[UK] Soaring bills 'pushing millions into fuel poverty'

from The Guardian

Charlotte Moore
Guardian Unlimited

Huge rises in household utility bills over recent years are having a dramatic impact on Britain's poorest families, a report claimed today.

UK households with the lowest incomes could be spending as much as a tenth of their incomes on gas and electricity, the price comparison website MoneyExpert.com said.

Analysis of government data showed that during 2004-05, the poorest 10% of households - around 2.4m homes - spent 5.7% of their annual expenditure on gas and electricity. The average proportion for all households was 3.1%.

But the rapid recent rise in the cost of wholesale energy - which has pushed up the average gas bill by two-thirds and the cost of electricity by a half in the last three years - means that the poorest households could now be paying as much as 10% of their incomes on fuel, according to MoneyExpert. This would qualify them to be classified as "fuel poor" according to government criteria.

This latest warning comes hard on the heels of two previous reports this month from National Energy Action and the National Right to Fuel Campaign, which claimed that up to 2m households in England will face fuel poverty by 2009.

A spokesman for the Child Poverty Action Group said MoneyExpert's report confirmed its suspicions that the poorest families were being hardest hit by the recent price hikes.

"The Government has been committed to ending fuel poverty and its focus has rightly been on ensuring that pensioners are protected, but other vulnerable groups such as low-income families with young children must not be forgotten," he said.

"If prices continue to rise with no extra help for the poorest, then both the government's fuel poverty and child poverty targets will be at serious risk."

Meanwhile, pensioners' groups said the government needs to redouble its efforts to help the elderly cope with rising fuel bills. A spokesman for Help the Aged said: "One and a half million older households currently lack decent heating or insulation and are at real risk without increased investment in schemes such as Warm Front and other home energy efficiency programmes."

Yesterday EDF Energy announced that it was putting up the cost of gas and electricity for the second time in less than a year - by 19% and 8% respectively - while the wholesale gas producer BG announced a 46% increase in its second-quarter profits.