Fuel bill subsidy vouchers to be targeted at poorest families

Fuel bill subsidy vouchers to be targeted at poorest families

Vouchers worth up to £100 will be issued by the government to help hundreds of thousands of low income families with the costs of rising fuel bills, ministers are planning to announce.

The payments are expected to form the centrepiece of Gordon Brown's autumn effort to revive his premiership by outlining initiatives to help people cope with the global economic downturn.

Whitehall sources confirmed last night that Downing Street and the Treasury are drawing up plans with other departments for fuel vouchers of between £50 and £100 for low income families.

Channel 4 News reported that payments would be aimed at some of the six million families who receive child tax credit. People claiming the working families tax credit may also qualify.

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It would cost the government £600m to pay to energy companies £100 on behalf of each of the families receiving child tax credit, the Institute for Fiscal Studies told Channel 4. If the government used information about people's income on the child tax credit forms to target the poorest half of claimants, that would halve the cost.

This suggests that the government has decided not to make a fuel payment of up to £150 to all 7.5m families claiming child benefit. The Sunday Times reported at the weekend that Sir Brian Bender, permanent secretary at the Department of Business, Enterprise and Regulatory Reform which is involved in drawing up the plans, was overheard on a train, when asked whether the payments would be aimed at low income families, saying: "No, a fuel rebate for everybody on child benefit."

But Whitehall sources said last night that payments would not be universal and aimed at low income families.

Vince Cable, the Liberal Democrats' Treasury spokesman, told Channel 4 News: "This is a seriously bad idea. The problem here is that the energy regulator, Ofgem, has identified the fact that the energy companies are benefiting to the tune of about £10bn over five years from being allocated free permits under the European trading scheme. It is a windfall to those companies.

"The underlying problem is that poor families pay much more for their power than better off families. If you're on meter the charges are much higher than on direct debit. They also live in badly insulated homes. The programme has to target those problems rather than flows of income."

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