Labour came to power in 1997 determined to tackle fuel poverty. In 2001 the Government pledged to end fuel poverty for vulnerable households by 2010 and for everyone by 2016. [Vulnerable households are defined as ones with a pensioner, child or someone who is disabled or suffering from a long term illness.]

Initially there was considerable success and the number of UK households in fuel poverty fell from 4 million in 1996 to 2 million in 2003. However, by 2006 that had risen again to 3.5 million (2.75 million of which were vulnerable households).

Somebody is said to be living in fuel poverty if they need to spend more than 10% of their income in heating their home.

There are three main reasons why people fall into fuel poverty:

• Household income
• Energy efficiency of their home
• Energy prices

One angle of attack has been to raise household incomes, through, for instance, winter fuel payments to pensioners which were introduced in 1997 by Gordon Brown. Some have called for them to be extended to groups such as families with disabled children as well. However, their success is linked to energy efficiency since extra spending on heating can be wasted through poor insulation.

Saving energy is also essential if we are to tackle climate change. The key aspect of the Government’s attempts to increase the energy efficiency of low-income households is the Warm Front programme which since 2000 has helped over 1.7 million households. Under this, every household qualifies for at least 50% off loft and cavity wall insulation as well as other energy saving devices such as low energy light bulbs.11 million lower income and pensioner households qualify for help free of charge.

In September, the Community Energy Saving Programme (CESP) was launched in areas where fuel poverty is a particular problem in order to make people aware of the help available. The Pre-Budget Report also brought forward £50 million of investment in Warm Front and provided an additional £100 million.

Nevertheless, there are problems that need to be addressed. Some people in need lose out because they fail to claim the qualifying benefits such as pension credit. Where people are eligible they may face a long wait because of a shortage of local skilled labour to do the work.

Of the three basic reasons for fuel poverty, energy prices have attracted the most controversy.

As fuel prices rose sharply last year, there were loud calls for a windfall tax on energy suppliers. The Government has pressured energy companies to contribute more to the Warm Front Programme, to provide lower or social tariffs to customers on low-income and to identify those who would benefit from them.

Unfortunately, social tariffs do not operate as well as they could. People are often unaware that they exist and suppliers do not seem to make great efforts to identify those of their customers who are fuel poor. Furthermore, only 2 out of the 6 big energy companies offer genuine social tariffs. Others have schemes that are overly complex and the social tariffs may not even be the lowest tariff that the company offers.

What is worse, those on low-income can actually end up paying over a third more for their gas and electricity if they use pre-payment meters rather than paying by direct debit.

There is clearly a need for greater action by central government to put pressure on companies to provide real social tariffs and increase funding for the Warm Front programme.

Local authorities could also play a key role in coordinating the fuel poverty programme. Local agencies such as social services, health services and the voluntary sector are best placed to know who needs help most. Local authorities could also ensure that there are sufficient skilled workers in an area to carry out the insulation work and check that it is actually done. There is much talk of green jobs and this is an area where they are needed at a time when there is a downturn in construction.

The Government has taken a significant step in the right direction with its new Heat and Energy Saving Plan which aims to deliver the biggest programme of energy improvement since the conversion to North Sea Gas in the 1960s. This will offer every home an ‘energy audit’, require energy suppliers to contribute an extra £350 million for energy efficiency and see local authorities and community groups working with energy providers to identify those most in need.  

Fuel poverty remains a stubborn problem and we need concerted action of this kind by both local and central government to ensure that energy companies have a sense of public spirit and realise that they are providing a service that meets a basic human need, fuel to cook and keep warm, not a luxury accessory.

[The House Magazine is published weekly and contains information on people, policy and politics at Westminster. It is managed by a cross-party editorial team of MPs and overseen by a panel of senior parliamentarians]