Energy suppliers will spend £500m this winter to help customers pay their energy bills after the government helped broker deals with 12 of Britain's biggest companies.
Sources told the Guardian that suppliers could do this in a variety of ways, including adding credits to some customers' bills, canceling debts of others, and adding credits to prepaid meters. He plans to use the funds.
Ministers hope the deal will help cushion the impact of decisions to cut winter fuel costs for 10 million pensioners, but the government said on Tuesday that the deal would help save an additional 100,000 people by the end of 2010. He acknowledged that there is a possibility of falling into relative poverty.
The deal was announced by the government at the same time as the update of the Warm Homes scheme, which provides funding for people looking to improve the energy efficiency of their homes. Sources say that together these schemes will help households lower their energy bills by up to £1 billion.
“We recognize that people are struggling because their bills are too high,” a government official said. “The long-term plan is to transition to clean electricity by 2030, which will increase or decrease in response to supply shocks.” The roller-coaster electricity bill will go away, but there's more we can do to help with the transition.”
Darla Vyas, chief executive of industry body Energy UK, told the Guardian: I'm really happy that the industry is now able to offer more services than ever before. ”
Ministers continue to face pressure over the cost of living, with consumer price inflation rising to 2.3% last month, above the Bank of England's 2% target.
Energy regulator Ofgem is expected to raise the quarterly industry price cap for January on Friday. Cornwall Insight, an energy consultancy, said Ofgem expects to announce that the average household's energy bill will rise by 1% on January 1, from £1,717 to £1,736.
promise of labor against The country's energy plan aims to cut tariffs by 300 pounds by the end of 2010, but the government has made little mention of that pledge since taking office.
Cuts to winter fuel payments will push an additional 50,000 pensioners into relative poverty next year and another 50,000 into relative poverty by the end of the decade, according to modeling published by the Department for Work and Pensions on Monday. Dew. Payments to pensioners' bank accounts were due to start this month.
Energy suppliers each year announce measures to help customers get through the winter, but government officials said they were being asked to go further this time. They said it was the first time industry body Energy UK had helped the government coordinate winter support on such a large scale.
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Some of the funding, mostly from six major suppliers, will be donated to charities supporting more vulnerable customers.
Officials also said the energy price cap would prevent businesses from adding on other customers' bills to help pay for support packages. Instead, some companies are thought to be financing their transfers through reserves, loan facilities or smaller profit margins.
The government also announced details of the Warm Homes Plan. Under the scheme, households will be able to claim £7,500 for a heat pump to replace their existing boiler. Under the changes to the system, households will no longer need to apply for planning permission to set up.
