To take my mind off wondering whether I should take my cash out of the bank and bury it in the vegetable patch, I’ve been wading through the government’s new insulation scheme, greeted by a slow hand clap in September. If you recall, some people had hoped for a windfall tax on energy companies to help those on low incomes pay for fuel. So to be told they should lag their lofts instead was as popular as Centrica boss Jake Ulrich’s suggestion we wear two jumpers.
Getting down to the nitty gritty, some parts of the scheme – while worthy – seem to be window dressing on measures that already exist. Downing Street says companies will invest £910m in making homes more energy efficient, possibly saving us £300 a year. But the £910m is over three years –just over £300m a year – not much compared to the £2.8bn companies were already spending.
£560m goes to the Carbon Emissions Reduction Target programme, subsidising loft and cavity wall insulation. Every household gets at least 50 per cent off their insulation and 11m households get it free. The remaining cash funds a Community Energy Saving Programme in which energy companies etc. will knock on doors in poorer areas to encourage customers to save energy. Plus fuel duty has also been frozen and the winter fuel payment increased by £50.
The government also wants more people to pay by direct debit. But many customers don’t want to and others have pre-payment meters because of credit problems. At least Ofgem is finally cracking down on companies charging more for pre-payment or cheque payment.
Help the Aged, which along with Friends of the Earth is suing the government for failing to tackle fuel poverty, reacted angrily to the insulation proposals, calling them "mediocre". But fuel poverty charity National Energy Action welcomed them and the community approach in deprived areas, although it fears the scheme don’t go far enough.
“NEA has campaigned for a national energy efficiency programme for a very long time, on the basis that most households pay significantly higher energy prices, irrespective of the market, than they need to and, in particular, this can lift many vulnerable households away from fuel poverty,” a NEA spokesman told me. “We welcome the government addressing this issue. It should also go some way to reducing our carbon footprint. However, we are concerned that the scheme does not offer much assistance for people suffering this winter.”
The charity is also pleased that Ofgem’s report this week is targeting unfair practices, such as charging customers on pre-payment meters a premium of up to 9 per cent. “This is often the only choice for customers in debt to energy companies,” explains the spokesman. “Ofgem’s proposals for some kind of price control to stop overcharging, and improved controls over sales practices are practical and very welcome.”
So perhaps we are slowly getting somewhere. The government says it’s writing to us to explain how to save energy, so none of us have any excuses. “No-one will be able to say they do not know how to reduce their energy bill” it warns in a somewhat headmasterly fashion in a statement on the Downing Street website.
But it’s getting colder and, I don’t know about you, but I’ve yet to receive any love letters from Gordon in the post. Perhaps he’s too busy propping up the banks. What’s more, NEA reckons there are actually 4m households in fuel poverty – not 3.5m as the government claims – because of lags in data collection. It’s doubtful whether the proposals will gather enough momentum to save these customers money quickly enough this winter.
It will be interesting to see whether knocking on doors makes a difference to energy usage in deprived areas, too. According to Green Building Magazine, the government’s Warm Front programme hasn’t actually cut usage in poorer parts of the country.
Have you benefited from the government insulation scheme? Leave a message and let me know.