Energy News

Energy suppliers turn their backs on fuel poverty

Tuesday 11 March, 2008

By Dan Drage

A further half million UK residents have been plunged into fuel poverty by escalating energy prices and supplier indifference.

According to the Department for Business, Enterprise and Regulatory Reform, for each 1% rise in utility bills, another 40,000 households are subjected to the rigours that fuel poverty brings. Utility bills have increased by an average of 12.5% over the last three months alone.

So what is fuel poverty? A household is defined as fuel poor if it takes over 10% of the occupant’s combined salaries to meet fuel bills. This can lead to the occupants receiving insufficient warmth and power, and these occupants are often children.

Despite these figures, Britain’s big six energy suppliers (including British Gas (www.britishgas.co.uk), E.ON (www.eon-uk.com) and npower (www.npower.com)) have signed less than 400,000 accounts up to their social tariffs. These tariffs were designed to help low income earners combat fuel poverty.

The government has attempted to convince utility companies to do more to alleviate fuel poverty, but any windfall taxes are seen as very unlikely. Chancellor Alistair Darling is likely to coo elderly voters and increase their winter fuel allowance in next week's Budget, an essential change needed now that the government’s winter fuel allowance scheme only covers 20% of a pensioner’s annual fuel bill.

Leading industry analysts claim that this is not enough, among them Chris Eagle, commercial manager at EnergyChoices.co.uk:

‘The government, energy suppliers, Ofgem, It doesn’t matter who it is, but somebody needs to act. Prepayment energy meters are holding low income households to ransom, and forcing them to remain poor. Those with prepayment meters should be afforded the same rights as any other customer.’

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