Category: News

MPs from across parties join call for Government to tackle energy crisis

The British public is calling on the government to support vulnerable people and do more to tackle the energy crisis ahead of tomorrow’s Spring Statement.

New research released today reveals that eight in 10 Britons (81%) think more financial support should be given to vulnerable people to help with their energy bills and a similar proportion (84%) back more support for people to insulate their homes to save energy.

The research commissioned by campaign group Warm This Winter also found that 85% of respondents agreed that developing more homegrown renewable energy would improve the UK’s energy security. 

The pledge has already garnered cross party support from MPs including former energy minister The Rt Hon Chris Skidmore (Conservative), Shadow Minister for Climate Change and Net Zero Dr Alan Whitehead (Labour),  Wera Hobhouse (Lib Dem Spokesperson for Energy and Climate Change), and former leader of the Green Party Caroline Lucas.

The Warm This Winter research also found that three quarters of Brits back a shift to homegrown renewables in order to help lower UK energy bills.

The Rt Hon Chris Skidmore MP said: 

Expanding popular, common sense measures like home upgrades and building out clean renewable energy is the best way to permanently bring down bills, protect households long term, and reach net zero.

Dr Alan Whitehead MP said: 

Far too many households are still struggling to pay their energy bills and make ends meet. The government must seize every opportunity to tackle the energy crisis long term.

Wera Hobhouse MP said: 

Everyone deserves to be able to keep warm during the winter. Tomorrow’s budget needs to reflect a recognition of this by the Chancellor and deliver a real plan to address the future of energy in this country. That future needs to be a green future, where clean energy production insulates us from volatile oil and gas prices and we truly have energy security.

Caroline Lucas MP said: 

We’re in a gas-driven energy price crisis, a climate emergency and a cost of living scandal – yet this Government is utterly failing to take action which could help tackle all three, and is leaving people and planet in the lurch. To help keep people warm every winter and secure a liveable future, the Chancellor must commit to properly fund a street-by-street, local authority-led home insulation programme, invest in abundant and affordable renewables, and provide urgent energy bill support for vulnerable households.

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

After a winter of misery which saw over nine million adults living in cold damp homes, it’s time for the government to stop the dithering.

We now need urgent action to protect the most vulnerable and fix Britain’s broken energy system. Even after free market conditions return to our energy bills later this summer, people will still be paying double what they were two years ago. 

Due to the energy crisis, the household energy debt mountain has grown to more than £2.5 billion and paying this back while the cost of living crisis continues is unfair. We need the Government and the energy industry to consult with charities to agree on a realistic way of tackling this vital issue.

On 1st April 2023, a mass lobby will see people around the country come together to demand change. To find out more and get involved, visit https://www.warmthiswinter.org.uk/mass-lobby.

ENDS

Online poll of 2000 adults aged 18+ in Great Britain between 22nd and 23rd February 2023. The figures are weighted and representative of the GB population.

Outreach to understand prepayment meter scandal launched

A nationwide call for evidence has been launched to ask energy customers to share their experiences of moving to a prepayment meter (PPM).

People can submit their experiences through an online form which is being hosted on Citizens Advice’s website and is open until Thursday 4 May 2023. A phone line (0800 464 3374) is also available to take evidence and consumers can also submit evidence via charities they may already be in touch with.

The eight-week programme of outreach is part of Ofgem’s market review of prepayment meters and remote switching, to ensure suppliers are meeting their legal obligations in protecting customers.

As part of the wider review, the End Fuel Poverty Coalition has also submitted a response to Ofgem’s consultation on protections needed to help protect energy customers.

In its response, the Coalition re-iterated its call for a legally enforceable ban on the forced transfer of homes onto a PPM (by court order or smart meter transfer) as the only acceptable solution to this abuse of power.

Despite the current voluntary ban being put in place by Ofgem and the Chief Justice, there are still reports of energy firms using the threat of a court order imposed PPM to intimidate households.

Until Parliament can legislate for such a ban, the Coalition argued in its consultation response that Ofgem must ensure that there is no return to forced transfer to PPMs until:

  1. The full PPMs Market Compliance Review has concluded and suppliers have implemented all recommendations. 
  2. Revised licence conditions have been implemented (to extend more protections to vulnerable households and extend the definition of vulnerability).
  3. Confidence is regained that suppliers have in place processes to follow the existing and updated rules set by Ofgem.

