More than 2 million people could enter fuel poverty on a single day


4:25 pm - July 21st 2011

by Éoin Clarke    


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I wish to start an awareness campaign for Fuel Poverty Day.

On the 1/8/2011, prices in gas will rise on average 20% and prices in electricity will rise 18%. It brings into fuel poverty families whose household incomes are £12,840-£14,440.

From the graph below I can tell you that this is more that 2million people.

To my knowledge, August 1st 2011 will be the largest single growth in fuel poverty in the history of the United Kingdom.

I would appreciate it greatly if someone could correct me but having looked at historical growth in fuel poverty this is the moment I have been dreading for some time.

The government need to development a coherent strategy to tackle fuel poverty. It will be the biggest political issue of Winter 2011.

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About the author
Eoin is an occasional contributor. He is a founder of the Labour-Left think-tank and writes regularly at the Green Benches blog.
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Story Filed Under: Blog ,Economy

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Reader comments


It’s long overdue that we flip fuel pricing on it’s head. Cheaper energy first, not more expensive…then the more you use the more expensive it gets.

Fuel poverty, is this the next big buzz phrase to sniff farts about?

I complained about my fuel poverty to a somalian, unfortunately they couldn’t hear me over the sound of their children screaming as they slowly succumbed to AIDs and starvation.

Privatisation of communications has indeed been a success and should be left alone.

Privatisation of essential utilities (water, gas, electricity) has been a complete and utter failure. They should be renationalised.

@Dave:

And there are pensioners and sick/disabled people in the UK who have to choose between food and heating in the winter. It will now get worse. Somalians starving to death and pensioners freezing to death are both wrong and should not be happening in this day and age.

Anyone dying due to lack of food (when we could feed the whole word if we wanted) and dying through lack of heating (when we could do something about these disgusting prices to make them affordable to all) are both as bad as one another and show what an utter failure the current global economic system is.

5. Luis enrique

Having looked at historical growth in fuel poverty, the moment you dread has arrived. A return to the dark days of 1998!

( see intro of 2010 annual report on fuel poverty statistics, 1996: 5.1m households, 2008: 3.3m)

Obviously rising fuel costs are a problem, despite Eoin’s lack of historic perspective. My favoured answer is tax fuel use more (make it more expensive for wealthy) and rebate cash to poor, let prices rise (which leaves incentives to reduce usage and invest in solar panels etc.)

” To my knowledge, August 1st 2011 will be the largest single growth in fuel poverty in the history of the United Kingdom. ”

If you double the threshold level of percentage of income figure where ‘fuel poverty’ kicks in on the same day we will have the biggest fall in ‘fuel poverty’ in the history of the United Kingdom. See how completely arbitrary aggregation can say anything we want it to say?

The not very radical solution to high energy prices at the national and individual level is to, umm, use less energy.

7. Éoin Clarke

No. 5,

The largest single growth in a “single day” ie, 2million homes in one 24 hour period

You figures for 1996 tell us nothing in light of that question.

8. Planeshift

“The not very radical solution to high energy prices at the national and individual level is to, umm, use less energy.”

Except if that means cold households (rather than say making houses more energy efficient), it means an excess death total over the winter measured in the thousands.

“Fuel poverty, is this the next big buzz phrase to sniff farts about?”

No, its been a policy objective to reduce fuel poverty for over 20 years, one shared by both Conservative and Labour governments, with reasonable success until about 2006 when the energy prices began to rise again.

“Having looked at historical growth in fuel poverty, the moment you dread has arrived. A return to the dark days of 1998!”

The one thing you are ignoring about this Luis is that over the past 13 years we’ve had millions of pounds spent on insulation schemes such as warm front, HEES, and whatever the Scottish one is. Meaning the actual situation, were this investment not to have not occurred, would actually be even worse.

9. Luis enrique

No 7

What question?

Yes, large increase in fuel prices translates into large increase in fuel poverty. But I think fact that fuel poverty has been as high in recent memory is of some relevance to an OP with a “biggest evah!” angle. Biggest change ok, but if it was split into two smaller changes, would it be any better?

