Friday 26 February is Fuel Poverty Awareness Day, a nationwide day of action in which campaign groups such as Fuel Poverty Action seek to draw attention to an issue which annually kills tens of thousands of the UK’s most vulnerable people.
Despite its position as one of the wealthiest nations in Europe, and one which finds itself facing increasingly mild winters, the UK has an appalling record when it comes to cold-related deaths amongst vulnerable groups.
This is a crisis that extends far beyond fuel poor UK homes, to a ‘market’ dominated by the ‘Big 6’ energy companies and allegations of price fixing, and leads directly back to an industry which, driven by global oil consumption, is known to be underpinning terrorism and war.
Who are the Fuel Poor?
As of 2013, to be considered fuel poor a household must spend more than the median on its energy bills and that expenditure must push the household below the poverty line. Before 2013 a family had to spend just 10% of its income on energy to qualify as fuel poor – and about 4.5million households per annum met this threshold. By tinkering with the definition of fuel poverty in 2013, the Coalition Government lifted 2 million households out of fuel poverty in the blink of an eye.
Yet even through that fog of terminological obfuscation, there is still 2 million other families in a wealthy first-world country unable to adequately heat their homes without falling into serious financial hardship.
The figures, when broken down, make for difficult reading.
According to the Office for National Statistics, nearly 120,000 people have died as a result of the cold weather, or an issue connected to it (such as influenza) over the last four years. In 2015, excess winter deaths rose by an appalling 140% – the worse figures since 1999/2000 – to an estimated 43,900.
Just the Poor and Old?
And yet despite these figures, fuel poverty remains a complex issue muddied by misconception and confusion.
25,000 older people die every year because they are unable to adequately heat their homes – that’s one pensioner every seven minutes – yet this is an issue that strikes across the generations. In 2013, the Association for the Conservation of Energy, estimated that 1.5 million children were living in fuel poverty. [UPDATE July 2020 – The Association for the Conservation of Energy merged last year with The Association for Decentralised Energy]
And speaking of misconceptions, this is not just an issue that effects those on the bottom rung of the economic ladder. A 2015 study by Policy Exchange found that half of fuel poor households had at least one person in employment.
Britain’s just a cold country…
It also has very little to do with the weather. Despite increasingly mild winters in the UK, the number of excess winter deaths continues to rise.
England and Wales have some of the worst excess winter mortality rates in Europe – worse than Nordic nations who endure much harsher winters (Norway’s figures are half that of the UK), while warmer climates such as Spain and Portugal have even worse rates of excess winter deaths.
So just why is the UK unable to adequately tackle this crisis?
Many put the blame firmly at the feet of the ‘Big Six’, the so-called ‘cartel’ of energy providers who dominate the UK energy market, comprised of e-on, edf, npower, SSE, British Gas, and Scottish Power.
The ‘Big 6’ control 95% of the UK energy market, and own 70% of the UK’s generating capacity.
That’s one hell of a monopoly and, unsurprisingly, it is consumers who are losing out and facing unprecedented hardship in the process.
The ‘Big 6’ earned a combined £100 million in 2007, a profit which had grown to £1.1 billion by 2013 – that’s a tenfold increase. Over the same period duel energy bills (households in receipt of gas and electricity from the same company) rose by an astonishing 45%.
Over the last two years the ‘Big 6’ have enjoyed a 45% reduction in wholesale fuel prices – a saving which is yet to make its way to consumers.
If this wasn’t bad enough, last year Citizens Advice reported that customers using pre-payment meters – predominantly low-income families – were paying on average £226 more per year than customers on direct debit deals.
Why not switch?
Of course consumers can change their energy supplier and leapfrog onto cheaper tariffs if they have the time to do their homework and trawl through the (perhaps) deliberately confusing choice available.
Yet 70% of consumers don’t switch (and miss out on savings of £234 a year in the process), and energy companies are more than prepared to take advantage of this situation by keeping prices steady and high in this distinctly uncompetitive market.
In the current market, the burden is on the consumer to switch, not on the suppliers to pass on savings.
