The government will miss its first target for cutting the number of households living in fuel poverty unless the Treasury allocates more money to tackle the problem in the upcoming Budget, campaigners have warned.
National Energy Action (NEA), responding to the BEIS (business, energy and industrial strategy) department’s recent revision to its Fuel Poverty Strategy, describes as ‘disappointing’ the decision not to commit any further funding to energy efficiency in last month’s spending round.
The Committee on Fuel Poverty, the government’s own statutory adviser on the issue, has calculated that £1 billion must be allocated by 2021 in order to achieve the Fuel Poverty Strategy’s first milestone, that all fuel poor homes should be improved to EPC Band E by 2020.
The response, seen by Utility Week, recommends allocating a further £1.8 billion from 2022 to 2025 in order to achieve the second 2025 milestone to bring such homes up to Band D en route to the statutory target of Band C by 2030.
Pointing to these figures, the NEA’s response says: “Without taking advantage of upcoming fiscal events this year, the first milestone will be missed and over 160,000 fuel-poor households could still be living in the least efficient homes by 2020 in England and the delayed cost of inaction will further backload delivery of the 2030 statutory target.
“Without enhancing current efforts, climate change targets will not be met, and poorer households will benefit the least from energy policies, whilst paying a higher share of the costs, despite making lower contributions to our overall emissions.”
NEA backs the government’s proposal in the draft strategy to replace the existing measure of fuel poverty, which uses a relative measure that results in many households dropping in and out of fuel poverty, with the simpler LILEE (Low Income Low Energy Efficiency).
This says that all households living in properties with a rating of Band D or below should be classed as fuel poor if they are pushed below the poverty line by power bills.
But it warns that the introduction of this measure, which will increase the number of fuel poor households by more than a million, would ‘only serve to make it more crucial to commit to adequate investment’.
The NEA also says it is ‘critical’ the Warm Home Discount, which obliges larger suppliers to offer a £140 discount on electricity bills for fuel poor pensioners, should be extended beyond its current cut-off date of 2021.
And the pressure group urges the government to adopt bring forward the Band C target to 2025.
“This more ambitious timeline is practical and would result in the poorest households realising the benefits of significant energy efficiency improvements over a longer period.”