NEA: Draft Bill could cause misery for millions warns charity

Draft Bill could cause misery for millions warns charity

by Ron Campbell, Chief Policy Analyst at National Energy Action

The bad news for domestic energy consumers is that measures proposed in the Draft Energy Bill will result in higher fuel costs; the consolation, supposedly, is that without these measures energy will be even less affordable in the longer term. We are assured by the Secretary of State that the Bill is essential to ensure that electricity markets deliver ‘secure, clean and affordable electricity’.

But only last week the Government published data showing just how many households currently lack access to affordable energy. The latest official fuel poverty statistics show that 3.5 million households in England cannot afford sufficient fuel to maintain a warm and healthy living environment. So what is the message from Government to fuel-poor households? That they will face greater harm to their physical and psychological health; that they will increasingly be required to choose between a warm home for their families and other essential goods and services; that they will be at risk of debt to their energy suppliers or even disconnection from supply?

NEA recognises the compelling case for action to address environmental concerns and that ambitious decarbonisation polices are a major element in this objective. But NEA does not believe that environmental policy should exist in isolation and without taking full account of the social detriment that inevitably follows higher energy costs. The Government has legally binding targets for emissions reductions in the Climate Change Act; but it has equally binding targets to eradicate fuel poverty by 2016 and current policy suggests that environmental objectives will be achieved at the cost of rising fuel poverty. It might seem axiomatic that as Government adopts policies that act against the interests of fuel-poor households it simultaneously implements policies to mitigate that detriment.

Of course this can be readily done. Agencies campaigning on environmental and social issues long ago reached consensus on how these two objectives could be reconciled – the common solution is a programme of radical improvement to heating and insulation standards across the UK housing stock.

But what is lacking is a combination of political will and a level of resources that is adequate and proportionate to the task. But despite constant reassurance during the passage of the most recent Energy Act that new funding for fuel poverty programmes would greatly exceed previous funding regimes this has not proven to be the case. Over the period 2010-2011 energy efficiency investment to improve properties occupied by financially disadvantaged households totalled some £1.1 billion; the most recent Government pronouncements on this subject indicate that annual expenditure in this area will fall to around £540 million from next year.

So what is the solution? How do we square social and environmental aspirations? One rational and innovative proposal has come from the Energy Revolution Campaign which advocates deployment of future revenues from the EU Emissions Trading Scheme and the imminent Carbon Price Floor to fund a national domestic energy efficiency programme that prioritises action to fuel poverty-proof the housing stock.

The campaign estimates that these taxes, which ultimately will be paid by domestic consumers, will generate annual revenues of some £4 billion over the next 15 years. Recycling the revenue would provide billions of pounds to transform heating and insulation standards across the nation’s housing stock; deliver major reductions in domestic carbon emissions; and create up to 200,000 jobs. Fixed it for you Mr Osborne.