Regular readers of my rantings will know that I have argued strongly against a windfall tax on the energy companies, which I felt was, in effect, a tax on enterprise. I also arguedthat Ofgem should either do its job or if doesn’t have the powers, then it must be provided with them, given they appear to be acting as the energy companies lapdog, not its regulator.

However it is a two way street, the energy companies were quick to announce large scale price increases, in virtual unison, yet they are deliberately vague about when the prices will come down, even though wholesale prices are now precisely what they were, before we had to accept price hikes of around 40%. Apparently at their regular meeting Energy Minister Malcom Wicks and Energy Secretary Ed Miliband “demanded” that prices should be brought down. But the boy Ed, and that excuse of a minister Malcom Wicks, accepted assurances from the energy companies that they would “bring prices down as soon as they can“. Pathetic, weak and completely unacceptable, the ministers should be completely ashamed of themselves, that is not progress, it is the energy companies telling government ministers to bugger off and the minister accepting it, the ministers should be sacked, here and now.

Energy companies argue that the reason prices have not fallen already is that they purchase at ‘forward’ prices, fair enough, I can completely understand this logic, however, it also means that they know exactly when the new prices will kick in, so to tell government ministers and for the ministers to accept, that they can only provide a vague indication is nothing short of a scandal and a con.

Energy is an essential service, not an optional commodity that the people of this country can elect not to purchase, therefore, any company choosing to invest in our energy sector should act reasonably and responsibly at all times. That is the nature of the investment, a guaranteed flow of business whatever the economic picture, in return for a measured and consistent return for investors. Clearly they are not acting responsibly and that is why a regulator was put in place, but Ofgem is nothing short of pathetic, either in terms of their leadership and/or as a lack of meaningful powers, either way, they are a complete waste, in their current form, of taxpayers money. The only other support the public can expect is political pressure from the energy ministers, but Ed and Malcom could not negotiate their way out of a paper bag, they are nothing short of useless. Sending boys in to do a mans job at a time when the cost of heating is going to be critical to the well-being of millions of British citizens is so shameful, I genuinely cannot express it in words.

Gordon Brown should replace Ed Miliband and Malcom Wicks, here and now and replace them with people that will negotiate hard, not act as the industry’s whipping boy. The energy companies have be told, that they must produce evidence of what their current wholesale prices are and when they expect them to come down, the they must be ordered to provide an immediate and proportional reduction in consumer energy costs. If they fail to do so, they must be informed that they will face future price caps and/or a windfall tax, for any amount that exceeds their previous years profits. Ofgem must be given the powers and a management team that is willing to regulate the industry, not capitulate. I do not believe in state intervention, however, if the energy companies will not play ball and legislation won’t work, then we must nationalise this industry. It is simply too important to ignore and the public most certainly deserve better than Messrs Miliband and Wicks representing our interests.

Without wishing to be melodramatic, the reality is many people will freeze this winter because they can’t pay their energy bills, by abdicating their responsibility to the public, this government and their ministers will have to ask themselves whether they did as much as they could have done in the circumstances. By their current record, I would argue they have not.

Yet again, Gordon Brown fails to grasp the nettle, coming up with a weak package of measures, that once again, lacks real detail and as always, with any money pledged by this government, it is more ‘jam tomorrow’. If Brown was running a business he would have been fired long ago.

This government claims that they have been “negotiating” with the big six energy companies, if that is the case, why are they having to threaten to legislate to ensure that the energy companies and energy producers cough up the £910m? That notwithstanding, Gordon Brown says “I do not expect the £910m that we raise to be passed on to the consumer by the energy companies“. Really? That sounds like a typical politician’s answer, the statement should have read, “The energy companies will not be permitted to pass on the £910m in the form of higher bills”.

So, let’s sum up, the government says that following negotiations, the energy companies will put up £910m over the next 3 years. But, this is not guaranteed, because the government, by their own admission, may have to legislate to force them and, there is no guarantee that we will not be faced with higher bills as a consequence of this investment. It is estimated that we are already paying an extra £35 per annum for existing energy saving measures employed by the big six. So there is a precedent for passing on the cost. Well done Gordon, great job.

The government have announced that the package is worth £1bn. Okay, lets get this straight shall we? The Warm Front programme has had £250m sliced off its grant, but the government now offer an extra £30m per year over the next 3 years as part of its measures to reduce those suffering from fuel poverty. On this basis, Gordon Brown has announced £910m that he hasn’t got agreement on and put back £90m of the £250m he removed from Warm Front. Where, exactly, is the big news here? Also, does the extra £90m the government are putting in, include the extra winter fuel payments referred to in the same announcement. As they invariably say, whenever Gordon makes an announcement, the devil is in the detail.

It is estimated that the energy companies received their own windfall of some £9bn in the form of free pollution permits under the European Emissions Trading Scheme. Was there no quid pro quo when this was gifted to the energy companies, who agreed this figure?