A spokesperson for the End Fuel Poverty Coalition, commented:

It is vital that anyone with experiences of using a prepayment meter responds to Ofgem’s call for evidence.

Only by telling our stories of the abuses that have taken place are the regulators and MPs able to take action to demand compensation from energy firms and reform Britain’s broken energy system.

Next week the House of Commons Business and Justice Select Committees will hear evidence from key players in the prepayment meter scandal including a former magistrate, British Gas contractors and Ofgem.

Brits back renewables as fuel poverty petition handed in

The British public is decisively in favour of a swift transition away from fossil fuels in order to ensure a reliable and affordable supply of energy, according to new research released today.

Over half of adults in Great Britain (54%) believe the country should aim to get off oil and gas as quickly as possible by ramping up efforts to improve energy efficiency and developing significantly more renewable energy. Less than a third (29%) support a more gradual transition away from oil and gas.

Just one in ten respondents to the poll conducted on behalf of the Warm This Winter campaign felt that the UK should aim to continue to meet its energy demand primarily with oil and gas for as long as is necessary. [1]

The news came as the campaign group, which includes over 40 of the UK’s leading charities, delivered a 400,000-strong petition to Number 10 Downing Street. The petition calls on the government to take decisive action now to solve the energy price crisis, which has left seven million UK households in fuel poverty this winter. 

The petition, which has attracted celebrity backers including business woman Deborah Meaden, anatomist Professor Alice Roberts and writer Emma Kennedy, has four key demands of the government:

  • Emergency support now: Providing additional financial support to people who without urgent action will be on the front-line of poverty every winter.‍
  • Help to upgrade homes: Launching a new, properly-funded programme of home upgrades and insulation across the UK to bring down bills and prevent energy waste.
  • Cheap energy:  More than triple the amount of renewable energy in the UK by 2030, including wind and solar generated in harmony with nature, in order to permanently lower bills.
  • Free the UK from oil and gas: Stop approving new oil and gas fields so that the UK can escape its dependence on volatile fossil fuels.

Dragons’ Den star and environmental campaigner, Deborah Meaden, is keen to see a restructuring of the UK energy market to allow the country to take advantage of the lower cost of renewable energy. Deborah said:

There is simply no excuse in one of the richest countries in the world for people to be having to make the choice between heating and eating or being forced into public spaces simply to keep warm.

The UK’s reliance on costly fossil fuels has left this country vulnerable to oil and gas price fluctuations – an absolute catastrophe for energy bills in the wake of Russia’s invasion of Ukraine. It’s time we overhauled the current energy system, decoupled renewable prices from the global gas market and prioritised harnessing our abundant natural resources, including wind, wave and solar power in order to secure energy supply and bring prices down in the long-term.

Jess Stone, 27, from Essex, handed in the petition on behalf of the 400,000 members of the public who signed it. She said: 

You try so hard to make everything stretch, but there’s only so much stretching you can do, and once you’ve cut out every single thing that isn’t essential, you’re still left having to cut out essentials.

It’s not just the physical toll, it’s not just the financial toll, it’s the mental toll that is getting harder and harder. Every single day I’m having to decide ‘what will we go without today?’.

I’m having to put my four-year-old to bed every night in a home that is too cold. He has asthma and the cold is bad for his lungs, but I just can’t afford to put the heating on, so we’ll go to sleep in the same bed for warmth, under two duvets, with him sleeping in his dressing gown.

I turn to places like food banks and baby banks for help. I’m grateful for these places, but they shouldn’t have to exist. Today I went to a baby bank to pick up a jumper for my son – he grows so quickly and I can’t afford to keep up, and he needs warm clothes when we can’t afford to heat the house.

I’ve donated his old clothes for other parents, we’re all helping each other out, but you think to yourself, why isn’t the Government doing something to actually solve this?

A spokesperson for the End Fuel Poverty Coalition which backed the petition commented:

Across the UK, the message to decision makers is clear: we need reform to our broken energy system and no return to the dirty fossil fuels of the past.

An end to fuel poverty which also meets net zero targets is possible, it just needs the political will to make it happen.

