Energy News

Government plan to tackle fuel poverty

Thursday 18 September, 2008

By becca.talbot@consumerchoices.co.uk

The Government unveiled their long-awaited plans to tackle fuel poverty last week, announcing that over £910 million will be invested in energy efficiency measures through energy suppliers.

Following weeks of negotiations with energy companies, Gordon Brown revealed a £1 billion energy efficiency strategy.

Free cavity wall and loft insulation will now be available to over 11 million pensioners and low-income households, with other households to receive a 50% discount on the cost of insulating their homes, part-funded by the energy companies.

The announcements came following the National Housing Federation’s prediction that over 25% of the British population will be in fuel poverty by 2010.

“The plans are for six million households to be insulated by 2011,” the prime minister said, then adding that energy providers, councils and voluntary organisations will be making door-to-door visits in deprived areas to promote the scheme, known as the Home Energy Saving Programme.

The government will work to increase the number of people paying their energy bills by Direct Debit, which can save up to £150 a year. It will also ensure those using pre-payment meters are not paying tariffs which are “unjustifiably higher” than those using other payment methods

“In truth we all know we need a lasting change,” Gordon Brown said of the plans. “We need permanent changes that can save money. Our objective is nothing less than a sea change in energy efficiency and consumption, at the same time as helping the most vulnerable pay their bills this winter.”

“This is the right approach, prioritising permanent and not just one-off changes and offering lasting benefits and fairness for all families,” he added.

The cold weather payment will be increased from £8.50 to £25 a week this winter. The payment is made only to people claiming certain benefits, such as the pension credit or income support, when the average temperature is zero degrees Celsius or below for seven consecutive days.

And more funding will be given to the Warm Front scheme, which will offer up to £2,700 worth of central heating costs and energy efficiency measures to a further 40,000 low-income and pensioner households.

The Government also confirmed plans that a further 600,000 consumers will benefit from social tariffs, which provide cheaper gas and electricity rates to the most vulnerable households. Nearly three quarters of these customers will benefit from a price freeze this winter.

However, the plans were not welcomed by everyone. Unionists have criticised the government for failing to introduce a windfall tax to address the ‘obscene’ profits earned by the UK’s ‘big six’ energy providers, who have raised prices by as much as 35% this summer. Gas and electricity bills have increased by about 40% since last year, taking the average household’s annual fuel bill to nearly £1,500.

Allan Asher of Energywatch, the watchdog, said: “The Government has done little to bring immediate and much-needed relief to consumers who cannot afford to keep warm this winter.”

Gordon Lishman, director general of Age Concern, said: “This package will leave millions of the poorest pensioners wondering how they will afford their bills this winter.

“However, wider pricing reforms are desperately needed to reduce fuel poverty levels and the millions of pensioners struggling to meet their bills will be disappointed that no further emergency help has been announced for this winter.”

Chris Eagle, Financial Director of EnergyChoices.co.uk said of the campaign: “These much-needed plans should have been announced a long time ago. But now energy efficiency measures are being put in place by the Government, everyone must make sure they are making full use of the services and discounts available to them.”

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