uSwitch.com urges the Government to keep the energy flame glowing

Fuel Poverty and climate change are two issues the Chancellor needs to address in his pre budget report this week, according to the UK’s leading independent switching and comparison service, uSwitch.com.

Keep the frost at bay

Gas bills have risen an unprecedented 87% since the end of 2003, yet the Winter Fuel Allowance hasn’t increased at all. uSwitch.com is urging Gordon Brown to boost the Winter Fuel Allowance and benefit the 2.8 million pensioners estimated to be in fuel poverty. This year’s record 13 price rises have increased the average fuel bill by £277 plunging a further 1.3 million consumers into fuel poverty.

In 2003, the maximum Winter Fuel Allowance available to pensioners aged between 60-79 was £200 and the average energy bill was £580, offsetting 34.5% of a customer's bill. Today, the Winter Fuel Allowance is still £200 but by 1st January 2007 the average energy bill will have risen to £1,013 and the allowance will only represent 19.7% of a pensioner’s annual bill.

Given that The Chancellor is sitting on an estimated £2 billion in ‘surplus’ revenue generated as a direct result of increases in North Sea Oil taxation in 2006, Mr Brown has no excuse not to address the less than adequate provisions made by the current Winter Fuel Allowance.

Measures to tackle fuel poverty amongst pensioners will cost a further £150 million in addition to the £665 million already budgeted for 2006-07. After accounting for this expenditure, the Treasury will still see a massive £1.185bn gain in revenue. If this money was invested in the 11.5 million people eligible for this benefit the Government could give an extra £103 to each pensioner.

Ann Robinson, Director of Consumer Policy at uSwitch.com, comments: “To put things bluntly, the Government is letting down millions of pensioners - as keeping warm this winter has become a bigger financial burden than it was last year. The latest figures show that targets to eradicate fuel poverty within vulnerable households in by 2010 are in serious jeopardy.

“Should the Chancellor decide to allocate ‘the spare’ £1.185 billion by distributing it amongst the 11.5 million pensioners who are eligible for the Winter Fuel Allowance – it would mean an extra £103or a rise of over 50% to each person at no extra cost to the Government, that really would be a ‘golden rule’ worth celebrating.”

uSwitch is also urging Westminster to take the lead from its Scottish counterparts who run a non means-tested Central Heating Programme providing free heating and insulation packages (worth up to £3,500) for those whose system is broken or beyond repair or who do not have any heating at all.

A Greener Britain

Climate change is high on the global agenda and the UK Government has laid out ambitious targets to reduce energy wastage. However, it is doing little to incentivise consumers to change their behaviour. uSwitch.com believes the Government could encourage greater take up of green energy tariffs by removing the 5% VAT. This means green energy products would become on average £7 a year cheaper than standard fuel tariffs and the UK could begin to combat climate change as a nation.

The UK is currently behind its carbon emission targets and is likely to fall between 2-5% short of its 2010 target for reducing Co2 by 20% - creating a real need for further initiatives to promote awareness and increase take up of green energy tariffs.

Ann Robinson, concludes: “Increasing awareness of global climate change is one thing, persuading consumers to change their behaviour is another. If the Government is going to meet its carbon emissions targets then it will need the help of the energy suppliers and consumers to achieve this. Given the fact that over a quarter of all damaging carbon emissions in the UK are caused by households, the Government has a responsibility to incentivise investment in renewable energy by providers and to encourage consumer uptake by removing VAT on green tariffs.

“With less than 200,000 (0.33%) of the UK population signed up to green energy tariffs, the UK is emitting more carbon emissions than many of its European counterparts. We urge the Government to follow the example of The Netherlands who provides tax breaks on renewable energy products to help fuel consumer demand and to stimulate growth in this market. We see little reason why the UK Government cannot implement the same measures.”