Unravelit News - Energy fuel measures - the government's missed opportunity

Energy fuel measures - the government's missed opportunity

Thursday, September 11th 2008

The government today announced a package of measures to help the country cope with soaring fuel bills. These measures include:

  • A partial reversal of previously announced cuts for the government's warm front scheme, which provides support to households on pension credit with the installation of central heating
  • Doubling of winter fuel payments to pensioners. Help for disabled and families with children under five - but only if the coming winter is severe
  • Free or half price insulation offers for all families and a price freeze for the remainder of this year for the poorest families

The measures have already been criticised as being overly focused on inducing long-term reductions in energy consumption, while providing little help for average families struggling to pay their bills this coming winter.

The current vagueness around the implementation of the longer term measures does not help. For example, it is unclear how the insulation offers will be marketed by the energy suppliers, and what the take-up will be.

The value of offering a price freeze for the poorest for the rest of the year (a period of a little over 3 months!) is also in doubt. The consensus is that suppliers had no intention of raising prices this year anyway, but that they will probably put through further increases in the New Year.

The measures also don't seem to include any new energy tariff initiatives that might help incentivise UK energy consumers to reduce their consumption, for example by introducing attractive fixed rate one year packages with usage limits.

We are also sorely missing any new initiatives to make bills more useful to the consumer, or example by forcing suppliers to clearly show the last 12 months of usage on every statement, within the context of the national average.

Most importantly, we are missing any special help for customers who use Prepayment meters - the most expensive way to purchase gas and electricity - and which are present in about 10% of UK households.

We were hoping that suppliers would be forced to offer their customers a free meter replacement, so that those willing and able to pay quarterly or by monthly Direct Debit, could benefit from cheaper prices, but this was not part of the package that was announced.

So unfortunately, the government's efforts are not going to help you this winter with the 25-35% extra that you will have to pay for your gas and electricity. This is the sad fact.

For the average family. the only way to save money on the energy bills is to somehow use less energy in the future and to switch to a cheaper tariff deal from another supplier, this can easily save up to 20%, so we do recommend that consumers take this step first.

Back to news and information »