The government has indicated that they have no wish to legislate regarding energy prices because they believe that competition will result in lower prices. Really, where is the evidence that this is so? The energy companies may raise their prices at different times, but, for the most part, they have all increased their prices more or less in line with the other energy suppliers. This does not look like competition. But regulation is not just about price increases, it is about preventing companies that are in a dominant position, with a product that the consumer needs to buy, abusing their position.

If Ofgem were given the powers through legislation they could prevent the big six energy companies imposing a penal charge on consumers who do not or cannot pay by direct debit. It is estimated that there is a difference of £144 per year between those that pay by direct debit and those using a prepayment meter, of which there are estimated to be 5m. Ofgem claim that it costs £85 per year to run a prepayment meter with 5m in use, this sound extremely unlikely and who’s side are they on anyway? At best, this charge is excessive and undoubtedly, Ofgem demonstrate how gullible they are by accepting this claim at face value. Given some 50% of the people with prepayment meters are likely to be on fixed or low incomes, it is appalling that they should be further penalised by the energy companies, who claim to be helping many of the same people with social tariffs, it really smacks of duplicity.

It is also worth remembering that the European Trading Emissions Scheme is a tax, therefore the government are also profiting from people’s misery. They can tell us until they are blue in the face that they “care”, but whilst they are effectively taxing essential commodities such as heating and lighting they are acting like hypocrite’s. Furthermore, our caring energy companies spend a tiny fraction of their revenues on social tariffs, just £50m per annum.

The bottom line is the initiative put forward by Gordon Brown & co in a very sensible one, certainly preferable to subsidising the fuel bills of those in fuel poverty, year in and year out. However, it is, seriously underfunded and as in commonplace with this government, spread over a long period, which means that some people will have to wait two or three years before they can take advantage of the savings.

As is usual, the opposition parties are, for the most part, silent on this issue. Critical, but offering no tangible solutions. Predictably, Cameron’s conservative party says little of any value, instead of seeing it as an opportunity to demonstrate what they would have done. As I have said before, Cameron doesn’t want to win the election, he just wants Labour to lose it, as they surely will. But it does clearly indicate that Cameron lacks backbone, new ideas, or more likely, both. At least Vince Cable comes up with some suggestions.

The government needs to be far more bold in their approach. They already collect more in green taxes than they invest back in ‘green initiatives’, they should substantially increase the amount of money invested in these energy saving measures, offering to match the energy companies pound for pound. They must also go back to the energy companies and renegotiate the current “agreement”, which needs to be doubled to have any serious impact.

Ofgem should have their powers increased to allow them to cap prices and restrict the energy companies from imposing unreasonable charges such as direct debit penalty payments and high premiums on pre-payment meters. The government should provide an undertaking that a fixed percentage of the income generated in green taxes imposed on the energy companies should be set aside and used for energy efficiency measures. By all means priorotise the most needy, but the government should not exclude everyone else.

The government must introduce legislation which requires the energy companies (producers and suppliers) to invest a minimum amount in infrastructure (based on their turnover), in the same way that the water companies are required to invest in infrastructure. This will avoid a situation where the energy companies can blackmail the government into submission by threatening not to invest in new power stations and so on. The government should investigate the generous £9bn windfall the energy companies received in carbon credits and if it was incorrectly assessed, then the difference should be clawed back. The Competitions Commission must launch an enquiry into competition in the UK market and publish their findings, based on which, the government must legislate if necessary.

The government should not be persuaded to introduce a windfall tax, this is far too crude and serves only to punish. There are other, more subtle ways of dealing with these types of challenges, such as suspending the carbon credits, whilst the initial £9bn is investigated and introducing emergency measures to increase the powers of the regulator. If the energy companies were to face a suspension of the credits they have priced into their share prices, a risk of price caps through the offices’ of the regulator and a Competition Commission enquiry, they will see a fall in their share prices and nothing is guaranteed to make them sit up and listen, than a fall in shareholder value.

This government is happy to fleece, bully and bellow at the people in this country, exercising ever more draconian powers over the individual, yet when it comes to big business, they seem at best impotent and more likely, incompetent and complacent. Come on Gordon, get you act together and fast.

Gordon Brown is right, the rumoured proposal that the government provide rebates or vouchers to those in ‘fuel poverty’ is simply not sustainable. With an estimated 4.5m homes in fuel poverty by the end of the year, this problem is of a scale that no government can realistically resolve without placing a massive burden on the public purse. Worst still, the problem will still be there in a year’s time, possibly even worse and those recipients will expect the government to step in again.

The government is right, investment needs to be placed into a long term solution, that both encourages and helps people use less energy. This is part education and part investment. It is estimated that home insulation and other energy saving measures can reduce energy bills by as much as a third. However, the government recently reduced the money available to Warm Front by a third, this does not provide much evidence that the government is practicising what it preaches. No doubt Gordon Brown will reverse this decision and then suggest that it is “new money”.

