Report into UK Energy Expenditure Shares - A Long Term View

This paper maps the percentage of household expenditure devoted to energy by UK households over the past 25 years. Mapping household energy expenditure shares over the long-run provides a solid evidence base for discussing the distributional aspects of the UK’s retail energy market. By looking over the long-run recent high expenditure shares are placed in context with low energy expenditure shares in the late 1990s and early 2000s appearing more exceptional. The large variations in energy expenditure shares across households, and through time, highlight the varying political saliency of energy and the dramatically more pressing budget choices facing low income households after energy price rises. While increased affordability pressures over the past 10 years support the political expediency of recent commitments to re-regulate energy prices, it is striking that many affordability support policies were first introduced when energy was at its most affordable. Casual empiricism suggests government ideology and the election cycle may be as important as energy expenditure shares in determining affordability support policies.