Fuel poverty: Power firms 'should be made to do more'

Consumer groups criticised Alistair Darling for not compelling Britain's energy industry to help the country's poorest people to pay their fuel bills after a spate of price rises.

The Chancellor said he wanted energy companies to triple spending on social tariffs for vulnerable customers to at least £150m a year, and ensure the 5 million customers on pre-payment meters got a fairer deal.

"We will work with the companies to take further action on a voluntary and statutory basis – to underpin this as necessary we will legislate," he told MPs. He also announced the one-off winter fuel payment for over-60s would rise by £50 and for the over-80s by £100.

An estimated 4.5 million are in fuel poverty, meaning that they pay at least 10 per cent of their income on power, heat and lighting. The Big Six energy suppliers charge customers using pre-payment meters, many of them poor, £543m more than those who pay by direct debit. After costs of supplying the meter are subtracted, pre-payment customers pay about £400m more annually – or £255 each.

"The one-off increase in the Winter Fuel Payment will give a year's respite. But Government should have done more," said Energywatch's campaign director Adam Scorer.

"...if Government is going to see a tripling of industry commitment to social tariffs it will need to require all suppliers to develop social tariffs to some minimum standards... relying on voluntary action by suppliers will not deliver the goods."

For the National Consumer Council, Jill Johnstone, director of policy, said the measures would not eliminate fuel poverty: "We need backstop legislative powers to underpin energy companies' responsibilities to vulnerable consumers," she said.

Mark Todd, head of energy at website energyhelpline.com urged the Government to avoid equalising prepayment with direct debit tariffs. "Prepayment meters are often given to those with a bad credit rating or those who have defaulted on their energy bills... so it seems unfair for the Government to interfere in the energy market in this way[it will] make energy even more expensive for most people."