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Energy firms set for profits boost from fixed tariffs

Research from Future Energy Associates has estimated that two energy firms that have offered new fixed tariffs are set to rake in an average of £484 and £469 respectively in profit on each customer. [1]

The profits will be driven by energy firms buying energy at a fixed cost and selling it to customers at a level below the current Energy Price Guarantee (EPG), but above the likely level of energy bills when the Ofgem price cap comes back into force for consumers from 1 July.

Analysts predict that based on an average household bill under the expected Ofgem Price Cap of £2,064 [2], customers who switch to the deal will lose out by £212 on the Ovo fix or £197 on the SSE offer compared to sticking to the Government’s EPG rate and then moving to a variable tariff governed by the Ofgem price cap from 1 July. [3]

A spokesperson for the End Fuel Poverty Coalition which is part of the Warm This Winter campaign, commented:

“The Wild West of the energy market is back, with energy firms trying to make a quick buck from people’s confusion with their energy bills.

“They are playing on the cost of living crisis to try and tempt customers onto a deal that offers security, but appears to come at a very high price to their pocket. People continue to be penalised by Britain’s broken energy system.”

Clem Atwood from Future Energy Associates, commented:

“After record breaking power prices of last winter we are now seeing forward electricity prices come down, meaning suppliers are now paying less for power than accounted for by Ofgem’s price cap.

“While costs continue to come down, suppliers will look to exploit consumer desires to move onto lower rate tariffs by trying to fix customers at close to current rates. Our analysis of costs shows that recent fixed tariffs are likely to make suppliers around 20% profit, whilst fixing customers at unit rates above the forecasted Ofgem price cap.”

Tessa Khan, executive director of Uplift, said:

“Energy companies are addicted to trying to make eye-watering profits at every turn. Having raked in billions in a matter of months from both government support schemes and the pain felt by businesses, they are now starting to turn again to our energy bills.

“It is yet another sign that the government needs to step in and fix the UK’s broken energy system. We need a complete overhaul of the system, including switching to cheaper renewables and funding for insulation, not a return to the bad old days of profiteering energy firms ripping us off.”

Jacky Peacock, Head of Policy at Advice for Renters, commented:

“Many of the families we assist have restricted their energy use to two hours a day and may well think that the fixed price guarantee will result in a saving. We’ll be doing our best to warn them to avoid such offers which are little short of scams.”

Ruth London from Fuel Poverty Action added:

“After all the misery suppliers have inflicted on their customers – unpayable bills, break-ins to impose unwanted prepayment meters, ill health, and cold, dark homes – is this a time for dirty tricks? The suppliers are playing on people’s fears and when we can’t pay their inflated prices we will be blamed and punished for going into debt.”

Notes to Editors

The content of this story is provided based on the assumptions below and the analysis by energy data experts. It should not be taken as formal financial advice. The prices of energy are correct at the time of analysis and may change considerably from the predictions made here.

[1] Tariffs examined: Ovo 1 year fix and SSE 1 Year Fix v28. Supplier Profits Calculated Utilising Comprehensive Methodology from Future Energy Associates (FEA), outlined below. In order to evaluate supplier profits, a comprehensive methodology was employed, which encompassed several steps as detailed below:

Firstly, the FEA collected electricity forward prices for a 12-month period, which is the level an energy supplier could be expected to pay for the energy they then re-sell to domestic customers.
Subsequently, electricity wholesale prices were calculated for each quarter, with both seasonal fluctuations and peak/base prices taken into consideration.
These wholesale prices were adjusted according to each of the non-wholesale price components present in a typical household bill. The analysis differentiated between components that adapt to decreasing wholesale prices and those that remain fixed, irrespective of wholesale price fluctuations.
Following this, electricity retail price unit rates were calculated by multiplying the annual Ofgem consumption values and standing charge forecasts. This process yielded the electricity portion of the household bill.
With respect to gas, the same difference ratio between gas and electricity prices, as derived from Cornwall Insight’s price cap forecasts, was assumed.
Lastly, gas and electricity prices were combined to determine the annual household energy bills, thereby allowing for a comprehensive assessment of supplier profits.

