Fuel Poverty

Submitted by AWL on 6 June, 2008 - 12:11 Author: Tom Unterrainer

According to the Treasury at least 2.5 million British households (around one in ten) suffer from fuel poverty (Energywatch puts the figure at 4 million, 16% of all households). Households in fuel poverty are those that spend more than 10% of combined income on gas and electricity.

In February this year the Fuel Poverty Action Group accused government of not doing enough to meet its target of eradicating fuel poverty by 2010. In previous budgets the government increased winter fuel allowances for the elderly and took other measures to create "good news" by specifically targeting grants and loans at economically precarious groups. Alistair Darling told the BBC that he was putting pressure on power companies to help "get people on to lower tariffs, helping people to insulate their homes".

None of this will help the millions of workers faced with low pay and spiralling living costs. The government now faces the problem of combating wide-spread and precipitous increases in the cost of fuel and FPAG claims that New Labour is unwilling to take action.

Since January the big power firms have increased gas and electricity prices by between 10% and 30%. They lay the blame for these increases on a jump in wholesale fuel costs, but in relative terms fuel prices are lower than the recent high point in 2006. At the same time, companies like British Gas have revealed record profits.

The Economist reports that "Households have been feeling the pinch since 2004 as a result of rising prices, taxes and the cost of servicing debt. The squeeze intensified in 2006 and 2007 ... Now higher oil prices are, in effect, levying a big extra tax on consumers" ('Pistol pointed at the heart', 31 May 2008).

Brown and Darling recognise that rising fuel costs are a problem, the ameliorative measures for the elderly and vulnerable demonstrate this. But they are unwilling to recognise the growing impact on the ranks of low paid workers. Rather, they aim to intensify the problems by holding down wages, implementing effective pay cuts in the public sector.

A response to fuel poverty must be combined with an overall offensive by the trade unions against low wages.

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