Energy price hikes will ‘hit the poorest hardest’, warn campaigners

The latest round of gas and electricity price rises will hit the poorest hardest according to the Child Poverty Action Group (CPAG).

British Gas today said it plans to raise gas bills by 12.4 per cent and electricity prices by 9.4 per cent from September. EDF Energy and Scottish Power have announced similar price rises in the last few days and other energy companies are expected to follow.

Analysis of Government data by MoneyExpert.com earlier this week showed that during 2004/05 the poorest 10 per cent of households – some 2.44 million homes - used around 5.7 per cent of their annual expenditure on paying gas and electricity bills. The equivalent figure for all households was 3.1 per cent.

But following the dramatic increase in gas and electricity bills over the past two years, MoneyExpert.com has warned that many of the poorest households in the country could now be spending 10 per cent or more of their annual budgets on paying for gas and electricity.

Kate Green, Chief Executive of CPAG, said:

“This latest round of price hikes will hit the poorest families hardest. Already hard pressed budgets will be stretched further still because of the spiralling cost of gas and electricity. It’s simply unacceptable for families on low incomes to be spending a tenth of their income just on gas and electricity

“The poor also pay more because they are more likely to have to use pre-payment meters which usually cost more than other ways of charging. As a matter of urgency, the energy companies should ensure that people are charged the same rate however they pay.

“The Government has been committed to ending fuel poverty and its focus has rightly been on ensuring that pensioners are protected, but other vulnerable groups such as low-income families with young children must not be forgotten.

“Although we’re enjoying a warm spell now, when winter comes round again parents with young children should not have to decide between putting on the heating and putting food on the table. If prices continue to rise with no extra help for the poorest, then both the Government’s fuel poverty and child poverty targets will be at serious risk.”

For further information from CPAG please contact:
Alex Belardinelli
CPAG Press Officer
Tel. 020 7812 5216 or 07816 909302
abelardinelli@cpag.org.uk