Clegg welcomes move to use energy company profits to help fuel pool

4.00.00pm UTC (GMT +0000) Thu 17th Jan 2008

Nick Clegg is backing a call by the energy regulator for electricity companies' expected £9 billion of windfall profit over the next five years to be clawed back by the Government to help people struggling with high fuel bills. Alistair Buchanan, the chief executive of Ofgem, raised the plan in a meeting with Chancellor Alistair Darling which was called to discuss rising energy prices. Energy companies can make windfall profits because the price of electricity rises to reflect the price of permits to emit carbon dioxide in the EU's emissions trading scheme.

Liberal Democrat Leader Nick Clegg said "Ofgem's proposal makes economic sense and should be heeded by the Government. Electricity companies who are already pushing up prices should not be gifted with £9 billion profits. It is totally wrong that the companies should be given a licence to print money on this scale through free allocations of emission permits."