Page last updated at 14:42 GMT, Friday, 30 May 2008 15:42 UK

Fuel poverty action plan unveiled

A gas ring
Further price rises this year have been widely predicted

Data on people with low incomes could be shared with energy companies to help people pay their fuel bills.

The government wants to share details so extra cash from suppliers, as well as existing grants, can be better targeted at the elderly and vulnerable.

The initiative is part of a package of measures that energy regulator Ofgem hopes will alleviate fuel poverty.

But campaigners say the plans do not go far enough, and that poorer families will continue to face a fuel crisis.

Steep rises

The government estimates 2.5 million households are in fuel poverty - defined as when more than 10% of household income is spent on fuel bills - but watchdog Energywatch says the figure is more than four million.

Concern for those on low incomes is growing since energy suppliers announced steep rises in the price of gas and electricity. All the major suppliers announced double-digit increases in early 2008, and more rises are expected by the end of the year.

The new fuel poverty measures announced today won't fix the problem - people will still be left out in the cold
Ed Matthew, Friends of the Earth

Most of the energy companies have so-called "social tariffs", and ministers are proposing that data identifying poorer families could be shared with the companies to ensure they pay the cheaper rates.

This could see information about who is on certain benefits shared with the suppliers, although new legislation would be needed to do this.

The government is planning for this with an amendment to the Pensions Bill which, subject to parliamentary approval, could come into force in the autumn.

Age Concern director general Gordon Lishman said that the sharing of data was "controversial, but justified".

He added: "We feel strongly that the severe pressure of rapidly rising energy prices justifies this kind of action, providing the data is handled by a trusted third party and people are fully informed about the scheme and given the option to opt out."

But Teresa Perchard, of Citizens Advice, said that there was public concern about handing out personal information to companies.

"We will be watching very carefully to see it is used wisely and people's personal privacy is not abused," she said.

Radical measures

Jane Senior borrowed from friends and family to cover debt

The charity estimates that 250,000 pensioners were pushed into fuel poverty by price rises earlier this year and has called for "radical new measures".

In addition, 3m in existing funding for general energy efficiency schemes will be set aside to help low income families wanting to generate their own power through heat pumps.

Ministers also want existing government programmes which help with energy efficiency to make sure people are aware of the help that is on offer.

The announcements follow an agreement last month which should see the energy companies putting an extra 225m towards tackling fuel poverty over the next three years.

The government has taken away more from us than it has given. Any additional help it can give us to help with the energy prices would be appreciated
Norman Russell, Essex

In an annual household bill, the amount paid by energy suppliers which is then earmarked for energy efficiency schemes increased from 18 to 38 in April.

Energy minister Malcolm Wicks said it was important to provide "sustainable solutions" for the elderly, disabled people, and young families at risk from fuel poverty.

He also admitted that the prime minister's announcement on developing new oil fields in the North Sea would have no impact on current fuel prices.

Fuel crisis

But the measures have not satisfied some charities and campaigners for fuel efficiency.

The National Housing Federation called for pre-payment meter charges - typically more than 100 higher than the average annual bill paid by direct debit - to be brought into line with standard rates.

Kate Jopling, of Help the Aged, said: "While it is welcome news that the government is moving in the right direction on fuel poverty, this initiative does not go nearly far enough to deal with the looming fuel poverty crisis."

Ed Matthew of Friends of the Earth said: "The new fuel poverty measures announced today won't fix the problem - people will still be left out in the cold.

Those who are on higher incomes should not be subsidising those on lower incomes on everything.
S, The City

"The only way to warm up our four million fuel-poor homes is to super-insulate them and help them produce their own energy. "

Chancellor Alistair Darling told the BBC that he disagreed with campaigners' criticism that the plan was simply reshuffling old ideas.

"What we have done is that we've reached an agreement with the power companies to increase the amount of money they spend in helping people get on to lower tariffs, helping people insulate their homes," he said.

"There is an obligation now on all energy companies to help their customers cut their fuel bills by insulation and other measures as well."

Liberal Democrat leader Nick Clegg said energy companies had a 9bn windfall profit from the Emissions Trading Scheme.

"The government should simply insist that this massive subsidy enjoyed by the energy companies should be used to help the most vulnerable families with their fuel bills," he said.

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