A million extra households threatened by fuel poverty

British Gas follow Scottish Power’s price hikes

9 June 2011

British Gas's announcement that they will raise their domestic energy prices comes as no surprise. It follows a similar announcement by Scottish Power in June.

But the scale of the hike (an average of 18% for gas and 16% for electricity) drew sharp intakes of breath from CSE staff who fear the price hikes could put as many as 1 million extra households into fuel poverty.

CSE's Senior Analyst, Ian Preston, is left in no doubt that the impact on the poor will be severe indeed.

"Our modelling shows that this increase will tip tens of thousands of Scottish Power’s customers into fuel poverty. And it doesn't end here. We fully expect the other big suppliers, EDF Energy, E.ON, Npower and Scottish & Southern Energy to follow suit shortly and raise their prices by a similar margin.

“If – or when – they do, we estimate that, with average bill increases of approximately £150, a further 1.2 million homes will be plunged into fuel poverty, adding to the 5.1 million UK households currently in that state. This means that next winter over 10.5 million people in the UK will be living in households where they struggle to afford to keep warm."

Scottish Power's announcement coincided with a report published by the Institute for Fiscal Studies (IFS) which showed that the country's poorest pensioners face a 'heat or eat' dilemma during cold weather.

CSE's Chief Executive Simon Roberts commented: "The IFS is right to point out that too many elderly people go hungry at the coldest times of the winter, simply to be able afford to keep some heat on at home. But our research shows that the same goes for other low-income groups, such as disabled people, single-parents and the single unemployed.

"And behind all the statistics generated by the IFS report and Scottish Power's price rise, we shouldn't forget that the health, well-being and self-esteem of real people will suffer as they face a triple assault of higher energy prices, a confusing and untrustworthy energy market, and poorly insulated homes. These people’s household budgets are so tight, they’ve told us they are unwilling to take the risk of changing energy supplier because don’t trust the energy market to give them a better deal than the one they are on and they can’t afford to pay a penny more."

You can read the testimonies of people struggling with fuel poverty in our report 'You Just Have to Get By'.

CSE has produced a range of leaflets on domestic energy saving which are downloadable from here.

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