Opinion Former Article

NEA: Government road map needs redirecting, says leading charity

The Low Carbon Transition Plan released today by no means offers the comprehensive road map to 2020 that will be needed to reduce carbon emissions and fuel poverty.

British households will face higher gas and electricity bills to cover the expansion and investment costs of new generation and home insulation programmes. The Government does however offer a commitment to introduce mandatory social tariffs, that force energy companies to keep prices down for those on lower incomes and aim to ensure the poorest do not suffer. There will also be a number of schemes to help ordinary households improve their energy efficiency.

New legislation will be needed for the mandating of social tariffs to take effect as of March 2011 when the current voluntary arrangements come to an end. Although long overdue, the mandate has been welcomed by leading charity National Energy Action (NEA) although faster action is needed to assist the most vulnerable people in society before then.

Jenny Saunders, Chief Executive of National Energy Action said:

"NEA has been pressing hard for a social mandate on energy tariffs and we are pleased that the Government has included this in their Transition Plan. We are however concerned at the timeframes involved and the potential narrowing of assistance to pensioner households when millions of low income families are also in fuel poverty and need access to lower tariffs and protection from rising prices.

"Although current arrangements benefit over 800,000 households it does not provide the support needed to a large number of vulnerable households."

Whilst the White Paper recognises the importance of Warm Front in assisting vulnerable households, NEA is concerned the reduction of funding for the next year has not been addressed which will lead to 50% fewer households being assisted in 2010.

A number of other measures were also highlighted by the charity as being 'important incentives'. Feed in Tariffs provide the opportunity to potentially assist those most in need by reducing the costs of heating and power but the levels must be adequate to make them attractive, and a mechanism is introduced to ensure capital investment for renewable technologies are accessible to the poorest communities. Pilots of the Pay as You Save mechanism opening up the opportunity for low cost financing are welcome but are not likely to be suited to those on the lowest incomes.

It was also proposed in the paper that energy regulator Ofgem be given new powers to take action against the energy suppliers where it believes there is unfair behavior. NEA welcomed the strengthening of Ofgem's ability to punish rogue elements in the energy supply industry.

Jenny Saunders, Chief Executive of National Energy Action said:

"Traditionally, low income households haven't benefited fully from the competitive market. A strengthening of Ofgem's powers to take action where competition can never serve the best interest of the poor and vulnerable is a welcome move."

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