struggling with souring fuel bills.
Tony Woodley, leader of the UK's biggest trade union, Unite, branded the move a "downright disgrace". Ministers were accused by the unions of betraying poor families after they ruled out the one-off payments.
And backbench MP Fabian Hamilton said the consequences could be "very serious indeed" for Labour. But Environment Secretary Hilary Benn said the energy saving measures promised instead would offer a more "long-term" solution to rising prices.
There were hopes the government would persuade the power giants to fund payouts of up to £100 per household. The government also insisted a windfall tax was still an option.
But they are now expected to focus instead on energy efficiency measures, in a package to be announced next week. Mr Benn told the BBC News Channel: ''Nobody's caved into anybody.
In a speech on Thursday, Prime Minister Gordon Brown said there would be no "short-term gimmicks or giveaways". "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.
"So people I hope will look at the help that's already available and then when we make an announcement next week to see what further assistance there is.
"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.''
'Greedy utilities''Greedy utilities'
But the decision is likely to be savaged by union leaders at next week's TUC conference in Brighton. But Tony Woodley, leader of the UK's biggest trade union, Unite, branded the decision to rule out the handouts a "downright disgrace".
Unite, currently the Labour Party's biggest donor, said "greedy" fuel companies had won out over struggling consumers and people needed an "immediate respite" to rising energy costs. He told BBC Radio Four'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."
FROM THE TODAY PROGRAMME More from Today programme
Unite general secretary Tony Woodley told BBC Radio Four'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".He said the government should introduce a windfall tax on the energy giants or go "even further".
FROM THE TODAY PROGRAMME More from Today programme
"We need to legislate to cap these prices 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.""We need to legislate to cap these prices 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."
Backer warning The government has been accused by opponents of allowing speculation about a one-off payment to run wild over the summer, after a senior official was overheard discussing the plan on a train.
Left-leaning pressure group Compass, whose campaign for a windfall tax has been backed by 90 Labour MPs, said the real disappointment would be felt by the "fuel poor who will go cold this winter".
Speculation ministers were planning a one-off fuel payment to child benefit recipients took off after a senior civil servant was overheard discussing the plan on a train.
It was not denied by Whitehall officials, who have been locked in talks with the energy companies over help for poor households.
What we want to try and do is try to ensure that we bring down household bills permanently, not a temporary one-off fix Phil Hope Cabinet Office minister
Ministers were not convinced a windfall tax was the answer - as the costs could be passed on to customers - but they also appear to have failed in their mission to persuade the companies to fund a £1bn programme of cash rebates for the most vulnerable consumers.
Labour backbencher Fabian Hamilton warned ministers they could lose support from people who need help paying bills.Labour backbencher Fabian Hamilton warned ministers they could lose support from people who need help paying bills.
"The consequences for Gordon Brown and the government could be very serious indeed," he said."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.""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".Mr Hamilton also said support from Labour's strongest backers "might fade away considerably".
The decision was also attacked by the SNP, with energy spokesman Mike Weir saying: "Yet again Gordon Brown has raised expectations over the summer just to crush them. The Labour government is out of touch with the real problems facing people in Scotland." The government's decision also cast doubts on Labour MPs' campaign for a windfall tax - although Downing Street is insisting all options are still on the table in negotiations with the energy companies.
Permanent fix 'No gimmicks'
It comes as research found the "big six" energy suppliers increased their shareholder dividend payouts by 19% last year.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.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.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 effect investment plans.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 effect investment plans.
In a speech on Thursday to the Scottish Confederation of British Industry, Mr Brown 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". 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.Mr Brown also said he was "cautiously optimistic" about the state of the economy.
The Cabinet Office minister, Phil Hope, insisted help would be targeted at middle and low-income families.
"What we want to try and do is try to ensure that we bring down household bills permanently, not a temporary one-off fix but permanent, and also provide some immediate help to those families that need it the most."