The Japanese Constitution and Its Economic Policy Consequences
Social consequences of energy policy
1
Viewpoint Social consequences of energy policy connected fall within the hardship categories defined in the Code of Practice which is meant to help them avoid disconnection. There is also a seasonal pattern in mortality statistics which for some groups is more pro- nounced than in a number of overseas countries with more severe winters than the UK. Energy policymakers believe that the social consequences of their policies are the domain of the social services. Here it is argued that a govemmant package should be implemented to improve the relationship between energy and social policy, including a comprehensive insulation programme, improvements in energy conservation and, in some cases, direct financial assistance. Keywords: Energy; Policy; Social effects An underlying theme of energy policy- making in the UK has been that 'sen- sible' energy policies should not be adapted to serve social purposes. Thus, the Department of Energy and the fuel industries take the view that the social consequences of energy policy have nothing to do with them. Fuel pricing policy is based on prin- ciples of long-run marginal cost, so that energy prices can give a message to consumers about the longer term impli- cations of current fuel consumption. These principles have carried the day whether or not they entail prices that are incompatible with consumers being able to afford adequate heat and light at home. Successive governments have argued that, when help has to be given to poorer members of the community to mitigate the effects of rising fuel prices, it should be given through the social security system. However, in practice the help that has been provided has been ad hoc and incremental, and it is clear that governments are institution- ally ill-equipped to approach the problem. Effects of rising prices These themes are addressed by Bradshaw and Harris, 1 who examine the problems and social consequences that have emerged as a result of rising real fuel prices and then look at the policies - such as they are - which have been developed in response. Most of the response has been in terms of trying to raise incomes - through the old Electricity Discount Scheme and in heating additions to supplementary benefit recipients. Meanwhile, the potential of insulation and conser- vation measures has by and large been neglected as a means of alleviating fuel poverty. Yet, without major steps being taken to ensure that people live in well insulated and efficient-to-heat homes, income maintenance policies will be ineffective and costly and will fail to solve the problems people have in paying for the fuel they need. It is not being suggested that the objective of energy policy should be to deal with the wider problems of poverty. It is reognized that energy and social policy will have different aims. However, what has been wrong with energy policy in the past is that it has been made in a vacuum with only the slightest consideration given to the social consequences of the decisions taken. Given that, on average, poorer families spend a higher proportion of their income on fuel than those better off, they are hit harder by rising real energy prices. Moreover, for a signifi- cant number of households, a very large proportion of their spending goes on fuel. (For example, a half of single pensioners living in rented accommo- dation spend more than 12% of their total outgoings on heat and light.) Each year many tens of thousands of house- holds have their electricity or gas cut off because they have not paid their bills and more than 90% of those dis- Increasing costs These social costs, in terms of financial hardship, debt, disconnection and physical distress, will continue to increase unless a package of measures to redress the balance between energy policy and its social consequences is brought forward.: An essential element of such a pack- age must be a major commitment by government to a comprehensive insu- lation programme. This might be organized along the same lines as the North Sea gas conversion programme, with improvements being made in all properties, house by house, street by street, and district by district. Direct financial assistance will be necessary for some consumers, either by adjust- ments in tariffs or more likely by some sort of fuel allowance. Help with budgeting and sensitive fuel board policies in relation to debt will also be required. A conservation-led package would save fuel, create jobs, improve the housing stock, and reduce the risk of debt, disconnection and discomfort. Such policies would be expensive - the insulation element could cost £3 billion phased over a number of years - but so too are the social costs one would be seeking to remove. Toby Harris London Uonathan Bradshaw and Toby Harris, eds, Energy and Social Policy, Routledge and Kegan Paul, London, 1983. 2Some tentative suggestions as to what would consffiute such a package are made in Energy and Social Policy, ibid. 372 ENERGY POLICY December 1983
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Transcript of Social consequences of energy policy
Viewpoint Social consequences of energy policy
connected fall within the hardship categories defined in the Code of Practice which is meant to help them avoid disconnection. There is also a seasonal pattern in mortality statistics which for some groups is more pro- nounced than in a number of overseas countries with more severe winters than the UK.
Energy policymakers believe that the social consequences of their policies are the domain of the social services. Here it is argued that a govemmant package should be implemented to improve the relationship between energy and social policy, including a comprehensive insulation programme, improvements in energy conservation and, in some cases, direct financial assistance.
Keywords: Energy; Policy; Social effects
An underlying theme of energy policy- making in the UK has been that 'sen- sible' energy policies should not be adapted to serve social purposes. Thus, the Department of Energy and the fuel industries take the view that the social consequences of energy policy have nothing to do with them.
Fuel pricing policy is based on prin- ciples of long-run marginal cost, so that energy prices can give a message to consumers about the longer term impli- cations of current fuel consumption. These principles have carried the day whether or not they entail prices that are incompatible with consumers being able to afford adequate heat and light at home.
Successive governments have argued that, when help has to be given to poorer members of the community to mitigate the effects of rising fuel prices, it should be given through the social security system. However, in practice the help that has been provided has been ad hoc and incremental, and it is clear that governments are institution- ally ill-equipped to approach the problem.
E f f e c t s o f r i s i ng prices These themes are addressed by Bradshaw and Harris, 1 who examine the problems and social consequences that have emerged as a result of rising real fuel prices and then look at the policies - such as they are - which have been developed in response. Most of the response has been in terms of trying
to raise incomes - through the old Electricity Discount Scheme and in heating additions to supplementary benefit recipients. Meanwhile, the potential of insulation and conser- vation measures has by and large been neglected as a means of alleviating fuel poverty. Yet, without major steps being taken to ensure that people live in well insulated and efficient-to-heat homes, income maintenance policies will be ineffective and costly and will fail to solve the problems people have in paying for the fuel they need.
It is not being suggested that the objective of energy policy should be to deal with the wider problems of poverty. It is reognized that energy and social policy will have different aims. However, what has been wrong with energy policy in the past is that it has been made in a vacuum with only the slightest consideration given to the social consequences of the decisions taken.
Given that, on average, poorer families spend a higher proportion of their income on fuel than those better off, they are hit harder by rising real energy prices. Moreover, for a signifi- cant number of households, a very large proportion of their spending goes on fuel. (For example, a half of single pensioners living in rented accommo- dation spend more than 12% of their total outgoings on heat and light.) Each year many tens of thousands of house- holds have their electricity or gas cut off because they have not paid their bills and more than 90% of those dis-
Increasing costs These social costs, in terms of financial hardship, debt, disconnection and physical distress, will continue to increase unless a package of measures to redress the balance between energy policy and its social consequences is brought forward.:
An essential element of such a pack- age must be a major commitment by government to a comprehensive insu- lation programme. This might be organized along the same lines as the North Sea gas conversion programme, with improvements being made in all properties, house by house, street by street, and district by district. Direct financial assistance will be necessary for some consumers, either by adjust- ments in tariffs or more likely by some sort of fuel allowance. Help with budgeting and sensitive fuel board policies in relation to debt will also be required.
A conservation-led package would save fuel, create jobs, improve the housing stock, and reduce the risk of debt, disconnection and discomfort. Such policies would be expensive - the insulation element could cost £3 billion phased over a number of years - but so too are the social costs one would be seeking to remove.
Toby Harris London
Uonathan Bradshaw and Toby Harris, eds, Energy and Social Policy, Routledge and Kegan Paul, London, 1983. 2Some tentative suggestions as to what would consffiute such a package are made in Energy and Social Policy, ibid.
372 E N E R G Y POLICY December 1983
