Consumer groups have criticised a Government deal where the six main energy companies pay only an additional £225 million over three years to help people who are struggling with rising power bills.

The Chancellor has been accused also of backtracking on a Budget pledge to make the industry do more for vulnerable customers. Energywatch, the consumer group, said: “The Government is letting the industry off lightly.”

Age Concern, Help the Aged and other consumer groups joined in the criticism, saying that the Government was failing the most vulnerable and had done nothing to tackle the injustice of charging the poorest customers more through pre-payment meters.

Help the Aged, which this week began a legal challenge to the Government over fuel poverty with Friends of the Earth, was also critical of the deal. Kate Jopling, head of public affairs at the charity, said: “This initiative will only scratch the surface. The Government cannot shirk its own responsibility to tackle this growing problem.”

Gordon Lishman, director-general of Age Concern, said: “A figure of £225 million over three years is well under the £150 million a year the Government said it would be looking for in the Budget. Helping 100,000 households is just a drop in the ocean.”

Of the 4.5 million people living in fuel poverty - defined as spending more than 10 per cent of income on heating the home - about a million are using pre-payment meters, according to Government figures.

Tariffs for the meters, used typically by pensioners and the less well off, are up to 45 per cent higher than for internet customers.

The deal follows Government threats to impose a windfall tax on energy companies unless they made extra efforts to cut bills for the poor. Ofgem, the industry regulator, raised the prospect of a tax when it said that the six big companies would effectively receive a £9 billion windfall from receiving free carbon emissions credits and that these could be subject to a one-off levy.

Under the agreement, six companies - British Gas, Scottish and Southern Energy, ScottishPower, EDF Energy, E.on and RWE's npower - will increase spending from £50million in the past financial year to £100 million this year, £125 million in 2009-10 and £150 million in 2010-11.

The Government is legally bound to eradicate fuel poverty by 2010. But, by its own estimates, it will miss this target by a large margin. By 2010, there may still be 1.3 million vulnerable households - nearly the same number as at the time of the Government's Fuel Poverty Strategy in 2001.

Mervyn Kohler, special adviser for Help the Aged, said this week: “When fuel costs fell, the Government was happy to take the credit for a fall in fuel poverty. Now that the energy market has changed, it must take responsibility for its inadequate response.”

John Hutton, the Business Secretary, said: “Thanks to the co-operation 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.”

Scottish and Southern Energy noted that the Government had stated that given the “substantial” commitment that an agreement of this kind represents, it will not expect companies to do more over the period 2008-11 on social assistance.

Both British Gas and EDF Energy said they welcomed the Government's announcement.

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