Union anger as Government cools on fuel cash handouts

THE decision to rule out cash handouts for households struggling with soaring fuel bills was blasted by unions as a "downright disgrace".

Ministers were expected to unveil plans to give each household up to £100 following in-depth discussions with power companies.

But Whitehall sources confirmed last night that the Government would instead focus on long-term proposals including support for energy efficiency measures.

The Unite union said "greedy" fuel companies had won out over struggling consumers and people needed an "immediate respite" from rising energy costs.

Left-leaning pressure group Compass said the real disappointment would be felt by the "fuel poor who will go cold this winter".

In a speech to the Scottish CBI in Glasgow last night, Gordon Brown insisted there would be no "short-term gimmicks or giveaways".

Ministers will now announce an assistance package for those affected by rising energy bills next week, following the £1 billion package of support for the housing market announced on Tuesday.

A spokeswoman for the Department for Business, Enterprise and Regulatory Reform (BERR) said ministers had been "working hard" with energy companies to find "long-term" solutions.

She said: "We are committed to responding to the concerns that hard-pressed families are currently facing."

The scrapping of proposed one-off payments is likely to upset more than 70 Labour backbenchers, who last month signed a petition calling for the introduction of a windfall tax on energy companies to help hard-pressed families.

Tony Woodley, joint leader of Unite, said: "At this moment in time people need immediate respite from the struggle to pay their gas and electricity bills.

"There must be a rethink and cash assistance for every needy household in the land. It cannot be right that big business is allowed to bank their obscene profits while ordinary people will shiver this winter."

Neal Lawson, chairman of Compass, said: "It is not a short-term gimmick to heat the homes of the poor and vulnerable.

"What people want is the warm glow of knowing the Government is on their side, they are not getting it. Just like the 10p tax issue – this decision can and must be turned round."

Labour MP Fabian Hamilton said the consequences for Labour ministers could be "very serious indeed".

He told BBC 2's Newsnight: "They could further lose support from those people that look to the Government for the help that they need right now.

"And I think that people like me – who are strong supporters of Gordon Brown and the current government as it's constituted – I think that our support might fade away considerably if we don't see the very people that we are trying to help supported by Labour."