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Friday, August 27, 1999 Published at 09:01 GMT 10:01 UK


UK

Poor 'exploited over fuel bills'

Millions in Britain spend over 10% of their income on keeping warm

More than a million people in the UK are without gas and electricity because they cannot afford to pay their bills.

The Consumers' Association says the poor are being exploited by gas and electricity companies who are adopting "Sheriff of Nottingham" type tactics.


The BBC's Greg Wood: "The Consumers' Association say it's very expensive to be poor"
Its report, Final demand: ending fuel poverty, shows the number of people who could not afford their gas bills last year doubled with suppliers cutting off nearly 30,000 homes.

And in the first three months of this year, electricity companies obtained over 24,000 warrants to cut off fuel supplies or install pre-payment meters.

Companies forced their way into more than 5,000 homes.

Some 1.5 million people effectively cut themselves off last year because of the cost of feeding the gas or electricity meter.

Meters

The Consumers' Association, which launched a campaign against fuel poverty on Friday, says pre-payment electricity meters, which companies claim help the poor to budget better, actually mean they pay more for their fuel than they would through other forms of payment.

It estimates pre-payment customers pay at least 7% more than those on direct debit.

The number of people with pre-payment meters is rising - 15% of electricity and 7.6% of gas customers pay for their fuel this way.

Most companies do not allow customers to switch to cheaper methods of payment if they get into trouble.

Eastern Electricity was the only exception.

Sharon Darcy, principal policy researcher at the association, said: "It is crazy that those with the least money are paying the highest prices for energy to heat their homes.

"Companies are being allowed to behave like the Sheriff of Nottingham by exploiting the poorest people.

"The goverment must take immediate action to end this problem."

The association says richer people have benefitted most from falls in average household energy bills since 1990.

The difference between the percentage of income spent on fuel has risen since the 1980s.

The lowest earners spend 9% of their income on energy, compared to 2% for the wealthiest.

Social action plan

A spokesman for the Department of Trade and Industry said the problem was being tackled.

The regulatory body for the fuel industry, Ofgem, is reviewing whether pre-payment meters reflect the cost of supply and the government had had meetings with industry bosses to talk about fuel poverty.

The government was also planning legislation to extend energy saving and insulation schemes for the poorest customers.

Henry Boyd, secretary general of the Gas Forum which represents most gas companies, said fuel poverty was "very high on the industry's agenda".

And Tony Jackson, chairman of the Electricity Association Fuel Poverty Task Force, set up in May, said the industry had "a strong track record" of serving the needs of all its customers.

It is working on plans to set up a fuel poverty index, to increase flexibility in payment methods and help people who have problems paying their bills.

"The industry accepts that it has responsibilities to its customers, including the fuel poor," he said.

Help the Aged estimates that one in three single pensioners is in severe fuel poverty, meaning they spend 20% of their income on trying to keep warm.

Many cut back on heating to save money and this contributes to the UK's 30,000 deaths a year from hypothermia.

Help the Aged this year teamed up with British Gas to provide financial help to insulate the homes of vulnerable people in order to protect them against hypothermia.



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27 Aug 99 | UK
Fuel poverty: Case studies

08 Apr 99 | UK
Scheme to combat winter deaths

10 Feb 99 | Medical notes
Hypothermia: The facts





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