It is time to end this shameful cold homes crisis

James S Murray
@James_BG
06 February 2015

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The government's modest efforts to tackle fuel poverty do not go nearly far enough. It is time to recognise tackling our cold homes makes economic and environmental sense

Today is the last day of Cold Homes Week, although sadly many people will have been too cold, too broke, or too dead to notice.

The perennial nature of the UK's fuel poverty crisis/scandal/national shame (delete as appropriate) means statistics revealing the true scale of the problem become dulled by repetition. But they shouldn't be; they are little short of a disgrace. Each year the UK typically experiences up to 30,000 excess winter deaths and this year it is on track to hit 40,000. Not all those deaths are directly due to cold homes, as increases in road traffic accidents and the limited success of this year's flu vaccination programme indicate, but poor housing stock is a big contributory factor to the spike in the death rate during the winter months.

Anyone who doubts that should consider this: each winter Sweden's death rate rises by around 10 per cent, in the UK it soars by 30 per cent. The main difference between the two countries? Our homes are much less efficient. Around six million low income households in the UK live in homes that have energy efficiency rating of Band D or worse, while over two and a quarter million households are officially living in fuel poverty. That is more than one in 10 households really struggling to pay energy bills and having to make choices between healthy comfort and other necessities. In one of the richest countries in the history of humanity, thousands die as a result of this unenviable choice.

It is a wilfully emotive comparison, but would we be so indifferent to these deaths if they were happening on this scale on the roads or as a result of medical negligence or military action? Sadly, cold grannies do not make for eye-catching headlines.

Instead, when the media or the political class deign to address fuel poverty at all it is to decry high energy bills and complain about corporate fat cats or renewables subsidies. I am no apologist for the energy companies who are often their own worst enemies, but focusing on energy prices is a distraction. Blaming energy companies for fuel poverty is like blaming supermarkets for food banks; confusing tariffs and sharp practices don't help, but they are not the root cause of the problem.

The uncomfortable truth is that energy prices in the UK are not high by European standards. A government study last year confirmed that "in 2012, average UK domestic gas prices, including taxes... were the ninth lowest in the IEA, third lowest in the G7, and were 18.9 per cent lower than the IEA median". Electricity prices were similarly competitive, and yet our domestic energy bills are among the highest in the EU. Why? Because our inefficient homes mean we use far more energy than many of our international competitors.

However, if there is one thing more scandalous than the UK's fuel poverty crisis it is the government's faltering and flawed response.

In fairness, some encouraging progress has been made. Winter death rates have been steadily falling thanks to flu vaccines and the gradual installation of insulation. Energy and Climate Change Secretary Ed Davey this week introduced new rules to stop landlords letting the coldest homes and again highlighted how one million homes have received energy efficiency upgrades through the government's Green Deal and Energy Company Obligation (ECO) schemes.

These improvements should be welcomed, but they are akin to a relegated football manager arguing they should not get the sack because they won a couple of games over the course of the season. As an analysis from the UK Association for the Conservation of Energy this week revealed the number of households receiving upgrades through government schemes slumped 80 per cent between the winter of 2011/12 and this winter. Had the rate of delivery seen in 2011/12 been maintained it would not be one million people enjoying warmer homes this weekend, it would have been nearly 2.8 million.

If the current rate of improvement continues over the next decade less than 30 per cent of the six million households enduring poor levels of efficiency will be improved. And yet, as BusinessGreen revealed, late last year, it is unlikely the current rate of improvement will continue - it is about to get a lot worse. The government's decision to water down the ECO scheme means energy company energy efficiency targets will be met in the coming months, bringing property improvement programmes to a grinding halt.

There is an obvious environmental angle to this failure to address the weaknesses in the UK's building stock. Around 40 per cent of emissions come from buildings and enhancing energy efficiency using proven technologies remains the most cost-effective means of tackling emissions. A genuinely ambitious programme to improve domestic energy efficiency would not just tackle fuel poverty, it would cut emissions and reduce the cost of decarbonisation by curbing demand for new wind farms and nuclear reactors. If we can't deliver the clean technologies that make financial sense regardless of climate change it does not put us in good stead for the big ticket clean energy generation investments that will be required over the next 15 years.

The bulk of the blame for this scandal lies not with Davey and the Department of Energy and Climate Change, but David Cameron, the Treasury and Conservative backbenchers. The Prime Minister's decision to axe "green crap" from energy bills did not so much throw the energy efficiency agenda under a bus, as lock it in a freezing cold room and wait for nature to take its course. The Treasury's repeated refusal to properly back a pay-as-you-save financing scheme that remains the most effective means of delivering national-scale energy efficiency improvements with serious funding and tougher regulations fatally undermined the Green Deal from the start. Tory MPs willingness to put the concerns of rentier investors above the health of their cold tenants meant energy efficiency rules that have finally emerged for the private rental sector are much weaker and later than they should have been.

However, the political blame game offers nothing for those currently considering whether they need to put on a third jumper of an evening. The question is what can be done to bring the UK's six million cold homes up to scratch?

The Energy Bill Revolution campaign has a relatively simple answer, designating domestic energy efficiency a national infrastructure priority and providing £3bn over the course of the next parliament on top of the £5bn you could raise by keeping the ECO scheme going would allow the UK to improve two million homes in five years to a Band C energy efficiency rating.

The proposal has significant business backing, not least because savvy executives recognise that money not spend on heat that flows out of single pane windows is spent on the High Street, driving economic growth. They also understand that a healthy workforce is more productive and that energy efficient buildings will help bolster UK energy security and reduce clean energy investment costs. It is no surprise that an analysis of the Energy Bill Revolution proposal suggests it could boost GDP by nearly £14bn by 2030.

And yet this eminently sensible proposal is struggling for traction in Westminster. Labour has revealed a domestic energy efficiency strategy that looks like an encouraging step forward, but is reluctant to endorse anything that smacks of increased Treasury expenditure. The Lib Dems are also likely to propose a beefing up of the ECO and Green Deal schemes, but are yet to back the kind of national retrofit programme that is needed. There is little evidence the Conservatives are planning any move on energy efficiency that extends beyond maintaining the status quo. David Cameron would be delighted if the words fuel poverty are not uttered once throughout the election campaign.

The standard response to proposals to spend taxpayers' cash on tackling fuel poverty is that there is no money. The government can't afford it. You do not need to belittle the debt challenge the UK continues to face, to point out that this is demonstrably untrue. There is infrastructure money available, the question is what do you choose to spend it on. The current government would prefer to prioritise roads at a time when car use appears to have peaked, runways at a time when aviation emissions have to start falling, and big energy projects at a time when reducing energy use offers better returns. It would prefer to throw emergency cash at the NHS rather than tackle one of the root causes of winter health crises. Some MPs would prefer to quietly argue the fuel poor do not deserve government largesse, while voting through much more costly measures designed to reduce energy bills for middle class voters.

There is a relatively simple way to tackle fuel poverty, reduce excess winter deaths, boost the economy, cut carbon emissions, cut the cost of decarbonisation, and improve the lives and health of millions of people. Whether it is short-sightedness, indifference, or incompetence that has stopped the government seizing this opportunity will be sadly irrelevant to the millions of people shivering through this winter.