A Fuel Poverty Free Scotland

A Fuel Poverty Free Scotland

Kevin Kane

Approximately one third of Scottish households live in fuel poverty.  According to the latest statistics, 649,000 households were fuel poor and 183,000 households were living in extreme fuel poverty in 2016-17 (Scottish House Condition Survey, 2017). 

The current definition of fuel poverty is as follows:

A household is in fuel poverty if, in order to maintain a satisfactory heating regime, it would be required to spend more than 10% of its income on all household fuel use. If over 20% of income is required, then this is termed as being in extreme fuel poverty.
(The Scottish Fuel Poverty Statement, 2002).

Due to concerns that this definition of fuel poverty is too broad and does not target those most in need, the Scottish Government arranged for an independent review to propose a new definition.  This definition is likely to be included (following the consultation process) in the Scottish Government’s new fuel poverty strategy which will be enshrined in the forthcoming Warm Homes Bill.  Under the newly proposed definition, households in Scotland are in fuel poverty if:

  • They need to spend more than 10% of their after housing cost (AHC) income on heating and electricity in order to attain a healthy indoor environment that is commensurate with their vulnerability status; and
  • If these housing and fuel costs were deducted, they would have less than 90% of Scotland’s Minimum Income Standard (MIS1) as their residual income from which to pay for all the other core necessities commensurate with a decent standard of living (Scottish Government, 2017c).

 Simply put, this definition states that once a household has paid for its housing, it is in fuel poverty if it needs more than 10% of its remaining income to pay for its energy needs.  The new definition introduces an income threshold to the fuel poverty definition, so higher income households are excluded from being defined as fuel poor, which addresses a common criticism of the old definition.  In short, if you can afford to turn your heating up full bung every day you are not fuel poor!

Eat or Heat? The Harms of Fuel Poverty

There is a high prevalence of fuel poverty among households where someone is living with a long term illness or disability, and those living in older housing and housing with a low energy efficiency rating.   Rural areas experience higher rates of fuel poverty due to a number of reasons, including limited access to mains gas; larger, detached dwellings; and more exposure to wind and weather.  Under the new definition of fuel poverty, while rates remain unchanged, the prevalence shifts away from older owner occupiers, towards younger people, particularly lone parents, and private renters.

Fuel poverty is a serious issue because affordable warmth and energy use is a basic need that must be met in order for people to thrive and be healthy.  Fuel poverty has a direct impact on health, particularly for those with respiratory conditions and heart disorders.  It is associated with a higher risk of mortality and increased morbidity rates – excess winter mortality figures for 2016/17 were 2,720 (Winter Mortality in Scotland, 2016/17, NRS).  It is also detrimental to mental health because of the financial strain it places on households.    Living in fuel poverty means living with discomfort and debt (massive source of stress) – it affects how much income a family has to spend on other basic items and households may have to choose between eating well and heating their home adequately.  It indirectly impacts on well-being and life opportunities – it has been found that long periods of living in poor heated accommodation is significantly associated with a child having no quiet place at home to do homework, which lowers their educational attainment and impacts on work opportunities in later life (Marmont Review Team, 2011).

The main drivers of fuel poverty are income, energy prices, energy performance and energy use, so it is undoubtedly a complex issue.  Alongside increasing long term income for fuel poor households (and great strides have been taken in this area through initiatives such as the Poverty Alliance’s Scottish Living Wage), there are at present a number of other opportunities for change to tackle the drivers of fuel poverty.  These include contributing to the development of the new Scottish Government fuel poverty strategy, pressing for the creation of a publicly owned energy company, tackling high energy prices, utilising recently devolved welfare powers, working with frontline partnership organisations to direct targeted interventions at those most in need, improving the energy efficiency of homes, new regulations in the housing sector, (particularly for those in the private rented sector) and improving how energy is used by households.

Development of a New Scottish Fuel Poverty Strategy

The Scottish Government failed in its ambitious pledge to eradicate fuel poverty in Scotland “as far as reasonably practicable” by November 2016 (as detailed in the Housing (Scotland) Act 2001).  That this target was missed is partly attributed to factors out with the Government’s control, such as the steep rise in fuel prices.  However, the failure to meet this pledge creates the opportunity for campaigners to lobby for a renewed approach to fuel poverty, one which is firmly based on the principle of social justice, and rooted in efforts to create a fairer and more equal society.  It is reassuring therefore that the Scottish Government believes:

“There is a growing need to reframe how fuel poverty is defined in Scotland, with greater prominence being accorded to issues of energy injustice and inequality. Over and above the classic metrics of income and required energy cost, therefore, a new definition should capture the lived experiences of people affected by fuel poverty, especially those for whom energy costs incur enduring hardship and adversity.”

(Scottish Government, 2016)

The Government is currently welcoming consultation responses on its new fuel poverty strategy (closing February 2018).  This strategy will be enshrined in the Government’s forthcoming Warm Homes Bill.  This provides an ideal opportunity to shape Scotland’s approach to tackling fuel poverty.  Interested parties and organisations can press the Government to commit to new targets on fuel poverty and to base its approach on a statutory framework.  You can access the consultation documents here.

What else can be done to eradicate fuel poverty?

Publicly Owned Energy Company

In October, 2017, the First Minister announced her intention to develop a publicly-owned not-for-profit energy company (POEC).   The Scottish Government’s long term energy plan published at the end of 2017 indicated the aim was for this to be operational by 2021 with further engagement on the issue planned for the end of 2018 (Scottish Government, 2017c). The development of a POEC would ensure affordable energy is accessible to everyone in Scotland. This is good news. However, anti-poverty campaigners must seek assurances from the Scottish Government that any new publicly owned energy company benefits those in fuel poor households.

