Energy News

Government penalises energy companies

Monday 3 March, 2008

Following the announcement of inflation busting price hikes by most energy companies, the government is now asking suppliers to help the poor or suffer a windfall tax.

The deal could offer subsidised heating and electricity to more than 4 million people who are living in fuel poverty. Fuel poverty is defined as households that spend more than 10% of income on energy.

Charity group National Energy Action says the industry’s latest tariff hikes have forced more than a half a million more households into fuel poverty. NEA reports currently energy companies spend only 0.11% of their £24billion turnover helping to tackle fuel poverty.

To add insult to injury, most energy suppliers reported booming profits for 2007.

Companies will be invited to fund a nationwide scheme allowing for standardised tariffs for low-income families or face huge taxes on profits.

Further details for the plan will be released on March 12.

Chris Eagle, commercial manager for EnergyChoices.co.uk says: “This deal will help to reassure customers about the massive profits energy suppliers appear to be stacking up. With some of the money now being passed back to them. Energy suppliers don’t want to suffer the blow from a windfall tax so they will likely settle on something that could help those in domestic dire straits. This could be a win/win suggestion by the government for both sides.”