A chart is available which shows that, for the average household, fixing now would result in a higher bill. This model assumes that the whole difference between the cost to the consumer and the cost to the supplier is profit. This assumption is a fair one as Ofgem and suppliers regularly correspond on the costs incurred by suppliers in delivering supply to consumers, which Ofgem then reflects every quarter in its price cap calculations (and therefore has been reflected in the operating cost assumptions made by this model). This process ensures energy firms should not be subject to significant operating losses on providing domestic supply.

This is summarised in the table below.

OVO, SSE Case Study (all numbers are GBP)
Tariff Names	OVO 1 Year Fixed 23 March 2023	SSE 1 Year Fixed v38
Annual Costs to households £	2275	2260

Ofgem Price Caps / EPG	Forecasted Average Ofgem Price Cap (01/04/23 – 30/0304/24)		See note [2]
Annual Costs to households £	2063		See note [2]

Tariff Names	OVO 1 Year Fixed 23 March 2023	SSE 1 Year Fixed v38	Notes
Annual Excess Costs To Households	212	197	I.e. difference between fixed tariff and average Ofgem Price Cap
Annual Supplier Costs of buying energy	1791	1791	Based on FEA calculations on forward energy prices when fixed tariffs announced.
Annual Supplier Profits £	484	469	See above for assumptions.
Annual Profits %	21.27%	20.75%	As a percentage of the cost a consumer could be paying on the Ofgem Price Cap.

[2] Based on EPG, Ofgem Price Cap and latest Cornwall Insight predictions and adjusted by FEA to take into account a full year of price cap changes and the Energy Price Guarantee operating for part of the year.

[3] A chart is available to outline the current situation for energy bills in comparison to the fixed tariffs now on offer.

Lords back campaigners’ call for changes to hydrogen trials

The House of Lords backed calls from campaigners to prevent energy firms from passing the cost of proposed hydrogen development onto bill payers.

But they failed to back calls to ban energy firms from forcibly entering people’s homes to convert their heating to hydrogen.

Plans are for the creation of “hydrogen village trials” which would force up to 2,000 homes in the trial area to convert their home heating and their appliances to hydrogen. The development of new sources of hydrogen were set to be paid for through a levy on households which was proposed in the Energy Bill.

Clauses also increased the powers of access granted to fossil fuel companies, which could theoretically involve forcibly installing hydrogen boilers without residents’ consent.

On Monday (24 April), the Energy Bill passed its latest stage in the House of Lords and will now move to the House of Commons where the Government can seek to overturn amendments – and MPs can try and introduce new changes.

An End Fuel Poverty Coalition explainer on how hydrogen could impact fuel poverty levels has been produced and can now be read online for people wanting to learn more about this new development: https://www.endfuelpoverty.org.uk/about-fuel-poverty/is-hydrogen-the-solution-to-high-energy-bills/

1.7m households in fuel poverty miss out on Government help

Almost two million households in severe fuel poverty will miss out on government help in 2023/24 according to new figures. [1]

Data produced by researchers at the University of York for Child Poverty Action Group has calculated that among those groups who will miss out are 688,000 fuel poor households with children. [2]

The figures also show that households in London, the North East and the North West are the most likely to miss out on Government help. Over 1m fuel poor owner-occupied households and over 500,000 struggling homes in the private rented sector will be among those who no longer get Government help.

The UK Government introduced new support packages for vulnerable households from 1 April 2023 to replace the Energy Bills Support Scheme and other programmes which ran over winter 2022/23. The new support includes payments of up to £900 for those households on some benefits, with the first instalments due to be paid this week.

Estimates based on Government data have also shown that over four million Energy Bills Support Scheme monthly payments of £66 or £67 from this winter had still to be made to or redeemed by households for the period October 2022 to February 2023. [3]

A spokesperson for the End Fuel Poverty Coalition, commented:

“Millions of people will be worse off in 2023/24 as energy bills remain high, but support from the Government has fallen in real terms.

