New government proposals will halve support given to those in fuel poverty

New government energy proposals will halve the support given to those in fuel poverty, according to analysis published today.

National Energy Action (NEA) has warned that under the new Green Deal due to be discussed by MPs today, support for the fuel poor and low income households will be slashed by 50 per cent next year.

Buried in the Green Deal details are proposals to cut support from around £1.1billion this year to just £540million in 2013.

The cut comes because the Coalition is replacing the existing Warm Front and Carbon Emissions Reduction Target (CERT) programmes with a new Energy Company Obligation (ECO).

Under the current schemes the Government will provide £1.1billion in grants to help lower heating costs and provide free insulation.

The ECO will only provide help totalling £540million next year.

Luciana Berger, shadow minister for climate change, slammed the new proposals. “At a time when millions of families are struggling with their energy bills, it beggars belief that this Government is cutting the number of people getting help to insulate their home,” she said.

“The most effective way people can save money on their bills is by improving their property’s energy efficiency - but this Government is so out of touch it is making that harder to do.”

The situation is worsened by the fact that the cash to fund the ECO will actually be raised by being added to consumers’ bills.

Maria Wardrobe, director of external affairs at NEA said: “In addition to the worrying 50 per cent cut in funding for energy efficiency programmes, the Energy Company Obligation will be funded through a consumer levy and all consumers will pay regardless of their income.

“This approach is regressive. We would like to see revenues from carbon taxes directed towards programmes to help the most vulnerable households to supplement the ECO.”

Under the Green Deal proposals home owners, tenants and landlords can install energy efficiency improvements at no upfront cost.

But the measures are paid for using a loan attached to the property which is repaid through charges on the household’s energy bill.

Interest rates on Green Deal loans are expected to be around 7-8 per cent and repayments could last for up to 25 years.

The Coalition had claimed that a ‘golden rule’ would apply so that the cost of repayments would not exceed the level of savings.

However it has have since admitted that savings will not be guaranteed and in some circumstances people’s bills will increase.

Luciana Berger said this wasn’t good enough. “Labour would better target the ECO so that extra support is given to the fuel poor.”

She said the party would also introduce measures to help elderly people facing fuel poverty, when they are forced to spend a tenth of their income on heating their home.

“We would force energy companies to put over-75s on the cheapest available tariffs to cut the energy bills of four million pensioners.”