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

A

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

Photo: Getty Images
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What do Labour's lost voters make of the Labour leadership candidates?

What does Newsnight's focus group make of the Labour leadership candidates?

Tonight on Newsnight, an IpsosMori focus group of former Labour voters talks about the four Labour leadership candidates. What did they make of the four candidates?

On Andy Burnham:

“He’s the old guard, with Yvette Cooper”

“It’s the same message they were trying to portray right up to the election”​

“I thought that he acknowledged the fact that they didn’t say sorry during the time of the election, and how can you expect people to vote for you when you’re not actually acknowledging that you were part of the problem”​

“Strongish leader, and at least he’s acknowledging and saying let’s move on from here as opposed to wishy washy”

“I was surprised how long he’d been in politics if he was talking about Tony Blair years – he doesn’t look old enough”

On Jeremy Corbyn:

"“He’s the older guy with the grey hair who’s got all the policies straight out of the sixties and is a bit of a hippy as well is what he comes across as” 

“I agree with most of what he said, I must admit, but I don’t think as a country we can afford his principles”

“He was just going to be the opposite of Conservatives, but there might be policies on the Conservative side that, y’know, might be good policies”

“I’ve heard in the paper he’s the favourite to win the Labour leadership. Well, if that was him, then I won’t be voting for Labour, put it that way”

“I think he’s a very good politician but he’s unelectable as a Prime Minister”

On Yvette Cooper

“She sounds quite positive doesn’t she – for families and their everyday issues”

“Bedroom tax, working tax credits, mainly mum things as well”

“We had Margaret Thatcher obviously years ago, and then I’ve always thought about it being a man, I wanted a man, thinking they were stronger…  she was very strong and decisive as well”

“She was very clear – more so than the other guy [Burnham]”

“I think she’s trying to play down her economics background to sort of distance herself from her husband… I think she’s dumbing herself down”

On Liz Kendall

“None of it came from the heart”

“She just sounds like someone’s told her to say something, it’s not coming from the heart, she needs passion”

“Rather than saying what she’s going to do, she’s attacking”

“She reminded me of a headteacher when she was standing there, and she was quite boring. She just didn’t seem to have any sort of personality, and you can’t imagine her being a leader of a party”

“With Liz Kendall and Andy Burnham there’s a lot of rhetoric but there doesn’t seem to be a lot of direction behind what they’re saying. There seems to be a lot of words but no action.”

And, finally, a piece of advice for all four candidates, should they win the leadership election:

“Get down on your hands and knees and start praying”

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.