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Fuel Poverty

Volume 477: debated on Thursday 12 June 2008

To ask the Secretary of State for Business, Enterprise and Regulatory Reform how many households he estimates will be removed from fuel poverty by the measures recently announced by the Chancellor of the Exchequer. (208993)

My right hon. Friend the Chancellor of the Exchequer (Mr. Darling) announced in the Budget that the Government would work with energy suppliers to increase their spend on social programmes designed to help those vulnerable to fuel poverty. The Government reached individual agreements with each of the six largest suppliers in April to increase their collective spend to at least £150 million a year by 2010-11.

The impact of this additional funding on the fuel poverty numbers will depend on how it is directed. If it is purely used to offset bills and equally distributed among the poorest households, then it could help to remove up to 100,000 of these from fuel poverty. Other scenarios may bring different benefits—for example, energy efficiency measures may benefit fewer but will be permanent. Energy suppliers will be free to determine how they target the additional spend within certain parameters currently being developed by Ofgem.

In addition, the Chancellor announced a one-off additional supplement to the winter fuel payment of £50 for the over-60s and £100 for the over-80s. This will benefit around eight million pensioner households.

The Government also announced action to investigate and tackle the high differential between the cost of energy to customers using prepayment meters and those paying by direct debit. Around 11 per cent. of the fuel poor pay for their gas via prepayment meters and around 20 per cent. of the fuel poor use prepayment meters for their electricity. Ofgem is currently investigating and is due to report in September. Subsequent action will depend on the outcome of Ofgem’s investigation.