Page last updated at 23:50 GMT, Sunday, 12 July 2009 00:50 UK

Thousands 'facing fuel poverty'

Warning over household fuel prices
The government has spent 20bn since 2000 on tackling fuel poverty

Rising unemployment and higher energy prices are likely to push hundreds of thousands more homes into fuel poverty, a key government advisory body says.

The Fuel Poverty Advisory Group (FPAG) says about 4m households in England are already in fuel poverty, spending more than 10% of their income on energy.

And it has urged ministers to set out a detailed plan for meeting their own target of ending the problem by 2016.

The government says it has spent £20bn on cutting fuel poverty since 2000.

Vulnerable

One of the key causes of fuel poverty is high energy prices. Average domestic fuel bills have increased by 125% over the past five years.

The report warns that the long-term trend on prices is likely to be upwards, not least due to the huge industry investment needed to meet green energy targets.

Unemployment is becoming a key factor too, the report added. The jobless rate is expected to hit three million in the next year and about 38% of those out of work are fuel poor.

Households in England in fuel poverty rose from 1.2m in 2004 to 4m by Sep 2008
Of those, 50% were pensioner households and 80% considered "vulnerable"
Average dual energy bills rose from £572 to £1,287 between Jan 2003 and Sep 2008
Source: Fuel Poverty Advisory Group

The FPAG has called for the government to set out a detailed plan showing how it will eradicate fuel poverty over the next seven years.

The report has been welcomed by one of the main consumer watchdogs, Consumer Focus.

Its energy expert Jonathan Stearn said: "We are urging the government to heed the warning of its own advisory group, that energy prices could rocket in the next few years.

"If the government is serious in its aim to end fuel poverty, it needs to do much more to help the most vulnerable households."

The numbers in fuel poverty fell dramatically during the early part of this decade, with the government establishing several schemes that provide help for vulnerable households.

Energy and Climate Change Minister David Kidney said: "The government has spent more than £20bn since 2000 on policies and programmes which can help tackle fuel poverty.

Energy prices
Those using pre-payment meters may pay more for their energy

"But we know the challenge needs further action, and recognise that rising energy costs have reversed the downward trend on the number of households in fuel poverty."

The report calls for urgent action to stem the rise of the fuel poor, with compulsory social tariffs for the least well off. Companies currently provide social tariffs on a voluntary basis.

The FPAG also urges the government to ensure those who pay for their energy using pre-payment meters (PPMs) do not pay over the odds compared with other payment methods.

In the worst cases, customers on PPM's are paying up to £255 a year more for their energy, the report said.

Energy regulator Ofgem plans to ban unfair price differentials between PPM's and other payment methods.

But in a statement it added: "Primary responsibility for tackling fuel poverty rests with the government, which must look at improving the housing stock and raising income levels for the fuel poor."



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