Responding to the announcement by the Secretary of State for Energy and Climate Change on home insulation, council leaders called for energy suppliers to pay a £500 million annual charge to help fund a comprehensive home insulation programme that would lift half a million people out of fuel poverty.

The Local Government Association (LGA), a cross party organisation representing councils in England, believes that the Government's ambition improve the housing stock long term is a good move but is calling on them to go further.

The LGA recently commissioned independent experts SQW energy to investigate the published financial statements of the six major energy suppliers. Its analysis found that dividend payments have risen from £1.378 billion in 2006 to £1.635 billion in 2007, a 19% increase and equivalent to £75 per household.


Extra investment in council-led home insulation programmes would save 10 million households £280 a year on their energy bills, lift 500,000 people out of fuel poverty and create up to 20,000 new 'green' jobs.

Sir Jeremy Beecham, Vice Chairman of the Local Government Association, said: "The long term plans announced to help people have warmer homes and cut their energy bills are a major step forward.

"The freezing conditions over the last couple of weeks have taught us that there also needs to be some urgent short term measures to cut bills and keep people's homes warmer.

"Last winter, during average temperatures, the cold was blamed for more than 25,000 extra deaths in England and Wales, the vast majority among the over 75s. Unless we act quickly more people will die unnecessarily because of the cold.

"A comprehensive home insulation programme is the best long-term solution to tackling fuel poverty, cutting domestic carbon emissions, creating jobs and saving people money.

"The suppliers talk about the need for investment in new forms of energy and nuclear power stations. The most effective investment drive would be a national home insulation programme. This would allow the energy firms to continue being profitable and provide the best long-term solution to cutting carbon emissions and fighting fuel poverty."

(CD/JM)