Every so often the Government wakes up to the reality of life in energy crisis Britain and takes action. The latest u-turn is that it now looks set to keep the average energy bill capped at current levels for another three months. But in reality, this will still feel like a 19% increase in bills for people from 1 April as the Energy Bill Support Scheme is coming to an end and new support for vulnerable households is insufficient.

Tessa Khan, executive director of Uplift added:

This shows the public is way ahead of the government on how to solve the UK’s energy crisis and lower energy bills permanently. Fix the leaks in our buildings to keep the heat in, crack on with developing cheap renewable energy, and move the UK off unaffordable fossil fuels.

Yet, because of the constant whispering of fossil fuel lobbyists, this government is dithering, while wasting public money subsidising new oil and gas drilling that will make zero difference to our energy security or bills. If it approves the huge Rosebank field, the UK public will effectively be over half a billion pounds poorer because of the subsidies, and the oil will most likely end up abroad.

Unaffordable energy prices are at the root of so many of the problems we are currently experiencing, needlessly. Other countries are successfully bringing down bills by upgrading homes with insulation and heat pumps and by accelerating renewables, so why can’t we? This government just needs to get on with it.

ENDS

[1] When it comes to UK energy security (ensuring access to reliable and affordable sources of energy), which of the following statements is closest to your view?

  • The UK should aim to get off oil and gas as quickly as possible by ramping up efforts to improve energy efficiency and developing lots more renewable energy – 54%
  • The UK should aim to continue to meet its energy demand primarily with oil and gas while making some effort to improve energy efficiency and build more renewable energy – 29%
  • The UK should aim to continue to meet its energy demand primarily with oil and gas for as long as is necessary – 10%
  • None of the above – 7%

Online poll of 2000 adults aged 18+ in Great Britain between 1st and 2nd February 2023. The figures are weighted and representative of the GB population.

Customers to see energy bills soar from 1 April

Despite the Ofgem price cap falling today, customers will see energy bills rise by 43% for the average household from 1 April 2023.

Under the Government’s Energy Price Guarantee, the level of support for all households will fall at the same time that the Energy Bills Support Scheme also comes to an end.

Over 70 charities and campaign groups have now called on the Government to scrap the energy bills hike, paid for by the estimated £11bn underspend in the Energy Price Guarantee budget.

The Ofgem energy price cap was £4,279 in January but it will drop to £3,280 in April because of falling wholesale prices. Under the Government support packages, the average household bill has been £2,100 but this will rise to £3,000 from 1 April.

And contained in the small print of the Ofgem announcement is further bad news for some consumers.

A spokesperson for the End Fuel Poverty Coalition, explained:

Not only will people’s bills actually go up from 1 April, but the Ofgem announcement today contains a sting in the tail for some households who do not pay by direct debit.

Households on pre-payment meters will continue to pay more for their energy with those on standard credit and Economy 7 tariffs also being hit. [1]

In addition, we have seen some regions pay significantly more for their electricity than others [2] and standing charges will increase for everyone by almost 10% [3] caused by the complex nature of Britain’s broken energy system.

This means some people will still pay even more, even if they use less energy.The Government must act to ensure that bills don’t go up, while also setting out a path to reform the energy market.

As prices soar, Greenpeace has also warned typical UK home could miss out on savings of £1,800 every year on their energy bills by the end of this decade unless the government ramps up plans to roll out insulation, and heat pumps. [4]

To help the public understand more about their potential savings, the charity has launched an Affordable Energy Calculator in partnership with Cambridge Econometrics at https://affordableenergycalculator.org/.

Georgia Whitaker, Climate Campaigner for Greenpeace UK, said:

Britain’s homes waste more heat than any in Western Europe. We can’t afford to carry on wasting energy like this in a cost of living crisis. Greener homes would keep communities warm and healthy and save us all money.

We need the government to support home improvements like insulation and heat pumps to lower bills, boost the economy, and help the UK reach our climate goals. Heating our homes really shouldn’t cost the earth.

Our Affordable Energy Calculator shows how much individuals and communities across the UK could save if the Government commits to invest in our homes in the upcoming Energy Bill.

Ruth London from Fuel Poverty Action, commented:

Public anger is intense and support is growing for a whole new system, Energy For All.

This would mean no standing charges, a free band of essential energy so that no one freezes to death with excess energy use charged at a premium.

