The fuel poor need a better Green Deal

The fuel poor are being hit hard by the cost of climate change policies and seeing little benefit - warns the Government's Fuel Poverty Advisory Group in its eighth annual report.

The group recognises that investment in energy infrastructure and measures to reduce greenhouse gas emissions are essential. However it highlights that energy bills could rise by up to a further 50% on top of the 125% rise in the last six years as the cost of these schemes will be largely, if not wholly, passed on to energy customers.2 The advisory group says this policy is regressive, and has a disproportionate impact on those on low incomes. At the same time, the future of grants to tackle fuel poverty, under the Warm Front scheme, is uncertain.

The advisory group believes that there should be a sea change in Government policies. It calls for a clear obligation on suppliers' energy efficiency programmes to prioritise the fuel poor and for the retention of the Warm Front scheme until a successor scheme has been developed. More of the funds raised through environmental charges on energy bills should also be directed to tackle fuel poverty. For example, the significant and regressive sums that will be raised through emissions trading or carbon pricing schemes could be specifically used for this purpose. It also recommends that the potential for differential carbon abatement charging relative to consumption level and ability to pay should be explored.

The group warns that the Government's Green Deal - mainly based on paying for energy efficiency measures through bill savings - will not deliver for the poorest energy customers. Although potentially a very good initiative for many consumers, it is unsuitable for the majority of fuel poor households who already under-heat their homes to cut costs, and would therefore be unlikely to make the bill savings required to pay for the measures.

Investment in tackling fuel poverty would provide a raft of benefits including; improving millions of people's quality of life; cutting costs to the NHS3; improved targeting of benefits; helping meet carbon reduction targets and creating thousands of jobs.

Derek Lickorish, Chairman of the Fuel Poverty Advisory Group, said: "Moves to make England greener shouldn't push the poorest households into the red. Unaffordable energy bills already cause misery for millions and without urgent action the situation is going to get much worse.

"Energy prices are set to rise, so the Government needs a clear strategy on how it is going to end fuel poverty. The only solution is to make fuel poor homes more energy efficient. This could contribute towards achieving many of the Government's goals - cutting costs to the NHS as well as the poorest energy customers, slashing carbon emissions and creating jobs.

"The Prime Minister said in his guide for society ‘that those that can should, and those who can't we will always help....and that my government always looks after the elderly, the frail the poorest in our country'. The Fuel Poverty Advisory Group looks forward to playing its part to help government deliver on those aspirations."

The Fuel Poverty Advisory Group is calling for the following five actions from Government:

An immediate and unequivocal goal to eradicate fuel poverty by 2016 and a clear strategy on how it will achieve this

Action to mitigate the impact on fuel poor consumers of increasing energy bills. Differential charging for carbon reduction measures should be considered, based on consumption and ability to pay, and form part of the proposed smart meter roll out

Improved targeting and increased investment in energy efficiency measures for fuel poor households including continued funding for the Warm Front scheme until an effective replacement scheme can be introduced

Current Social Price Support proposals should continue but must be reviewed in 2014. Rebates will probably continue to be needed for some vulnerable households

A sustained and continuous benefit take up campaign with Benefit Entitlement Checks (BECs) as an integral part of all energy efficiency schemes, particularly those targeted at people on low incomes