Big Six to cash in on hardship

9th December, 2013

AS THE bitterly cold winter nights draw in millions of Britons face the bleak prospect of rationing the heating in their homes.

Fuel prices have more than doubled in eight years as incomes have stagnated yet while fuel poverty increases the political battle raging over energy policy sheds more heat than light for hard-pressed Britons.

David Cameron promised to instigate a review of the impact that Governmentmandated measures, wrongly called green levies, are having on our bills after Ed Miliband's game-changer promise of a price freeze.

The results of that review will be con-firmed in the Chancellor's Autumn Statement on Thursday. Logically you might have expected that the energy companies, now vying with bankers as the most unpopular businesses around, might be the ones asked to tighten their belts.

Not a bit of it. According to documents leaked last week they are likely to be the main beneficiaries of the Government's review, as energy-saving programmes they have fought against are cut and homes continue to leak energy.

Much play will be made of the Chancellor reimbursing the Big Six for the cost of the Warm Homes Discount, which provides annual 135 subsidies for the fuel bills for about two million households. Sadly this is less than half the households in fuel poverty. These add just one per cent to the average bill and will still be administered by the energy firms.

Slightly larger amounts were due to be available to cover energy efficiency measures, providing better insulation to some of the most vulnerable households. This equates to about four per cent of an average bill, or 47 a home. It is called the Energy Companies Obligation, or ECO, and it requires the firms to help householders save energy by installing measures such as insulation, efficient boilers and heating controls.

THIS concept was first introduced by the last Conservative government almost 20 years ago on the basis that it followed the "polluter pays" principle. It has been by any standards very successful. About half of British homes now have these energy saving measures in place, for whom the Big Six admit average fuel bills are 400 lower each year.

Overall home energy use has dropped by a quarter since 2005, largely owing to the installation of these measures. With costs per unit of fuel doubling during the same period, however, overall bills have not gone down but homes that are energy efficient are paying an average 25 per cent less than those which are not.

All this has cut the energy companies' turnover badly. That is why they are trying to destroy the only nationwide energy saving programme that exists. The day after Mr Cameron's announcement all Big Six companies appeared before the Commons Energy Select Committee parroting the same line: stop the Energy Companies Obligation.

These programmes are not so much "green" schemes as ones to improve social welfare. Almost half the 1.3billion a year worth of investment under ECO is aimed at helping low-income households.

This is important because, while in Scotland, Wales and Northern Ireland there have continued to be significant (and growing) taxpayer-funded programmes, since January there has been no publicly funded England-wide programme devoted to improving the energy performance of homes of those in fuel poverty.

These amount to more than five million households, in each of which there is a constant struggle to choose between heating and eating.

Last week came the dire news that the number of people dying needlessly last winter shot up by 30 per cent. Nearly 10,000 of these deaths are thought to be the result of cold, leaky homes as people struggle to buy heat. Age UK director Caroline Abrahams said: "Excess winter deaths are preventable and are a damning indictment of our failure to address the scandal of cold homes.

"Those living in the coldest homes are three times more likely to die a preventable death than those living in warmer ones. It should be a cause of shame."

It is disgraceful that the Big Six have orchestrated this campaign to neuter energy saving, predominantly to draw attention away from their price gouging. The extent to which they are already overcharging customers is estimated by the founder of Ovo, one of their challengers, at 3.7billion this year.

UNFORTUNATELY their campaign appears to be succeeding in blackmailing the Government into halving its policy to require energy companies to help customers stop wasting money by wasting fuel.

This will mean that over the next two years the Big Six will avoid spending 1.3billion on installing efficiency measures while taking 360million more annual fuel sales than they expected.

There will be 600,000 households paying an average of 400 more each year than they would have done if they had received the energy efficiency makeover.

Thursday's Autumn Statement now looks likely to end up lining the Big Six's pockets even more than they already are.

I am sure that cannot have been what the Prime Minister had in mind when he called for the overhaul of green taxes.

Source: The Express

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