Energy cost 'pushing 10% into debt'

The National Housing Federation said hikes in the cost of gas and electricity would force many low-income families to have to choose between heating their homes or eating this winter.

The group predicts that 1.5 million electricity customers will be in the red by the end of next year, a rise of 150,000 people, while gas customers who are in debt will jump by 140,000 to 1.1 million people.

The federation, which represents England's housing associations, said many poorer customers would be forced to go without fuel because they simply would not be able to afford to pay for it. It said the average energy bill had soared from £676 a year in 2005 to an expected £1,406 a year in 2009.

The warning comes as Prime Minister Gordon Brown is due to unveil a package of measures to help people struggling with the soaring cost of energy.

Details of the package were not available, but it is widely expected to focus on assistance with energy efficiency measures like loft insulation, new boilers and double glazing.

The federation said one of the key issues that exacerbated fuel poverty was the practice of charging people who pay for gas and electricity through pre-payment meters higher tariffs than other customers.

It said around five million people paid for their energy in this way, and although most of them are on low incomes, they will pay around £76 more for their energy next year than customers who are billed quarterly.

Meanwhile, campaigners reacted with fury to a remark made by an energy company boss over the fuel bill crisis facing millions. E.On boss Mark Owen-Lloyd joked that continued high gas and energy prices would mean "more money for us" - ignoring the plight of millions of low-income families who will face a choice between food and warmth this winter.

The energy firm apologised unreservedly for their head of emissions trading's blunder and warned he could face disciplinary action.