Britain's 'fuel poverty' rises to 5.5M

July 18, 2011 at 6:30 AM
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LONDON, July 18 (UPI) -- One million more U.S. households fell into "fuel poverty" in 2009, bringing the total to 5.5 million, a government report indicates.

Some 4.5 million households were deemed to be in fuel poverty in the United Kingdom in 2008, up from 4 million the previous year, Britain's Department of Energy and Climate Change said in an analysis released last week.

The government agency says a household is in fuel poverty if it needs to spend more than 10 percent of its income on fuel to maintain an adequate level of warmth (usually defined as 70 degrees for the main living area, and 64.5 degrees for other occupied rooms).

Of those 5.5 million homes in fuel poverty in 2009, some 4.5 million of them were "vulnerable" households, defined as one that contains the elderly, children or somebody who is disabled or long-term sick.

DECC researchers blamed the growing fuel poverty on "rising fuel prices." Gas prices, they said, rose 14 percent while electricity prices went up 5 percent from 2008-09.

The DECC report came only days after British Gas announced it would hike consumer gas prices an average of 18 percent and electricity bills 16 percent. Scottish Power has already raised gas prices 19 percent and electricity 10 percent.

The rest of the "Big Six" British power companies -- npower, E.ON, EDF and Scottish and Southern -- are expected to follow suit. Some 99 percent of British residents receive their electricity from one of the Big Six utilities.

British Gas, Energy and Climate Change Secretary Chris Huhne said he would "refuse to stand by and watch this happen" and promised to push the Big Six suppliers "to help their customers overhaul their drafty homes and understand the best tariffs on offer and I'm backing new entrants to bring more competition to the market."

"The uncomfortable truth is Britain's consumers are being buffeted by the violent and unpredictable winds of global fossil fuel prices," Huhne said, noting that France, which derives 74 percent of its electricity needs from nuclear power, saw its energy prices rise only 3 percent this year.

"The U.K. electricity market has to change, so that we escape the cycle of fossil fuel addiction. Alternatives like renewables and nuclear power must be allowed to become the dominant component of our energy mix," he said.

The DECC report, however, seriously underestimates the number of Britons who are actually struggling to pay to meet their fuel bills, asserted Consumer Focus, an energy consumer advocacy group partially funded by the British Department for Business, Innovation and Skills.

"Worryingly, the predictions for fuel poverty in 2011 are likely to be an underestimate as four of the Big Six have yet to announce their expected price rises," Consumer Focus Director of Energy Audrey Gallacher said.

"If these are in line with the increases announced from British Gas and Scottish Power, around 12 million people, or 6.4 million British households, are likely to be in fuel poverty when the latest price rises hit."

Gallacher blamed rising prices on the high up-front costs of developing renewable energies and called on the government better target help to low-income households through energy efficiency programs.

"Given the scale of the problem, however, these schemes alone are not enough to tackle it. This must be one part of a broader coherent U.K. government strategy to help those living in fuel poverty," she said.

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