National Energy Action (NEA) blog

26th November, 2013

We are in the midst of a cold-homes crisis. Energy bills are rising, incomes are dwindling, and the energy efficiency of our housing stock remains abysmally low. The result is an estimated 2.4 million households living in fuel poverty in England, and many will be facing difficult choices this winter over which household necessity they will need to do without.

Fuel poverty means being unable to heat your home to the level needed to stay warm and healthy. Even at a conservative estimate 2,700 people are dying each year because they can’t afford a warm home – far exceeding those killed on our roads. Beyond unnecessary and premature mortality there are many other health impacts from living in cold homes leading to an estimated £1.3bn per year cost to the Health Service for treating the symptoms of fuel poverty.

Recently, energy prices and the plight of those who are struggling to heat their homes affordably have been rarely out of the headlines. While it is certainly encouraging that the severity of this problem is being recognised and debated, the intense focus on energy prices ignores the fact that the main problem is not the price we pay per unit of energy but the fact we have some of the poorest quality, energy inefficient housing in Europe. It is no coincidence that over half of all fuel poor households live in properties with a low energy efficiency rating of E, F or G, and are much more likely to have uninsulated cavity or solid walls.

Improving domestic energy efficiency is therefore the most sustainable and effective way of tackling fuel poverty. As well as reducing fuel bills and making homes warmer and more comfortable, energy efficiency improvements implemented on a large scale can bring wider social benefits, such as more jobs, increased money in the local economy, and a reduced burden on the health service.

The Government’s current scheme to improve energy efficiency in fuel-poor households is the Energy Company Obligation. Of the £1.3bn which ECO is expected to cost, only £540 million is directed towards low income households and the rest is used to subsidise insulation in able-to-pay households with solid walls or non-standard cavity walls. This represents a cut of around 50% in funding for heating and insulation measures to low income households compared to 2011-12, and it also means that these customers are effectively contributing to a scheme via their energy bills for which they may see no personal benefit.

Despite its flaws however it is vital that ECO is not extended, reduced or removed completely before a suitable alternative is put in place. It may not be perfect but it is bringing real benefits to some households and at least provides somewhere for the fuel-poor to turn this winter when they need help to improve the heating and insulation of their homes. In the longer term however we need the Government to ensure that the forthcoming fuel poverty strategy for England sets an ambitious new primary objective for minimum energy efficiency targets for low income households, supported by a national energy efficiency scheme funded directly from Treasury. This could really help end the scandal of cold homes for good.

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