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Last Updated: Tuesday, 9 August 2005, 07:55 GMT 08:55 UK
Fuel poverty is 'new social evil'
By Allan Asher
Chief executive, Energywatch

Gas
Rising energy prices push more people into fuel poverty

In 1942, five great social evils were identified in a seminal report into poverty.

The evils were want, squalor, idleness, ignorance and disease.

It was powerful stuff: the report, which was written by the economist William Beveridge, helped bring about the post-war welfare state.

But it did little to eradicate fuel poverty.

Frozen plight

Looking at modern Britain you could legitimately add fuel poverty to the original list.

The rough and ready definition of fuel poverty is of someone who spends more than 10% of their income on keeping themselves warm.

However, fuel poverty is not just about low incomes.

It is part of a complex picture, linked to multiple deprivation, unaffordable fuel prices and poor housing stock characterised by inadequate insulation and inefficient heating systems.

Disconnections

While fuel poverty has of course always been around, it emerged as a serious social concern in the mid-1970s, born out of the oil crisis.

Britain has the highest number of avoidable deaths due to winter cold in Western Europe

By 1986, household gas and electricity disconnections due to debt ran at a peak of 160,000 a year.

Since then, companies have introduced "safety net" policies to make sure vulnerable customers are not disconnected.

But the latest figures suggest there are currently over two million households across the UK that cannot afford to keep adequately warm at a reasonable cost.

As energy prices rise, this number will go up.

Yet, 34% of people would not ask for financial assistance if they could not afford to heat their home throughout the winter, according to a recent survey.

The consequences are enormous.

Fuel poverty can and does kill.

Britain has the highest number of avoidable deaths due to winter cold in Western Europe.

It is estimated that 24,000 older people will perish this winter because they often can't afford to heat or from ill health linked to cold, damp living conditions.

As for children, fuel poverty can lead to educational under-achievement, social exclusion, physical and psychological ill health.

Liberal markets

Unlike being ill, people who are fuel poor do not necessarily know that they are. As such, they are not a group that is easily identifiable.

The government's target of eradicating fuel poverty by 2016 will be in serious jeopardy if energy price rises go ahead

Yet it is clear that since 1996, the liberalised energy markets has helped bring energy prices down and with it the number of fuel poor, and prices are still cheaper in real terms than before privatisation.

In 1991 there were 7.3 million households that were either fuel poor or were considered vulnerable to suffering fuel poverty. By 2002 this figure had fallen to just over two million.

But double-digit hikes in energy prices in the past 18 months - 21% in gas and 18% in electricity - put this progress at risk.

The government's target of eradicating fuel poverty by 2016 will be in serious jeopardy if energy price continue to rise.

Back into poverty

The government-sponsored Fuel Poverty Advisory Group has suggested that a 10% price rise across the board will condemn as many as 400,000 consumers back to living in fuel poverty.

GUIDE TO UK POVERTY
How is it that nearly one in five Britons live in poverty?

For many of those already paying more than 10% of their income on energy, the impact will be more than they can bear.

The situation can be most acute for those who pay for their energy through a pre-payment meter.

While having a pre-payment meter imposed by a supplier is preferable to being without heating or hot water, these consumers have to pay more for their energy, sometimes up to double, than those paying by direct debit.

Pre-payment meters increase the chances of living in fuel poverty.

Decrepit housing

Tackling fuel poverty is not just about reducing the price of energy, it is also about improving energy efficiency.

Fighting fuel poverty now has to go hand in hand with being more energy efficient.

Too much of Britain's housing stock is decrepit and close to being unfit to live in.

The government and the power firms have invested about 400m a year in insulating the homes of the fuel poor, and some suppliers have introduced special tariffs and trust funds for vulnerable groups, such as the elderly.

The Energy Smart campaign, which is sponsored by community groups, public bodies and Energywatch, aims to encourage consumers to save on their bills by switching supplier, changing payment method and being energy efficient.

Companies like British Gas provide free energy-efficiency measures like the Warm-a-life scheme which provides free insulation and energy saving measures for people on income-related benefits.

And other energy companies, like PowerGen, have a target of removing 250,000 households from fuel poverty by 2010.

All in all, though, the welfare state's universal approach to fighting social evils 60 years ago has levelled up society.

But universalism is no longer the weapon for fighting fuel poverty in the 21st Century.

The challenge now is to dispense the tailor-made help to those who really need it - from benefit maximisation to energy efficiency grants and making bills more manageable.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated.


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