Thu, Dec 30, 2010 - Page 9 News List

Cold claims lives while energy firms get rich

Successive governments have allowed Britain’s privatized, liberalized utility companies to get away with murder

By George Monbiot  /  The Guardian, LONDON


Were you to list the factors that distinguish civilization from barbarism, this would come close to the top: The elderly are not left to die of cold.

By this measure the UK is a cruel land. Although we usually have one of the smallest differences between winter and summer temperatures at these latitudes, we have one of the highest levels of excess winter deaths. Roughly twice as many people, per capita, die in the UK than in Scandinavia. Even Siberia has lower levels than we do. Between 25,000 and 30,000 people a year are hastened to the grave by the cold in the UK — this winter it could be much worse.

Why? Inequality. We have an economic elite untouched by the ills afflicting other people. It survives all changes of government. Its need for profit outweighs other people’s need for survival. Here’s how our brutal system operates:

Fuel poverty is defined as having to spend 10 percent or more of your income on keeping your home at a decent temperature. Between 2003 and 2008 (the latest available figures) the number of households in fuel poverty here rose from 2 million to 4.5 million. That’s not people; that’s households: This blight now afflicts 18 percent of the UK’s population. Yet since 2000 more than £25 billion (US$38.5 billion) of our money has been spent on programs ostensibly designed to prevent it. Admittedly, much of this spending doesn’t really have anything to do with fuel. The winter fuel payment is, in truth, a universal pension supplement that people can spend as they wish: It helps large numbers of the elderly to get by. However, most of the other spending programs are ill-conceived, unfair and unfocused.

Even before the coalition took office, the government’s statutory advisers estimated that 7 million households would be fuel-poor by 2016, which happens to be the date by which New Labour pledged to eliminate fuel poverty. As the incomes of the poor fall and the Tories deregulate further, it could get worse.

The main reason is that the privatized, liberalized utility companies have been allowed to get away with murder. In her book Fixing Fuel Poverty, Brenda Boardman shows fuel poverty has risen so steeply because public control over the energy companies is so weak. In 2002 the regulator, Ofgem, decided it would stop regulating consumer prices. The energy companies immediately increased their profit margins, tenfold in one case. When world energy prices rise, the companies raise their tariffs, often far more steeply than the wholesale price justifies. When they fall, domestic prices often stay where they are.

The price rises are exacerbated by policies that penalize the poor. People who use pre-payment meters to buy gas and electricity (often the poorest) are stung for an extra £120 a year. Those who consume the most energy (generally the rich) are subsidized by everyone else. They pay a lower tariff beyond a certain level of use. It ought to be the other way round. The first units you consume should be the cheapest. Before the election both the Conservatives and the Liberal Democrats demanded an inquiry into competition in the energy market. They’re not demanding it any more.

There should be a perfect synergy between climate change and social justice policies. As the Commons energy and climate change committee points out, “improving the energy efficiency of homes is the most effective way of tackling fuel poverty.” However, the government’s green policies are unfair and regressive. Everyone pays at an equal rate for reducing energy emissions, yet those who need the most help to green their homes and reduce their costs don’t get it. Policies such as the European emissions trading system, the carbon emissions reduction target and the feed-in tariff are, according to the government’s climate change committee, likely to throw another 1.7 million people into fuel poverty by 2022. This is an outrage.

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