Page last updated at 23:04 GMT, Tuesday, 9 June 2009 00:04 UK

Tax plan to tackle fuel poverty

Thermostat
The government has targets for tackling fuel poverty

Winter fuel payments should not be paid to higher-rate taxpayers, a committee of MPs says, and the money saved should be spent on helping the fuel poor.

Taxing payments and stopping the outlay to more wealthy individuals would release £250m a year in the UK, the Environment Committee report said.

The winter fuel allowance pays £250 for the over-60s and £400 for the over-80s.

The committee's report said the government was certain to miss its statutory targets on fuel poverty.

The government vowed to eradicate fuel poverty - defined as when 10% or more of the household income is spent on energy bills - in vulnerable households by 2010 and in all households in England by 2016.

The report said that more than five million UK households experienced fuel poverty last winter.

Plan

The committee said that the government should have reviewed its fuel poverty policies earlier, especially when domestic fuel prices had been rising.

The [committee] report sounds a loud wake-up call for the Government, whose strategy to tackle fuel poverty is miles away from reaching its targets
Michelle Mitchell, Age Concern and Help the Aged

It said that Department of Energy and Climate Change should set out a detailed action plan in the next three months on how it was going to provide more insulation for UK homes by 2015.

"We need action and clarity - not further consultation - to tackle the three elements that drive fuel poverty: prices, incomes and energy efficiency levels," said committee chairman Michael Jack.

This included taxing winter fuel payments, which it said cost more than £2.7bn this year although only 12% of recipients were in fuel poverty.

The Warm Front programme, which increased the energy efficiency of people's homes, received £400m of government funding this year - an amount that will be halved next year.

'Wake-up call'

The money saved by taxing payments could be used for an energy efficiency scheme for the fuel poor, the committee suggested.

In addition, it proposed that funding for cutting carbon emissions should be more transparent and the range of energy efficiency programmes should be merged into one.

It said more should be done to advertise who was eligible for social tariffs to those struggling with paying bills

Michelle Mitchell, charity director for Age Concern and Help the Aged, said: "The [committee] report sounds a loud wake-up call for the government, whose strategy to tackle fuel poverty is miles away from reaching its targets."

Jonathan Stearn, energy expert for watchdog Consumer Focus, said: "It is outrageous that there are still more than five million vulnerable households struggling to afford to heat and power their homes.

"The government's current energy efficiency schemes are simply not up to scratch. Immediate investment is needed in a radical and coordinated action plan if we are to lift millions of the poorest pensioners, families and disabled people out of fuel poverty and cut carbon emissions."



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