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Brown unveils £910m fuel measures Brown unveils £910m fuel measures
(20 minutes later)
Gordon Brown is unveiling a £910m package aimed at helping people with rising gas and electricity bills. Gordon Brown has unveiled a £910m package of extra spending by energy companies aimed at helping people with rising gas and electricity bills.
It includes half price insulation for all households and a freeze on this year's bills for the poorest families.It includes half price insulation for all households and a freeze on this year's bills for the poorest families.
Winter fuel payments for pensioners will also more than double if there is a severe winter this year.Winter fuel payments for pensioners will also more than double if there is a severe winter this year.
Mr Brown said he wanted a "sea change" in energy consumption as well as immediate help for poor families.Mr Brown said he wanted a "sea change" in energy consumption as well as immediate help for poor families.
The package includes:
  • Free cavity wall and loft insulation for pensioners and poor households
  • 50% off cost off insulation for all households
  • Freeze on this year's bills for half a million poor consumers
  • Partial reversal of cut to warm front programme giving free central heating to poorest pensioners
  • Pensioner fuel payments to go up from £8.50 a week to £25 a week if there is a severe winter
    • "This is the right approach, giving priority to permanent - not just one-off - changes, with the offer of lasting benefits and fairness for all families, cutting bills permanently every year," said Mr Brown at his monthly Downing Street press office.
    The prime minister said this was a "better way" than bringing in the one-off cash rebates for consumers paid for by a windfall tax on energy firms demanded by trade unions.The prime minister said this was a "better way" than bringing in the one-off cash rebates for consumers paid for by a windfall tax on energy firms demanded by trade unions.
    Energy-saving measures in the home
    But he said half a million of the most vulnerable consumers "will not pay higher energy bills this winter".But he said half a million of the most vulnerable consumers "will not pay higher energy bills this winter".
    The package will cost the energy companies £910m but Mr Brown stressed he did not want to see that passed on to consumers.The package will cost the energy companies £910m but Mr Brown stressed he did not want to see that passed on to consumers.
    The Tories say it is clear the government has "nothing to offer" to people struggling with bills.
    The package follows last week's announcement aimed at boosting the housing market, which included a 12-month stamp duty holiday for properties worth £175,000 or less.The package follows last week's announcement aimed at boosting the housing market, which included a 12-month stamp duty holiday for properties worth £175,000 or less.
    Energy-saving measures in the home
    The package will include the reversal of up to £100m in cuts in the government's "warm front" scheme, under which households on pension credit can have central heating installed for free.
    And, for the first time, power generators such as Drax will contribute, as well as the big energy providers.And, for the first time, power generators such as Drax will contribute, as well as the big energy providers.
    'Financial help''Financial help'
    Environment Secretary Hilary Benn told BBC News the measures would help people struggling with energy bills.Environment Secretary Hilary Benn told BBC News the measures would help people struggling with energy bills.
    "It's very tough and it's difficult because of the huge rise in oil prices and the effect that it's had on gas and electricity prices. For pensioners there's the financial help coming this winter," he said."It's very tough and it's difficult because of the huge rise in oil prices and the effect that it's had on gas and electricity prices. For pensioners there's the financial help coming this winter," he said.
    Lucy French explains her struggle with power bills
    "If you're in real difficulty and on a low income, contact your energy supplier and see if you can be eligible for one of these social tariffs that we've negotiated with the energy companies."If you're in real difficulty and on a low income, contact your energy supplier and see if you can be eligible for one of these social tariffs that we've negotiated with the energy companies.
    "But also look and see what other help is available, for more insulation in your home, because that will get the bills down.""But also look and see what other help is available, for more insulation in your home, because that will get the bills down."
    We are doing everything that we can Gordon Brown
    Last week ministers denied "caving in" to the firms, by not insisting on cash rebates for people to help with bills immediately.Last week ministers denied "caving in" to the firms, by not insisting on cash rebates for people to help with bills immediately.
    The government argues that more long-term measures are needed - average household electricity bills are expected to increase to more than £500 per year by 2010, and gas bills to around £900.The government argues that more long-term measures are needed - average household electricity bills are expected to increase to more than £500 per year by 2010, and gas bills to around £900.
    Chancellor Alistair Darling has already said he has "serious reservations" about a windfall tax and Prime Minister Gordon Brown did not mention one when he was asked about the package on Wednesday.
