Believe it or not, we are living in the seventh wealthiest country in the world, at a time when GDP is growing at one of the fastest rates amongst developed countries. Yet how can this be, when last month it was reported that recipients of items from food banks were forced to return tins of food because they couldn’t afford to heat them up in their kitchen?
Photo: Sunday Times
A crisis point has been reached. 7,800 deaths each winter have been attributable to cold housing. It is not only affecting the elderly: amongst children, indoor mould from cold bedrooms is a major cause for serious lung conditions. The recent 8% rise in energy prices is certainly a significant cause, yet, amazingly, the UK still has one of the lowest prices for energy (per kWh) in Europe.
The major culprit is poor insulation. Unfortunately, fitting solid wall insulation, for example, costs well in excess of £5000. The government is telling us all to take out a loan from the ‘Green Deal’ scheme, but the interest rates are ridiculously high, making it completely unrealistic for households on low incomes. Fortunately, there are already some grants available through the ‘Energy Company Obligation’, but the existing funds can only scratch the surface of the true scale of the problem.
One possible solution is being proposed by the ‘Energy Bill Revolution’. This is a campaign to use the £4 bn per year raised from carbon pricing (mainly the EU emissions trading scheme) to undertake a radical package of energy efficiency grants for 600,000 vulnerable houses every year. This finance for new boilers and insulation would reduce energy bills by £310 amongst those who simply cannot afford basic heating as things currently stand. The bonus would be a cut in CO2 emissions of around eight million tonnes per year, equivalent to the annual emissions of a coal power plant.
There are, however, several downsides to the campaign. Firstly, what happens to the source of funding for the grants if the carbon price falls? Secondly, general government services would have to be cut, since this is how the emissions trading revenues are being spent at the moment (although the cut would be fairly minor). Lastly, there are criticisms that green taxes themselves should be scrapped, because the charges fall disproportionately upon poorer households that spend a larger portion of their earnings on heating and electricity; and compensating with insulation grants might become too bureaucratic. Despite the objections, over 200 MPs have already signed the campaign’s petition; and through careful policy-making these obstacles can be overcome.
Compared to other schemes, the Energy Bill Revolution seems to be one of our best hopes of tackling the twin crises of fuel poverty and extreme climate change. It represents a genuine long-term solution, unlike Ed Milliband’s more crowd-pleased policy of capping energy prices, or David Cameron’s intentions to abolish green levies.