Insulation plan aims to beat fuel bills

Gordon Brown will unveil a crash programme next week to insulate millions of homes, as part of plans to cut fuel bills for families across Britain, The Independent has learnt.

He will announce a multi-million pound scheme to install loft insulation and other energy-saving measures to save families hundreds of pounds a year which will form the heart of the Government's drive to ease the pain of punitive fuel rises. The scheme could eventually upgrade every home in the country.

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Mr Brown believes the increased winter fuel allowance for pensioners announced earlier this year will provide only short-term help with soaring bills. He argued that long-term measures to cut people's costs for good will offer greater help to voters.

About half of all heat lost in an average home is lost through the walls and loft. Insulating to current standards could save the average family in a three-bedroomed semi £275 a year.

Speaking last night to the CBI Scotland, Mr Brown declared: "We are currently working up proposals with the utility companies to address problems caused by the impact of world oil prices on gas and electricity bills. Not short-term gimmicks but firm steps towards making every home in Britain more energy efficient, reducing bills not just temporarily but permanently." Ministers have ruled out any increase in the winter fuel allowance and will not offer cash help to low income families, believing that action on energy efficiency will do more to cut fuel bills in the short and long term. They have exerted pressure on the energy companies by insisting that a windfall tax on their profits is still an option.

Number 10 has faced intense pressure to impose a levy on energy firms' profits, with 90 Labour MPs signing a petition pressing for such a move. Alternative proposals to raise cash by auctioning carbon credits have fallen foul of European rules. Ministers favour using the continuing clamour for a windfall levy to extract cash from the private sector for their programme to ease the pain of fuel price inflation.

Pressure intensified to implement the windfall tax yesterday as a survey showed the six major energy companies had increased dividends by 19 per cent last year, rising from £1.4bn to £1.6bn. Sir Jeremy Beecham, acting chairman of the Local Government Association, which commissioned the research, said the cash should be channelled into a national home insulation programme.

Labour MPs are also pressing Mr Brown to implement a far-reaching package of measures to tackle fuel poverty by introducing green energy.

Members of SERA, the Labour Party's environmental campaign group, whose members include a string of senior ministers, called on the Government to supplement the winter fuel allowance with subsidies for energy efficiency measures. A report, sent to all Labour MPs today, calls for the creation of a National Energy Service to drive measures to cut fuel consumption and proposes that the New Deal for the unemployed be transformed into a national environmental task force to deliver cuts in household fuel consumption.

It also calls for all homes to be given a free energy MOT and calls for communities that develop renewable energy schemes to get discounts on fuel bills.

The report warns: "It is the political and moral duty of a Labour government to act with compassion to tackle the immediate energy pain being felt by families across the UK; but we must also recognise that the measures to tackle this issue – fuel payments, subsidies, social tariffs, windfall taxes, will not deal with the long-term root causes of these problems."

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