'More help needed' for fuel poor

The group says the 2016 target could still be hit

Government policies have made it impossible to meet a target to end fuel poverty in England by 2010, according to its own advisers.

The Fuel Poverty Advisory Group says progress has been made to help the vulnerable, but more could have been done for those in financial difficulty.

It said money to be spent on winter fuel payments could be better targeted.

It added that the higher prices paid by those using prepayment meters are beyond its "wildest nightmares".

Missed target

Fuel poverty is defined as a household that spends more than 10% of its income on fuel bills.

Never in our wildest nightmares did we imagine that some of the energy companies would drive up the differences between the prices of those paying by different methods to current levels Fuel Poverty Advisory Group, sixth annual report

The government faces statutory targets to eradicate fuel poverty as far as reasonably practical among vulnerable households in England by 2010, and all households in England by 2016.

Recent energy price rises have pushed the number of fuel poor in England to an estimated 2.3 million households.

Ministers have admitted that the target would be missed, with a predicted 1.2 million vulnerable households in fuel poverty in England by 2010.

'More to be done'

"The increase in energy prices has made the fuel poverty targets much more challenging," the group said in its sixth annual report.

The review is the advisory group's sixth annual report

"However, the government's policies over a period have now made it impossible to meet the 2010 target and this will result in a shortfall, greater than necessary.

"The government has recently taken some important steps, but has not yet in our judgement done everything which is reasonably practicable to meet the targets."

But it added that the 2016 target could still be met by making some "difficult decisions".

Targeted spending

The report said it was beyond the group's "wildest nightmares" that those on prepayment meters faced bills up to £145 higher than the typical £845 a year gas and electricity bill paid by those on direct debit.

Consumers paying by cash or cheque faced bills £85 a year higher than direct debit customers.

But the group said it was encouraged about the government's recent views on tackling this and regulator Ofgem's probe into competitiveness of domestic supplies.

Chancellor Alistair Darling said in his Budget that the winter fuel payment to the over-60s will increase from £200 to £250 in 2008-9, and those over 80 will receive an extra £100, taking their total to £400.

Peter Lehmann, the advisory group's chairman, said that although welcomed by pensioners, this money - an estimated £250m a year - should have been targeted at the poor, rather than across the board.

He said the money would have been better spent on Warm Front grants to improve energy efficiency of homes, a view shared by Friends of the Earth.

"Ministers must ensure that the homes of the fuel poor are super-energy efficient. This is the only way that these households can be properly protected from high energy prices in the long term," said campaigner Ed Matthew.

Latest price rises

Gordon Lishman, director general of Age Concern, said: "If ministers were serious about meeting the Government's fuel target, the Budget was the time for action but instead they promised yet more talks with the energy companies and an inadequate, one-off increase in the Winter Fuel Payment."

The big six energy companies have raised prices this year

All six big energy suppliers have announced significant price rises since the start of the year.

Scottish and Southern Energy was the last to make the move with an average 14.2% increase in electricity bills, and a 15.8% lift in gas charges for domestic customers coming into force on 1 April.

In early January, Npower put prices up for its electricity customers by 12.7%, while its gas price rose by 17.2%. EDF put up electricity tariffs by 7.9% and gas prices by 12.9%. British Gas increased gas and electricity prices by 15%.

Scottish Power increased gas bills by 15% and electricity bills by 14%, and E.On put up gas bills by 15% and electricity tariffs by 9.7%.

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