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Govt 'should use carbon tax revenues to fund thermal insulation'

Using carbon tax revenues to pay for energy-efficient measures such as thermal insulation could boost the British economy.

This is according to new research from Consumer Focus that found large-scale distribution of these fixtures will not only reduce utility costs, it should increase the UK's gross domestic product by 0.2 per cent and generate up to 71,000 jobs by 2015.

The report - which has been backed by several organisations such as the Trades Union Congress - argues that the government's existing energy policies are failing to deal with fuel poverty, which is currently affecting around six million families and due to extend to nine million by 2016.

Instead, Consumer Focus advised that by using revenues from carbon trading, ministers could lower these figures by up to 87 per cent.

It said they should also mimic a policy that is being rolled out in France, which uses the proceeds of auctioning allowances in the EU Emissions Trading Scheme to fund the installation of thermal insulation to one million homes every year.

Mike O'Connor, chief executive of the organisation, observed the study challenges the view that the UK cannot afford to tackle fuel poverty.

"It argues that there is a triple-win available of warmer homes, greater energy-efficiency and economic growth if we can use carbon taxes revenue to benefit consumers," he added.

By making these changes, the report found the average homeowner's fuel bill would be reduced by more than £200 annually.

However, climate change minister Greg Barker stated the government is already taking crucial steps in order to help vulnerable individuals with their utility bills.

He said: "Two million households will get help under the Warm Home Discount Scheme this year, including more than one million low-income pensioners who will get £130 off their bill."

Those eligible for the initiative - which offers protection for the next two winters - will receive the one-off discount on their electricity bills between the months of October and March.

Posted by Rachel Jenkins