300,000 will be in fuel poverty by Christmas as ministers fails to act on energy prices

300,000 will be in fuel poverty by Christmas as ministers fails to act on energy pricesFuel Poverty Advisory Group slams 'inadequate' Government initiatives
Households struggling to pay bills are expected to top nine million by 2016Forcing firms to insulate homes for poorer customers will add 116 to billsMinisters are doing too little to 'soften the blow' of costly green measures

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UPDATED:

00:05 GMT, 17 December 2012

The latest round of energy price rises will leave another 300,000 families struggling to pay their heating bills this Christmas, the Government's adviser on fuel poverty warns today.

In a devastating report, the independent Fuel Poverty Advisory Group said Government initiatives were 'completely inadequate to tackle the scale of the problem' and warned that ministers were doing too little to 'soften the blow' of costly green measures which are forecast to send energy bills even higher.

It warns that the number of households struggling to pay their bills is expected to hit more than nine million by 2016 – the date by which the last government pledged to end fuel poverty.

Toxic cocktail: Derek Lickorish blames wholesale prices, cost of reforms and cuts in income

Toxic cocktail: Derek Lickorish blames wholesale prices, cost of reforms and cuts in income

It is estimated that four million households are currently in fuel poverty, or forced to spend more than 10 per cent of their income to keep their home warm.

Around half of those are pensioners, while a further fifth contain at least one child aged five or under.

In a separate report published today, the Institute for Public Policy Research warns that an initiative to force energy firms to insulate the homes of poorer customers could add up to 116 to the average bill.

The FPAG's study suggests that average gas bills have increased by 40 per cent in the past five
years, with electricity bills up by 24 per cent.

Recent price rises are expected to push bills up by a further 7 per cent, taking the average dual fuel bill to 1,365 a year.

Those living in homes not connected to mains gas pay an average of 2,100 a year. The price rises are expected to leave a further 300,000 families in fuel poverty.

Derek Lickorish, chairman of the
FPAG, which was set up to provide advice for ministers, said: 'Millions
are living in misery due to high energy bills.

'Yet time is running out for the Government to poverty-proof the homes of those on the lowest incomes.

Radical reform: Mr Lickorish's group has dismissed Government initiatives as 'inadequate'

Radical reform: Mr Lickorish's group has dismissed Government initiatives as 'inadequate'

Radical reform: Mr Lickorish's group has dismissed Government initiatives to tackle the problem as 'inadequate'

Action needed: The Mail has been highlighting the growing energy crisis facing millions of households

'A
toxic cocktail of rising wholesale prices, the high cost of energy
reforms and cuts in incomes for many households means fuel poverty
levels are set to skyrocket without radical action.'

Mr
Lickorish, a former energy company executive, said green measures
driven by Brussels would add 63billion to bills in the next 15 years –
equal to more than 4billion a year.

He said the money should be used to fund a drive to insulate Britain's ageing housing stock.

The
Government recently announced proposals to require energy firms to
provide only four tariffs for each fuel and to place all customers on
the cheapest price available for their chosen tariff.

But critics have warned that the
plans could see an end to cheap deals, stop consumers switching
suppliers, reduce competition and push up bills in the long run.

Mike O'Connor, chief executive of the
consumer watchdog Consumer Focus, said research shows 6million
households plan to cut back on heating this winter due to fears about
costs.

Mr O'Connor, who backed the call to
use revenues from green taxes to insulate homes, said: 'Current
Government plans for energy efficiency schemes are inadequate to deal
with the scale of the fuel poverty problem.

'Millions of older people, families
and people with disabilities will be left living in cold homes and
struggling to afford their bills unless extra measures are taken.'

Under pressure: Environment secretary Owen Paterson is facing strong calls for action

Under pressure: Environment secretary Owen Paterson is facing strong calls for action

Figures released this week by the independent Office for Budget Responsibility, which advises the Treasury, suggest that energy prices will rise by a further 5 per cent next year.

A spokesman for the Department for Environment, Food and Rural Affairs said two million households were already set to benefit from Government help on heating costs, including one million pensioners who will get 130 off their bill.

The spokesman said: 'We have also already announced our intention to launch a new fuel poverty strategy next year to make sure we are targeting help at those who need it most.

'The Fuel Poverty Advisory Group has an important part to play in helping us assess our progress in this area and we will now carefully consider the recommendations set out in their annual report.'