Press Story

The cold weather conditions seen in the UK over the past few weeks have highlighted the urgent need for the Government to commission an independent review of its emergency measures to help people cope with peaks of cold weather and its longer-term strategy to address fuel poverty to reduce rising winter death rates in future.

ippr's research suggests that numerous fuel poverty programmes and hundreds of millions of pounds invested by the Government and by the energy industry have failed to address the problem adequately. ippr says it's time to think again.

ippr argues that this year's exceptionally cold winter will lead to more people dying because they can't afford to pay their energy bills. It highlights that the Government has a target to eradicate fuel poverty by 2016, but despite this, in the last five years, the problem has been increasing (reversing the improving trend of the last decade).

The standard definition of fuel poverty means that someone is fuel poor if they need to spend more than 10 per cent of their income to keep warm. Inevitably, three current trends mean that fuel poverty is expected to rise:

Energy prices are set to rise for the foreseeable future as we get to the end of the era of cheap energy.
The incomes of poorer households are likely to fall because of the recession and its aftermath.
The poor quality of much of the UK housing stock in terms of heating and insulation standards.

Current government initiatives such as the Winter Fuel and Cold Weather Payments, a collection of energy efficiency schemes and energy price support programmes are providing help, but it is not sufficient to deal with the growing problem of unaffordable fuel costs, which contributed to the deaths of 36,000 people last year, a 49% increase over 2007/08.

ippr says that some bold new thinking is needed to prevent the problem worsening over the long-term.

In a forthcoming report 'Fuel poverty, where next?' ippr will argue that the Government should commission an urgent and independent review of the UK's short term fuel poverty measures and longer-term fuel poverty strategy as the current strategy - which dates from an era when energy prices were falling - is not fit for purpose. ippr argues that government should take the following steps:

Prioritise energy efficiency measures (over assisting people with paying their bills) as it is a more sustainable and cost effective way of tackling fuel poverty in the long run.
Ensure fuel poverty programmes are paid for in a way that is fair. While making energy companies pay for schemes to help their poorest customers (as proposed in the Energy Bill going through parliament) may seem attractive, this means that energy customers are paying through their fuel bills, which is not fair because people on lower incomes pay proportionately more towards the costs of these schemes.
The Government should at least match any extra money they are making the energy companies spend through fairer taxes and public spending to combat fuel poverty in the long run.
More should be done to make the most of technological innovations such as smart meters, micro-generation technologies and community-scale heating.
Work in partnership with organisations like Local Authorities and not just the energy companies, in the fight against fuel poverty.

Lisa Harker, Co-Director of ippr, says:

"During this bitter cold snap, the obvious thing to do is to turn up the heating at home. But sadly, the proportion of people in this country who cannot really afford to do that is now rising again. The recession means there is less money around to reduce fuel poverty, and at the same time energy prices are going up.

"The latest Government legislation puts greater emphasis on the energy companies helping low income households, but this in itself will not be enough. We need a new, far-sighted fuel poverty strategy, which ensures that wealthier households pay their fair share, and that sustainable energy saving measures are prioritised."

Notes to editors:

1) ippr's forthcoming report 'Fuel poverty, where next?'' by Jenny Bird, Ron Campbell and Kayte Lawton will be published in February 2010.

2) The Government's Energy Bill was introduced in the House of Commons on 19 November 2009 and received its Second Reading on 7 December 2009. It is now in Committee phase. The Bill contains proposals to introduce 'mandatory social price support', which would help to tackle fuel poverty by lowering the energy bills of more of the most vulnerable consumers and giving greater guidance on the types of households eligible for support. These measures will be funded by requiring energy companies to make available at least £300 million per annum by 2013-14 on social support. (See http://man270109a.decc.gov.uk/en/content/cms/legislation/energybill/energybill.aspx for more information)

3) There were an estimated 36,700 excess winter deaths in England and Wales in 2008/09 - an increase of 49 per cent compared with figures for 2007/08. The 2009/10 figures are very likely to be higher still.

4) The Department for Energy and Climate Change is running a review of its own on fuel poverty at the moment, but its focus is on making incremental changes to the existing strategy. ippr's research concludes a much bigger picture, radical and independent review chaired by a national figure is needed.