“Without further Government support and rapid roll out of energy efficiency programmes, the Dickensian conditions experienced by millions this winter will be replicated again. Until Britain’s broken energy system is reformed, we will continue to see households rely on Government support to help them through the energy bills crisis.”

Professor Jonathan Bradshaw, from the University of York’s Social Policy Research Unit, commented:

“This data answers an important question because it is an indication of the limits of using the receipt of social security benefits to mitigate fuel poverty, and suggests who might be the types of household that need to be targeted in other ways, including by some kind of social tariff.”

The main reason behind households being excluded is the link between cost of living payments and mean-tested benefits.

Alison Garnham, CEO of Child Poverty Action Group, said:

“The Government’s one-off cost-of-living payment is welcome, but this data shows it doesn’t go far enough. Flat-rate payments leave families with children, who have higher living costs, short-changed. Increasing child benefit, which lost a quarter of its value in the last decade and goes to lower and middle income households, is the first step to making sure struggling families have enough money to heat their homes.”

Tessa Khan, executive director of Uplift which is part of the Warm This Winter campaign, added:

“The Government’s rehashed policies on energy efficiency fall miles short of the national programme of insulation and home upgrades that is needed to solve the fuel poverty crisis in the longer term. Ministers also continue to deny communities access to onshore wind, which is among the cheapest energy sources around and a resource we have in abundance. Instead Ministers are handing billions in subsidies to oil and gas developments that won’t lower bills or boost UK energy security, as most of it is oil for export.

“It is beyond time that this government delivered real policies that address the big issues affecting people’s lives, not least eye-watering energy bills.”

ENDS

[1] PDF available to download: https://cpag.org.uk/sites/default/files/files/policypost/Who_are_the_fuel_poor_revised.pdf. The figures are, if anything, an underestimate of the problem as the definition of fuel poverty used for these calculations is one of the most targeted available.

[2] 69 per cent of the households missing out are from the bottom three income deciles, 39 per cent are families with children, 59 per cent are living in owned/ mortgaged houses, 66 per cent are income poor.

[3] Calculations and data available from: https://www.endfuelpoverty.org.uk/energy-firms-holding-280m-of-taxpayers-cash-meant-for-customers/. Customers affected should contact their energy firm for advice and information on how to claim these payments.

Energy firms holding £280m of cash meant for customers

Britain’s leading energy firms are sitting on a multi-million pound cash stockpile which is earmarked for customers under the Energy Bills Support Scheme which finished in March.

According to figures reported in the Mail on Sunday, over four million monthly payments of £66 or £67 had still to be made to or redeemed by households for the period October 2022 to February 2023. Figures including March payments will be available later this month.

The value of these missed payments stacks up to almost £280 million, with half owed to customers on traditional prepayment meters who have not cashed in 2.1m vouchers issued by the firms.

While there are no suggestions of wrongdoing – as any money not paid out to consumers will be returned to the Treasury – the revelations highlight the problem of energy firms not passing the EBSS payments onto people who will be in desperate need and that spent the winter in cold damp homes.

A spokesperson for the End Fuel Poverty Coalition, which is part of the Warm This Winter campaign, commented:

“In some cases, energy firms have been far too slow to pass on these vital funds to customers who may have spent the winter living in cold damp homes.

“While many millions of households have had their payments issued with no problem, the figures around pre-payment meter voucher redemption are particularly worrying. These customers are often among the most vulnerable and have been paying more for their energy in the first place.

“Energy firms need to up their game significantly to end this breakdown in customer service and help get the Energy Bills Support Scheme to those who need it.

“If a customer believes they are missing a payment or a voucher for their prepayment meter they should contact their energy supplier as soon as possible as payments can still be made and vouchers can be reissued.”

