Thursday, 9 October 2008

Dealing with fuel poverty

With all the bail-outs and rescue packages being rolled out across the world these past few weeks, you could be forgiven for thinking that nationalising things was back in fashion. If only. Across the world, governments are spending billions of pounds from public purses to prop up the failed banking system. It's a kind of fake-nationalisation, which I would only support if the boards and management structures of these banks were abolished as part of the deal- heads need to roll and the least well-off need to be protected against the recession. While the banks are being partly nationalised as an emergency measure, there is also another crisis that we need to deal with.

The deregulation and privatisation of the gas and electricity utilities in the UK has led to a long-term escalation of fuel poverty, despite an initial fall in numbers of fuel poor. Liberalisation of the energy markets went along with an apparent increase in prosperity, but the recent weeks appear to be showing that prosperity under the neo-liberal model has been based on unsustainable foundations and easy credit. Customers now have very little protection against fluctuating fossil fuel prices. They are at the mercy of the market. Some of the energy companies might implement a handful of measures to try and help their poorest customers, but never in proportion to the amount of money they are making. These safety nets are clearly not enough when according to the latest estimates, a quarter of our population are being plunged into fuel poverty (representing more than a doubling of the numbers in 2005). Fuel poverty still existed before privatisation. But I can't see any way of eradicating it or even reducing it without bringing these utilities into public ownership.

Wales and the UK have the highest number of avoidable deaths due to winter cold in Western Europe. No other prosperous country allows its elderly to die due to lack of heating in the way that we do. In the short-term, a windfall tax on the record profits of the six energy companies is needed. This would pay for new social tarrifs, energy efficiency measures and an expansion of the winter fuel payments system. But in the Assembly yesterday I made it clear that this windfall tax would only be a one-off measure. The only way we can abolish fuel poverty in this country is to remove the profit motive by taking the utilities into public ownership. Energy must be provided on an affordable basis and can't be used to create huge dividend pay-outs for shareholders. I called for this in the Senedd because fuel poverty is an injustice which is ending lives prematurely.

1 comment:

Anonymous said...

... and from the same debate:

Peter Black: I agree with Alun Davies’s penultimate point, on the need for a level playing field in terms of the price that people pay for energy in this country. That has not been the case, as evidenced in the report and in other available evidence, simply because energy companies charge people differently, depending on the methods by which they pay. In doing so, they discriminate against those who do not have bank accounts, who rely on meters and who, effectively, are among the poorest in society. That is entirely wrong.

I will also pick up on something else that Alun said. He said that the Labour Party has the policies and the political will to tackle fuel poverty. It is probably no coincidence that fuel poverty has increased massively in the last year, as a result of the credit crunch and the economic problems that we have faced, and, yes, it has happened on Labour’s watch. Some of that is due to world-wide problems, but some of it is also due to the way in which the Government has managed these issues. One energy company increased its prices by a small amount in France, but by four or five times that amount in the UK, which is a simple example of the way in which the Government has regulated the energy companies. France clearly has a better regulatory framework than the UK, and, as a result, we are suffering.

If Labour really had the political will to deal with fuel poverty, it would have some idea of where fuel poverty exists in this country. The report refers to the fact that the Government has commissioned work to break down where fuel poverty exists, ward by ward, around Wales. When it commissioned those figures, they were due to be published at the end of summer 2007; it is now October 2008. When I asked earlier this year when those figures were to be published, I was told that it would be August 2008, but, as far as I am aware, those figures are yet to be published. That demonstrates how much will there is behind this Government for tackling fuel poverty; it cannot even target what little it is doing, because it does not know where fuel poverty is worst. The Government and I could make an educated guess as to where it is worst, but we need those figures before we can target action effectively.


That issue needs to be addressed rapidly, along with the issues around the home energy efficiency scheme, which has been referred to by a number of Members. It is clear from the reviews and from the committee’s report, that HEES does not target fuel poverty in any effective way. For example, one in five people who have been helped by the home energy efficiency scheme are fuel poor, while the others are not. The scheme was not set up in that way, which I understand, but the report that first identified this issue is now several years old. The committee has revisited this issue, but we are being told that it will take another review and more time before that can be dealt with. I do not expect instant answers for this winter, because it is too late, but I expect that the Assembly Government should take action to deal with a report that identified a problem two or three years ago. It should at least publicly state whether the home energy efficiency scheme is about dealing with fuel poverty. If it is not, what is it for and may we have something else that will deal with fuel poverty, please?

To go back to Alun Davies’s penultimate point on the price that people pay, Mick Bates gave some figures on the discrepancies between what people pay for their energy, depending on their method of payment. Energy companies have increased the charges on pre-payment meters by as much as £70. If you have a pre-payment meter, you will pay £70 per year more than someone who pays quarterly. If someone is paying by direct debit, they pay £560 per year less than someone who has a pre-payment meter. That is an absolute scandal. I accept that that is beyond the remit of the Welsh Assembly Government, but it should be within that of the UK Government. After all, this is meant to be a partnership. Although I accept that the Welsh Assembly Government does not have control over all the levers that could be used to deal with fuel poverty, it is meant to be working in partnership with the UK Government on a range of issues, including fuel poverty and child poverty. So far—excepting what has been done here—that partnership seems to have fallen apart. We do not seem to be making any progress at all.


G. Lewis