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– Fuel poverty on the rise

 

Fuel poverty on the rise with worse news imminent for most vulnerable

 

On the 14th July, the Department of Energy and Climate Change announced the latest statistics on fuel poverty. This is defined as when 10% or more of income is used on fuel and energy. The figures do not make comfortable reading. The broad conclusions are as follows:

  •   In 2009, there were 5.5 million fuel poor households in the United Kingdom, an increase of a million from the previous year; this is approximately 18.4% of the total number of households.

 

 

Photo courtesy of www.nea.org.uk


 Closer examination of the figures shows a much more serious trend:

  •  49.1% of those in fuel poverty are single people with 33.1% living in households with two persons,
  •  64.2% of those households that are fuel poor are classed as inactive. This includes the retired,
  •  26.3% of households that are fuel poor are working,
  •  9.5% of households are unemployed

 But there appears to be worse to come!

Comment:

The fuel poverty figures only cover up to 2009. Therefore, it does not take into account the substantial increases in both oil and gas during 2010 and the first half of 2011. Given the present economic situation, where disposable income is decreasing, the situation can only get worse. For example, at the end of 2009 oil prices were starting to increase from around $75 a barrel rising to over $104 a barrel by 2010.

 

The indirect effect of high energy prices will also have a knock on effect on staple products like grain, food production and delivery costs. This could not have come at a worse time owing to the environmental factors like the fires and droughts in grain producing areas. The increase in bread and egg prices are a consequence of this. This could end the option ‘Eat or Heat ‘, as nether could be afforded.

 

Whilst the government appears to be taking some action on fuel poverty there must be questions on the effectiveness of these measures. Certainly there is some help available with for example the service the energy companies offer to the over 60’s, and the winter fuel payments. But this may not go far enough. Given the fact that over a quarter of those in fuel poverty are working and usually not entitled to direct help there should be extra help offered.

 

A practical example to help those most in need could be for example; to abolish the charges paid by means other than direct debits. What the energy companies and the government do not appear to understand is that given the dire financial situation and the fact that being overdrawn by a few pence can incur substantial charges people simply cannot afford this option and it discourages people from using this system of payment. One piece of welcome news announced by the government was that the OFT would be investigating the energy market in relation to concerns that a price cartel was being operated.

 

Whatever the outcome the future situation appears bleak. One final factor and perhaps the most worrying aspect of all is that according to economic experts the world is in recession and whilst in previous recessions oil prices have softened this time they appear to be doing the opposite.

 

Hypothermia causes approximately 30,000 deaths a year mainly affecting the very young, the ill and the old, are we to expect this number to increase and do we accept this as a result of either difficult decisions or market forces?

 

Finally the government should note the day they published the figures, 14th July Bastille Day in France, after all one of the causes of the French Revolution was caused by shortages of affordable staples like bread.

 

David Healey

 

Project Support Officer

The report HERE

 Press release: HERE

 

 

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