Government should consider discounts for least well off, says Energy Advice Line

The Government should consider introducing energy discounts for the least well off following fresh evidence that the UK’s poorest households had been hardest by spiraling energy prices.

Julian Morgan, managing director of the price comparison, switching and advice service for energy users, said the least well off urgently needed extra help to cope with their energy bills.

“The economic downturn has hurt all socio-economic groups, but for the poorest in the community it’s been an absolute disaster,” Mr Morgan said.

“The evidence is clear that the rising cost of energy has impacted low-income households particularly hard, with fuel bills rising more sharply than the cost of necessities like food and other housing costs.

“It’s time for the government and OFGEM to consider energy discounts to protect the most needy, otherwise the heat-or-eat dilemma faced by so many households won’t go away.”

According to a cross-party inquiry into hunger and food poverty, the poorest UK households now spend 40% of their income on housing, food and fuel. This represents an increase of 9 percentage points between 2003 and 2012 – the biggest rise faced by any economic group.

Almost half of a family’s income is spent on housing, food and fuel costs

Details of the inquiry, reported in the Observer newspaper, suggested the disproportionately large hit taken by the poor was due entirely to rising housing and fuel costs, as the percentage of income spent on food was the same as a decade ago.

In a separate development, Big Six energy supplier SSE admitted that bad debts – the amount owed by customers more than 6 months in arrears with their bills – had jumped by more than 30% to £118 million in the past year.

SSE made overall profits before tax during the period of £1.55 billion – up nearly 10% on the previous year or the equivalent of £3000 a minute.

Analysts said the bad debt figures highlighted how many UK households were struggling to pay their energy bills after years of price rises. They said the figures were especially significant as the debts were incurred while customers actually reduced their energy consumption due to high prices and a mild winter.

“I believe a fuel discount for the most needy would significantly alleviate the struggle faced by many households to put food on the table,” Mr Morgan said.

“The evidence is becoming clear that the cost of food is not the underlying cause of food poverty – it’s the ever-increasing cost of energy.

“The government and OFGEM urgently need to consider, for example, expanding the winter fuel discount currently available to needy pensioners.”

The Energy Advice Line is the UK’s leading impartial comparison, switching and advice service for businesses and householders. It actively campaigns for reform of the UK’s energy market to boost competition, get consumers a better deal from suppliers and lower energy prices.

The Energy Advice Line’s price comparison and switching service is free and completely impartial. Consumers can obtain energy quotes with a few computer strokes based on a diverse panel of energy suppliers including the major players and smaller independent utility companies.

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