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UK Prime Minister Gordon Brown today announced a £910 million package of measures aimed at driving a “lasting change” in energy efficiency and consumption.

Despite energy companies posting huge profits, Brown ruled out a windfall tax earlier this week that some MPs and the Trades Union Congress have been calling for to help consumers cope with rising energy prices.

The new package, together with existing measures, creates a £6.5 billion programme of investment in the country’s housing stock, with the aim of insulating all homes by 2020, claims the Government.

Energy companies, including electricity generators for the first time, will have to have to foot the £910 million bill for energy efficiency measures that include free cavity wall and loft insulation for pensioners and low income households and a 50% cut in insulation costs for all households.

The Government will keep a watchful eye on energy companies to ensure that they do not pass the costs back to consumers through future price rises. Business Secretary John Hutton added that the Government “will not hesitate to intervene” if deemed necessary by consumer watchdog Ofgem.

The package will also increase in cold weather payments from £8.50 to £25 a week for pensioners, the disabled and poor households with children under five if temperatures drop below zero for seven consecutive days.

The move also looks set to at least partially reverse plans to cut the warm front programme, which provides free or discounted insulation and heating to low income households. Under Brown’s latest announcement, an extra £74 million of public money will be ploughed into the scheme over the next two years.

According to Environment Secretary Hilary Benn, households could save £100 through loft insulation and £150 through cavity wall insulation over 12 months.

“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,” he said.

But is a potential £250 saving enough when energy prices rose by an average of around 38% in 2008, according to Energywatch, and the average household faces an annual energy bill of £1300?

According to a coalition of charities and consumer bodies, over five million homes won’t be able to afford heating this winter and over 20,000 deathly – mainly among the elderly – can be attributed to the cold each year.

They are calling for Government action on a ten-point Fuel Poverty Charter to help households meet rising costs. While Brown’s announcement meets some of their demands, improving the energy efficiency of the country’s existing housing stock has to go much further.

As well as cavity wall and loft insulation, super-efficient boilers and hot water tank insulation, double/triple glazing and draught-proofing, much more ambitious energy efficiency measures are needed. These include solid wall and under-floor insulation; home or community level renewable energy measures such as heat pumps, solar thermal, solar photovoltaics, community wind and biomass boilers; and micro and community level combined heat and power systems.

The Government should introduce minimum energy efficiency standards for all homes and invest in a national programme to bring all UK homes up to this standard, starting with the most vulnerable.

The coalition of charities claims that the Government is failing in its commitment to eradicate fuel poverty – for vulnerable groups by 2010 and in England by 2016.

However, Sir Jeremy Beecham, Acting Chairman of the Local Government Association, welcomed the move saying, “Councils have argued for six months that a national home insulation programme is the only way the country can tackle the twin problems of climate change and fuel poverty.”

For further information:
www.number10.gov.uk/Page16806
www.defra.gov.uk
www.warmfront.co.uk/
www.energywatch.org.uk/media/news/show_release.asp?article_id=1124
www.foe.co.uk/resource/press_releases/Fuel_Poverty_Charter_08092008.html
www.lga.gov.uk/lga/core/page.do?pageId=984077