This would be funded by windfall profits and end to fossil fuel subsidies with accelerated energy efficiency and renewables expansion to reduce cost of the proposals.

ENDS
[1] Standard credit +6.2%, Economy 7 +4.1%, PPM +1.4% (source Ofgem letter p3)
[2] For example, electricity in North Wales & Mersey is 6.7% more expensive than in the East Midlands (Ofgem default tariff cap level document, based on direct debit payment and standard average use on single point meter).
[3] Based on dual fuel, direct debit increase 9.7%, Standard Credit 9.4% and PPM 7.8% (Ofgem default tariff cap spreadsheet table 1b, column BO compared to BP)
[4] This figure was calculated using the most common dwelling type (owner-occupied, three bedroom, semi-detached) in England and Wales, according to ONS data*, with the most common characteristics (eg condensing gas boiler central heating) for that type of dwelling. This type of dwelling would see a £1,832 reduction per year, or 64.7%. The number is not a mathematical average of all UK homes. Other dwelling types show similar savings in percentage terms, so a one bedroom council flat would see a £606 reduction (59.5%) and a four bedroom detached house would see a reduction of £3,579 (64.9%).

 

 

Households unable to pay for essentials as Spring Budget looms

A quarter of households regularly run out of money for essentials, and people believe the UK Government must to more to help households get through the energy bills crisis, new figures released by a group of leading charities and campaigning organisations today shows.

Nationally, 37% of people end the month with no money left over, while nearly a quarter of people (24%) run out of money for essentials either most months or most days. Only 35% of people finish the month with some money to put aside for the future.

Around one in twenty (6%) of people are trying to survive on incomes so low that they can’t pay for essentials most days – a figure that rises to over one in ten (11%) in the UK’s 100 most deprived constituencies.

The new polling highlights the devastating impact of the cost of living crisis across the country, showing how people in both the country’s most deprived areas and its most affluent ones are struggling to get by.

Even among the 10 most affluent constituencies in the UK, 19% of people say they find themselves unable to pay for the likes of food or bills by the end of most months. That rises to 26% of people in the 10 most deprived constituencies.

The figures have been released to mark the launch of a new initiative in response to the cost of living crisis which some of the UK’s biggest charities and organisations have teamed up to create.

Ahead of the Spring Budget the group has launched an open letter backed by the End Fuel Poverty Coalition as well as charities, businesses, Metro Mayors and over 37,800 thousand members of the public. The letter, addressed to the Prime Minister and the Chancellor, asks them to take action to ensure the crisis illustrated by these figures does not become the UK’s ‘new normal’.

Members of the public can sign up online: https://act.38degrees.org.uk/act/together-through-this-petition

Two thirds (67%) of people described the UK Government as “not doing enough” to address the cost of living crisis.

Matthew McGregor, CEO at campaign group 38 Degrees, said:

This polling paints a bleak picture of the crisis unfolding across the country: families running out of money to put food on the table and keep kids warm is rapidly becoming our new normal.

As the Spring statement looms, a united message is coming through loud and clear from the British public – in the most and least deprived corners of our country – Rishi Sunak and Jeremy Hunt: do your jobs. Stop kids going hungry, end the energy bills ticking timebomb and relieve the sickening worry from families fearing the worst.

Dan Paskins, Director of UK Impact at Save The Children, said:

Whether you’re in a rich or poor area, the majority of people believe the UK government isn’t doing enough to help people in the cost of living crisis. Families are now existing month to month, even day to day in some cases and going without essentials, making us deeply worried about the impact this has on children.

The poll, conducted by Survation, questioned people in both the 100 most deprived and the 100 least deprived constituencies in England, Wales, Scotland and Northern Ireland, with the majority in both groups agreeing that the UK Government’s cost of living action is insufficient.

Experts rally to support calls for better energy bill support

Charities and the energy sector have joined calls from consumer rights champion Martin Lewis for the Government to provide more support on energy bills from 1 April 2023.

A petition for the public to sign has now been launched by campaign group 38 Degrees.

Sign now: https://act.38degrees.org.uk/act/cancel-energy-price-hike

In a letter to the Chancellor, Lewis called for the Government to keep the energy price guarantee (EPG) at a typical £2,500 a year, rather than hiking it to £3,000 a year as currently planned.