The Government also issued figures under Freedom of Information rules to The Times suggesting that the number of prepayment meter vouchers still to be cashed in now stands at 341,000. However, the official published data suggests that this figure is the number of prepayment meter vouchers that have been paid to energy firms but have yet to be delivered to households, rather than the number not redeemed by customers.

Energy firms told the Mail on Sunday that would also urge customers to claim the payments.

The full data set is available to download: MoS EFPC CALCULATIONS

PPMs code of practice does not go far enough

Energy firms have signed up to a new code of conduct to govern the forced installation of prepayment meters.

The code has been described by Ofgem as a “new voluntary code of practice [which] is a minimum standard that clearly sets out steps all suppliers must take before moving to a PPM which will place a voluntary ban on forcibly installing prepayment meters in the homes of customers over 85 and will make representatives wear body cameras as part of a new code of conduct.”

However, a spokesperson for the End Fuel Poverty Coalition, commented:

“This code of practice simply does not go far enough and the fact it is voluntary undermines its objective.

“There are really vulnerable groups which have been omitted from its full protection and we have serious concerns about how it will be implemented, such as how people will prove their medical conditions without being humiliated by an energy firm health inspection.

“The plans also fail to deal with the elephant in the room – the growing household energy debt mountain. According to figures from the Warm This Winter campaign 29% of the population is in debt to their energy firm.

“This was the Government’s opportunity to take meaningful action and introduce targeted debt relief for those most in need. It has failed to do so and seems to have given in to energy industry demands to let them go back to the bad old days of forcing prepayment meters onto customers in distress.”

Rachael Williamson, head of policy and external affairs at Chartered Institute of Housing responded to the announcement, commenting:

“This new code of practice is an important step forward in ensuring that some of the most vulnerable residents cannot have a prepayment meter installed in their home against their will. CIH welcome the code and Ofgem’s parallel focus on tighter enforcement and oversight, but we would like to see it go further and forbid forced installations in the homes of all vulnerable residents, not just those defined in the code as high risk.

“This is especially important for renters, who are more likely to be financially vulnerable or living with a cold-related illness, and who have borne the brunt of the cost of living crisis. We now need to see these changes incorporated into suppliers’ license conditions as soon as possible.”

Caroline Abrahams, Charity Director at Age UK, said:

“It’s good to see some regulation coming in to begin to rein in the practice of forcibly installing pre-payment meters (PPMs), which has previously been something of a Wild West, but these new rules do not go far enough.

“We don’t think any older person should be subjected to this treatment, not only the over-85s and the over-75s who are deemed vulnerable in some way, partly as a matter of principle but also because of concerns about how effective the assessment of vulnerability will be. The risk is that some older people – and younger people too – who should definitely not be on a PPM end up on one.

“Today marks an important first step but ultimately the sooner the practice of forcibly installing PPMs ends the better. In the meantime PPMs should only ever be used as a last resort.”

The Centre for Sustainable Energy also agreed that the moves do not go far enough, writing in a blog post:

“CSE advisors are hearing from more and more people in absolutely desperate circumstances every day. Keeping healthily warm is a basic human right and it’s wrong that so many people are struggling with cold homes and seriously worried about money.

“We urgently need a long term plan to fix our broken energy system. We need targeted support for people on low incomes. We need a strategy to improve homes so they so they don’t leak heat.”

Hypothermia cases in England surge during energy bills crisis

The Daily Mirror has today reported a huge rise in the number of hypothermia cases in England.

The statistics published in the Mirror today show that there was an 82% increase in hypothermia cases in December 2022, compared with December 2021 and a 36% increase in hypothermia cases comparing 2022 to 2021 as a whole.

The figures come following the inquest of the death of a 87-year-old woman who died in December 2022 after reportedly refusing to turn on her heating for fear of rising energy costs.

A spokesperson for the End Fuel Poverty Coalition commented:

“From Awaab Ishak to Barbara Bolton, the deadly impact of living in cold damp homes has been made painfully clear in recent months.

