Energy suppliers should be subjected to a £500 million annual charge to combat fuel poverty and cut carbon emissions, council leaders have said.

Responding to the £992 million half-year profits posted by the British Gas parent company Centrica, Cllr Paul Bettision, Chairman of the Local Government Association (LGA) Environment Board, said: "Energy companies are making massive profits at the expense of hard working families. If these firms paid the same as householders do through their bills we could insulate 10 million homes, take £2 billion off energy bills and lift 500,000 people out of fuel poverty. The cut in bills would be the equivalent of a penny off the standard rate of income tax and would help people manage rising costs.

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"Meeting this country's ambitious targets to reduce carbon emissions and help households manage rising fuel costs will require ambitious policies. We should seize the chance to pay for a massive investment drive to insulate people's homes that provides a long term solution to rising fuel costs and cutting carbon emissions."

(CD/JM)