Nick Clegg accuses energy companies of 'blackmail'

11.50.00am UTC (GMT +0000) Wed 3rd Sep 2008

"A disastrous Winter for customers unable to pay their bills" warns Nick Clegg

Nick Clegg, the Liberal Democrat leader, has accused energy companies of "blackmailing" the government because they are apparently reluctant to fund energy-saving measures for poorer customers. Mr Clegg told BBC Radio 4's Today programme "Without help, this winter could turn out to be a disastrous one for customers unable to pay their bills."

"Actually, what's going on," Said Mr Clegg, " is a glorified form of blackmail, particularly by the foreign-owned energy companies who seem to have the government over a barrel. They seem to be saying, 'No, you can't oblige us to do more to help the most vulnerable, or provide more insulation for British homes or install smart meters to help people conserve energy - otherwise we are not going to invest in the British energy market.' That I think is a ridiculous state of affairs, not least because this government has issued more than £9bn of windfall subsidy to precisely those energy-generating companies."

"The companies should "plough back a lot of that money into these areas, insulation, smart meters, social tariffs [discounts for poorer customers], so that this winter is not the disastrous winter it might well be for many, many vulnerable families in Britain," Clegg said.

Mr Clegg said he was not in favour of a windfall tax on profits - the option favoured by some Labour MPs - "not least because the revenue from that just disappears into the clammy hands of the Treasury". Instead, he said he was in favour of telling the energy companies "through regulatory requirements" that they would have to recycle some of the £9bn to help vulnerable customers.