Page last updated at 00:20 GMT, Monday, 8 September 2008 01:20 UK

One in four 'facing fuel poverty'

A gas ring
The average annual energy bill is set to rocket to 1,406 next year

Almost a quarter of the population will be pushed into fuel poverty by the end of next year, a report has suggested.

By the end of 2009, 5.7 million UK households will be spending at least 10% of their income on energy bills, the National Housing Federation said.

Average household electricity bills are expected to increase to more than 500 per year by 2010, and gas bills to around 900.

The government said it was doing a great deal to help reduce fuel bills.

The National Housing Federation research, entitled Energy Prices and Debt, said low income households would be worst hit by increases to pre-payment schemes.

The number of families in fuel poverty - defined as when more than 10% of household income is spent on fuel bills - has increased by 100% since 2005.

Graph showing fuel price rises

Around 5.7 million people will spend 10% of their annual income on energy bills by 2009, compared with around 3.8 million in 2007 and 2.4 million in 2005, the report said.

The average energy bill is set to climb to 1,406 next year, from 676 in 2005.

But the report said big energy companies charge the five million people who pay for their energy through pre-payment meters more than those who are billed quarterly. Most are from low income backgrounds and will pay up to 65 more by 2010, it said.

Ruth Davison, director of the federation's campaigns and neighbourhoods department, called the findings part of a "full-scale national energy crisis".

"The government needs to grasp the nettle and take strong and radical action to protect the nation's energy customers.

"Britain is virtually unique in Europe in that our energy suppliers have been privatised and deregulated. The promise at the time of deregulation was that prices would fall. This has palpably not happened. It is time for ministers to regulate the market," she said.

'Hopelessly off course'

Energy companies should not be allowed to charge pre-payment meter customers "grotesquely high tariffs", a cap should be put on prices, and "companies should use profits to pay for social and energy efficiency responsibilities," she added.

The research coincides with calls from charities and consumer bodies for the government to follow a 10-point charter on fuel poverty.

The charter, supported by Friends of the Earth, the Association for Conservation of Energy and National Energy Action, urges the government to properly insulate UK homes, install renewable energy systems and provide short-term crisis payments to low earners.

Ed Matthew, Head of UK Climate at Friends of the Earth, said the government's current fuel poverty plan was "hopelessly off course" and must be transformed.

Since 2000 we have spent 20 billion on fuel poverty benefits and programmes
Government spokesman

"We have set out exactly what needs to be done to sort out this national disaster - ministers must now listen and take action now to fulfil all our recommendations," he said.

A spokesman for the Department for Business, Enterprise & Regulatory Reform said: "The government is committed to responding to the new insecurities that hard-pressed, hard-working British families face and is already doing a lot to help people save energy and reduce their fuel bills.

"Since 2000 we have spent 20 billion on fuel poverty benefits and programmes - assisting over two million households in the UK."

Winter fuel payments help nearly 12 million people a year in the UK and in addition to the 200 normally awarded to the over-60s and 300 to the over-80s, a one-off payment of 50 and 100 respectively has been made available for this winter, he added.

Last week the government ruled out one-off fuel payments.

But it is facing mounting pressure to help those hit by high energy bills, with TUC leader Brendan Barber the latest to call for a windfall tax.


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