Cheap insulation for every home in Britain - but energy giants escape windfall tax

Every household in Britain is to be offered cheap deals on a range of measures to save energy and cut fuel bills.

Pensioners and the poorest families will have wider access to free loft and wall insulation, draught-proofing, heating systems and double-glazing.

And, in a surprise move, Gordon Brown will also announce today that discounts will be available to any homeowners who wish to apply, regardless of income.

Ministers have secured an extra £800million for energy efficiency measures from the 'big six' power giants in return for not hitting them with a windfall tax.

The package will focus on two existing programmes - Warm Front, where pensioners and those on some benefits can get heating and insulation improvements, and the carbon emissions reduction target (CERT), where utility firms pay towards energy-saving schemes in homes.

Around four million poorest households will be eligible for free loft and cavity wall insulation, modern central heating systems and lagging for hot water tanks.

Almost 20million more will be able to claim discounts for the same measures and also receive items such as cheap energy efficient lightbulbs. Grants would not be meanstested, sources said last night.

The major energy suppliers - Centrica, EDF, Scottish Power, Scottish and Southern, E.ON and npower - have agreed to increase their contributions to the CERT scheme by 20 per cent over the next three years. There may also be cash from power generators Drax, British Energy and International Power for the first time.

Mr Brown insisted yesterday that the measures would give people the chance to cut their bills every year rather than one-off help for this winter.

But his £1billion package - part of an autumn fightback - sparked renewed demands for immediate cash help for the worst off and union calls for price caps.

Joe Harris, general secretary of the National Pensioners Convention, said: 'Energy efficiency schemes won't help them pay their bills this month and neither will they prevent over 20,000 pensioners dying from the cold this winter.'

Kate Green, chief executive of the Child Poverty Action Group, said: 'The immediate crisis is in family pockets, not wall cavities.

'The Government has just a few weeks to rescue millions from fuel poverty this winter. Failure to secure the money these families need would ultimately come down to a lack of moral leadership.'

The National Housing Federation said soaring bills will push one in ten households into debt with their fuel supplier by the end of next year. It predicts the number of households in the red on electricity will rise by 150,000 to 1.5m, while the figure on gas will jump by 140,000 to 1.1m.

The Federation's campaign chief, Ruth Davison, said the Government was not doing enough, adding: 'The situation is now so serious that many households will simply have to choose between heating or eating.'

The GMB union has tabled a motion for the Labour Party conference urging the Treasury to follow the French example and impose a limit on increases in gas and electricity prices.

Age Concern also highlighted growing problems with the Warm Front programme, which was introduced eight years ago.

It said some pensioners are being put off because they have to contribute up to £2,000 as grants are capped at £2,700 and the work often costs more.

There are also reports of long delays and shoddy workmanship leaving the poorest homes without heating and warm water and facing costly repairs.

Warm Front funding is being slashed from £350million this year to £235million in 2011 and the Tories claimed that today's announcement will be merely reversing those cuts.

Spokesman Alan Duncan said: 'People who will really struggle to heat their homes this winter have been waiting months for this announcement but now it's clear Labour has got nothing to offer.

'After all the grand promises, all they can offer is to restore a budget they cut last year.'