Councils must take the lead on tackling energy costs

Paul Bettison
The Guardian,
Wednesday July 30 2008

You can bet that jaws will drop across the nation. As the cost of heating and lighting a typical home blasts through the £1,000-a-year mark, and the number of householders in fuel poverty nears 6 million, the main utility companies begin publishing their interim results this week - and the picture is expected to be one of healthy profits.
The Local Government Association (LGA) will be quoting the announcements in repeating its call for the government to levy an annual charge of £500m on the energy companies for at least five years. The LGA wants the money to insulate half of all homes in England and Wales, knocking £200 a year off the fuel bills of 10 million consumers, lifting 500,000 households out of fuel poverty, and cutting domestic carbon emissions by 20%.
You and I already pay an extra £33 towards our fuel bills to fund home insulation schemes run by the utility companies. What we are arguing is that the suppliers should match these contributions pound for pound out of their profits. Councils should lead this programme to tackle the pitfalls of existing schemes because local authorities would ensure a more efficient method of carrying out the work, greater accountability, and a better chance of encouraging householders to take part.
During a debate around the climate change bill, environment minister Phil Woolas said he supports the principle behind our proposals - but that the sticking point for the government is that, without changing how the energy market is regulated, it is not possible to stop the utility companies from passing on the charge to consumers.
I would argue that this stumbling block can be surmounted - it just needs a display of political will.
Energy regulator Ofgem has signalled a possible solution. Referring to the energy industry benefiting from a £9bn windfall in tradable permits under the European Emissions Trading Scheme, Ofgem chief executive Alistair Buchanan said: "That is why Ofgem is renewing its proposal that this windfall could be used to help customers in fuel poverty, who have been hardest hit by the recent energy price rises."
When Gordon Brown was challenged this month by Nick Clegg MP about fuel poverty, he said that winter allowance is paid to 11 million pensioners at a cost of £2bn, and that the utility companies are paying £100m to help low-income families. We support these measures, but they do not encourage people to reduce energy use over the long term, nor improve the housing stock.
Energy suppliers are making hefty profits at the expense of householders. Councils are the link between national aspirations and individual actions to tackle climate change. We should seize this chance to pay for a massive drive to insulate people's homes, providing a long-term solution to rising fuel costs and cutting carbon emissions.
· Paul Bettison is chairman of the Local Government Association's environment board.