One thing we have learnt this week – Fuel poverty

IMG_0761Is fuel poverty why one elderly person is dying every 7 minutes in the UK?  The latest figures for England and Wales suggest 120,000 people have died of cold weather over the last 4 winters.  Taking the average deaths in the summer and winter months and taking the difference suggests an excess of winter deaths.  The interesting thing is the further north you go the lower this excess is.  So in Spain and Portugal the winter death rate is far higher than the UK whilst Norway is a lot lower and Finland has no difference in winter death rates at all.

Age UK think the problem is fuel poverty.  The problem is energy costs particularly of gas have soared.  In 2002 I was paying 1.1p a kWh for gas now I’m paying over 5p.  And our energy costs are still not the most expensive in Europe.  Elderly people cannot afford to heat their houses to the minimum of 16°C for all rooms at 18-21°C for living rooms.   In Nordic countries buildings are very well insulated.  The labour government had several initiatives to tackle this problem, one of which was the warmfront scheme.  This seems to have been pretty successful, having insulated 2.3 million homes.  They also introduced the winter fuel payment, an extra amount of money given to all pensioners to help with their fuel bills.  The coalition government did away with the first scheme introducing the “green deal”, a market based scheme which involved taking out loans.  This bombed with an uptake rate of less than 20,000 homes.  Its been scrapped by the new Tory government, but nothing has yet replaced it.  Although the energy companies still offer free insulation etc. to those who want it.  The problem is considerable with 4.5 million people still living in fuel poverty in the UK.

The question is what to do about it?  Short of Tradable Energy Quotas and a citizens income, both of which I support but are not on the political radar then the problem needs attacking at both ends.  We need to raise people’s incomes and insulate their homes.  On the raising incomes pensioners have been well treated by governments in recent years and its hard to see pensions rising significantly enough to deal with the problem.  This leaves somehow richer bill payers subsidising poorer bill payers in some way.  This happens to a certain extent in some ways already.  The energy company I’m signed up with makes everyone pay the same so there is no direct debit discount or higher rates for those on pre-paid meters.  The free energy efficiency measures provided by the energy companies are also subsidised by everyone- which in effect means those who are better off.  This cross subsidy idea whilst attractive to me would be on a more formal basis difficult to administer and has civil liberties implications.

The other necessity is for energy efficiency measures.  The problem here is that even with the rise in energy prices most energy efficiency measures still take a very long time to payback.  This is one reason why the green deal failed (that the interest rates on the loans).  Double glazing is likely to almost at the stage of paying for itself if the lifetime is taken at 20 years but really the only form of heat based energy efficiency measure that pays its money back in next to no time is loft insulation.  This leaves us with a problem that a market based scheme is not going to work.  The measures need some subsidy and the best way of doing that is by the energy companies.  Its looks like we should go back to warmfront.

Neil

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