Category: News

Tory leadership hopefuls face fuel poverty crisis in constituencies

New estimates, first reported in the i Paper, have revealed the impact of the energy bills crisis on the constituents of the Tory leadership contenders.

The End Fuel Poverty Coalition has calculated that almost 60,000 households will be in fuel poverty in these four seats alone from 1 October 2022 based on current energy price cap estimates. 

Across England, the estimated total is around 7.7m households likely to face fuel poverty this winter (32%).

Across the four constituencies, residents of Liz Truss’ seat in South West Norfolk will be hit the hardest with almost 40% of homes plunged into fuel poverty – even after taking into account the current levels of support promised by the previous Chancellor.

In Rishi Sunak’s own seat, more than a third (37%) of households will be in fuel poverty this coming winter.

Without urgent action from the next Prime Minister, 28% of households in Kemi Badenoch’s seat and 26% of people in Penny Mordaunt’s constituency will also face fuel poverty.

Last week, a new campaign group was formed by some of Britain’s biggest charities, calling for the leadership contenders to promise urgent action to help people through the cost of living crisis.

The group wrote to all MPs standing in the contest to ask them to pledge to:

  • Provide financial support to people who without urgent action will be on the front-line of poverty this winter
  • Upgrade and insulate homes across the UK to bring down bills and prevent energy waste
  • Rapidly expand clean energy, which is now four times cheaper than gas, to urgently lower energy bills
  • Stop drilling new oil and gas fields so that we can escape our dependence on volatile fossil fuels.

None of the candidates have responded to the letters as yet (Tue 19 July 0700). 

Paul Dixon, Rural Evidence Manager for Action with Communities in Rural England (ACRE) said: 

This is a wake-up call for the Conservative leadership candidates and a reminder that fuel poverty is as much a problem in rural constituencies as it is in urban areas. The new Prime Minister must prioritise this issue and take decisive action to make sure everyone stays warm this winter.   

Ruth London from Fuel Poverty Action added: 

These demands are simple and urgent and there’s plenty of money available – including the millions of pounds being used to subsidise fossil fuel profiteers.  How can any of these candidates claim that saving lives is a priority for them, when they haven’t pledged action or even responded to this urgent letter?

Ian Preston, Director of Household Energy Services at the Centre for Sustainable Energy, commented:

We need to literally insulate people from the impact of future energy price increases! If we insulate our homes and buildings well, they’ll become more energy-efficient and it saves people money so they can buy other essential items. But more than this it also helps with our energy security by reducing our dependence on fossil fuels.

A spokesperson for the End Fuel Poverty Coalition, commented:

The figures show that drastically rising levels of fuel poverty are an issue right across the country, from the inner cities to our rural areas. Even in warmer weather, fuel poverty is a huge issue and this winter it will become devastating for millions.

Candidates in the leadership race have started to acknowledge the issue, but none have yet grasped the scale of the problem and the full range of actions needed to help people this winter.

Without a co-ordinated plan to end fuel poverty, one of the first acts of the new Prime Minister will be to preside over a miserable and dangerous winter for millions of households.

Tessa Khan, director of Uplift said:

What actions will they, as Prime Minister, take to help people through this winter and permanently lower energy bills? This is what people are interested in, not this parade.

Despite this, we’ve heard virtually nothing from the candidates on their plans to fix our broken energy system, whether that’s support for upgrading the efficiency of homes, which is the cheapest, quickest way of reducing bills, or what they will do to accelerate renewables, which is now the cheapest source of energy. Proposals to expand oil and gas, or fracking, are for the birds with high gas prices predicted to stay until the end of the decade.

With winter less than 3 months away, the candidates for PM need to set out credible plans now for what they will do to help people stay warm this winter and in winters to come, because bills won’t come down otherwise. Unaffordable heating bills will be a stark reality for millions for years and it demands a coherent, practical response now.”

Methodology used to calculate the statistics can be read here.

How fuel poverty is still an issue during the summer

The majority of campaigning on fuel poverty is done in light of the excess winter deaths and wider health problems living in cold homes causes.

But fuel poverty also affects people in warmer weather.

As Dr Harriet Thomson, a Senior Lecturer in Global Social Policy and Sociology at the University of Birmingham, writes:

“If the effects of the heatwave are predicted to be so severe and/or prolonged they will extend outside the health and social care system. In other words, the extreme heat could cause illness and death, including among those with no pre-existing illnesses.”

