Council leaders call for 'home insulation levy' on energy companies » Bill payments » 24dash.com

Energy companies should be hit with an annual levy to fund a national home insulation programme, local government leaders argued today.

With pressure growing on Prime Minister Gordon Brown to help hard-pressed families by imposing a windfall tax on the firms, the Local Government Association (LGA) said the insulation scheme would lift 500,000 people out of fuel poverty and would be more effective than one-off payments to the hardest hit.

The leaders of Conservative, Labour, Liberal Democrat and Independent groups at the LGA have written to six cabinet ministers to make their case.

It comes on the same day that more than 70 Labour MPs signed a petition urging Mr Brown to claw back some of the huge profits made by firms as domestic energy bills spiralled.

While the MPs propose a one-off windfall tax, the LGA said an annual levy to be invested in insulation would be far more effective in the long-term and would also help fight climate change.

As well as lifting 500,000 people out of fuel poverty, it argued, the move would cut £200 off the energy bills of 10 million households and reduce domestic carbon emissions by 20%.

Councillor Paul Bettison, chairman of the LGA Environment Board, said: "One-off payments to deal with rising energy bills will be of help to many households but will do little to tackle the root causes of fuel poverty.

"A national home insulation programme would be the best long-term solution to this challenge and that of cutting carbon emissions.

"There are 10 million homes in this country that still lack basic insulation. Making these properties more energy efficient would take around £2 billion off fuel bills each and every year and also reduce domestic carbon emissions by a fifth."

The council leaders have written to Chancellor Alistair Darling, Communities and Local Government Secretary Hazel Blears, Environment Secretary Hilary Benn, Business Secretary John Hutton, Work and Pensions Secretary James Purnell and housing minister Caroline Flint.

Councillor Bettison added: "Energy suppliers are making eye-watering profits at the expense of hard-working families.

"The Government should seize the opportunity to take a long-term solution to current problems by using these disproportionate excesses to pay for a massive drive to insulate people's homes."