Living in the cold

As part of the Bevan Foundation’s #joinagainstpoverty campaign, Steffan Evans reflects on why the Welsh Government did not succeed in its aims of eradicating fuel poverty by 2018.

As the nights draw in and temperatures drop, many of us will be turning up the central heating, but for some people, keeping warm is a real struggle. This is not a problem that only affects a handful of people in Wales.

155,000 households live in fuel poverty, despite a Welsh Government target of eradicating the problem by 2018. What has gone wrong and why are there still so many people struggling to keep their homes adequately heated in 2019?

First, it is worth noting that the Welsh Government has made some progress in reducing fuel poverty over the last decade. In 2008, 332,000 households lived in fuel poverty or 26% of all households. The number of households living in fuel poverty has therefore more than halved with the proportion living in poverty dropping to 12%. This reduction has not affected everyone in Wales uniformly, however.

When breaking down the number of people living in poverty by income deciles an interesting picture emerges with regards to where the reduction in fuel poverty has come from. In 2008, of the 70% richest households, 83,048 were estimated to live in fuel poverty. By 2018 that number was 75% lower, with 21,000 households living in fuel poverty. For the bottom tenth however, the number of people living in fuel poverty had only dropped by 25%, from 119,000 to 92,000 households. This perhaps provides an indication as to why the Welsh Government has failed in its target to eradicate fuel poverty.

To date much of the focus of the Welsh Government’s work on fuel poverty has been on promoting energy efficiency in homes, with the Welsh Government spending £252 million on its Warm Homes programme. Energy inefficient homes is only one of the drivers of fuel poverty, however, with low incomes and high energy bills also having an impact. An individual can live in a very energy efficient home, for example, but if they are on a very low income even relatively modest energy bills can push them into fuel poverty. This perhaps explains why there has been a sharper decline in the number of households living in fuel poverty amongst wealthier households than in poorer households.

This also flags up another issue with the Welsh Government’s target to eradicate fuel poverty by 2018. Whilst the Welsh Government does have some powers that it can use to increase incomes, many of the key policy leavers remain at Westminster, whilst the Welsh Government has very limited powers that could impact on the price of energy. Given that the Welsh Government only has significant control over one of the drivers of fuel poverty, energy efficiency, adopting a target of eradicating fuel poverty by 2018 was always overambitious.

What is clear however, is that as the Welsh Government seeks to adopt a new fuel poverty strategy, its focus must be on those households who are living in poverty. At present a household is said to live in fuel poverty in Wales if they spend more than 10% of their income on fuel costs. Whilst this may be a good measure of homes that are expensive to heat, it is not a good measure of poverty. A high-income household who lives in a large detached house, may have expensive fuel costs, but if they have sufficient income to enjoy a good standard of living after covering these then it seems inaccurate as describing them as living in any form of poverty. A low-income household, however, who may have a smaller bill, could face real hardship as they try to heat their home this winter.

We believe that the Welsh Government’s focus should be on those poorer households. In both England and Scotland, new measures have recently been adopted that try to more accurately capture those households that pushed into poverty by their fuel costs. We believe that the Welsh Government should consider adopting a similar approach so that its activities over the next decade are targeted at those households trapped in poverty.

To assist the Bevan Foundation to continue our work on this and more then join us today.A Wales without poverty is more than just a slogan or a soundbite – it is a better future that we all need to work hard for. Please will you join us against poverty today?

Steffan Evans is a Policy and Research Officer at the Bevan Foundation