Energy firms threaten legal action over fuel poverty

A coalition of energy companies, including EDF Energy, E.ON UK and Scottish Power, have threatened to take the Government to court if, as appears likely, it misses its fuel poverty targets.

In 2000, the Government made the legally binding commitment to completely eradicate fuel poverty among the vulnerable – the elderly, disabled and families on low incomes – by 2010. Households are defined as fuel poor if they spend more than 10 per cent of their disposable income, excluding housing benefits, on utility bills.

But the number of fuel-poor households in the UK actually doubled between 2004 and 2006 from 1.2 million to 2.5 million as bills soared.

The Government has been criticised for not providing enough funds to its Warm Front subsidy scheme tasked with tackling fuel poverty. The Treasury has earmarked £800m over the last three years to provide free insulation and heaters. But officials are working on the next Comprehensive Spending Review (CSR), which will fix government department budgets for the next three years. There are fears that the budget for the Warm Front scheme – which stood at £350m this year – could be cut by one third. This would effectively end any remaining chance that the Government's 2010 fuel poverty target could be met.

Andrew Warren, chief executive of the Association for the Conservation of Energy has written to the new Secretary of State for the Department for the Environment, Food and Rural Affairs (Defra) Hilary Benn warning of legal action if the budget was slashed. A Defra spokesman said: "No decision has been taken on the CSR. We remain determined to help those in fuel poverty.".