Fuel poverty is bigger than the energy companies: government must share responsibility

In September New Power interviewed Derek Lickorish, chair of the Fuel Poverty Advisory Group. He said:

“If we are not careful we are seduced into the notion that this is all about the energy companies. That is very dangerous and suits the government. But who sets the framework? The government.

“Energy companies’ other failure is not pressing government about the strategic issues that are facing the industry. If we don’t get capacity built, and soon, constraints will really drive volatility. The fact that they have been unable to get government to resolve things like the capacity market and contracts for differences –  this is serious.

“We have got ourselves in a very tight spot the consequences of which are difficult to predict. But with even a modicum of economic understanding one knows that faced with a shortage of anything the price will go up.  We will be faced with that unless we are going to not shut down plant at due time – and although on the one hand you can see the rationale for that, on the other it makes a mockery of regulation. It creates a clear case of regulatory uncertainty.”

… “When we give subsidy off bills it is effectively legitimising the waste of energy. It’s a sticking plaster and it does nothing about the long term issue.

“I believe the sacred cow of the winter fuel payment needs a serious look.  It’s £2.1 billion. There is no doubt that when it was originally conceived it was perceived as a pensions supplement rather than a fuel subsidy, so we mustn’t lose sight of that. But equally there are an awful lot of people getting it who don’t need it.

“I would like to see this benefit redistributed by being  properly ring-fenced and invested in the type of  measures we are talking about. If you were to couple that with even 10% of oil and gas revenues that would have a great impact.”


From our interview with Derek Likorish, published in New Power, September 2013. For more details or a copy of this issue contact [email protected]