£100m pledged to insulate homes

Alistair Darling today announced an extra £100 million to help tens of thousands of families insulate their homes in a move to cut emissions and reduce energy bills.

As he announced a package of measures to tackle the financial crisis, the Chancellor said "economic recovery must support our environmental objectives - not come at its expense".

Alongside the £100 million of new money, he brought forward another £50 million to help with insulating homes, which together will help 60,000 households cut their fuel bills.

The Chancellor also warned that if energy companies did not take steps to close gaps in prices paid by customers on different payment schemes, such as pre-pay meters, the Government would take action to end the unfair structure.

And he said regulator Ofgem would be monitoring changes in prices for gas and electricity and publishing quarterly reports to address concerns that falls in wholesale prices were not being passed on promptly to consumers.

As part of moves to bring forward spending on infrastructure projects, he said £535 million would be spent more quickly on environmental protection projects, rail transport and energy efficiency.

The funding would include better flood defences, better heating and insulation for homes and 200 extra trains.

And he said Government policies would lead to more than £50 billion of investment in the low carbon economy.

As part of moves to boost renewable energy investment, he said he would be extending the Renewables Obligation - which requires suppliers to source a percentage of their electricity from green sources - for another 10 years to 2037.

But he also said oil and gas from the North Sea would continue to play an important part in the UK's energy mix and said he would be working with industry to put incentives in place to increase production from marginal oil fields.

The accelerated spending includes £20 million on flood defences to produce earlier protection for 27,000 homes, and £60 million to provide 16,000 social homes with energy efficiency measures.

Some £300 million will speed up the delivery of up to 200 new carriages to expand capacity on the rail network.

The Pre-Budget Report's acceleration of spending on green investment aims to sustain and expand the 350,000 jobs in the low-carbon sector.

But environmental groups accused the Chancellor of blowing a golden opportunity to deliver a Green New Deal which would stimulate the economy and tackle climate change.

Friends of the Earth executive director Andy Atkins said: "The Government has dodged a golden opportunity to kill two birds with one stone by using the Pre-Budget Report to tackle both the economic downturn and global climate change."

While creating new jobs by insulating homes was a "step in the right direction", he said ministers should have gone much further to cut energy waste and develop the UK's renewable energy potential.

"This could create exciting new business opportunities and tens of thousands of jobs - as well as slashing fuel bills and greenhouse gas emissions.

"Increased public borrowing must be invested in creating a successful, low-carbon economy, instead of blowing it on a spending spree that won't avoid the climate change collision course we are currently on," he warned.

And Greenpeace executive director John Sauven said the money spent on extra home insulation gave "a slight green tinge to an otherwise bleak budget".

"We had hoped Mr Darling might fire the starting gun on a clean energy revolution that would unlock hundreds of thousands of green collar jobs and develop a new UK manufacturing base capable of exporting renewables and energy efficient technologies to the world.

"This was an historic opportunity to invest billions in a low-carbon, high technology future, but the Chancellor blew it.

"We can only hope that by the time he formulates the Budget itself, he will have grasped the potential of high-tech climate solutions to get us out of this recession and make us economically competitive for the coming century," he said.

Environment Secretary Hilary Benn welcomed bringing forward spending on flood defences.

He said: "This is good news for householders, helping to protect 27,000 homes and families at risk more quickly through projects improving defences in inland and coastal areas.

"Bringing forward money now will accelerate the work to better protect ourselves from flooding in the future."