By Alistair Brown
It’s cold outside. And while the recent snow will have brought joy to many, for others the cold weather means a constant struggle to keep homes warm. Often, turning the heating up is a matter of choosing between eating and heating – a choice that has come to symbolise the growth of fuel poverty in the UK.
The government currently defines fuel poverty as ‘the need to spend more than 10% of household income on energy bills to heat homes to an acceptable level’. Millions across the UK are in this position, with almost 5 million people officially living in fuel poverty. Vulnerable groups – the elderly, children and those with a disability – are particularly affected. Hackney is one of the worst boroughs in London for fuel poverty.
But it’s not just energy bills driving fuel poverty. The reason that many in Hackney are so sensitive to bill rises is that the housing stock in the borough is often very inefficient. Much of the energy we use to heat our homes is leaking straight through our walls, roofs and windows.
It’s a waste of money and energy, it’s bad for the environment, and it means people are living in draughty, cold homes that are bad for their health.
The situation is particularly bad in private rented housing. With demand for private rented housing so high in London, landlords don’t need to do much to their property to attract tenants. And generally the tenant will be responsible for paying the energy bill, so the landlord has no incentive to improve the energy efficiency of their property beyond the bare minimum. To make matters worse, energy efficiency measures such as insulation are not properly valued in the housing market, so even ‘good’ landlords are unlikely to prioritise energy efficiency improvements when looking to increase their property value.
There’s plenty that can be done to improve the situation – cavity wall insulation, solid wall insulation, boiler replacement, draught-proofing, double glazing. But while they will often save you money in the long term, many of these solutions come with a big upfront cost, and they’re a hassle to have installed.
The new Green Deal scheme, launched by the government this week, is supposed to help overcome both the upfront cost and the tenant-landlord split incentive issue by attaching an energy efficiency loan to the property, rather than the tenant or landlord. But the scheme is so complex and so heavily criticised that it seems unlikely to attract much renovation work. The new ECO subsidy scheme will also fund energy efficiency measures, but the scale of the scheme is nowhere near enough to tackle the UK’s fuel poverty problem.
What’s needed is a massive injection of funding – billions per year to be spent on a nationwide effort to bring our homes up to standard. Pie in the sky in these straitened times? Not necessarily. From this year, the treasury will be collecting a new source of revenue from the EU’s Emissions Trading Scheme, to be followed by an additional tax through the government’s Carbon Floor Price. This funding is estimated to provide £2bn of income per year to begin with, rising to £4bn per year after 2020. It’s environmental taxation, designed to reduce carbon emissions of large industrial and energy producers. As consumers, we will be paying for this tax through our energy bills – so it is only right that the revenue should be spent on action to help reduce those bills.
This is the argument that the Energy Bill Revolution Campaign is taking to the government. A group of 100 charities, think tanks, and businesses are on board, asking the government to use its new carbon revenue to deliver a massive retrofit campaign in the UK’s housing sector. Digs is on board too. After the recent cold snap, the help can’t come fast enough.
If you are struggling with your bills and/or are interested in energy efficiency measures, visit the Energy Saving Trust website: http://www.energysavingtrust.org.uk/ or call 0300 123 1234