Millions of Britons who are struggling to pay their heating bills could apply for discount vouchers under government plans for a nationwide fuel poverty scheme.

The Government has proposed that energy companies pay a set proportion of their turnover, which it would then match with tax revenues, to fund a national voucher scheme.

Energy companies spend only 0.11 per cent of their £24 billion turnover on helping to tackle fuel poverty, defined as those who have to spend more than 10 per cent of their weekly income on energy. The latest round of price rises is thought to have placed an additional 500,000 people in this predicament, throwing into jeopardy a Labour pledge to eradicate fuel poverty by 2016. Companies have been criticised for reporting huge profits while raising prices. After the latest increases, the average household fuel bill now exceeds £1,000 a year.

The government proposals emerged at a meeting at the Treasury yesterday hosted by Yvette Cooper, Chief Secretary to the Treasury, and Malcolm Wicks, the Energy Minister, with the heads of three of Britain’s biggest energy suppliers, Centrica, owner of British Gas, EDF and Powergen. Alistair Darling, the Chancellor, may give further details of the scheme in the Budget on Wednesday next week.

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BACKGROUND

• Energy suppliers in talks to help 4.5m families

• Senior energy regulator leaves for Centrica

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• Windfall tax on big energy firms is 'piracy'

• 'Restrictive' National Grid is fined £41.6m

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Duncan Sedgwick, chief executive of the Energy Retail Association, said: “It seems to be a regular occurrence for government to come knocking at the door of energy companies for cash solutions to its social problems.”

Alan Duncan, the Shadow Business Secretary, said that the scheme was a publicity stunt and that prices should reflect global markets.

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