Indeed, during the last major UK heatwave, the NHS was at crisis point and during the same year, in Japan more than 130 people died and 70,000 were rushed to hospitals; while in Quebec, the heat claimed the lives of 90.

And the situation could get worse with the Met Office predicting heatwaves will become more regular and more intense in the UK.

As the Big Issue reports, it will be the vulnerable who are most at risk from high temperatures.

Traditionally, people would turn to fans and air-conditioners to help keep themselves and their families cool, but the World Economic Forum predicts that using air-conditioners increases energy bills by 42% and warns:

“As temperatures increase around the world, cooling is emerging as a new, basic need – even in countries that traditionally have not previously required such appliances.”

But the solutions to summer fuel poverty are similar to cold weather fuel poverty. While good insulation of housing helps reduce the need for heating systems, so it can also reduce the need for cooling systems too.

As Dr. Thomson explains:

“We know that housing plays a huge role in mitigating the risks of excessive indoor warmth.

“Our  research within Eastern and Central European countries found that overheating was most common in districts dominated by large apartment blocks, particularly if the building lacked cooling features such as shutters and tiled floors, natural shading from trees, and the ability to cross-ventilate.”

At the Centre for Sustainable Energy, experts have provided easy (and cheap!) advice on how to keep your home cool, but as Ian Preston from the CSE adds:

“A well-insulated and ventilated home will actually help with keeping the heat out too. If you’re able to invest in insulation do so, just make sure ventilation is considered at the same time.”

As Greenpeace UK’s energy campaigner, Georgia Whitaker, argues investing in a nationwide programme to green our homes will not only help us cope better when temperatures soar but also help bring down energy bills, tackle the cost of living crisis and slash carbon emissions to help tackle climate change, which is the driving force behind the increasing numbers of heatwaves we’re experiencing:

“The number one thing the government should be doing to beat the heat is insulating houses. Insulation keeps homes cool in the summer, warm in the winter and means people use less energy because less of it is wasted through draughty windows, walls and roofs.”

A spokesperson for the End Fuel Poverty Coalition commented:

“Keeping cool in the summer is just as important as staying warm in winter for many vulnerable groups.

“Yet energy bills remain at record highs meaning that running air coolers and fans will put a strain on household finances. In addition, efforts to insulate homes continue to lag behind what is required.

“Combined, this means that people will be subject to the full force of this summer’s heat waves.”

Leading charities urge PM-hopefuls to end fuel poverty

Warm This Winter, a new national coalition group, has published an open letter in The Times to all candidates in the race to become the next Prime Minister asking that they urgently set out how they plan to address the cost of living crisis driven by soaring energy bills.

The letter calls on each of the candidates to use these next precious few weeks to set out practical measures for how they will help people now, and how they will ensure we have lower energy bills in future. 

The campaign, which is backed by the End Fuel Poverty Coalition, is pushing for practical solutions that have the public’s support, and which are ready-to-roll out now, including:

    • Providing financial support to people who without urgent action will be on the front-line of poverty this winter
    • Upgrading and insulating homes across the UK to bring down bills and prevent energy waste
    • Rapidly expanding clean energy, which is now four times cheaper than gas, to urgently lower energy bills
    • Stopping drilling new oil and gas fields so that we can escape our dependence on volatile fossil fuels.

A spokesperson for the End Fuel Poverty Coalition commented:

Based on current estimates, well in excess of a third of all homes will be in fuel poverty this winter, yet the candidates to be our next Prime Minister are ignoring the single most pressing issue facing families across the country.

Unless leadership candidates promise bold and decisive action, the next Prime Minister’s first act as leader will be to preside over the worst winter for millions of people in living memory.

Full letter to candidates

We are writing to you from Warm This Winter – a new national coalition representing 40 organisations and over 22 million people from across the UK during this time of national economic crisis – to ask what your plan would be as Prime Minister to address the cost of living crisis.

We are headed into a potentially catastrophic winter. In eleven weeks time, more than a third of households – many millions of British families –  may not be able to afford to heat their homes. Meanwhile, earlier this year, 2.3 million families on low income were going without enough food and were unable to keep their homes warm. 

According to the latest predictions, from October 1st the average annual energy bill will be over £3200. That means, for example, that the average pensioner will spend more than a third of their state pension on heating their home – and many people, including families, will have to choose between heating and eating. In the words of Martin Lewis last week: “millions of households will be forced into poverty unless we act. This is a genuine, urgent emergency.”

So far in the Conservative leadership campaign, no candidate has put forward a credible plan to support families, businesses, village and community halls, places of worship, hospitals and schools to keep their buildings warm this winter. Indeed whilst the public has grasped the scale and seriousness of the crisis heading our way, none of the leadership candidates seems to have done so.

