Fuel Poverty is a Policy Problem; Freezing to death is a human one…
According to a study reported in The Independent a year ago 65 people a day die for want of adequate heating over winter. That is a shocking state of affairs for the 5th richest nation in the world. It is an unfortunate fact of real politick that the Westminster bubble reaction to this is to blame the Big Six energy companies.; They should rather try and create an environment where better informed consumers and their families, efficient allocation of resources through markets and government financed social support all work together to ensure that temperature related deaths are consigned to history along with workhouses, poorhouses and outhouses.
As is so often the case, the best is being made the enemy of the good. Suppliers (and other interested parties) are being put off trying to reach the vulnerable, the elderly and the disenfranchised by the weight of compliance being placed on any outbound calling, sales or contact activity. The fifty thousand feet view, were I the CEO of an energy company, would be that every time I tried to engage with that section of the market that doesn’t shop around online my business get smashed with fines, bad PR and further red tape. Why on earth should that CEO bother to do anything more than the de minimis necessary to be compliant with legislation? The current system does nothing to promote anyone (other than the state) to innovate solutions that might help that section of society that languishes in fuel poverty. That is a crying shame; all the more so because people are dying.The Winter Fuel allowance, CERT (or now ECO), Cold Weather payments and the Warm Home Discount (see here for more information) are all admirable attempts to ameliorate fuel poverty but they are, at heart, blunt tools wielded by the centre in a way that cannot possibly capture everyone that needs to be helped.
Unfortunately, rather than working with other agencies to find ways of reaching those parts that are difficult to reach, it would appear that Whitehall and the various interested government bodies are more interested in regulation, red tape and box ticking.
Fuel Poverty – Definition and facts
What is Fuel Poverty?
A household is said to be fuel poor if it needs to spend more than 10% of its income on fuel to keep the home warm. In 2012, around 6.5 million – that’s 27% – of UK households are in fuel poverty, that is 4.5 million more than in 2003.
Fuel poverty is not a new problem but as the energy bills tend to increase faster than incomes. The Fuel Advisory Group, which is funded by the Department of Energy, estimates that another 3 million UK families could be in fuel poverty by 2016. The impact of fuel poverty on health is huge with 25,000 extra people dying each winter from medical conditions compared of the rest of the year.
Causes behind Fuel Poverty:
Fuel poverty is caused by a convergence of 3 main factors:
- Low household income: the cost of heating a home accounts for a large proportion of total income for households on benefits or low wages
- High energy prices
- Poor energy efficiency: the quality of the building and its insulation affect how much energy is needed to heat the home
2 other factors contribute to fuel poverty:
- Under occupancy: when people on low incomes live in properties that are bigger than they need, for example, an older person who lives alone in a house that was once a family home
- Appliance use: UK households use more and more appliances. Low-income households are more likely to use older, less energy efficient appliances with higher running costs
Who are the most at risk?
Those most at risk from fuel poverty and cold-related illness are the most vulnerable members of our society. The elderly account for 50% of the fuel poor! Last year the over 65s were faced with energy bills more than double those they paid in 2005. Families with young children and those who are chronically sick or disabled are also more at risk than the rest of the population.
The most fuel-poor areas in the UK:
Some regions in the UK are more hit by fuel poverty than others.
Indeed, the proportion of households that are fuel poor vary in the different UK nations:
- England: 16.4% (10.8% in London; 21.6% in the West Midlands)
- Scotland: 27.9%
- Wales: 26.2%
- Northern Ireland: 43.7%
We note that several parts of the UK have shown a significant rise in the number of homes that are now in fuel poverty.
ONS – Netmums – DECC – IPSOS MORI – OFGEM – The Independent