29 August 2008
Energy companies should forgo some of their 'eye-watering profits' to fund a national home insulation programme, town hall leaders have said.
The heads of all four of the Local Government Association's political groups – Labour, Conservative, Liberal Democrat and Independent – said an annual charge should be levied on energy companies to help combat fuel poverty.
In a letter addressed to Cabinet ministers, including Chancellor Alistair Darling and Local Government Secretary Hazel Blears, the LGA leaders argue that the move would lift 500,000 people out of fuel poverty, cut £200 off the energy bills of 10 million households and reduce domestic carbon emissions by 20%.
Paul Bettison, chair of the LGA's environment board, said one-off payments to households would do little to tackle the root causes of fuel poverty, which were best addressed by a national insulation programme.
'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,' he said.
The LGA's demand comes as Labour backbenchers, backed by the centre-Left campaign group Compass, are calling for a windfall tax on energy companies' profits to help households struggling with rising fuel bills. More than 80 Labour MPs, including some ministerial aides, are said to have signed the petition.
But shadow business secretary Alan Duncan was dismissive of the campaign, saying Labour MPs had not thought how the tax might work, given that many energy companies are not based in the UK.
'Whipping up hatred is not a good basis for fair taxation,' he said. 'What matters more than retrospective taxation is properly working competitive markets.'