Day Six: Dear David…thoughts from a truly joined-up thinker

Guest blog: By Tony Watts, Chairman of the South West Forum on Ageing

Fuel poverty: it’s a long-term problem, so let’s have a long-term solution 

So what do we know about the energy situation in this country that we didn’t last week?

Well we know the Government was made to look clueless about energy policy when David Cameron’s insistence that fracking will reduce future UK energy bills was shown to be nonsense. Because we are tied into global energy pricing, us generating shale gas – even if it moved into overdrive – won’t make a happ’orth of difference to what we pay.

We also know that, according to a new BBC poll, 38% of us are worried about affording our heating bills, while 77% of us believe energy prices are set unfairly by the Big Six energy suppliers.

So while the Government is sharply downsizing the number of people officially living in fuel poverty (by redefining the term), the reality is that a huge proportion of us are struggling to keep warm and still get by.

Following the Hills Review, fuel poverty won’t just be defined as simply a household that spends 10 per cent of its annual income on heating and lighting (4.5 million households in 2011). The definition is set to become “low income households facing high energy costs”.

It’s meant to take out the (presumably well-off) occupants of large draughty houses. But you have to wonder, with more and more people seeing incomes squeezed and essential living costs going up, whether numbers won’t start rising again soon.

Government thinking is that they will be able to better target measures to relieve the burden of high fuel bills, not least in the hope of reducing the annual toll of 25,000+ elderly people losing their lives because of high fuel bills and under-insulated homes. The polite term is “excess winter deaths”.

It happens every year (although not in other, colder countries), and it’s the equivalent of a medium sized town being wiped off the map.

And what we have known for some time, not just this week, is that the only direction in which energy bills are going is north. It’s variously down to: global supply and demand; control of our energy market by a small group of big players; how much Government decides the rest of us should subsidise the less well off through energy saving schemes and Warm Home Discounts; and subsidising green energy.

So is there a solution?

Well yes, several actually.

Firstly, the nation needs to generate more sustainable energy as a long-term solution to what is a long-term problem. That means every new home should be as close as possible to having zero energy bills. It’s technically possible and realistically affordable. Current work in Corby demonstrates this – over the year solar panels and heat pumps will put as much electricity INTO the grid as the householder takes out. Moreover, the investment is immediately returned by the home being worth far more.

Secondly, every new factory and distribution centre should be built WITH solar panels already in place.

Thirdly, far more should be made to get the less well off on the best tariffs.  As it is, that the poorer you are, the more you pay (pro rata) for energy – either through a meter on a high tariff and/or (because they are low users) paying a relatively high standard charge.

Yes, there’s help through warm home discounts. Yes, older people receive winter fuel allowances (£2.1billion of it during 2011/12 – arguably not all of it well targeted) and cold weather payments which will vary from year to year (£146.1million in 2012/13, £430.8 million for 2010/11. But should we really be relying on handouts to make heating affordable?

Fourth, efforts to retro insulate homes should be redoubled – the current ECO scheme is only just touching the sides, while Green Deal looks a busted flush: only a handful of homes have actually had work undertaken despite the thousands of assessments undertaken. Far more needs to be done to persuade people that they can benefit, and that means working together: a new initiative in Bristol called “Streets Ahead” is encouraging communities to apply for grants (for instance) to have exterior wall insulation fitted on old houses.

Fifth, we need REAL competition in energy supply, and that’s where initiatives such as Community Buying can make a huge difference. Those most affected by high oil prices can – simply by collaborating – lower energy bills by 10 or even 15%. It’s still expensive… but it’s a start. Arguably, if enough people joined, that would provide leverage to achieve far, far more.

United, we can make a difference.

CJP says: a huge thank you to Tony who can be reached directly here: tony@hartleywatts.co.uk