We believe that in these next precious few weeks – when the Government should be planning and preparing for this winter – you should set out your plan for tackling the crisis of unaffordable energy bills, which are set to remain high until at least 2025. We know that this emergency, fuelled by the spiralling price of gas and by the war in Ukraine, does have solutions that are ready-to-roll out now – and that would also help us protect the future of the natural world – these include:

  • Providing financial support to people who without urgent action will be on the front-line of poverty this winter
  • Upgrading and insulating homes across the UK to bring down bills and prevent energy waste
  • Rapidly expanding clean energy, which is now four times cheaper than gas, to urgently lower energy bills
  • Moving away from drilling new oil and gas fields so that we can escape our dependence on volatile fossil fuels

Our members and supporters want to know what your plan would be – so we can have a proper debate on the most important and urgent issue facing this country. Whilst we may not all have a say in who becomes the next Prime Minister, we can ask that any candidate has a practical plan to keep people safe and warm this winter. 

We would be keen to meet with you to discuss this further.

Full list of signatories:

  1. End Fuel Poverty Coalition
  2. The Climate Coalition
  3. CPRE The countryside charity 
  4. Wildlife & Countryside Link
  5. Save the Children
  6. WWF UK
  7. The Wildlife Trusts
  8. Oxfam
  9. Fuel Poverty Action
  10. Fair Energy Campaign
  11. Robin Hood Tax
  12. The Centre for Sustainable Energy
  13. Energy Action Scotland
  14. Chartered Institute of Environmental Health
  15. Possible
  16. Ashden
  17. Austerity Action Group part of Social Workers Union
  18. New Economics Foundation
  19. Uplift
  20. Camden Federation of Private Tenants
  21. Regen
  22. Northern Housing Consortium
  23. Groundwork
  24. Advice for Renters
  25. Fairer Housing
  26. Friends of the Earth Scotland
  27. MCS Charitable Foundation
  28. Fairness Foundation
  29. Tax Justice UK
  30. Women’s Budget Group
  31. The Economic Change Unit 
  32. Wellbeing Economy Alliance Scotland
  33. IPPR
  34. Chartered Institute of Housing
  35. The Centre for Ageing Better
  36. The Working Class Economists Group
  37. Greenpeace UK 
  38. Friends of the Earth England, Wales and Northern Ireland
  39. 38 Degrees
  40. Action with Communities in Rural England

    41. %0

Business groups call for action on fuel poverty

Leading business groups, including the Advertising Association, Business In The Community, Food and Drink Federation, the International Chamber of Commerce (ICC) and RenewableUK, have urged Conservative Party leadership candidates to support the millions of people facing fuel poverty.

In an open letter, the groups also call on the next Prime Minister to implement manifesto commitments on net zero and nature restoration.

The letter states:

In today’s challenging context, an accelerated rollout of low cost, clean energy, energy efficiency, and industrial decarbonisation is vital to protect the UK from the volatile global fuel prices underpinning the ongoing energy crisis.

This is an urgent priority as skyrocketing energy bills inflict considerable costs on businesses and push ever more households into fuel poverty.

Eliot Whittington, Director, UK Corporate Leaders Group said:

The Conservative Party has a significant track record of climate leadership. Their new leader will have a choice between building on this track record and delivering for the UK economy and society or abandoning it and condemning the country to fall behind on the energy transition and face unnecessary costs and risks.

Forward looking businesses want more, not less, ambition on climate action, especially as we see the ramifications of volatile fossil fuel supply chains ramping up the cost-of-living crisis and reducing regional energy security.

The next Prime Minister must centre climate policy and continue delivery of net zero and regenerating the UK’s nature.

Julie Hirigoyen, CEO, UK Green Building Council said: 

As prices soar businesses are looking for the next Prime Minister to deliver on the UK’s legal climate commitments, not ditch them.

Tackling the climate and cost of living crises are two sides of the same coin. Insulating our homes and businesses will bring bills down, bolster energy security and help achieve net zero carbon, whilst giving a real boost to the economy and industry.

Sandy Begbie CBE, Chief Executive Officer, Scottish Financial Enterprise said:

Whoever succeeds Mr Johnson as Prime Minister will face significant challenges, particularly tackling the cost of living crisis, accelerating economic recovery and addressing the pressing climate emergency.

