Budget ‘green recovery package' must tackle fuel poverty

Consumer Focus is urging the Government to invest in a series of Budget measures to tackle fuel poverty, as part of the ‘green recovery package' promised by the Prime Minister.

This necessary action will protect the poorest households, cut carbon emissions and help the country face the recession.

Unless the Government takes radical action, it stands no chance of meeting its target to end fuel poverty by 2016. Action to tackle climate change will, according to the Committee on Climate Change, increase the number of fuel poor by almost 2 million. Fuel poverty levels are also set to spiral as unemployment levels rise.

Proposals in the recent Fuel Poverty Bill, backed by a coalition of organisations including Consumer Focus, would lift over 80 per cent of households out of fuel poverty, halve their average energy bills and cut their carbon emissions by 59 per cent. The measures would also put around £6.6 billion back into the economy and provide 31,000 jobs up to 2016. However by blocking the Bill the Government has missed a major opportunity to take action to end fuel poverty.

Consumer Focus's Deputy Chief Executive, Philip Cullum, said: "Expensive energy bills remain a huge problem for the poorest households and unless the Government invests in solutions now, millions of customers will suffer real hardship and fuel poverty levels will continue to spiral.

"Unless it invests in a major energy efficiency package the Government's commitment to end fuel poverty by 2016 will become pure fantasy. Putting these measures at the heart of the Budget's promised green recovery package would tackle fuel poverty, improve the environment, and create tens of thousands of jobs. This is a solution that would both protect the poorest in our society and give a welcome boost to the economy."

Key Budget measures should include:

A more coherent approach to energy efficiency
The current piecemeal approach to energy efficiency schemes is inefficient, with help not targeted adequately at the poorest homes. Comprehensive improvements to current schemes, such as Warm Front, are needed as part of a radically increased and more joined-up energy efficiency package.

More sensible tax treatment of energy efficiency products
Reductions in VAT for energy efficient products would help incentivize consumers to improve the energy efficiency of their homes.

Further action to end unfair energy prices
Although there have been reductions in pre-payment meter tariffs over the last year, millions of the poorest energy customers, particularly those paying by cash or cheque, continue to pay more for their energy. Ofgem has recently made welcome proposals to ban unfair pricing, but the Government must ensure this translates into real benefits for vulnerable consumers. It must also legislate to ensure social tariffs are the cheapest deals on offer to fuel poor households.

Investment in green building skills
A substantial share of any new Government funding for re-training should be invested in improving green building skills. This would help the hard-hit construction industry to develop the skills need to make homes more energy efficient, which, as part of a major energy efficiency scheme, could benefit consumers by reducing energy bills.