The first annual report on fuel poverty, has been published by the Departments for Trade and Industry and Environment, Food and Rural Affairs.

The study concludes that the number of households suffering from fuel poverty in the UK has dropped over 40 per cent by about 2.5 million.

Forum Response: Ofgem

Callum McCarthy, chief executive of Ofgem, said: "We welcome the news that the number of homes in fuel poverty has fallen from 5.5 million to 3 million since 1996. We are delighted that lower gas and electricity bills have played a significant role in this reduction.

"Ofgem contributes to helping the fuel poor through its Social Action Plan. We also administer the Energy Efficiency Commitment on the government's behalf, which will provide around £300 million in energy efficiency investments to fuel poor homes by 2005. Progress has been made this year in encouraging energy companies to identify vulnerable customers who could benefit from their help, through improvements in debt prevention and energy efficiency advice.

"We will continue to work to ensure that competition works for all gas and electricity customers. We look forward to continuing our contribution to the success of the government's Fuel Poverty Strategy."