With the Energy Bills Support Scheme ending at the same time, households will see the real cost of their bills increase by around 43% from an average bill of £2,100 this year.

Over 70 organisations have now come out in support of the call, including: Age UK, Christians Against Poverty, the End Fuel Poverty Coalition, Warm This Winter, Centre for Sustainable Energy, Energy Action Scotland, Huntington’s Disease Association, Epilepsy Action, Fairer Housing, Advice for Renters, Scope, South West London Law Centres, FareShare, Green Alliance, Joseph Rowntree Foundation, MS Society, Nesta, Sense, Leonard Cheshire and Mencap.

Energy UK, the trade association for the energy industry, has also come out in support of the call.

The letter says the planned increase in the Energy Price Guarantee (EPG) will increase bills for almost every home in the country:

This comes at the same time that the £400 energy bills support scheme comes to an end.

Yet things have changed since then, and I would ask you to urgently consider postponing that increase. This cannot wait until the Budget – in practice, energy firms will need to know much sooner if the planned rise isn’t happening on 1 April, or they are bound to have to communicate to customers that it is coming.

This decision to increase prices was made at a time when wholesale rates were looking to be far higher than they are now.

In fact, on current predictions the EPG subsidy may well only be needed from April to July. After that, the underlying price cap currently looks like it may be cheaper than even the current EPG rate of £2,500 a year for a typical household.

This means the provisioned Government expenditure on the energy subsidy will be billions less than expected when the plans were made, giving significant headroom to enable a postponement. Plus, maintaining a lower EPG will also help reduce inflation.

In real terms, the package of support for the most vulnerable households in 2023/24 risks being even less than this winter when there were 9m people living in cold damp homes.

Failure to act was described by Martin Lewis as a “national act of self-harm.”

Energy firms pre-payment response to Minister an insult to victims

Energy firms have only provided “half the picture” to the Secretary of State for Energy and Net Zero after the Government asked all suppliers to set out how they are supporting their customers, how many warrants to forcefully enter peoples’ homes they have applied for and how they will make up for any wrongdoing.

Data from the Warm This Winter campaign suggests that as many as two-thirds of pre-payment meter households will contain elderly people, young children or those with a disability or long term health condition.

A spokesperson for the End Fuel Poverty Coalition commented:

The energy firms are trying to pull the wool over our eyes yet again and have failed to comply with the Government’s reasonable demand for information and details of compensation they will offer wronged consumers. This is an insult to the victims of the pre-payment meters scandal.

The truth is that they have invested time, money and resources in securing almost a million court warrants against households since 2020. Even if only a fraction of those are enforced this is still too many.  [1]

Every one of those enforcements involves the energy firm breaking into someone’s home to impose on them a pre-payment meter which is more expensive for that household than direct debit. They will also charge the household for the installation.

Over the last three years, figures suggest that those on pre-payment meters may have paid hundreds of pounds more per household than other customers. [2]

Advice received by the Coalition has highlighted four areas where there might be reason for further compensation. These are in relation to possible breaches of the European Convention on Human Rights (articles 6 and 8), the Equality Act, trespass rules and breaches of contract / licence conditions. [3]

As well as compensation, campaigners have set out a five point plan which the Government must implement to address the pre-payment meter (PPM) scandal: 

  1. Move people off legacy PPMs more systematically (using data to identify PPM customers on the priority service register to move to faster smart meter rollout)
  2. Remove the premium paid by PPM and standard credit customers.
  3. Reduce standing charges for PPM customers.
  4. Address debt build up for PPM customers through a debt repayment matching scheme (funded through fines levied on energy firms for poor performance).
  5. Introduce wider reforms to make energy more affordable for PPM customers (such as introduction of a social tariff or free band of energy for all).

Calls for an inquiry into the scandal have also increased. 

In the House of Commons on Monday 6 February, Sir Robert Neill MP said that the scandal must indicate:

First, that the process itself is flawed and should not be continued and, secondly, that there must be an inquiry into not just the process itself, but the suitability of some of those who are representing the energy suppliers and Ofgem in court.

Either they gave misleading information by inadvertence or, potentially, they did so deliberately, which, on oath, amounts to perjury. That is a very serious matter which brings the court process into disrepute, and it needs to be investigated too.

