Extra cash to help with fuel bills

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An extra £225 million will be provided by the six biggest energy firms to help people struggling to pay rising power bills.

Business Secretary John Hutton said the companies would spend £150 million by the year 2010 on social assistance, on top of £100 million over the next year and £125 million in 2009/10.

The Government said that if the money was just used to offset bills it could remove up to 100,000 people from fuel poverty - where 10% of a household income is spent keeping a home warm.

Ministers said the money could also be used to pay for energy efficiency measures.

Mr Hutton said: "Thanks to the cooperation of our energy companies the amount of money being spent on social programmes to help the poorest heat their homes is now set to treble.

"This is a significant boost to the billions already spent by Government and the energy companies, and means we can now get this vital extra support to the people who really need it in time for the coldest months this coming winter.

"I do not underestimate the difficulties and anxiety that rising energy prices can cause but I believe that this extra cash, coupled with ensuring we have the most competitive market possible, will help us towards our goal of eradicating fuel poverty in the UK."

Scottish and Southern, one of the firms involved, said it was fully committed to delivering its share of the agreement and said it was committed to quadruple the number of its customers benefiting from a special "social tariff".

British Gas, another company involved, said: "We welcome today's decision regarding a voluntary approach to addressing fuel poverty."