Benefit reforms at risk of worsening fuel poverty in isles

Changes to government benefit payments risk worsening the blight of fuel poverty and leaving scores of vulnerable people in Shetland in the cold this winter, according to the Citizens’ Advice Bureau (CAB).

The independent charity is warning that changes to social tariffs have made it much more difficult for unemployed, elderly and disabled consumers to get a rebate on their bills. It is likely to exacerbate the impact of huge price rises announced by energy companies in recent months.

The assistant manager of CAB’s Lerwick office, Sylvia Jamieson, this week wrote to Northern Isles MP Alistair Carmichael asking him to intervene due to concerns about the government’s new warm home discount scheme.

Those eligible for the scheme can claim a £120 rebate on their energy bills this winter, replacing a previous tariff offered by energy companies including SSE. But CAB says many folk are now experiencing major difficulties in re-applying.

Households spending more than 10 per cent of their income on energy bills are defined as suffering from fuel poverty. Those falling into that category used to get a discount if they received benefits or tax and pension credits.

Now, those who qualify for incapacity benefit will not be able to request a discount until they have been transferred over to the new employment and support allowance, which is replacing incapacity benefit. That process will not be complete until March 2014, which could leave some folk in the cold for three successive winters.

In addition, if an individual is appealing against having their benefits stopped – a process which can take several months – they cannot apply for a rebate in the meantime.

Ms Jamieson said the omissions were in danger of plunging many defenceless people into “even greater financial hardship and fuel poverty”. In her letter to Mr Carmichael, she wrote: “These changes to the scheme mean that some of the most vulnerable customers are facing a winter of suddenly increased electricity costs, at a time when electricity price rises are also being implemented.”

The MP – who is a whip in the coalition government – responded by saying he had written to UK energy and climate change minister Chris Huhne asking for answers: “We must ensure that any problems with the current system are ironed out and that the welfare of individuals most in need is put first so that people are not adversely affected by this.”

CAB has seen a surge in queries from islanders following large rises in electricity and gas bills in the past couple of months. Many households were already desperately struggling to cover the cost of heating prior to the latest round of price increases.

SSE, the parent company of Scottish Hydroelectric which operates the power station in Lerwick, increased its electricity and gas prices by 12 per cent and 19 per cent respectively last month. The other big providers have announced similar rises, and regulator Ofgem said last month that the firms’ profit margins had risen from £15 per customer in June to £125.

Though CAB does not offer advice on how to change supplier, Ms Jamieson accepted there may be a lack of awareness among the Shetland public that several different companies supply electricity and gas to households. Nationally it is estimated that changing supplier can save customers between £100 and £200 a year. Those able to make payments by monthly direct debit can also shave large sums off their bills.

A delegation of SIC councillors will head to Edinburgh on Tuesday to urge housing minister Alex Neil to take steps to alleviate fuel poverty in Shetland. Social services committee chairman Cecil Smith and vice-chairman Allison Duncan will be lobbying Mr Neil on the problem, thought to afflict around 3,500 homes in Shetland. In August one member branded the current council’s failure to address fuel poverty as “disgraceful”.

CAB constantly finds itself dealing with clients who have near-chronic difficulties heating their homes. Adequate heating is generally defined as 21ºC in the living room and 18ºC in other occupied rooms. But many elderly, disabled and other low income groups are only able to afford heating for one or two rooms in the house, and some find themselves wrapping up in blankets to keep warm during the bitterly cold winter months.

One recent CAB client is a single mother, who lives in a council house in a rural part of Shetland with her three children. She has health and mobility problems and receives disability living allowance, but has to spend over £50 a week on electricity.

She can only put heating on in the main living areas, but not in the bedrooms. Both she and the children have foregone essentials such as clothing and school outings and they have had to cut back on food. Keeping up with the increasing cost of electricity has caused her to fall into debt after not being able to maintain other payments.

CAB is working with the SIC and other bodies including Hjaltland Housing on a “one stop shop” to help householders take steps to cut energy bills. People are being urged to make sure they are claiming any benefits they are entitled to, and to see if they qualify for the discounted social tariffs.

Anyone whose home lacks insulation – widely viewed as the key to eliminating fuel poverty in the long term – or has damp or condensation in their dwelling could be entitled to grants to help reduce their energy costs. Smart monitors are also available to increase householders’ awareness of how much different electrical appliances cost to run.

UK prime minister David Cameron and Mr Huhne met the “big six” energy firms – British Gas, EDF, SSE, npower, E.ON and Scottish Power – at a summit last week. Following that, consumer rights organisation Which? said it wanted to see concrete action to bring prices down and make the malfunctioning market more transparent.

The average household energy bill nationally is now nearly £1,300 a year, with the figure believed to be significantly higher in windswept remote areas like Shetland. Which? is calling for tough measures to force suppliers to reduce their baffling array of different tariffs. It also wants steps taken to allow like-for-like comparisons of deals offered by competitors.

A Which? investigation found that the 400 tariffs available were so confusing, and the various options so complex, that many staff manning the six companies’ call centres simply had no idea which was their best deal. It said staff gave out questionable advice on potential savings and in nearly a third of cases failed to offer customers their cheapest tariff.

Which? executive director Richard Lloyd said: “It’s good to see the Prime Minister and the major suppliers accepting that the energy market needs to improve, and some immediate help for people struggling to pay their energy bills this winter. The government now needs to do more to ensure this wasn’t just a talking shop.

“The energy companies are agreeing to measures that should have been put in place long ago. To ensure real change, next we need the Government to produce an energy plan that shows consumers how they’ll be getting fair and affordable energy. It took years to get into this mess and it will take more than an afternoon to fix it.”

You can contact Hjaltland Housing’s “one stop shop” for free and impartial advice on energy bills by phoning (01595) 741368. To find out whether you are eligible for benefits you can contact CAB’s Lerwick office on (01595) 694696.

• The Shetland Times is keen to hear from anyone who is struggling to keep up with their energy bills. You can contact the newsroom on (01595) 746713 or by emailing editorial@shetlandtimes.co.uk.