Fuel poverty escalates in U.K., needs urgent action


Derek Lickorish,
Chairman, Fuel
Poverty Advisory
London, U.K. — (METERING.COM) — July 23, 2009 – Against a background of escalating fuel poverty in the United Kingdom, the Fuel Poverty Advisory Group (FPAG) is demanding urgent government action to tackle the issue, warning that without radical action many more households will be pushed into fuel poverty as a result of investment in climate change prevention measures, growing unemployment and potentially escalating energy prices.

Describing the past five years as “devastating” for fuel poverty, the FPAG estimates that 4 million-plus households in England were in fuel poverty as at September 2008, compared with 1.2 million households in 2004. Almost 50 percent are pensioner households and 80 percent are vulnerable in some way.

Between January 2003 and September 2008 average domestic dual fuel (gas and electricity) bills increased 125 percent from £572 to £1,287. Non-gas fuel poor consumers (0.6 million) using kerosene or liquid propane gas (LPG) incur costs 50 percent and 90 percent higher respectively than those for mains gas. Government figures for 2006 indicate around 2.7 million homes in England do not have mains gas.

The FPAG says it recognizes that the long term trend for energy prices will be upwards, despite some recent falls. The first report of the Committee for Climate Change estimates that the cost of measures to address carbon budgets will put another 1.7 million households into fuel poverty by 2022. Increased industry investment, predominantly in new power stations, with estimates ranging from £150 billion by 2020 to £234 billion by 2025, will also increase energy bills. Furthermore, the potential for gas prices to remain volatile with increasing imports from Qatar, Algeria and Russia, is also of concern.

The FPAG says the government has made some positive announcements, including a heat and energy saving strategy, an increase in the energy companies’ social programs, and an increase in cold weather payments. However, although welcome, these are inadequate and further measures are required as part of a robustly coordinated and detailed plan.

The FPAG also notes that despite a narrowing of the differential between prepayment and other payment methods for domestic energy consumers, it is of the view that a prepayment inequity persists, being as much as £255 per year in the worst cases.

In order to make rapid progress in the short term the FPAG recommends that government sets out a clear delivery road map to eradicate fuel poverty by 2016. Energy affordability needs to be understood, and a social tariff should be mandated to ensure assistance to the most vulnerable households. In addition benefits needs to be claimed and increased in line with real energy costs.

The FPAG says it supports the rollout of smart meters to households, but the implications for customers and a new approach to debt management for a smart meter future should be thoroughly explored. There is also concern about the implications of peak pricing and the potential for vulnerable customers to inadequately heat their homes. It should be possible to eliminate the need for total disconnection through load limiting.

Commenting on the report Derek Lickorish, chairman of the Fuel Poverty Advisory Group, said that the measures in place to deal with fuel poverty now are simply inadequate to tackle the potential rise in fuel poverty in the future.

“Unless fuel poverty is tackled head on, many hundreds of thousands more vulnerable pensioners, families and disabled people will struggle to afford their energy bills. A thorough strategy, with decisive action on social tariffs and energy efficiency, is needed from the government to help lift the poorest households out of fuel poverty.”

The Fuel Poverty Advisory Group is an advisory Non-Departmental Public Body, sponsored by the Department of Energy and Climate Change (DECC). Its primary task is to report on the progress of delivery of the Government’s Fuel Poverty Strategy and to propose and implement improvements to regional or local mechanisms for its delivery.