Tackling High Energy Prices

A publicly owned energy company has the potential to make significant improvements in this area, but while such an initiative is being explored, there are other avenues to address high energy prices.  High energy bills create hardship for lower income households.  Additionally, poor households often have to pay a “poverty premium” on energy, with pre-payment meters meaning even higher energy costs.  Energy is a reserved area so ire must be directed at Westminster.  Sympathetic MPs must put pressure on Ofgem for stricter regulation of the UK energy market and targeted action on energy providers is required.

Utilising Devolved Powers

The Scottish Government should review devolved welfare and social security policies to explore how they could act to alleviate fuel poverty, including those powers more recently devolved such as Winter Fuel Payments and Cold Weather Payments, and the Energy Company Obligation (which requires the big six energy suppliers to help householders save on their energy bills and carbon emissions).  It is expected the Scottish Government will look to use these new powers from April 2018, so there is an opportunity to urge the Scottish Government to explore potential solutions, while also lobbying for reform at UK level.

Highlands and Islands

The Highlands and Islands is a net exporter of energy, yet despite this, energy users in the Highlands pay a 2p per unit surcharge, which exacerbates the already high levels of fuel poverty in rural areas.  The campaign to abolish the surcharge levied at Highland energy consumers has been running for some time, with Kate Forbes, SNP MSP for Skye, Lochaber and Badenoch recently picking up her constituency predecessor, Dave Thompson’s, baton for change on this issue.  There is popular will in the Highlands for abolishing the 2p surcharge and so all political hues should get behind Kate’s renewed campaign.

Energy Performance: Regulation of the Private Rented Sector

Under the new definition of fuel poverty, there is a more accurate reflection of who is affected by fuel poverty and high levels are found amongst those living in privately rented accommodation.  Therefore, the development of Scotland’s new fuel poverty strategy provides the ideal opportunity for greater regulation of the private rented sector. 

Scotland’s Energy Efficiency Programme (SEEP) is currently being developed and will form part of the Scottish Government’s fuel poverty strategy.  The aim is to improve the energy efficiency rating of buildings over the long term with the eradication of fuel poverty at the heart of this programme.  There should be a push for SEEP to include regulation of the private rented sector to secure greater energy efficiency.  This regulation, as part of the new fuel poverty strategy, could include introducing a minimum standard of energy performance which properties must comply with in order to be leased.  For housing more generally, there could also be a duty for local authorities to produce Local Heat and Energy Efficiency Strategies with powers for local authorities to enforce minimum energy efficiency standards.

Energy Use: Direct Support for Those at Risk

An increased understanding by households of how to use energy in the home could also contribute to reducing fuel poverty.  The Scottish Government’s consultation on the new fuel poverty strategy suggests “local agencies should put in place training and skills development that support front line staff to identify challenges people face in sustaining good health and wellbeing, including signs of fuel poverty or the risk of fuel poverty, and make appropriate referrals to specialist advice and support services” (Scottish Government, 2017b).  There is a need to collaborate at community level to identify the most fuel deprived and to deliver fuel poverty programmes to them.  Therefore, it is important to encourage Partnership Working with frontline services, such as social work and health, to deliver training to their staff to identify those most at risk of fuel poverty and refer them to specialist advice and support.  There is an opportunity here to develop fuel poverty programmes with Housing Groups, to provide a service to their tenants where those at risk of fuel poverty are identified and supported with identifying ways to improve their energy use, change to cheaper energy tariffs and smart meters and to check residents are receiving all benefits they are entitled to which could help them with their energy costs.  Crucially, this would provide quality, direct, support for vulnerable households

Conclusion

If anyone is struggling to comprehend what “fuel poverty” means for people living it in reality, it is when a child lies shivering by a temperamental 4 bar electrical heater which is the only source of heat available in the home.  It is houses crawling with damp, where its inhabitants dress as if they are going to attend the George Square Christmas market.  It is boiling a kettle to warm up a basin of cold water to wash the baby in, because the pre-payment gas meter has ran out of emergency credit and so no hot running water is available.  It is standing in the queue of the local shop with a gas and lekky card in one hand and messages in the other, realising you can’t afford both, and pondering whether eating or heating is more important, before pocketing the electricity card or laying down the bread and dozen eggs.  It is a disgrace that anyone in an energy rich country like Scotland should be faced with this dilemma.

We know the Scottish Government do not have power over energy price regulation. However, they can still be a positive beacon for change and should not be afraid to tackle the big energy providers head on.  Along with anti-poverty campaigners and groups, the Scottish Government can be a powerful voice for change, so the fuel poverty free Scotland we all wish to see finally becomes a reality.

Follow me on Twitter – @Kanekane2014 

 

 

References

}Marmot Review Team (2011) The Health Impacts of Cold Homes and Fuel Poverty, Report produced for Friends of the Earth.

}Scottish Government (2017a) Scottish House Condition Survey 2016: Key Findings. Available at: http://www.gov.scot/Topics/Statistics/SHCS

}Scottish Government (2017b) Consultation on a Fuel Poverty Strategy for Scotland, November 2017.

}Scottish Government (2017c) Scottish Energy Strategy: The Future of Energy in Scotland, December 2017.

}Scottish Government (2016) A Scotland without fuel poverty is a fairer Scotland: Four steps to achieving sustainable, affordable and attainable warmth and energy use for all, Report of the Scottish Fuel Poverty Strategic Working Group to the Cabinet Secretary for Communities, October 2016

Scottish Executive (2002) Scottish Fuel Poverty Statement, available at: http://www.gov.scot/Publications/2002/08/15258/9951

 

 

 

 

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