Tuesday, 5 August 2008

Poorest targeted with energy-saving schemes

Ministers are examining a raft of green energy measures, including bringing forward a £2.75bn home insulation programme funded by energy companies, to protect Britain's poorest from the impact of rising gas and electricity prices.

They are looking at the idea of front-loading a scheme known as the carbon emissions reduction target (Cert) so that more money is spent sooner by energy companies, with a greater proportion of the funding going to the fuel-poor.

The three-year programme promotes reductions in carbon emissions for households by installing energy efficiency measures such as cavity wall and loft insulation in the homes of people on low incomes and the elderly. It is designed to raise more than £2bn from the energy companies over three years, but could be front-loaded so that more is spent this year and next.
Ministers may also publish a general consultation paper on windfall taxes on the profits of the energy utility companies, but that is not the preferred option of the chancellor, Alistair Darling, or of the Department of Business and Enterprise and Regulatory Reform (Berr) led by John Hutton.

Last week Centrica, the parent company of British Gas announced a 35% price increase, sending shudders through Whitehall. The average British household now faces annual gas and electricity bills of more than £1,200, driving tens of thousands into fuel poverty.

Ministers are also looking at restoring cuts in the Warm Front programme, a package of measures worth up to £2,700 for vulnerable homeowners or for those on benefits. Funding for the programme, designed to cover insulation and central heating, has been cut by 16% from £350m in 2007-8 to £295m in 2008-9, a cut already criticised by the Berr select committee and one that Gordon Brown has already hinted he may reverse.

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