New Prime Minister must make ending fuel poverty a priority

The End Fuel Poverty Coalition has laid down a challenge to the candidates for the Conservative Party Leadership Contest to confirm they will tackle fuel poverty if they become Prime Minister.

At the heart of the pledges the Coalition is asking candidates to make, is for them to fully commit to spending the full amount promised by the Conservative Manifesto for energy efficiency during this Parliament.

Candidates will be asked to support the following measures:

  1. Urgently address the operational issues with the package of support announced by the previous Chancellor in May 2022.
  2. Commit to further, short-term, financial support for people in fuel poverty this winter and to mitigate any further increases in the price cap over and above the £2,800 predicted by Ofgem in May 2022.
  3. Co-ordinated action to rapidly improve the energy efficiency of our homes, fulfilling 2019 Conservative Manifesto commitments and including a skills strategy to ensure work is delivered to the highest standards.
  4. Announce a review and subsequent reform of the energy supply market to consider the introduction of policies such as a social tariff, energy for all allowance and a total price cap ceiling.
  5. Work with energy firms to ensure the country has a secure, renewable-led, domestic energy supply.

The Coalition will write to MPs as they declare their candidacy and will publish responses received.

A spokesperson for the End Fuel Coalition commented:

The next Prime Minister could leave a legacy of setting the country on the path to ending fuel poverty.

But solving the public health and social inequality challenges caused by rocketing energy bills will require a full package of support to those in fuel poverty now – as well as measures to ensure no more households become fuel poor this winter.

At the heart of candidates’ policy proposals must be a commitment to implement their party’s 2019 Manifesto promises on household energy efficiency in full.

Energy Company Obligation rules set out by Government

The End Fuel Poverty Coalition has welcomed news that the Government has laid down the regulations for the new “Energy Company Obligation” Scheme to help improve the energy efficiency of peoples homes.

The scheme, known as ECO4, will last until 2026 and will help insulate homes, reducing energy bills. To access the fund, households will need to speak to their energy supplier or social housing landlord.

A spokesperson for the Coalition commented:

It’s welcome that the necessary legislation is finally being laid, but it is absolutely vital that we get swift passage of the regulations before the summer and with cross-party support to ensure no more bumps in the road.

We would also encourage BEIS and Ofgem to continue to work with installers and energy companies to keep up the number of retrofits carried out this summer before further price hikes kick in, and take other steps to ensure effective and smooth delivery (such as tackling supply chain and skills shortage challenges).

There are still some areas where the scheme could be improved, for example in ensuring more advice can be provided and that there is more support for the lowest income households so that those who can make household contributions do not receive overly preferential treatment.

Customers will also need more support if their boilers breakdown. There is a massive reduction in the allowance for this in ECO4, and no good alternative process for emergency (keeping in mind that a heat pump install will take longer could leave households without heating for a longer period in winter).

Finally, given the scale of the current cost of living crisis, more support will be needed to help a wider number of households reduce their energy bills permanently through energy saving measures such as insulation and heat pumps.

We encourage the government to boost existing schemes with new public spending commitments in the forthcoming Autumn Budget.

Government urged to address ten failures in energy bills plans

Fuel poverty campaigners have revealed ten significant failures in the Government plans to address the escalating energy costs this winter.

In a letter to the Chancellor and other Cabinet Ministers, the End Fuel Poverty Coalition has called for a meeting to discuss operational problems with the measures announced by the Government on 26 May.

Among the concerns highlighted by the group of more than 60 charities, trade unions, social enterprises, local government representatives and other campaigners are:

  • A failure of proposals to help those on pre-payment meters, in Park Homes, off-gas, on heat networks and not on electricity meters.
  • The risk that those in the Private Rented Sector will not see the benefits of Government support passed on by landlords.
  • Concerns about how the financial support may impact on the care charges disabled, elderly and vulnerable people are assessed on.

With the winter 2022/23 price cap now predicted to exceed the £2800 Ofgem estimates, the End Fuel Poverty Coalition has also called for wider reform to the energy market.

It warns that further, short-term, financial support for people in fuel poverty will be needed this winter to mitigate any further increases in the price cap above £2800 and support for those suffering already.

The Coalition has also repeated its calls for a review and subsequent reform of the energy supply market to consider the introduction of policies such as a social tariff, energy for all allowance and a total price cap ceiling.

Anne Vivian-Smith, a disabled former community worker from Nottinghamshire, commented:

The lack of urgency from the Government is terrifying. Special tariffs for disabled customers who have unavoidably high energy use need to be created now. Disability benefits have not increased, yet disabled people have very few ways to economise without cutting something essential like food or care.

