Energy levy cuts may increase fuel poverty
The Government's shake-up of energy levies, worth an average saving of £50 for British householders, risks pushing more Westcountry households into fuel poverty, it has been warned.
Chancellor George Osborne has confirmed that the cost of some energy efficiency and social schemes will be rolled back in tomorrow's Autumn Statement. The cuts include the cost of the energy company obligation (ECO), an insulation scheme delivered by major energy suppliers, in a move that is expected to reduce bills by an average of £30-£35 next year.
But Community Energy Plus, a social enterprise based in Camborne, West Cornwall, said the measures could do long-term damage in Devon and Cornwall, with cuts to a scheme which insulates homes with solid walls.
Chief executive Tim Jones said: "The announcement is yet another example of the Government making knee-jerk London-centric policy changes that will see householders in Cornwall missing out on vital funding to help them future-proof their homes against rising energy prices." He added: "Reducing the Carbon Emissions Reduction Obligation element of ECO by a third is counterintuitive as it will significantly reduce the number of households that will get help to insulate the solid walls of their home, which is the single most effective way of reducing their heating bills over the longer term.
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"In Cornwall, where 35% of homes already face higher heating costs from living in buildings with solid walls which are difficult to keep warm, and where we are more reliant on expensive forms of heating due to limited access to mains gas, this announcement is most certainly not welcome as it has the potential to push many more households into fuel poverty.
"We're all likely to enjoy a short-term gain, but we must not lose sight of the fact that many will face longer-term pain as the problem of inefficient homes leaking heat is not being addressed – the first significant programme to offer insulation solutions for solid wall homes is being severely compromised.
"While energy suppliers have quite rightly faced a barrage of criticism over recent energy price rises, a reduction in the impact of the social programmes is not the magic bullet to cure the ills of the industry – it is instead letting the suppliers of the hook."
An estimated 43,000 households in Devon and Cornwall are classed as being in fuel poverty – where more than 10% of income is spent on domestic fuel.
Energy companies, which recently announced major hikes in prices, have pledged to pass on the savings.
EDF welcomed the move, and said it did not expect to raise prices again before 2015. The firm said: "EDF Energy was the only major energy company to lessen the impact of higher charges in advance because it was confident that action could be taken to reduce costs.
"Following this news, EDF Energy expects to be able to maintain its lower price rise of 3.9%, as anticipated. That decision left customers with bills £80-96 lower than major competitors who had announced price increases.
"The company looks forward to hearing more detail from the Government, but does not anticipate that EDF Energy's prices will rise again in 2014. Customers should expect other energy suppliers to follow EDF Energy's lead by significantly lowering their prices."