Tariffs 'could ease fuel poverty'

Advisers say the government's fuel poverty targets will be missed

Social tariffs are failing to meet the needs of the estimated 4.5 million people in fuel poverty, according to financial comparison website Uswitch.

It said this year's 15% rise in energy prices had pushed another 500,000 people into fuel poverty.

But fewer than 400,000 consumers were benefiting from the social tariffs offered by energy companies to those who were struggling, it found.

The government is considering a fuel voucher to help the poorest pay bills.

'Missing out'

Fuel poverty is defined as affecting households that spend more than 10% of their domestic income on domestic fuel.

Uswitch said that, based on a survey of 7,787 people in October, some 27% of those in fuel poverty were pensioner households.

It said the Winter Fuel Allowance for the elderly was failing to keep up with rising energy bills. The government gives �200 to people over 60 towards their bills and �300 to the over-80s.

One in 10 households could not afford to keep warm this winter and 29% were forced to cut back on heating or make savings elsewhere, the survey suggested.

It said that even if the big six energy suppliers boosted their social tariff provision as planned, they would still be helping fewer than one million people.

The lack of an industry standard for social tariffs meant different customers had tariffs calculated in different ways, Uswitch said.

Some companies had offered lower prices on mainstream plans and one demanded direct debit payments, which excluded those without a bank account.

Voucher plan

"There must be an industry standard on social tariffs, clear criteria over which consumers should qualify, and a guarantee from suppliers that people on social tariffs will always be paying the lowest available price," said Ann Robinson, Uswitch director of consumer policy.

Five of the big energy companies have raised prices this year

Consumer watchdog Energywatch said that people using prepayment meters, often found in the poorest households, were charged an average of �255 more a year than those paying by direct debit.

It called for more "meaningful" social tariffs and the swift introduction of smarter metering systems.

A separate survey of 2,700 people by Moneysupermarket.com suggested only 2% felt that recent energy price rises were justified.

Treasury ministers have met the big energy companies to discuss the idea of vouchers to help the poorest people pay their bills.

But campaigners have described the idea as a "knee-jerk" response and the Energy Retail Association said it had already made a significant contribution to help vulnerable householders.

Last month, the government's advisers - the Fuel Poverty Advisory Group - said the government's target to eradicate fuel poverty in vulnerable households in England by 2010 was set to be missed, even without the latest price rises.

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