Families ‘face Third World winter’ after fuel bills jump 21%

Published on Thursday 6 October 2011 15:55

Britain is on the brink of an affordability crisis over energy bills, after an average 21 per cent rise in prices over the past year.

More than a quarter of households are already struggling to afford the costs, while six in ten say they would struggle to afford a further increase of as little as £30 a month, according to a report by uSwitch.com.

A recent round of price hikes by the “big six” energy companies, including ScottishPower and Scottish and Southern Energy, put the average dual-fuel bill at just under £1,300.

A total energy bill of £1,500 a year is the tipping point at which 77 per cent of households say they will be rationing their energy, with 59 per cent claiming they will go without adequate heating and 36 per cent that they will be forced to turn their heating off entirely.

The average household energy bill would need to go up by only £207, or 14 per cent, for the country to hit that £1,500 “affordability ceiling”.

Ann Robinson, director of consumer policy at uSwitch.com, said almost seven million UK households were already in fuel poverty – defined as spending more than 10 per cent of household income on energy bills.

“This is a wake-up call and the clearest evidence yet that the UK is on the brink of an affordability crisis when it comes to household energy,” she said.

“We are now just £207, or 14 per cent away, from hitting an affordability ceiling, after which consumers will start rationing their usage as though they are living in the Third World.”

The Scottish Government yesterday pledged extra cash to tackle fuel poverty, as it warned rising energy prices could see one million homes affected by the problem.

Infrastructure secretary Alex Neil announced an extra £5 million of funding for this year, taking the total spend to £53m.

The money will be used to provide insulation and heating systems for some of the most vulnerable people under the energy assistance package.

Mr Neil also revealed that Scottish Government funding for fuel poverty and energy efficiency programmes was to rise by 35 per cent from this year’s total by 2014-15. As he unveiled the funding increase, he also warned that, despite existing efforts, more needed to be done to tackle fuel poverty.

He said: “The dramatic increases in fuel prices announced this summer could push up to 170,000 additional households in Scotland into fuel poverty – taking the total to one million.

“This government is determined to tackle fuel poverty head-on and made increased funds available to do so.

“I am very pleased to announce that funding for Scottish Government fuel poverty and energy efficiency programmes will be £65m in 2012-13 and 2013-14, rising to £66.25m in 2014-15.

“That is a 35 per cent increase on the £48 million being provided in 2011-12 and illustrates very clearly the importance we are giving to supporting households affected by fuel poverty.”

However, opposition MSPs said the extra cash was a only partial reversal of earlier cuts.

Labour’s Lewis Macdonald said the government was going to “restore, at least in part, the cuts in funding to tackle fuel poverty which were made in the current year”. He added: “These welcome increases still do not take funding to the position that it was in 2010-11.”