Price Fixing?
Two years ago the energy regulator Ofgem claimed to have found evidence of “possible tacit co-ordination” between the ‘Big 6’ companies on the timing and size of price announcements, but stopped short of making specific allegations of price fixing.
It did, however, refer the ‘Big 6’ to the Competition and Markets Authority (CMA).
The CMA will report imminently on its two-year inquiry and campaigners are hopeful this could signal the end of the ‘Big 6’ energy companies’ monopoly, and perhaps even see the market taken into public ownership (although this remains incredibly unlikely).
EDF, by the way, is largely owned by the French State so it would appear the Government has no issue with nationalised companies, as long as they bring no benefit to the UK’s public purse.
Crushing Cheaper, Greener competition
At the tail-end of 2015 the ‘Big 6’ scored a big win when the Government announced it was to cut subsidies to homeowners who installed rooftop solar panels by 65%, a move which put some 18,000 jobs in the solar industry at risk.
The solar industry is the biggest competition to the fossil fuel reliant ‘Big 6’. The government argued it needed to protect household bills from the impact of subsidies for green energy, yet it has increased subsidies and announced new tax breaks for the fossil fuel industry.
The fossil fuel industry is incredibly energy inefficient. Over half of the energy in gas and around two thirds of the energy in nuclear and coal used to produce electricity is lost as waste heat.
Comparatively, the energy lost from renewable sources is less than 1%. So it remains baffling that the Government sees green energy as a burden, and the fossil fuel industry as worthy of increased investment. Such is the power of the ‘Big 6’.
Warmer Homes
But extortionate energy bills are not the sole reason for the UK’s appalling rates of excess winter deaths.
The UK housing stock is amongst the least energy efficient in Europe. At the end of the 1990’s Labour’s warm front scheme improved energy efficiency in 2.3million homes.
The scheme helped pensioners cover extra heating costs in winter and, along with winter fuel payments, was designed to cut excess winter deaths.
The scheme was scrapped by the Coalition Government in 2012 and replaced by the Green Deal, which encouraged homeowners to take out Government loans to insulate their homes. But this too was scrapped last year when it was revealed that only 15,000 homeowners had taken up the Government’s offer.
Slumlords safe for now
Households in rented accommodation are more likely to be fuel poor. In January, Conservative MP’s voted down an amendment which would have required landlords to ensure their properties were fit for human habitation.
Green Jobs for all?
The campaign group 1 Million Climate Change Jobs believe drastic change is needed. They argue that by moving away from the fossil fuel industry and instead investing in green energy the government could create 90,000 jobs a month, in part by employing workers to insulate and retrofit homes.
This shift from inefficient (and inevitably finite) fossil fuels, to cheaper and more efficient green energy would signal a bold and positive move to end fuel poverty. Homes would be warmer; energy would be cheaper.
But as it stands today, the ‘Big 6’ remain dominant. Campaigners fear a whitewash in the soon to be reported Competition and Markets Authority report. But the damage caused by this so-called cartel of energy companies extends beyond the fuel poor cold homes of Britain.
Where does the energy come from?
Energy Security is a serious issue in the global political landscape of 2016.
In 2014 the UK imported 60% of the fuel needed to generate the nation’s electricity, including coal from Russia and uranium from Kazakhstan, both hardly bastions of human rights.
But when it comes to oil, it really gets scary. Oil is the biggest import into the UK market. In 2014 the UK imported $76.9million of oil from around the world, importing $2.4billion worth from Saudi Arabia, which at the time was discreetly funding ISIS.
Oil is a murky business. These days, oil consumption is how ISIS makes its money, with oil sales from its controlled territories netting it £1million a day.
It’s not difficult to trace a route back from our excessive levels of oil consumption to terrorism, to war, and to the current refugee crisis.
This is why we should all tackle the big six.
What you can do
- Switch to an ethical supplier, like Ecotricity or Good Energy.
- Check out Fuel Poverty Action.
- Check out 1 Million Climate Change Jobs.