Whilst there are an estimated 4.5m people in fuel poverty, it is worth noting that everyone is suffering, irrespective of whether they have been labeled as such. Those that are not currently in fuel poverty are also having to contend with higher fuel bills, higher food bills and in some cases, higher mortgage costs. Many who are actually working have had to seek part-time jobs. If the government provides subsidies to those in fuel poverty, the truth is, everyone else will have to foot the bill, either through higher taxes or higher fuel bills. The government need to be creative rather than simply shifting the burden, not least because those that are in work have consistently, under this government, been expected to take up the slack and pay for those that are not prepared to look for part-time work.

The government should increase the amount of money available for energy saving measures such as insulation and low energy bulbs. They should persuade, rather than attempt to threaten, the existing energy companies to meet this additional investment on a pound for pound basis. It must be remembered that these energy companies will have to invest billions of pounds over the next 10 years to secure our energy resources for the next generation. They must stop talking about a windfall tax, but instead, use the carbon trading scheme to maximum affect to encourage the investment in UK based energy saving measures rather than those of third world countries.

There is no doubt that the energy companies have taken advantage of the current turmoil to increase their profits and therefore the dividend payments received by their shareholders. The government must provide the regulator with teeth, in order that the regulator can control and approve energy increases. If the regulator is not in place to keep a handle on such matters, then what is it there for? [Can Parliament control Energy Prices]

Another, perhaps more controversial solution, is to allow those in fuel poverty to seek part-time jobs. Yes, I am talking about lone parents, pensioners, the unemployed and the 2.5m in receipt of long term disability payments. There will be some that are genuinely not capable of work, even light work, but the vast majority could do something, stacking shelves, cleaning, washing cars etc. If those in work have to help themselves to keep their heads above water, then why not the unemployed, lone parents, pensioners and long term disabled? Many won’t because they have to declare the money they earn and so, for every pound they earn, they lose it in benefit. So in a way, their view is understandable, given it is a disincentive to help themselves.

Instead of just giving them another handout, which only encourages them to expect a bailout everytime they are in trouble, the government should give them a tax free allowance, that would allow them to earn, for example, up to £150 per month without having to pay tax or national insurance. Yes, we wouldn’t get any tax revenues from these earnings, but neither would the rest of us have to pay out a cash subsidy in full. Better still, it encourages them to stand on their own two feet, to stop looking at the state, or more accurately their working neighbours, friends and relations to subsidise their living expenses. There may be a special case for pensioners, but they, of course, do receive additional fuel allowances and many would work part-time if it were not for the complicated process of paperwork and tax they must endure at the hands of this bureaucracy obsessed government. Those in receipt of ‘tax credits’ could be provided with a special ‘work credit’ that would allow them, or their partner to earn a specified amount of money which would not be subject to tax or national insurance. This could be removed, if necessary, at a leter date as the economy improves.

Any allowances should be very carefully targeted at those that simply cannot help themselves, genuine cases, not the workshy. Those in receipt of benefits would have no excuse not to do what everyone else must do when things are tight, to go and get a part-time job, to help themselves. You reap what you sow.

A creative approache to government always has its critics, because there will always be those that believe it is wrong to expect people to help themselves, or it is just not the way things are done in the UK. Who cares, our greatest leaders have had original thought and a desire to deliver. But, desperate times require desperate measures. A government bereft of original thought, needs to be more radical, a government that believes throwing money rather than opportunity in the direction of the so called poor, needs to look at alternatives.

This government needs to look at its income much the same as the average family. In difficult times, the family will look at ways to economise, ways in which they can generate additional income and ways in which they can reduce or minimise the cost of their borrowings. Government needs to adopt a similar approach. There are countless examples of this government’s waste, excess and abuse of taxpayers money. They need to reign this in now. Government needs to look, not at borrowing their way out of this mess, or just dipping into the pockets of the hardworking taxpayers once again. They must be creative in their thinking, radical in their approach and understand that if it was not for the taxpayers of this country, the poor would be desolate, starving and homeless. But there is a limit to just how much you can redistribute wealth and most taxpayers have had enough.

The pound is low, which makes exports much cheaper, this government should have their best ’salespeople’ lobbying leaders of other countries to buy our products, to improve our exports. It doesn’t matter whether it is the trade department or the ambassador, everyone should be put to work to help this country. Taxpayers funds, as the government has finally discovered, are not the bottomless pit they once believed. Be creative, be bold and stop worrying about your seats at the next election. This government must start to demonstrate respect, not contempt for the ‘have’s’ that have subsidised and supported the ‘have not’s’ and allowed you to spread our money around as if it were your own or an automatic entitlement. Above all, remember, there are 650 of you that have been entrusted with the future of this country, earn that trust by doing your jobs!

A good start would be to suspend or dramatically reduce our overseas aid budget. This could provide up to £5bn to invest in energy saving measures. Charity, as the saying goes, begins at home. This government ignores that at it’s peril.