Energy firms in boost for poor households

A new deal between the big six energy firms and the Government could help up to 100,000 households that are vulnerable to fuel poverty.

British Gas, E.ON, Scottish Power, Scottish and Southern, EDF and npower have agreed to boost their spending on programmes to give poorer consumers preferential tariffs and grants to improve their energy efficiency. Spending stood at £50m in the past financial year but will increase to £100m this year and then £125m in 2009-10 and £150m in 2010-11.

If all the extra money was used to offset the bills, it could remove up to 100,000 homes from fuel poverty – defined as where 10 per cent or more of household income is spent on energy.

Energy Secretary John Hutton said: "I believe this extra cash, coupled with ensuring we have the most competitive market possible, will help us towards our goal of eradicating fuel poverty in the UK."

Last week, Help the Aged and Friends of the Earth said they were taking legal action against the Government for not doing enough to help the people most affected by rising fuel prices.

David Bootle from the National Energy Action charity said the new deal posed more questions than answers. "I don't know how they have come to the 100,000 figure and I also don't know how they are going to pay for it.

"Will it come from profits or will they pass it on in higher costs for their wealthier customers?"