“The energy bills crisis is now a public health crisis and without additional support for those in fuel poverty we will continue to see thousands of excess winter deaths caused by people living in Dickensian conditions.

“The Government must step in to speed up roll out of insulation measures and reform Britain’s broken energy system this summer. Without this, hypothermia cases will soar again next winter.”

Council candidates urged to help end fuel poverty

Over half the population in England (54%) say they are unhappy or very unhappy with the level of support for energy bills which is now available. Just 12% say they are happy or very happy with the support on offer. [1]

The research from the Warm This Winter campaign comes as candidates have been confirmed for the local elections taking place across England in May.

Council candidates have been urged to sign up to a pledge to help end fuel poverty as part of their campaigns.

The pledge, created by the End Fuel Poverty Coalition, calls on council candidates to improve the energy efficiency of Council and housing association housing stock if elected.

Prospective candidates signing the pledge also commit to backing better enforcement of existing regulations on energy efficiency and property standards in the private rented sector and campaigning to reform Britain’s broken energy system.

The polling suggests that dissatisfaction with energy bills support stretches across the political divide with 43% of Conservative voters living in England, 67% of Labour voters, 57% of Lib Dems, 58% of Brexit / Reform voters and 51% of Greens unhappy with the help on offer. [2]

Councillors and council candidates can find out more about the pledge online at https://www.endfuelpoverty.org.uk/end-fuel-poverty-councillor-pledge/

A spokesperson for the End Fuel Poverty Coalition which is part of the Warm This Winter campaign, commented:

“While many of the solutions to Britain’s broken energy system lie at the door of the Westminster Government, local authorities also have a role to play in beating fuel poverty.

“From providing advice to residents and taking action on housing stock, to using their influence in political parties to call for change, councillors can have a powerful voice in making life better for their constituents.”

At the start of April hundreds of people took action in a mass lobby of politicians to call for change at a national level, with over 80 events taking place at MPs constituency offices across the UK calling on them to sign the Warm This Winter MP pledge.

People affected by the energy bills crisis should initially contact their energy firm or Citizens Advice for help.

ENDS

This news story relates to England only.

[1] 2,196 people interviewed between 20th and 21st March 2023. Results were weighted to be representative of the GB population.

How happy are you about the level of support for energy bills from 1 April 2023?

Very happy: 2%

Happy: 10%

Neither happy nor unhappy: 25%

Unhappy: 26%

Very unhappy: 28%

Don’t know: 8%

[2] Based on self-declared 2019 voting behaviour, England-based respondents only.

Energy bills crisis continues on April Fuels Day

Every household in the country will see their energy bills increase by at least £67 a month from 1 April as the energy bills crisis continues.

Dubbed April Fuels Day by campaigners, who are staging a mass lobby of MPs at over 70 locations across the country on Saturday, the increase in bills is caused by the Energy Bills Support Scheme coming to an end.

Figures from the Warm This Winter campaign have revealed that more than a quarter of people (29%) are already in debt to their energy companies even before the price rise. With Debt Justice calculating that those on prepayment meters have combined debts of £1bn.

An investigation by Bloomberg has uncovered that three energy firms have added half a billion pounds to energy bills by manipulating the electricity market by powering down their generators at peak times, only to then demand a much higher price from the Grid.

Figures from National Energy Action also reveals that standing charges, which customers pay every day to access the grid regardless of use, will hit a new high from 1 April – up 64%. It means that almost half (41%) of what those in the poorest households spend on energy will now go solely on these daily fees.

A spokesperson for the End Fuel Poverty Coalition commented:

“People are being taken for fools. The Government is saying that it is providing support to households, but the reality is that everyone’s bills are going up.

“Even when market conditions return to energy bills later in 2023, people will still be paying double for their energy than they were in 2020.

“Meanwhile, every week we learn about new ways the energy firms are profiting from the misery of households. The latest revelations about energy firms’ excesses show just how broken Britain’s energy system is.

“This week was supposed to be the Government’s big energy security announcement, but instead we got a dump of thousands of pages of policy and data with no real substance.”

