Theresa May’s government has been forced to admit it’s trapped 2.5 million households in poverty

Theresa May Budget Tax
Steve Topple

The government has been forced to admit that it’s “running out of time” in tackling a poverty-led crisis which kills 25,000 people each year. And it went so far as to say that its progress is too “slow”, leaving 2.5 million households in a precarious trap.

A ‘matter of urgency’

The Department for Business, Energy and Industrial Strategy (BEIS) has released its annual Committee on Fuel Poverty report [pdf]. The term ‘fuel poverty‘ means a household’s energy costs are above the national median average; and that if a household spent this amount it would leave them officially in poverty, by the recognised standard.

And the BEIS pulls no punches in its assessment of the situation in the UK. While it welcomed various government measures, it also said [pdf, p10]:

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We are strongly advising the government that time is running out if it intends to reach the milestones and target, and that every day of delay now only increases the challenge later on – not to mention the impact on the health and wellbeing of those who still live in fuel poverty. [The] government therefore needs [to act] as a matter of urgency…

The Canary spoke to Labour’s Shadow Business Secretary Rebecca Long-Bailey. She said that:

A cold, poorly insulated home doesn’t just mean that lots of heat is wasted resulting in a high bill. It means getting ill, it means repeated visits to the doctor, a much longer recovery time and a greater pressure on the NHS. Fuel poverty also has a greater social impact. Children living in cold homes see an impact on their ability to achieve, either through illness or simply a poor quality home environment. The financial and emotional stress it can place on families can also damage relationships and lead to long term stress-related mental health issues.

Damning statistics

And the BEIS report sums up Long-Bailey’s points. It found that [pdf, p5]:

  • The number of households in fuel poverty increased to 2.5 million in 2015; up from 2.38 million in 2014.
  • 25,000 people die each winter due to fuel poverty.
  • It costs a fuel poor household, on average, an extra £353 in energy each year compared to the national median amount.
  • 45% of households in the worst fuel poverty are in private rental properties [pdf, p22].
  • 20% of all fuel poor households are in social housing [pdf, p44].

This ties in with the rises in energy bills between 2010 and 2016. As FullFact noted, customers paid on average £883 more in that period due to additional price rises than if prices had just risen with inflation. And the BEIS says that it’s the poorest people being hit the hardest.

It noted that [pdf, p9]:

The statistical trend shows a decrease in the percentage of fuel poor households in owner-occupied properties and an increase in privately rented, local authority and housing association properties.

Money well spent?

Also, one million of the 2.5 million fuel poor households were families. But the BEIS said [pdf, p7] that, of the £2.07bn that the government spends each year in Winter Fuel Payments for elderly people, and the Warm Home Discount, only 10% of this actually reaches households in fuel poverty [pdf, p7]:

The majority [of the £2.07bn] is received by pensioners who have a median equivalised after housing cost income of twice the level of those in fuel poverty.

The government has set three targets of “upgrading as many fuel poor homes as possible”. These are getting homes to: energy efficiency band E by 2020, band D by 2025 and band C by 2030. But the BEIS said that, to do this, it will cost £15.4bn [pdf, p16]. And presently, only £1bn of funding will be available [pdf, p14]. The BEIS also noted that progress was too “slow” towards the 2030 target [pdf, p6].

It also forecast that, even if the government meets its own targets, there will still be 175,000 households living in the most severe fuel poverty by 2019. This would cost households, compared to the national median energy bill [pdf, p12]:

  • £1,474 per year more for those with dependent children.
  • £1,343 per year more for those who do not use electricity or gas to heat.
  • £1,291 per year more for those in villages, hamlets or which are isolated dwellings.

Fuel poverty: a national scandal

The BEIS made numerous recommendations. It outlined how the government needs to [pdf, p6-8]:

  • Ensure the proper funding is in place to tackle fuel poverty.
  • Identify the most efficient and effective way to help fuel poor households.
  • Compile better statistics of each household’s situation regarding fuel poverty.

But Long-Bailey believes the government isn’t doing enough. She told The Canary that, with wage and benefit rises not keeping up with inflation, let alone energy price rises:

It is not enough to simply tackle fuel poverty as a stand alone issue. The government must tackle the causes of fuel poverty. Without investing in the tools businesses need to drive up wages and productivity, wages will continue to stagnate. And without real government effort to reform our broken energy market and insulate homes as an infrastructure priority, families up and down Britain will continue to suffer.

Fuel poverty is an ever-increasing stain on the UK. When you have poverty-stricken households having the added burden of deciding whether to ‘eat or heat’, then something is seriously wrong with the energy supply in the UK. But when 25,000 people die every year because they can’t afford the most basic of human rights, it’s a national scandal.

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