10. Luis enrique

8 yes you are right I did ignore that

11. Luis enrique

Richard W

Well the number of households for whom fuel costs are greater than some arbitrary but sensible percentage of income is a useful metric, and changes in it reflect real changes in the circumstances of households. Just like, say, the number of people living on under $1.25 PPP, the current def of extreme poverty is arbitrary but meaningful

If you want less of something you tax it, if more you either leave it alone or subsidise it. All in favour of removing taxes on fuel then?………. Anyone?

13. Planeshift

“If you want less of something you tax it, if more you either leave it alone or subsidise it. All in favour of removing taxes on fuel then?………. Anyone?”

It’s competing concerns and priorities isn’t it? fuel clearly has many benefits, but also has externalities. So the issue isn’t about taxing fuel, but which types of fuel to tax and getting the level of tax correct so it reflects those externalities.

“So the issue isn’t about taxing fuel, but which types of fuel to tax and getting the level of tax correct so it reflects those externalities.”

True but what we’re doing is already taxing fuel highly, (I don’t have the figures to hand but I believe we already have an aggregate tax on fuels that is well above Stern etc), and then add green taxes on top of this. Not the best idea if you don’t want people freezing to death.

15. Planeshift

“True but what we’re doing is already taxing fuel highly,”

We’re also subsidising it for some groups of people through winter fuel payments and social tarrifs (technically not a subsidy, but same principle).

Look, there is a good libertarian critique of fuel poverty policy that is waiting to be made here, but it isn’t being made because libertarians can’t be bothered to do any research into the issue in detail and are instead focusing on lazy arguments about tax, or the issue not being an issue.

“We’re also subsidising it for some groups of people through winter fuel payments” Cut in the last budget, without attracting attention.

17. Richard W

@ 8. Planeshift

Energy efficiency of houses is one way to get people to use less energy. However, the subtext of alarm over rising fuel costs always come across to me as assuming that people currently need to consume all the energy that they use. Therefore, there is not anything that they could do to just cut down on their consumption. As Luis alludes to we should subsidise the energy costs of the vulnerable and people on low incomes. The absolute last thing we should do is to actually subsidise energy otherwise people will use too much off it and use energy efficiently.

Imagine what would happen if we renationalised energy utilities like Douglas @3 suggests and subsidise the cost of energy for everyone. Would our use of energy go up or down? If we used more energy because it was subsidised how could that be better in anyway. We need to be reducing our use of our energy until we can figure out ways to develop new energy sources. High energy prices will help that process.

@ 11. Luis enrique

Some metrics are useful. Is a metric that aggregates the fuel costs of people living in Torquay with people living in Fort William likely to be accurate?

My income is £9,600 but do not worry I’m not human I. disabled.

19. Luis enrique

Richard,

I’m not sure what you mean by accurate, but useful, yes. The fact that people in Fort William have higher heating needs than those in Torquay is not time varying. If the percentage of households spending over 10% of income on fuel varies over time, that’s meaningful.

20. Planeshift

“assuming that people currently need to consume all the energy that they use. ”

It depends whether you perceive the issue here as high fuel bills because of the cost of heating your home (whether due to bad insulation, behaviour or whatever), or the problem here is people stay cold because they may be afraid of high fuel bills etc. Unsurprisingly studies on how people behave find people in fuel poverty tend to go to either extreme, but it tends to be those who are outside the labour market (i.e. can’t get a job to increase income) such as pensioners and disabled people who turn the heater off and stay cold. These are the groups of people who we want to increase energy consumption.

What exactly is the statistical basis for the claim in the OP? How many people are actually affected by the Scottish power price rise, which ( correct me if I’m wrong) is the only price rise taking place on that date. Two million doesn’t sound rigth to me…

22. Jack Kelly

There is something many people could do (not everyone, of course), that would really help. Last winter I took advantage of an offer from my combined gas/electricity supplier to install solar panels on the roof of our 3 bed semi in Cambridgeshire for £99. I’m not naming them as this is not an advertisement.

Previously, our bills were about £130-140 a month for dual fuel. Now, it is averaging about £105-115 a month. The £99 was paid off in six months. I don’t really care how much profit the power company makes on feed in tariffs – I’m sure it’s a lot. What I care about is the saving to me.

