The fuel companies fuel poverty

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14 April 2008

Last week the government announced that it was going to tackle "fuel poverty" - and end it by 2010, which sounds a bit like the undertaking to end child poverty by 2020. In other words, it is not going to happen.

Of course the government should be tackling this rather shocking problem. It is estimated that as many as 4.5 million households are "fuel poor" - which means that they spend 10% or more of their income on heating their homes.

So industry minister, John Hutton, came up with a pledge that "up to" 100,000 of the poorest families will be given help to pay their fuel bills.

But then he explained how this help was to be financed! Apparently the fat cat power companies have signed an agreement, so that, collectively, they pledge to pay 225m towards these costs.

Yet these 6 companies together, managed to make a clear profit of 6 billion in the last year alone! What is more, they are not even being compelled to stump up the cash. It is all voluntary.

Hutton has also explained that he does not feel it is necessary to pass any laws to control the way that the energy companies treat the poor. No, he has only made one mild threat towards these unbelievably greedy sharks - and that is, that he might "look into" the possibility that the companies may be overcharging the very poorest customers - those who are forced to use pre-pay meters. And if this is eventually found to be so, he says he might just pass some legislation at that later stage, "to make sure there is a fair deal for the customer".

In fact Hutton argues the same line that the Tories did when they privatised the utilities: that a competitive (private) market is essential for keeping prices low. What a joke! Surely he knows that this nonsense flies in the face of the experience of all of us - and nobody is exempt, since we all need to use electricity and/or gas, so we know that the price of fuel only goes in one direction: up!. And any price cuts only last long enough to get us to switch supplier but when we do, the price just goes up again.

It is only by legislating that the government could do something about the extortion of the energy companies. That way it could impose price controls on them, or it could take us back to the pre-Tory era, of public sector provision. But such choices are not and never have been, on Labour's business-friendly agenda. This is why it will not end relative poverty of any kind in this country, whether it is fuel poverty, child poverty, or general poverty.