    He did mention the winter fuel allowance as well as better insulation.
    Union demandsUnion demands
    Garry Felgate, chief executive of the Energy Retail Association, which represents energy companies, said the firms were investing huge sums of money.
    "The energy companies are spending billions of pounds getting you and I to use less of their product," he said. "And they're making money in terms of profits which they're needing to do to invest in the new power stations and the new power lines that we need."
    Lucy French explains her struggle with power bills
    But the trade unions are expected to step up their demand for a windfall tax on the energy companies.But the trade unions are expected to step up their demand for a windfall tax on the energy companies.
    Tony Woodley, general secretary of Unite, described the planned insulation package as "crackpot" and urged immediate cash help for people struggling with soaring energy bills. Earlier this week, Tony Woodley, general secretary of Unite, described the planned insulation package as "crackpot" and urged immediate cash help for people struggling with soaring energy bills.
    Child Poverty Action Group chief executive Kate Green said energy efficiency should already be a national priority but added: "The government has just a few weeks to rescue millions from fuel poverty this winter."Child Poverty Action Group chief executive Kate Green said energy efficiency should already be a national priority but added: "The government has just a few weeks to rescue millions from fuel poverty this winter."
    Government sources have told the BBC the deal with the energy companies is worth more than what would have been raised through a windfall tax.
    Thursday's announcement follows a National Housing Federation report suggesting that almost a quarter of people will be in fuel poverty by next year - defined as spending more than 10% of their income on energy bills.Thursday's announcement follows a National Housing Federation report suggesting that almost a quarter of people will be in fuel poverty by next year - defined as spending more than 10% of their income on energy bills.
    HAVE YOUR SAYInsulation and other energy saving measures are the way forward Paul, KilburnSend us your commentsHAVE YOUR SAYInsulation and other energy saving measures are the way forward Paul, KilburnSend us your comments
    The Conservatives said Mr Brown had actually cut the budget for energy efficiency grants for people on benefit last year, and was simply restoring the budget.The Conservatives said Mr Brown had actually cut the budget for energy efficiency grants for people on benefit last year, and was simply restoring the budget.
    Shadow business secretary Alan Duncan said: "People who will really struggle to heat their homes this winter have been waiting for months for this announcement - but now it's become clear that Labour has got nothing to offer."Shadow business secretary Alan Duncan said: "People who will really struggle to heat their homes this winter have been waiting for months for this announcement - but now it's become clear that Labour has got nothing to offer."
    For the Liberal Democrats, Vince Cable told BBC Radio 4's The World Tonight that while the measures leaked so far appeared "very sensible" the money involved was "a tiny fraction" of the amount energy companies had raised as a result of being given free carbon trading permits by the government.For the Liberal Democrats, Vince Cable told BBC Radio 4's The World Tonight that while the measures leaked so far appeared "very sensible" the money involved was "a tiny fraction" of the amount energy companies had raised as a result of being given free carbon trading permits by the government.
    ENERGY-SAVING MEASURES 1. Loft insulation: Prevents 15% of heat lost through the roof. 2. Tank and pipe insulation: A hot water cylinder jacket of at least 75mm cuts heat loss by 75%. 3. Cavity/solid wall insulation: About 30% of heat lost through walls. Homes built after 1920 - with cavity walls - can be injected with insulating material. Older houses with solid walls can be fitted with an extra layer.4. Double-glazing: Can cut heat loss by about 50%. The two panes of glass create an insulating barrier. 5. Draught-proofing: About 20% of heat lost through poor ventilation and draughts. Measures include fitting brushes to letterboxes. Source: Energy Saving TrustENERGY-SAVING MEASURES 1. Loft insulation: Prevents 15% of heat lost through the roof. 2. Tank and pipe insulation: A hot water cylinder jacket of at least 75mm cuts heat loss by 75%. 3. Cavity/solid wall insulation: About 30% of heat lost through walls. Homes built after 1920 - with cavity walls - can be injected with insulating material. Older houses with solid walls can be fitted with an extra layer.4. Double-glazing: Can cut heat loss by about 50%. The two panes of glass create an insulating barrier. 5. Draught-proofing: About 20% of heat lost through poor ventilation and draughts. Measures include fitting brushes to letterboxes. Source: Energy Saving Trust
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