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

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Pity the Premier League – so much money can get you into all sorts of bother

You’ve got to feel sorry for our top teams. It's hard work, maintaining their brand.

I had lunch with an old girlfriend last week. Not old, exactly, just a young woman of 58, and not a girlfriend as such – though I have loads of female friends; just someone I knew as a girl on our estate in Cumbria when she was growing up and I was friendly with her family.

She was one of many kind, caring people from my past who wrote to me after my wife died in February, inviting me to lunch, cheer up the poor old soul. Which I’ve not been. So frightfully busy.

I never got round to lunch till last week.

She succeeded in her own career, became pretty well known, but not as well off financially as her husband, who is some sort of City whizz.

I visited her large house in the best part of Mayfair, and, over lunch, heard about their big estate in the West Country and their pile in Majorca, finding it hard to take my mind back to the weedy, runny-nosed little girl I knew when she was ten.

Their three homes employ 25 staff in total. Which means there are often some sort of staff problems.

How awful, I do feel sorry for you, must be terrible. It’s not easy having money, I said, managing somehow to keep back the fake tears.

Afterwards, I thought about our richest football teams – Man City, Man United and Chelsea. It’s not easy being rich like them, either.

In football, there are three reasons you have to spend the money. First of all, because you can. You have untold wealth, so you gobble up possessions regardless of the cost, and regardless of the fact that, as at Man United, you already have six other superstars playing in roughly the same position. You pay over the odds, as with Pogba, who is the most expensive player in the world, even though any halfwit knows that Messi and Ronaldo are infinitely more valuable. It leads to endless stresses and strains and poor old Wayne sitting on the bench.

Obviously, you are hoping to make the team better, and at the same time have the luxury of a whole top-class team sitting waiting on the bench, who would be desired by every other club in Europe. But the second reason you spend so wildly is the desire to stop your rivals buying the same players. It’s a spoiler tactic.

Third, there’s a very modern and stressful element to being rich in football, and that’s the need to feed the brand. Real Madrid began it ten years or so ago with their annual purchase of a galáctico. You have to refresh the team with a star name regularly, whatever the cost, if you want to keep the fans happy and sell even more shirts round the world each year.

You also need to attract PROUD SUPPLIERS OF LAV PAPER TO MAN CITY or OFFICIAL PROVIDER OF BABY BOTTLES TO MAN UNITED or PARTNERS WITH CHELSEA IN SUGARY DRINK. These suppliers pay a fortune to have their product associated with a famous Premier League club – and the club knows that, to keep up the interest, they must have yet another exciting £100m star lined up for each new season.

So, you can see what strains and stresses having mega money gets them into, trying to balance all these needs and desires. The manager will get the blame in the end when things start to go badly on the pitch, despite having had to accommodate some players he probably never craved. If you’re rich in football, or in most other walks in life, you have to show it, have all the required possessions, otherwise what’s the point of being rich?

One reason why Leicester did so well last season was that they had no money. This forced them to bond and work hard, make do with cheapo players, none of them rubbish, but none the sort of galáctico a super-Prem club would bother with.

Leicester won’t repeat that trick this year. It was a one-off. On the whole, the £100m player is better than the £10m player. The rich clubs will always come good. But having an enormous staff, at any level, is all such a worry for the rich. You have to feel sorry . . .

Hunter Davies’s “The Beatles Book” is published by Ebury

Hunter Davies is a journalist, broadcaster and profilic author perhaps best known for writing about the Beatles. He is an ardent Tottenham fan and writes a regular column on football for the New Statesman.

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories