Poor 'penalised' by energy firms

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UK energy firms must stop charging the poor more for gas and electricity, consumer groups and charities warn.

A coalition, which includes Energywatch and Help the Aged, said millions of low income homes used prepaid meters to budget but this ended up costing more.

People with meters paid up to £173 more for gas and up to £113 for electricity in a year, it said.

The call comes as British Gas is the last of the big six suppliers to raise prices for a second time this year.

Wholesale costs

The firm said in July that "unprecedented high wholesale energy costs" had made necessary the September price rise of 12.4% for gas and 9.4% for electricity.

Energywatch said the rise made it "the round dozen this year" as the other big five suppliers - EDF Energy, npower, Powergen, Scottish Power and Scottish Southern Energy (SSE) had also raised their prices twice.

We need action now to ease the hardship of the most vulnerable in society Energywatch

The industry watchdog added it meant domestic gas prices had risen by around 87% and electricity prices by 56% since 2003.

Energywatch joined forces with eight other groups, including Citizens Advice, Disability Alliance and Child Poverty Action Group. They have written a letter to the six energy firms, calling for a "better deal for struggling households".

It says while government measures may help low-income households in the long term, the suppliers should take the lead by making prepaid meter charges the same as bills paid quarterly.

'Most vulnerable'

Energywatch Chief Executive Allan Asher said: "We need action now to ease the hardship of the most vulnerable in society.

"We expect suppliers to do more to recognise their responsibilities and adopt policies which reduce the burden on the poorest who are often paying the most."

The industry watchdog said no major supplier had equalised prepayment meter charges with standard credit for both gas and electricity.

It said British Gas had equalised prepaid meter charges for just gas while Scottish Power, EDF Energy and Powergen had equalised charges for electricity.

The coalition of consumer groups and charities fears increasing number of consumers unable to put money in their meters will disconnect from supplies this winter.

It also cites predictions there would be three million "poor fuel" households by the end of 2006. This means households who spend 10% or more of income on heating and lighting.

Earlier this year, the groups warned that warm homes were in danger of becoming a luxury as escalating fuel costs were "blighting the lives" of millions of families.

Most UK gas still comes from the North Sea but production has declined faster than expected. As a result, 5-10% of the total supply is imported and subject to global market forces.