There is a 25 year contract with the company to keep the panels, but it is transferable if you sell the house, and I think that having panels would increase the value of the property anyway. Maintenance / replacement of the panels is up to the company, so no cost to us.

£99 my god when I asked it was £20,000 and I had to pay half so £10,000 to me and I had to agree to keep the panels in place.

So if you go it for £99 then my god you had a good deal

24. Matt Wardman

Dr Eoin

Yes, you highlight an important point, though it’s more complex: things such as the atomisation of households and the higher temperatures we heat our houses to are also a big part of the story.

Chanelling Tim Worstall, since his absence implies he’s probably in a bar somewhere.

Your 2m in the band £12,840-£14,440 looks about right, and I’ll ignore the lazy “national average” from whoever drew that graph.

But I’m with British Gas, who have about 20% of the electricity customers, and 40-50% of the Gas Customers (both from memory).

They are putting their prices on 18th August, and if that chunk of the market is waiting until then, then where does this 24 hour period 1st August thing come from – or are you being a bit enthusiastic?

I don’t see why ‘in the next month’ would be any less dramatic.

Is the figure above household income or individual income? If it is household income you are correct, but as many homes have two earners (perhaps a full-time and a part-time), then if this is individual incomes it is incorrect.

2 people in the same house earning £15,000 and £8,000 individually have a higher household income than a house with one person earning £23,000, so that lessens the impact further.

I tried to get Jeremy Vine to discuss this yesterday(!)

This affects me directly and it’s horrible stuff. This will mean less food for very poor families. Children will be eating less, less warm baths, etc.

Families who use keys/cards, will be hit worse. It costs £100!…to convert to Direct debit from keys/cards, at the moment.

Timing is cynical…Parliament in recess.

Horrible

Luis Enrique: “a return to the dark days of 1998″
In 1998 we weren’t slashing all benefits at the same time, including those housing benefits and grants necessary to aid households in reducing their energy use. I think that’s a weakness in the article: the problem right now (as homelessness charity Shelter have been pointing out) is not any single issue (cuts, fuel prices), but that they are all bearing down on low income households at once.

RichardW: “The not very radical solution … use less energy.”
I agree in broad terms using less energy as a population would be the way to tackle this, but this is something households with an income of between £12,840 and £14,440 are not ideally placed to do on their own. Most people in this income bracket will be either unable to afford the up-front cost, or living in private rented housing with no rights at all regarding its energy efficiency (except on paper – in my experience asking low-cost private landlords for even very basic repairs causes immediate eviction, about which you have no comebacks whatsoever since landlord disputes no longer attract legal aid). The main people who push up the price of energy are people who use loads – and usually these are the people for whom the cost is insignificant.

Dave: You can now expect the same line to be used against you in future when you complain about absolutely anything which is worse in Somalia…

Assuming the government brings in minimum pricing soon, could I then be in alcohol poverty?

And would anybody care?

Thought not.

If you want to cut coal dioxide emissions, more fuel poverty is what is needed, everywhere. That’s the way to get some energy savings actually done.

This isn’t exactly rocket science…though Dr Clark tends not to do any research:

Oil and Gas prices much higher
Sterling much lower
Green taxes/subsidies in energy bills

31. Luis enrique

27 jungle, slashed benefits should be in the data, if benefits are counted as income because fuel poverty is fuel costs rel to income. So comparisons with 1996 should still be valid.

Hopefully nobody thinks the solution is to subsidise fuels to create lower prices. Google Saudi Arabia oil demand if you want to see where subsidised prices can get you, now the sixth largest oil consumer in the world. Lower prices increase demand and consumption, reduced incentives for insulation, renewables investments etc,

If you want to do something about this, really far better to tax fuel and rebate cash to poor households to cover fuels cost but leave inplzce large gains from things like reducing use, insultion, solar etc.

32. Planeshift

“If you want to do something about this, really far better to tax fuel and rebate cash to poor households to cover fuels cost but leave inplzce large gains from things like reducing use, insultion, solar etc.”

