Brown's bright idea to tackle gas bills

11 September 2008

Six million homes will be made more energy efficient and pensioners could see their winter fuel payments double under new measures designed to tackle higher energy bills unveiled by Gordon Brown.

The government has spent the summer investigating possible measures it could implement to help millions of homes struggling in the face of gas and electricity bills rising up to 35% this winter.

One possible solution was introducing a windfall tax on energy suppliers, with money raised passed back to consumers. Many MPs backed this solution, as did consumers; a recent Moneywise poll found 59% of you would support a one-off tax on energy companies.

However, Brown has ruled out such a tax. Instead, today’s measures include free or half-price loft and cavity wall insulation for millions of families between now and 2010. In addition, pensioners could see their winter fuel payments more than double from £8.50 a week to £25, but only if there is a severe winter this year.

And, half of million of the UK's poorest households could benefit from an energy bill freeze this winter.

Brown says the measures will not only help keep energy bills as low as possible, but they will also help people be more energy efficient.

But the Conservative Party has slammed the measures, claiming they offer nothing for people struggling with higher bills.

The government is to pass legislation that will force energy companies to invest £910 million in making homes more energy efficient between now and 2010.

It says its aim is to insulate of all Britain's homes, where practical, by 2020.

Eleven million elderly and low-income households will qualify for today's new energy-efficient measures at no cost, and another two million homes could receive discounted rates.

A new Community Energy Saving Programme is also being established that will see local councils, voluntary organisations and energy companies carry out house-to-house calls in deprived areas to offer help on energy efficiency.

Finally, the government has announced a £74 million investment in its pre-existing Warm Front Scheme, which offers energy efficiency measures to low income and pensioner households. Around 40,000 households could see their fuel bills reduced by £180 per year as a result, it says.

This is a u-turn on previous plans to cut investment in the Warm Front Scheme by £100 million.

Environment secretary Hilary Benn says: "The government has a longstanding commitment to help those living in fuel poverty, but recent price rises mean we are committed to do even more to assist people in reducing their bills where possible. And energy companies must do their bit too.

"This plan is about giving help, not only over weeks and months, but over the coming years by enabling householders to make their homes more energy efficient."

Alistair Phillips-Davies, director of energy supply director of Scottish and Southern Energy, describes the new legislation as an "imposition" coming as it does just five months after energy firms increased their financial support to fuel poor groups.

"The scale of what the government is now expecting, and the extent of the resources required to deliver it at short notice, at a time of rising fuel input costs, are very substantial," he says. "Nevertheless, we fully recognise the pressures faced by householders the length and breadth of the country."

But Allan Asher, chief executive of energywatch, says the measures are not enough to tackle fuel poverty.

“Improved energy efficiency is the long-term solution to fuel poverty, but any new government measures to increase the amount of funding for efficiency programmes must come with the cast iron assurance that it will not be added to consumers' bills,” he adds.

"The government has done little to bring immediate and much needed relief to consumers who will not afford the cost of keeping warm this winter.”

Scheme in numbers

Energy companies and generators will invest £910 million towards the National Home Energy Saving Programme, with £560 million pumped directly into the existing home insulation and energy efficiency programme and £350 million used to set up the Community Energy Saving Programme.

The government is investing an additional £74 million to the Warm Front Scheme.

It is also investing an estimated £16 million to increase cold winter payments for pensioners.

Households that install loft and cavity wall insulation, plus buy low energy lightbulbs and practice energy efficient measures such as switching off appliances, could save £300 a year as a result.

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