Osborne’s dash for gas will worsen fuel poverty

Autumn Statement 2012: George Osborne's 'Dash for Gas' is not only environmentally ruinous but will also worsen fuel poverty, writes nef's James Angel.


James Angel is a social policy intern at the new economics foundation (nef)

Alongside the autumn statement yesterday came George Osborne’s ‘gas strategy’, designed, in his words, “to make the best use of the lower cost of gas power”. The reality is the cost of gas is rising, with devastating environmental and social implications.

As well as spelling disaster for the climate, the problem Osborne is so desperately trying to obscure is the rising cost of gas is, in reality, the main factor driving up energy bills. Ofgem estimates that of the £150 average energy bill increase last year, £100 of this was due to the rising cost of gas. What’s more, experts say the only way is up.

The chancellor claims:

“We don’t want British businesses and families to be left behind as gas prices tumble on the other side of the Atlantic.”

Did he miss the ECC’s recent report that said shale “will not be a ‘cheap’ source of gas and there is unlikely to be a repeat of the US experience”? All of the evidence says that, while the advent of shale gas may have brought down gas prices in the US, this could not happen in the UK. Instead, it is the costs of renewables that are quickly declining.

The social impact of gas on our energy bills is that one in four UK homes are now in fuel poverty.

Using World Health Organization estimates, 7,200 of last year’s 24,000 excess winter deaths were a result of cold homes; deaths from hypothermia have doubled over the past five years.

Millions of people are being forced to choose between heating and eating. Fuel bill debt is spiralling out of control and the NHS is left saddled with a £1.36 billion burden spent on treating the health impacts of cold homes. Osborne’s decision to dash for gas instead of renewables will only exacerbate what is already a national scandal.

The situation is compounded by austerity, ever-worsening inequalities, falling wages and rising food prices (the latter of which is being driven by climate change and so will also be intensified by more gas). The money available to support those in fuel poverty has already been cut by a quarter, while energy efficiency measures for the fuel poor have been slashed by 44%.

Yesterday’s autumn statement announcement of deeper cuts will make the bills bite even harder. Meanwhile, the profit-margins of the Big Six energy companies increased by 700 per cent in a five-month period last year.

Things don’t have to be this way. Choosing renewables over gas would bring down bills, tackle climate change, create jobs and save the economy£20bn a year. What’s more, renewable energy naturally lends itself to decentralisation and democratic community control and, as such, could form the basis of a re-organised society that allows communities to benefit from and have control over their energy.

We’re catching a glimpse of this in the co-operative energy projects emerging in towns and cities across the country, from Brixton to Bristol to Brighton. These projects have emerged alongside a new and diverse social movement against the dash for gas which has seen gas power stations occupied and pensioners demonstrating outside the Treasury in the context of a surge of public support for renewables.

The battle for our energy future has begun.

This article was first published on the nef blog.

See also:

Graph: UK energy consumption by sectorNovember 29th, 2012

Osborne’s ‘dash for gas’ dashes hopes for growthDecember 4th, 2012

“One Planet” Labour: Miliband and Balls a welcome contrast to gas-loving OsborneNovember 27th, 2012

The new dash for gas is utter follyMarch 20th, 2012

Shale gas is not the answer to our energy problems – and here’s whySeptember 15th, 2011

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