Page last updated at 14:43 GMT, Wednesday, 23 April 2008 15:43 UK

Measures to target fuel poverty

A gas ring
Ofgem is already investigating the domestic fuel supply market

Energy suppliers have agreed a package of measures aimed at lifting poor and elderly people out of fuel poverty.

The agreement includes allowing customers using pre-payment meters to use switching web sites and making sure help reaches those most in need.

It does not specify extra funds for the fuel poor, although more than 10% of household income goes on energy bills.

The measures were announced after ministers, consumer groups and energy firms met in London.

Organised by energy regulator Ofgem, the "summit" looked at how best to target spending on those most in need.

"The actions from this Ofgem summit will help ensure that resources to fight fuel poverty have the highest impact by targeting them precisely on those who need them," said Sir John Mogg.

Energy firms have promised to increase funds to help the four million fuel poor, after raising prices this year.

'Strategy in disarray'

Those attending the event included energy minister Malcolm Wickes, the chief executives of Scottish Power, Npower and Scottish & Southern and groups such as Energywatch.

It turns out that the very poorest consumers often have to pay hundreds and hundreds of pounds more than the rest of us
Alan Asher, Energywatch

Energywatch chief executive Alan Asher said electricity prices were unreasonably high and that many people faced "choosing between heating and eating" over the winter.

The government has been criticised for failing to do enough to help low-income households having to pay an extra levy to use pre-payment meters.

"It turns out that the very poorest consumers often have to pay hundreds and hundreds of pounds more than the rest of us," Mr Asher added.

A coalition of Age Concern, Child Poverty Action Group, and National Energy Action has suggested the government's strategy was in "disarray" and called for fresh initiatives.

I see no reason why pensioners should not be able to get their homes insulated for free
Benjamin Platt, Liverpool

The coalition claimed the average annual fuel bill for those aged 65 to 74 had risen to 1,010 - equivalent to 15% of the average income of a single pensioner of that age.

Lone-parent families on basic state benefits saw fuel bills eating up 11% of their income, the group added.

"The action taken so far is nowhere near enough to help those pushed into fuel poverty this year, let alone in the future," said Gordon Lishman, director general of Age Concern.

Ministers have yet to comment on the discussions, although Ofgem is expected to make a statement later.

Price rises

Experts expect the government to miss its target of ending fuel poverty in England by 2010.

Ministers say they have introduced a range of measures, while the big six energy providers have also committed to putting an extra 225m over the next three years into their social assistance funding.

But all six have raised bills this year.

Electricity pylons
Electricity bills have risen sharply

From 1 April, Scottish and Southern Energy customers have been paying, on average, 14.2% more for their electricity and 15.8% more for gas.

In early January, Npower put prices up for its electricity customers by 12.7%, while its gas price rose by 17.2%. EDF put up electricity tariffs by 7.9% and gas prices by 12.9%. British Gas increased gas and electricity prices by 15%.

Scottish Power increased gas bills by 15% and electricity bills by 14%, and E.On put up gas bills by 15% and electricity tariffs by 9.7%.

The coalition wants the extra VAT revenue from these rises to be spent directly on tackling fuel poverty.

They have also called for more money for the Warm Front Grant which makes homes more energy-efficient and for the Winter Fuel Payment to be extended to vulnerable groups rather than just the elderly.

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