Union call for regulation of energy prices attracts support

Union call for regulation of energy prices attracts support

A motion at the Labour conference to end the right of power companies to set prices is attracting support from some government ministers and advisers close to Gordon Brown.

The motion, from the GMB union, is effectively a rival to one from the Unite union calling for a windfall tax on power companies. The GMB calls for Ofgem, the regulator, to be replaced with a new tough regulator to set prices.

One leading political adviser, known to be close to Gordon Brown, has described Paul Kenny, the GMB general secretary, of being "canny " in putting up the idea, which he said "would be more effective than an one-off windfall tax". Other Brownite ministers support the idea.

However, Malcolm Wicks, the energy minister, made a last-ditch stand at a private meeting to discuss the wording of the motion to persuade delegates to drop it.

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According to sources, the GMB got backing from a number of constituency parties, including Barrow, the constituency of John Hutton, the business secretary, and Sedgefield, the constituency of former PM, Tony Blair.

The resolution calls for "new regulatory controls in order to ensure that UK households benefit from secure and stable energy pricing and attacks" and attacks "free market fundamentalism".

Ministers are also acutely aware that the present situation allows the French nationalised company EDF to hike prices in the deregulated market in the UK, while being barred in its native country by law from raising prices by more than 2% above inflation. This protects French consumers and industry from the crisis effectively using British consumers to subsidise the French.

With the threat of a backlash from angry voters facing up to 35% price hikes, ministers are said to be keen to be seen to take action to contain soaring bills.

Meanwhile, the government is also coming under pressure to do more than issue "warm words" to help the 1.7 million people on housing lists and build more council houses.

Dissatisfaction has boiled over the decision-making process that followed a highly critical motion passed last year calling for a commitment to allow the mass building of council houses.

While the government has agreed in principle to the idea – so far hardly any houses are being built and the councils are having to compete for a further 5,000 homes with the private sector.

Austin Mitchell, Labour MP for Greater Grimsby, said: "The report to conference falls a long way short of what is required."

Today Jack Dromey, NEC member and deputy general secretary of Unite, is said to be trying to broker a deal with ministers to commit the government to a bigger council house building programme.

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