Hutton issues energy price warning

The business secretary has effectively ruled out a windfall tax on energy firms, warning that "the era of cheap energy is over".

John Hutton said in an interview in Thursday's Telegraph newspaper that while the government will look at helping poorer families with their fuel bills this winter, consumers must get used to paying more for power.

He also effectively ruled out a windfall tax on the excess profits of gas and electricity firms, saying they have not ripped off their customers, who have benefited "very considerably" from low prices in recent years.

Hutton has been lobbying against a windfall tax within Whitehall in recent weeks as a clamour has grown on the Labour backbenches against both the rising profits and prices of the utility companies.

More than 70 Labour MPs have signed a petition calling for the one-off levy, but the minister fears such a move would deter future private investment in the UK energy supply.

"The era of cheap energy is over," he said. "The question is how are we going to adjust to that and what sort of help can we provide to those who are going to struggle the most.

"There is genuine concern about the difficulties that people will face paying their heating bills over the coming winter and we are looking at extra support.

"What we shouldn't do is create a climate that makes it harder to attract new investment. The new nuclear investment, the new renewables investment, the new investment in clean coal and gas.

"We need £100bn-plus in the next 10 years, so we've got to create the right framework that encourages investment. So we must not lose sight of that.

"And we shouldn't do anything that has the effect of putting up bills further."