You also need legislation to change practices in the private sector rental market, to ensure landlords have to adopt good insulation and energy efficiency standards.

Whether Eoin is right about an extra 2m in fuel poverty in one day, or just when further members of the big 6 put up their prices is immaterial.

In a very short space of time we will see a very rapid rise in the levels of fuel poverty.

There are solutions to this – we need to have a national insulation programme – increase the insulation in every home in Britain – starting with those in most need. Not only does this reduce fuel poverty, it helps meet our climate change targets, and would also create tens of thousand of new jobs.

We also need to have a massive programme of renewable installations – primarily solar PV, but also other technologies. Current programmes are focussed on home owners, rather than tenants, who are most likely to be those struggling to pay their fuel bills. A Government installed PV system would be available for free, but would not attract FiT to the occupier. This would reduce the electricity consumed by the occiupier, as well as exporting green electricity to the grid. Again thousands of jobs created, let alone the skilled workers employed to manufacture the required panels.

The costs of these programmes could be met by the savings from the welfare budget needed to support those people at the bottom of the income scale, who will struggle most with fuel bills. The cost of taking thousands of workers off the dole to install this equipment would also be very little, once the savings in benefits are taking into account.

34. Spartacusisfree

NuLaber wrecked the economy; the necessary 25% devaluation is hitting us hard. They also cocked up energy policy thinking the fake CAGW scare [the climate models are broken, NASA knew this by 2004 and created fake physics to keep 'high feedback' in AR4] is a Marxist victory when it’s really Robin Hood in reverse, the likes of Cameron’s father-in law-robbing the poor to pay the rich.

‘Green jobs’ are semi-skilled at best, new serfs for new feudalism. The victors are banks, re-insurance companies and renewable energy barons. The way out is to dump the windmills, a proxy for c. 82% fossil fuel dependence, wait a decade until solar is cheap enough and in the meantime invest in fuel cells and CCGTs using shale gas, with 40% nuclear to follow.

To get employment we need to maximise industrial jobs and by academic selection, those suitable for engineering training. Airy-fairy bleating by the left is futile; it’s your own fault for believing estate agent and windmill salesman’s hype.

35. Leon Wolfson

@4 – We won’t be able to afford to feed the electricity pre-pay meter this winter. And since the heating is dependent on that, that goes out as well.

@6 – Right, to tell the poor to turn the gas and electric off. Thanks for that. We know how to generate energy, NIMBY’s and the LibDems have simply held it up for years, and rip-off pre-pay meters are allowed.

I live in a draughty rented house with single glazing, and the landlord won’t pay a penny for works nor allow us to do it (but we can’t afford it anyway). I can’t afford to move, won’t be able to get any real work done from home (as I need to to generate paying business) in the Winter for the cold, and expect to be miserable all winter, with only the hob for cooking, etc.


Reactions: Twitter, blogs
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  2. Anna Hedge

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  9. Wulfy

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  10. The F-Word

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  11. Philippa

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  12. BendyGirl

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  13. davidgerard

    RT @libcon: More than 2 million people could enter fuel poverty on a single day http://bit.ly/n3G3xH | This is just awful…..:-(

  14. Jon Mark Deane

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  15. Jamie

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  16. vikz Richards

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  17. Clive Burgess

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  19. Luke Burstow

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  20. Lauren G

    More than 2 million people could enter fuel poverty on a single day | Liberal Conspiracy http://t.co/uekhcx5 <— With charts

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  31. Amy Russell

    More than 2 million people could enter fuel poverty on a single day | Liberal Conspiracy http://t.co/3dj658W via @libcon

  32. Plymouth City UNISON

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  33. Stuart Smith

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  34. Staffordshire UNISON

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  35. Helen W

    This is really going to hurt >> RT @libcon: More than 2 million people could enter fuel poverty on a single day http://bit.ly/n3G3xH

  36. Oli Foster-Burnell

    More than 2mn people are set to enter fuel poverty from 1st August http://bit.ly/oC7WsE with gas up 20% & Electric 18%!

  37. Danny Stevens

    More than 2 million people could enter fuel poverty on a single day | Liberal Conspiracy http://t.co/h3R6KC6 via @libcon





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