Feeling the heat (or not)

A fifth of UK households suffer fuel poverty while energy giants cash in.

Last month, secretary of state for energy and climate change Chris Huhne issued the government's latest energy report. The Electricity Market Reform (EMR) white paper makes clear how keen the Department of Energy and Climate Change (DECC) is to promote investment in gas, despite the fact that the fossil fuel's prices are currently sky-rocketing.

In the same week, DECC published its annual fuel poverty report. This highlights the significant rise in fuel poverty between 2008 and 2009 (most recent figures), with DECC predicting that figures for 2010 and 2011 will have increased further due to ongoing rises in energy costs.

The schism between the two government reports is striking and signals a worrying trend in the British energy market that sees energy corporations taking advantage of the rise in wholesale gas prices to exploit the British consumer to an unprecedented degree.

A household is defined as fuel poor if it spends more than ten per cent of its income on fuel to maintain adequate levels of warmth. Since 2003, soaring gas and electricity prices have been too great to be offset by rising incomes or energy efficiency measures, leading to year-on-year growth in fuel poverty (Fig. 1). In 2009, the number of fuel poor households in the UK was approximately 5.5 million, a rise of around one million from the previous year. In other words, more than a fifth of all UK households are now living in fuel poverty.

Figure 1 - Fuel poverty in the UK, all households and vulnerable, 1996 to 2009

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Source: DECC Fuel Poverty Statistics 2011

Where gas is concerned, energy firms have blamed enormous price increases on the 30 per cent rise in wholesale cost. However, consumer price rises go far beyond this. Wholesale costs are nowhere near their 2008 peak yet consumer prices are at an all-time high. Energy consumers are therefore being exploited by energy firms at a time when they most crucially require support.

Today, E.ON became the fourth of the six major energy firms to announce increases in its gas and electricity prices, the second rise this year for the company. Scottish & Southern, British Gas and Scottish Power have already announced further price rises.

One of the most worrying outcomes is the impact that this is having on the elderly. Almost 50 per cent of those living in fuel poverty are over 60. Last December, George Monbiot underlined the severity of the UK's failure to address this disgraceful problem:

Although we usually have one of the smallest differences between winter and summer temperatures at these latitudes, we also have one of the highest levels of excess winter deaths. Roughly twice as many people, per capita, die here than in Scandanavia and other parts of northern Europe, though our winters are typically milder. Even Siberia has lower levels of excess winter deaths than we do. Between 25,000 and 30,000 people a year are hastened to the grave by the cold here - this winter it could be much worse.

More widely, the majority of households experiencing fuel poverty are statistically "vulnerable", in other words they contain the elderly, children or someone who is disabled or has a long term illness. In England, over 70 per cent of households are classified as such.

There are several steps that must be taken to address the escalating problem of fuel poverty. For a start, it is fundamental that energy regulator Ofgem starts to assert itself in the face of criminal price hikes. With one of the least regulated energy markets in the developed world, very little will change until the big six are brought under much tighter control.

Investment in energy efficiency measures and implementation of green energy programmes are likewise going to be fundamental to addressing the longer-term energy crisis, particularly in a world needing to get to grips rapidly with climate change and diminishing natural resources.
The energy giants currently have what seems like free reign to do as they please. It's time to tell E.ON and co. to F.OFF.

Tess Riley is a freelance journalist and social justice campaigner. She also works, part time, for Streetbank, and can be found on Twitter at @tess_riley

Picture: ANDRÉ CARRILHO
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Leader: Boris Johnson, a liar and a charlatan

The Foreign Secretary demeans a great office of state with his carelessness and posturing. 

Boris Johnson is a liar, a charlatan and a narcissist. In 1988, when he was a reporter at the Times, he fabricated a quotation from his godfather, an eminent historian, which duly appeared in a news story on the front page. He was sacked. (We might pause here to acknowledge the advantage to a young journalist of having a godfather whose opinions were deemed worthy of appearing in a national newspaper.) Three decades later, his character has not improved.

On 17 September, Mr Johnson wrote a lengthy, hyperbolic article for the Daily Telegraph laying out his “vision” for Brexit – in terms calculated to provoke and undermine the Prime Minister (who was scheduled to give a speech on Brexit in Florence, Italy, as we went to press). Extracts of his “article”, which reads more like a speech, appeared while a terror suspect was on the loose and the country’s threat level was at “critical”, leading the Scottish Conservative leader, Ruth Davidson, to remark: “On the day of a terror attack where Britons were maimed, just hours after the threat level is raised, our only thoughts should be on service.”

Three other facets of this story are noteworthy. First, the article was published alongside other pieces echoing and praising its conclusions, indicating that the Telegraph is now operating as a subsidiary of the Johnson for PM campaign. Second, Theresa May did not respond by immediately sacking her disloyal Foreign Secretary – a measure of how much the botched election campaign has weakened her authority. Finally, it is remarkable that Mr Johnson’s article repeated the most egregious – and most effective – lie of the EU referendum campaign. “Once we have settled our accounts, we will take back control of roughly £350m per week,” the Foreign Secretary claimed. “It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS.”

This was the promise of Brexit laid out by the official Vote Leave team: we send £350m to Brussels, and after leaving the EU, that money can be spent on public services. Yet the £350m figure includes the rebate secured by Margaret Thatcher – so just under a third of the sum never leaves the country. Also, any plausible deal will involve paying significant amounts to the EU budget in return for continued participation in science and security agreements. To continue to invoke this figure is shameless. That is not a partisan sentiment: the head of the UK Statistics Authority, Sir David Norgrove, denounced Mr Johnson’s “clear misuse of official statistics”.

In the days that followed, the chief strategist of Vote Leave, Dominic Cummings – who, as Simon Heffer writes in this week's New Statesman, is widely suspected of involvement in Mr Johnson’s article – added his voice. Brexit was a “shambles” so far, he claimed, because of the ineptitude of the civil service and the government’s decision to invoke Article 50 before outlining its own detailed demands.

There is a fine Yiddish word to describe this – chutzpah. Mr Johnson, like all the other senior members of Vote Leave in parliament, voted to trigger Article 50 in March. If he and his allies had concerns about this process, the time to speak up was then.

It has been clear for some time that Mr Johnson has no ideological attachment to Brexit. (During the referendum campaign, he wrote articles arguing both the Leave and Remain case, before deciding which one to publish – in the Telegraph, naturally.) However, every day brings fresh evidence that he and his allies are not interested in the tough, detailed negotiations required for such an epic undertaking. They will brush aside any concerns about our readiness for such a huge challenge by insisting that Brexit would be a success if only they were in charge of it.

This is unlikely. Constant reports emerge of how lightly Mr Johnson treats his current role. At a summit aiming to tackle the grotesque humanitarian crisis in Yemen, he is said to have astounded diplomats by joking: “With friends like these, who needs Yemenis?” The Foreign Secretary demeans a great office of state with his carelessness and posturing. By extension, he demeans our politics. 

This article first appeared in the 21 September 2017 issue of the New Statesman, The revenge of the left