17 Dec 2012

Fuel poverty ‘could hit another 300,000’ people

Price hikes will push another 300,000 people into fuel poverty by Christmas and 9 million homes could be in fuel poverty by 2016, according to the Fuel Poverty Advisory Group.

While the government says it is acting to reduce energy prices, new figures show price hikes will push another 300,000 people into fuel poverty within weeks.

“With a cold winter, welfare reforms cutting incomes, and all at a time of austerity measures and other rising household costs, the plight of the fuel poor has never been more serious,” said Derek Lickorish, chairman of the Department of Energy-funded group Fuel Poverty Advisory Group.

Millions are living in misery due to high energy bills, he said. Nearly half of the UK’s fuel poor households are pensioners, a third of homes house people with a disability or illness, 20 per cent include a child aged five or under and one in 10 house someone aged 75 or over.

Speaking at the Fair Energy Summit in London, Energy Secretary Ed Davey said: “I’m quite frankly fed up with commentators suggesting the government are deliberately increasing energy bills, when in fact we are doing everything we can to reduce them.”

Ed Davey: ‘No apology’

“The bulk of the cost we add to bills is for supporting low carbon technologies and energy efficiency,” he said. “I make no apology for ensuring that we meet our legally binding carbon targets and renewable energy targets.”

The Fuel Poverty Advisory group is urging Prime Minister David Cameron to assess welfare reforms on fuel poverty. Consumer advocates also want the government to direct some of the £4bn in annual carbon taxes to tackle the problem with solutions such as a more ambitious programme of home insulation. The coalition has said it wants to end fuel poverty by 2016.

“A toxic cocktail of rising wholesale prices, the high cost of energy reforms and cuts in incomes for many households means fuel poverty levels are set to sky-rocket without radical action,” Mr Lickorish said.

The average annual energy bill has increased by 7 per cent, costing direct debit customers £1,247, and cash and cheque customers £1,336, the Fuel Poverty Advisory Group said. Families are considered to be in fuel poverty when they have to spend more than 10 per cent of their incomes on keeping their homes warm.

Deaths feared

A report last year by the Hills Fuel Poverty review found that between 2004 and 2009 more than 10 per cent of the 27,000 excess winter deaths in England and Wales could be due to people unable to afford the cost of heating in their homes.

Lobby group 38 Degrees today urged consumers to flood Deputy Prime Minister Nick Clegg’s office with emails asking him to ensure he fights for his vision of a clean, green economy powered by low-carbon technologies.

“We need targets that make our electricity carbon free, which will give industry the certainty it needs to invest and create jobs in a new green economy,” 39 Degrees said in a statement. “If we are going to overcome the power of fossil fuel lobbyists and George Osborne, people power from thousands of us is going to be crucial.”

Mr Clegg today suggested wealthy pensioners should be stripped of a raft of benefits as Britain continues to struggle to balance the books. Such a move would lead to means-testing for the winter fuel allowance, free bus travel, prescriptions and television licences.

In a keynote speech, Mr Clegg mounted a vigorous defence of the coalition’s welfare reforms, insisting the government had an “absolute duty” to ensure the system was fair to all. His speech came on the eve of the fifth anniversary of his election as leader of the Liberal Democrats.

Energy regulator Ofgem has indicated it plans to simplify the energy market in 2013 by giving customers the choice of one in four tariffs – including one with a variable rate and another with a fixed rate over a fixed period. Suppliers will have to place customers on the less expensive price available for their tariff.