On Thursday 21 December, the government released the details of how much the cost of energy has increased by. To say it’s a lot may be the understatement of the year.
Spiralling costs
The Department for Business, Energy, and Industrial Strategy (BEIS) has released its quarterly and monthly consumer price indices of fuel. These document the amount that electricity and gas have gone up by. It found that, in real terms (adjusted for inflation), between July and September 2017 (compared to the same period in 2016 [xls, table ‘highlights’]):
- All domestic fuels increased in cost by 3.2%.
- Electricity went up by 7%.
- Liquid fuels, like kerosene heating oil, went up by 12%.
- Solid fuels, like coal, went up by 0.9%.
Only the price of gas came down, and that was by 1.8%.
Meanwhile, the Office for National Statistics (ONS) reported that real wages for the three months to October 2017 were 0.2% lower than the same period in 2016. So our energy is effectively costing us more, while we have less to pay for it with.
And the spiralling cost of energy just exacerbates the problem of fuel poverty.
Fuel poverty
As The Canary previously reported, the term ‘fuel poverty‘ means a household’s energy costs are above the national median average. That means that, if a household spent this amount, it would leave them officially in poverty by the recognised standard.
In October, the BEIS found that [pdf, p5]:
- The number of households in fuel poverty increased to 2.5 million in 2015 – up from 2.38 million in 2014.
- Fuel poverty contributes to the 25,000 excess winter deaths each year.
- On average it costs a fuel poor household an extra £353 in energy each year compared to the national median amount.
Entrenched problems
Labour’s Shadow Business Secretary Rebecca Long-Bailey told The Canary that the government isn’t doing enough to deal with rising energy prices and fuel poverty:
It is not enough to simply tackle fuel poverty as a stand-alone issue. The government must tackle the causes of fuel poverty. Without investing in the tools businesses need to drive up wages and productivity, wages will continue to stagnate. And without real government effort to reform our broken energy market and insulate homes as an infrastructure priority, families up and down Britain will continue to suffer.
But this problem is not new. As the BEIS figures also show [xls, table “annual”], between 2006 and 2016 real terms electricity prices rose by 35.8% and gas by 43%. The problem of energy prices and fuel poverty is an entrenched one. And it will take a complete rethink by the government to start fixing it.
Get Involved!
– Support the campaign group Taxpayers Against Poverty.
– Read more from The Canary on Energy.
Featured image via Flickr
