Price rises ‘set to fuel big increase in poverty’

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SOME 300,000 more homes are likely to have been pushed into “fuel poverty” by Christmas, amid soaring energy prices, an advisory body warned today.

The Fuel Poverty Advisory Group (FPAG) urged Prime Minister David Cameron to take stronger action to ensure there was a more widespread and ambitious effort to tackle “spiralling” fuel poverty levels.

It said the latest round of energy price rises has increased the average annual energy bill by 7 per cent, taking it to £1,247 for direct-debit customers and £1,336 for cash and cheque customers.

These are likely to have pushed a further 300,000 households into fuel poverty, and estimates have already shown that over nine million households could be living in fuel poverty by 2016, the FPAG said.

The FPAG said the government should create a cross-departmental group on fuel poverty to ensure a joined-up approach, as well as creating a new duty for local authorities to meet fuel poverty targets.

It said the government should also carry out an urgent impact assessment of welfare reforms on fuel poverty.

Derek Lickorish, FPAG chairman, said: “With a cold winter, welfare reforms cutting incomes, and all at a time of austerity measures and other rising household costs, the plight of the fuel poor has never been more serious.

“Millions are living in misery due to high energy bills. Yet time is running out for the government to fuel-poverty-proof the homes of those on the lowest incomes.

“A toxic cocktail of rising wholesale prices, the high cost of energy reforms and cuts in incomes for many households means fuel poverty levels are set to sky-rocket without radical action.”

Families are considered to be in fuel poverty when they have to spend more than 10 per cent of their incomes on keeping their homes warm.