ENDS

[1] Official Ministry of Justice data revealed magistrates courts granted 920,855 warrants between Jan 2020 and Dec 2022 in England and Wales. Media reports suggest around 30,000 were granted in January 2023 in England and Wales. Media report 32,000 warrants were granted in Scotland in the first ten months of 2022.

[2] This winter every PPM household overpaid by £258 on average (Citizens Advice). PPM installation cost £150 (Ofgem). Equals basic overpayment of £408.

For households who have been on a PPM before October 2022, this basic level will increase based on how many years they have been on it, but someone who has been on a PPM since 2019, has over paid around £102 compared to a DD meter (winter 2019/20 £38, winter 2020/21 £28, winter 2021/22 £32). Total of £600

2019 is the starting point because that’s when Ofgem changed the rules to make PPMs much more expensive.

[3] Indicative advice received from Leigh Day Solicitors is not a formal legal opinion, but provided to help the Coalition discuss next steps in the campaign to help victims.

Council set to become first to debate pre-payment meters scandal

Norwich City Council will become  the first local authority to formally debate the pre-payment meters scandal.

Papers for the Council meeting on 31 January include a motion lodged by councillor Lucy Galvin.

The motion calls for the Council to continue its work to support vulnerable households on pre-payment meters and to urge the central government to do more to help.

Energy Secretary Grant Shapps has recently announced that the Government will ask energy firms to abandon the forced transfer of homes onto pre-payment meters.

However, Norwich political leaders will be asked to write to the minister to express their continuing concerns about recent investigations by the media which revealed energy firms have secured almost 500,000 court warrants to install traditional pre-payment meters.

With reports suggesting that many of these court applications are approved in bulk, the Council leaders will also be asked to write to Norwich Magistrates Court to ask what processes magistrates followed prior to granting energy firms warrants of entry. 

The motion goes on to call for more information about how magistrates could be sure these households were not classed as vulnerable and what sanctions magistrates can take if it is found that energy firms did not complete vulnerability assessments on customers before applying for a warrant. 

Cllr Lucy Galvin (Nelson ward, Green Party), commented:

Pre-payment meters could cost customers in excess of £200 more for their energy this winter and so the Council must use all communications methods at its disposal to explain, inform and continue to underline to residents that they do not have to accept a prepayment meter.

Council resources are stretched, but we also need to make extra attempts to ascertain which city council tenants have prepayment meters, especially those who might be at extra risk of being cut off, and monitor them to offer assistance, for example through housing officer and other support.

A spokesperson for the End Fuel Poverty Coalition, commented:

3.2m pre-payment customers have been cut off from keeping themselves warm and sadly it is falling to councils to pick up the pieces caused by the delays in central Government action on this issue and the inadequate nature of support for vulnerable people.

Figures for the Warm this Winter campaign found that 64% of pre-payment meter customers are vulnerable, with 51% having health conditions or disabilities.

A third are now living in cold, damp homes posing a health risk to themselves and their families.

The fact is that none of these vulnerable customers should be on pre-payment meters in the first place.

The End Fuel Poverty Coalition continues to call for a full ban on the forced transfer of customers to all kinds of pre-payment meters and a Government inquiry into energy firms practices around pre-payment meters. 

Other councillors wanting to use a copy of the motion to tailor to their own council area can find this online.

Government issues cease and desist order on pre-payment meters

The Government has finally responded to the long-running campaign to ban the forced transfer of homes onto pre-payment meters.

The weekend has seen further reports about the “murky” court process which leads to warrants being issued in a kangaroo court process. And in  media briefings on Sunday, the Secretary of State, Grant Shapps MP has set out steps to tackle the issue.

These include a call for suppliers to voluntarily end forced prepayment switching.

A spokesperson for the End Fuel Poverty Coalition commented:
The Government’s cease and desist order to energy firms is a welcome move, but falls short of the full ban on the forced transfer of homes onto pre-payment meters which we need to see to protect the most vulnerable.
We also need to ensure that this voluntary approach covers the millions of people on smart meters, who must never be switched onto pre-payment mode without their active, informed consent.
Recent revelations about the role of the courts have also been left unanswered.
We need a full investigation to get to the bottom of the scandal quickly and ensure that if mistakes have been made, that those responsible are held to account and those that suffered are compensated.
The full detail of the Government plan is yet to be confirmed with Sky News reporting the Government will meet with Ofgem, energy suppliers and an advice charity next week.
Image: Shutterstock

Millions of energy customers hit by 7.6% hidden price hike

Customers on popular electricity energy tariffs saw their bills shoot up on 1 January 2023 according to new data released today. [1]

The figures, from Future Energy Associates and reported by the BBC, found average annual rises of £116 for electricity-only Economy 7 tariffs, revealing an 7.6% increase.