Tessa Khan, executive director of Uplift, which is part of the Warm This Winter campaign added:

“The government has finally recognised that Britain’s energy system is broken but, by its own admission, its plans this week won’t do anything to lower our energy bills.

“Its rehashed policies on energy efficiency fall miles short of the national programme of insulation and home upgrades that is needed, and it continues to deny communities access to onshore wind, which is among the cheapest energy sources around and a resource we have in abundance.”

“Instead Ministers are handing billions in subsidies to oil and gas developments that won’t lower bills or boost UK energy security, as most of its oil for export. It’s beyond time that this government delivered real policies that address the big issues affecting people’s lives, not least eye-watering energy bills.”

Rising energy debt creates mental health crisis for households

Energy debt is causing mental health anguish for millions, with Brits now facing a summer of misery in an attempt to get back into the black before next winter takes hold, according to new research. [1]

The research commissioned by the Warm This Winter campaign found that more than a quarter of people (29%) are currently in debt to their energy companies.

Over one in ten (12%) vulnerable households, such as the elderly and disabled, are now sitting on an energy bill debt of at least £250 each. A fifth (18%) of prepayment meter customers owe upwards of £250 each, with many owing more than £500.

More than half (54%) of people in energy debt are worried that they won’t be able to save enough over the summer months to pay off the accrued debt, rising to 70% of lower income households.

Close to a third of respondents (30%) in energy debt are experiencing anxiety as a result and 12% say worrying about it is now making them ill. Over a fifth (22%) of vulnerable householders are spending sleepless nights thinking about it.

To combat this, one third (33%) of people in energy debt are now being forced to sacrifice essentials, including not keeping up with household maintenance (18%) and skipping meals (17%).

One in ten (12%) say they will have to use other forms of debt, such as a credit card or overdraft to help pay off their energy bills.

The Chancellor’s energy price cap extension has done little to alleviate consumers’ concerns, with 56% of Britons saying they are unhappy or very unhappy with the level of support with energy bills which will be available for energy bills from 1st April.

People affected by energy debt should initially contact their energy firm or Citizens Advice for help. Those concerned for their mental health can contact Mind.

A spokesperson for the End Fuel Poverty Coalition which is part of the Warm This Winter campaign, commented:

Combined household energy debt will top £2.7bn by the end of June this year and the Government needs to bring together industry and charities to find a solution to the problem.

People will be unable to repay this staggering amount and rather than passing on bad debt to other bill payers, as the energy firms suggest, the Government should use targeted debt relief to wipe out part or all of the energy debt.

This will help the most vulnerable move out of fuel poverty and boost the spending power of hard-pressed consumers.

On Saturday 1st April 2023, a mass lobby of politicians will see people around the country come together to demand change. Over 70 events have been arranged nationwide, including demonstrations and meetings with local MPs to highlight the breadth of public concern about the energy crisis.

Heidi Chow, executive director of Debt Justice, said:

Energy debt is having a devastating effect on millions of households who can no longer afford to properly heat their homes, cook meals, or operate medical equipment.

By ignoring the problem of energy debt the government is needlessly prolonging the anxiety. It is time for them to get their heads out of the sand and tackle this unpayable debt in a fair way.

In March, campaigners from Warm This Winter delivered a 400,000-strong petition to Number 10 Downing Street calling for the government to take decisive action now to fix our broken energy system, which has left seven million UK households in fuel poverty this winter.

Tessa Khan, executive director of Uplift, added:

This government has provided temporary relief for some over the winter, but utterly failed to fix the core problem facing the UK, which is the unaffordable price of energy.

Household bills are still double what they were two years ago and high energy costs are making food and other goods more expensive.

It is beyond time that the government took real action to permanently lower energy costs, which means rolling out support to upgrade homes and accelerating the development of cheap renewable energy, both of which have huge public support.

Instead of handing billions of pounds in subsidies to profitable oil and gas companies, this government should be 100% focused on helping ordinary households and businesses.

