Mixed reactions greet energy efficiency package

By Philip Waller

LONDON (Reuters) - Trade unions attacked the government plans to make utilities cut their customers energy use rather than pay a windfall tax on profits, while analysts said it was a sensible long-term solution to high energy prices.

The Energy Retail Association of power suppliers, which has opposed calls for a windfall tax on utility profits, said the policy announced on Thursday was a better idea than taxation.

"The investment in energy efficiency measures announced today represents a more sustainable and long term solution to our energy needs," it said.

The government package includes 910 million pounds of extra cash from the utilities to help householders, facing soaring bills, to make their homes more energy efficient.

Utility watchdog energywatch said it was too little too late to help customers facing much bigger energy bills this winter after two rounds of big price hikes earlier this year.

"The lack of political will to tackle fuel poverty is not just disappointing, it approaches negligence. While government has now woken up to the scale of the challenge and is becoming alert to the need for some action, the sense of urgency is lacking," energywatch Chief Executive Allan Asher said.

The GMB union, which has members in every sector of the economy, welcomed the government's stance that it may act to reduce "unjustifiably high charges" for energy users who pay in advance -- and who are often on low incomes -- if the industry and its regulator failed to solve the problem.

But GMB General Secretary Paul Kenny said: "In the energy market, we have the equivalent of a house fire, but the government has yet to send the fire brigade to deal with the obscene profits."