Darling tells energy companies to help poor

By Daniel Fineren

LONDON (Reuters) - Utilities should give millions of people paying for power and gas with pre-paid meters a better deal and triple funding for their poorest customers, Chancellor Alistair Darling said on Wednesday.

Darling said he would force companies to help poorer customers struggling to cope with soaring prices if they did not act voluntarily, while suppliers which had feared mandatory price caps welcomed the chance to negotiate.

"We want to see the 5 million customers on prepayment meters given a fairer deal and energy companies to increase their support to vulnerable customers," Darling told parliament in his first budget.

Energy companies spend around 50 million pounds annually on "social tariffs" for their poorest customers but Darling said that should be tripled.

"I want to see this rising to at least 150 million pounds a year over the period ahead," he said. "We are committed to helping people who need the help most... We will legislate if it is necessary."

Some power companies charge prepaying customers hundreds of pounds more than those paying by direct debit, because of the higher administration costs.

Utilities warn that moves to cut profits from pre-pay meters would mean other bills rising and argue other measures, like the mandatory social tariffs proposed by EDF Energy, would be more effective.

"This would ensure a level playing field for suppliers and sufficient funding since it would require statutory mechanisms by which money was redirected for this purpose," EDF said in a statement.