To find out more and get involved, visit https://www.warmthiswinter.org.uk/mass-lobby.

ENDS

[1] Researchers interviewed 2,196 people between 20th and 21st March 2023. Results were weighted to be representative of the GB population. GB 18+ population is 51,435,642 (ONS) with around 4.5m experiencing anxiety as a result of energy debt.

Energy bills still set to rise despite Budget

Energy bills are calculated to rise by £285 a year for the coming financial year 2023/24 according to ECIU.

This is despite a Government u-turn on the Energy Price Guarantee which was due to increase bills even further from 1 April.

Meanwhile, calculations show that combined household energy debt could exceed £2.7bn by the end of June 2023.

Other inequalities in the energy market remain with customers paying by standard credit (i.e. paying by cash, cheque or bank transfer) will pay £202 a year more than those on direct debit or pre-payment meter.

Meanwhile some regions, such as Merseyside and North Wales will pay 6.7% more for the electricity than others, such as those in the East Midlands.

A spokesperson for the End Fuel Poverty Coalition commented:

“Despite government support and falling wholesale prices, every household will pay more for their energy this coming financial year than they do at the moment. That’s due to how the energy pricing system works and expected reduced levels of support from the Government.

“This is coupled with soaring food prices and transport costs and no end in sight to the cost of living crisis.

“We need further action to provide energy debt relief to get households onto even keel and long term changes to Britain’s broken energy system. This includes tariff reform and rapid improvements to energy efficiency of housing to ensure we never again see an energy bills crisis.”

Tessa Khan from Uplift, which is part of the Warm This Winter campaign, commented:

“If the Chancellor wants to boost growth he needed to tackle the energy crisis for the long term and he hasn’t.

“Energy bills will still rise, albeit by not quite as much, meaning millions of households will continue to live in fuel poverty. From July, the average household is still set to pay double what they were in 2021.

“Crucially, there is no long term plan here to fix the UK’s broken energy system for good: no support from upgrading homes, nothing to accelerate renewables to shift the UK away from volatile fossil fuels as is happening in other countries.

“While the Chancellor might like to think the energy crisis is over, for so many households and businesses unaffordable energy bills are still a painful reality.”

National Energy Action predict that the number of households in fuel poverty will grow to 7.5m as a result of the Budget announcement.

Graham Duxbury, Chief Executive of Groundwork UK, said:

“We are glad to see the government extending support with energy bills for a further three months and taking steps to tackle the injustice of higher costs for people on pre-payment meters.

“However, more needs to be done to ensure everyone is able to access the energy they need to stay warm and well. Even with government support in place, our Green Doctor energy advisors have been shocked by the level of hardship households have experienced this winter.

“To avoid people suffering unnecessarily in the winters to come, we need a radical plan to eliminate fuel poverty, through increasing the energy efficiency of homes, providing better coordinated advice to the most vulnerable energy users, and investing in the skills and jobs we need to transform our energy infrastructure.

“Doing this is vital to preventing the worst effects of climate change, reducing health inequalities and creating more prosperous communities.”

Chartered Institute of Housing (CIH) chief executive, Gavin Smart said:

“We’re pleased to see the government taking action to support people with high energy bills, by bringing charges for pre-payment meters in line with direct debit customers and extending the current Energy Price Guarantee at the current rate for a further three months. CIH called for this as part of the End Fuel Poverty Coalition. We would however have liked to have seen more support for energy efficiency measures, helping to tackle some of the root causes of current energy pressures.

“Housing was notable by its absence. We are disappointed that the Chancellor did not use this opportunity to restore local housing allowance to the 30th percentile, as we and others had called for. The decision to leave rates frozen at 2020 levels means the affordability gap for private renters will continue to grow, resulting in increased evictions and homelessness. We would urge government to urgently look again at this, particularly given its commitments on homelessness prevention.

“We note that various changes were announced on welfare. We await the details in this in the forthcoming White Paper and will provide further briefing for members on Budget announcements over the coming days.”