The result is that Economy 7 users now pay 46% more than other electricity tariffs (an average of £464 per household, per year, although many electricity-only households use significantly more than an average household). [2]

Standard credit customers also saw their electricity bills increase, while there was variation in changes of unit rates for those on direct debit and prepayment meters.

Compared to those customers on dual fuel tariffs, electricity rates are now 2% more expensive for electricity-only customers.

With 2.1m households only using electricity for their heating, many are struggling to stay warm this winter. [3]

Campaigners are now calling for the Government to extend the “alternative fuel payment” of £200 to all households on electricity only tariffs and commit to roll out reforms to the energy pricing arrangements as soon as possible.

Clement Attwood from Future Energy Associates commented:

It is a little known fact that it is actually up to the supplier to determine rates for some tariffs that are not explicitly capped by the current Energy Price Guarantee rate.

This has caused the average electrical Economy 7 tariff to be more expensive than the average active electrical constant rate tariff. We also saw a higher level of variation between dual fuel and electricity-only tariffs than we expected, which will hit those on the margins of fuel poverty the hardest.

Price variations similarly do occur by region and certain regions consistently have more expensive tariffs.

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

As the growth of cheap UK renewables drives down the cost of generating electricity, energy firms should be lowering the rates they charge. The government needs to urgently get on with reforming energy pricing, as well as ramping up the development of homegrown renewable energy, so that consumers can benefit from cheaper, clean energy now and in winters to come.

One Economy 7 customer, Jonathan Bean from Buckinghamshire saw his Scottish Power bills jump by 13%. He commented:

I’m already paying three times more for my heating and hot water than those with gas or oil.  Now yet more price increases have come in, whilst support payments are being cut.

My son and I will literally freeze this winter, and next.

A spokesperson for the End Fuel Poverty Coalition commented:

Millions of people have been forced into deeper levels of hardship this winter due to this price hike. This will lead to people living in cold damp homes which can cause significant health complications, which only puts more pressure on the NHS.

It is completely unreasonable that those customers on Economy 7 tariffs are paying significantly more for their electricity and also receiving significantly less support with their bills from the Government.

Ruth London from Fuel Poverty Action said:

There is simply no justice in the energy pricing system. These prices for Economy 7 and the costs of all-electric homes are a scandal, along with imposition of prepayment meters, and high standing charges, and the way people on District Heating networks are left out of all protection. Not to mention ill-repaired housing, bad insulation, and damp.

Again and again the people who pay most are those who have least to begin with. We need Energy For All – it is not a luxury, it’s a right.

ENDS

Graphic: Shutterstock

[1]  Future Energy Associates are energy data specialists and software developers, providing retail tariff data and services to the government, private and third sector. Tariffscan, their tariff monitoring platform covers the whole domestic retail market across more than 50 suppliers. Updated daily, Tariffscan is provided through a dashboard and modern API giving users direct access to the latest tariff rates and insight. For more information on Future Energy Associates, visit https://www.futureenergy.associates/

The increases seen are largely due to EDF and Scottish Power raising Economy 7 rates. A standout example would be the EDF tariff where the most expensive economy 7 tariff is £598 more expensive than its equivalent constant rate electrical tariff.

3.3m households were on Economy 7 tariffs in 2021 in England alone (LG Inform / BEIS data: https://lginform.local.gov.uk/reports/lgastandard?mod-metric=3785&mod-period=2&mod-area=E92000001&mod-type=namedComparisonGroup&mod-group=AllSingleTierAndCountyLaInCountry_England ). The BBC report the figure at 2.5m.

[2] Based on ofgem’s consumption figures. Source: https://www.ofgem.gov.uk/energy-advice-households/average-gas-and-electricity-use-explained

[3] 2.1m households figure from ONS in its latest report on the census data: https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/census2021howhomesareheatedinyourarea/2023-01-05