Support for families suffering fuel poverty fails to reach the needy

Only one in eight households in fuel poverty receives discounted gas and electricity bills, despite a multimillion-pound commitment by the main energy companies to help vulnerable people to endure the winter.

The companies promised to spend £225million over the next three years on social tariffs, which offer the cheapest deals to customers most in need, but an investigation by the Liberal Democrats has found that the initiative is not working.

A combination of huge variations in deals offered by the main suppliers, complex rules and onerous eligibility criteria has meant that consumers have little idea what help is available, how to claim or which company offers the best terms, the party says.

Of the 5.4 million households trapped in fuel poverty - where one tenth or more of income is spent on gas and electricity - only 641,438 are on social tariffs with the six main energy suppliers. Centrica, the owner of British Gas, has the most, with 352,303, and ScottishPower the least, with 2,500. ScottishPower has said that its new fuel poverty programme will significantly increase this number.

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Steve Webb, energy spokesman for the Lib Dems, said: “Millions of households face a bleak winter because of fuel poverty, yet most are not even covered by the special schemes run by the energy companies. The rules of the schemes on offer are bewilderingly complicated, which means that consumers have little hope of knowing which company's scheme would be best for them. The Government needs to make sure that all people living in fuel poverty receive systematic help, wherever they live and whoever they buy their power from.”

Gas and electricity bills rose a record 42 per cent, or £381, this year, and the average annual power bill is £1,292, according to the price comparison website uSwitch.

Paul Dornan, head of policy and research at the Child Poverty Action Group, said: “Poor families often pay the most for energy because they have to use the more expensive payment methods and, though social tariffs are supposed to stop this problem, to be effective, the access needs to be easy.”

According to the Lib Dem research, help for vulnerable households depends on an array of differing and confusing factors. Some companies base eligibility on age and the number of bedrooms, others on state benefits and how the bill is paid, and yet more base it on total income. Aid also varies, from cash discounts to fixed bills regardless of consumption.

Mervyn Kohler, special adviser to Help the Aged, said: “The inconsistency and restrictions found in the social tariffs currently on offer from the big six energy providers is a clear indication that a new strategy on fuel poverty is required.”

Age Concern said that the poorest households were least aware of bill discounts and least likely to know how to apply for them. It estimated that one in three older households was in fuel poverty and accused the Government of failing to tackle price inequalities.

Ofgem, the energy regulator, has demanded commitments from the main power companies that they will pass on recent steep falls in wholesale energy prices. It published its own report on discounts yesterday. The report says that take-up of cheaper energy deals, including social tariffs, had reached 800,000.

Centrica (owner of British Gas)

350,000 customers on a list entitled to benefits are eligible for the “Essentials” tariff. Annual cost to company: £90 million

E.ON “StayWarm” tariff available, based on size of the house. Saving of £400, but only to about 27,000 customers. Cost: £10 million

ScottishPower “Carefree Plus” tariff on offer to some over60s. Currently just 2,500 customers. Cost to company: £4.5 million

EDF “Energy Assist” available to those in receipt of some benefits, currently 115,000. Cost: £10 million

Scottish & Southern “Energyplus Care” for 81,000 who spend more than 10 per cent of their income on energy bills. Cost: £16 million

npower “Spending Warmth Tariff” for 63,000 households with income under £13,500. £14 million

Source: Liberal Democrats