The government’s plan for tackling fuel poverty is short-sighted

Successive UK governments’ inability to respond effectively to fuel poverty has been a classic example of short-term political thinking combined with government failure.

We have known for decades how to solve fuel poverty. The long-term solution is the same today as it was when David Amess introduced, and passed, the Warm Homes and Energy Conservation Bill in March 2000, when the government extended the reduced 5% rate of VAT to all installation of energy saving materials in homes a few days later, and then published the draft UK Fuel Poverty Strategy in February 2001 that led to the setting up of the Fuel Poverty Advisory Group later that year.

The strategy clearly stated the need to properly insulate all the homes occupied by people susceptible to fuel poverty, reduce energy costs, and increase incomes. And was also clear that this was a climate change imperative – more than 20 years ago!

Successive governments have tried to address this through a variety of more, or less, successful programmes and have failed to solve the problem at yesterday’s energy prices, never mind tomorrow’s. The deadline for the elimination of fuel poverty just keeps being pushed back.

Though it isn’t popular in government, the fact is that, on this, Insulate Britain, Households Declare, New Economics Foundation’s Great Homes Upgrade, and a huge number of other groups whose advice governments over the years haven’t successfully acted on, are right.

Governments, by failing to properly regulate, fund, or effectively deliver, insulation for homes occupied by people in fuel poverty, have implicitly decided that they would rather their successors throw money at a problem when it arises, like now, than invest sufficiently ahead of time in a long-term solution.

So now the government is spending £9.6 billion in just six months this year, to take a small part of the sting out of rising energy costs. Ironically this is more than £9.2 billion promised, but not yet committed, in the Conservative manifesto for insulation

As a result, we have the coldest, leakiest homes in Europe. The latest data from climate tech firm tado, shows that UK homes leak more than three times as much as Norwegian homes.

Even the regulation of the private rented sector, with minimum standards of EPC E today, going to C in 2025, has failed. One of our biggest private landlords, Grainger, has dozens of homes that are rated F or G, for which the only requirement is to list them on the almost impossible to find ‘Sub-Standard Homes’ register (or the PRS exemptions register as the government prefer to call it).

So now the government is spending £9.6 billion in just six months this year, to take a small part of the sting out of rising energy costs. Ironically this is more than the, admittedly inadequate, £9.2 billion promised, but not yet committed, in the Conservative manifesto for insulation over the five-year life of the parliament.

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If we’d invested consistently since 2001, we would now have homes above Norwegian standards of insulation and warmth, and possibly, like them, we would have 60% of our homes powered by heat pumps. Norway’s energy consumption per capita (for all uses) peaked around the turn of the century. It was the policy response triggered by a spike in electricity prices in 2002/3 that unleashed the heat pump revolution in Norway so maybe, despite our poor insulation starting position, we may be about to experience the same.

The benefits of warm affordable homes go far beyond alleviation of poverty, with substantial reductions in costs to the health service. At the end of last year BRE estimated that poor housing costs the NHS around £1.4 Billion a year in health care costs, of which substantially more than half is due to ‘excess cold’. The new NHS Integrated Care Systems, with their new public health mandate, will shortly have the ability to start addressing this. Again, like climate change, prevention is cheaper than cure.

Our energy pricing system, based as it is on the short-term marginal market cost of gas from overseas is completely dysfunctional. This is in sharp contrast to Norway whose energy comes mainly from hydro-electricity and where electricity is priced at about the same level as gas.  

These again require long term investments but when the choice is that, or having poverty imposed on our most vulnerable by Russian gas producers, it feels like the kind of decision that we elect our politicians to make in the country’s best long-term interests.

In a relatively short time (around 2035 in the UK) we will be generating all our own electricity from renewable sources (Scotland is nearly there today). Breakthroughs in vehicle to grid technologies (using car batteries for short term grid storage), and smart grids, look like they can manage down our future peak electricity requirements to close to current levels. We will probably still need grid level storage but even that might be mitigated by transnational electricity supergrids (providing access to geothermally generated electricity from Iceland or solar generated electricity from the Sahara).

These again require long term investments but when the choice is that, or having poverty imposed on our most vulnerable by Russian gas producers, it feels like the kind of decision that we elect our politicians to make in the country’s best long-term interests.

Government now appears to be in a place where their ‘Ten Point Plan for a Green Industrial Revolution’ is all we are going to get. The plan is completely inadequate to deliver the warm affordable homes the country needs, either to solve fuel poverty or to meet our climate targets, as it fails to address the largest housing tenure, owner occupation.

None of this looks likely to change imminently in the current gridlock at the top of Government.

Failure to learn, and act on, the lessons of the past means we are doomed to repeat them.

Chris Brown, executive chair and founder, Igloo