Heating or eating isn’t a slogan, it’s reality, it’s now and we need help.

A spokesperson for the End Fuel Poverty Coalition, commented:

As well as operational concerns about the existing Government support, Ministers must also realise that the measures will only seek to prevent additional homes entering fuel poverty and help to stop many of those in fuel poverty becoming utterly destitute. It will not fundamentally improve the situation of the 6m-plus households already in fuel poverty.

We would urge the Government to make further statements to set out additional financial support for people in fuel poverty this winter, announce co-ordinated action to improve the energy efficiency of our homes and ensure we have a secure, renewable-led, domestic energy supply.

Ian Preston, director of household energy services at the Centre for Sustainable Energy said:

It’s not fair that people, especially those on low incomes, are paying for the energy market failure through bills. If the government insists on reclaiming these costs via our bills, then they should be collected at the unit rate so those that consume more energy pay more. The average annual energy bill increase is significant for people on low incomes, who are already having to make tough choices about paying for energy or other essentials like food. They simply can’t cover any additional costs.

Every month, CSE’s advice service helps thousands of people reduce their bills and we’ve already seen unprecedentedly high numbers of people seeking energy saving or financial advice. Urgent support is needed to cope with the UK pandemic of fuel poverty, but the only long-term solution is insulation.

We need to stop energy waste from cold buildings and homes. If you insulate someone’s home, you are literally insulating them against the cost of energy.”

Ruth London from Fuel Poverty Action commented:

Instead of further subsidising investment in polluting fossil fuels, the government should be ensuring that every household has enough energy to keep warm and keep the lights on. Energy For All – a free band of energy to cover basic needs – would spur a sudden interest in insulating UK’s notoriously cold damp homes.

Roni Marsh, Money Advice Team Leader at South West London Law Centres, said:

We are seeing clients on prepayment meters who do not have the funds to turn their gas or electric on. South West London Law Centres provides debt advice to help people reduce debts and access additional funds but this does not fix the fact that someone has not got enough money to afford to buy gas or electric.

We are living in the age of heat or eat and we cannot fix this for a client on a limited income.  South West London Law Centres believes that a social tariff is needed. To have to tell someone that there is no way we can reduce their fuel costs any further and give them a foodbank voucher to try and free up the money they would spend on food so they can spend that on fuel instead is not a long term option.

Laura Santamaria, Chair for Fair Energy Campaign, added:

Should a family in a developed country have to choose between heating or eating? As the situation keeps spiralling out of control, the number of households under fuel poverty is increasing exponentially. This unprecedented scenario in UK history has set the scene for urgent action towards energy justice and deep sector reform. Access to clear, affordable energy is a human right.

Jan Shortt, General Secretary of the National Pensioners’ Convention said:

The NPC has also written urging Ofgem and the Chancellor to work together to urgently look at immediate and long term measures to help those struggling with fast rising energy bills. We don’t believe the Chancellor’s emergency measures are enough to deal with the ongoing hikes in energy prices and we need to see a long term strategy from the government and Ofgem.

The NPC is also asking for: the reduction or removal of Standing Charges; a permanent £500 increase in the Winter Fuel Allowance; an end to Price Discrimination against those who can’t pay online, or by Direct Debit, or who don’t have Smart Meters; the removal of 5% VAT on energy; and major investment in insulation of cold, damp housing.

Georgia Whitaker, Oil Campaigner at Greenpeace UK, added:

It’s no wonder the UK is in the mess it’s in given the incessant short-term thinking in government. Yes, urgent financial support is desperately needed for the millions struggling to pay their bills. But without tackling the root-cause of fuel poverty, this crisis is only going to get worse. It doesn’t take a genius to work out that providing warm homes that waste less energy and cost less to heat will bring down bills, so why is the government so reluctant to invest in improving the efficiency of people’s homes?

A spokesperson for the Chartered Institute of Housing added:

We welcomed the Chancellor’s emergency measures to support people in fuel poverty, but they were only a sticking plaster. The best way to help keep people’s energy bills down, now and in the future, is to invest in a national insulation scheme to tackle energy inefficiency in our homes, which are the leakiest in Europe. Landlords need support from the government to do this effectively and at pace, including funding and programmes to tackle the shortfall in skilled retrofitters across the country.

ENDS

Full copy of the letter to sent to the Chancellor and copied to the Secretary of States at DWP, LUHC and BEIS:

The End Fuel Poverty Coalition welcomes the support you outlined in the House of Commons on 26 May 2022.

Two important principles have now been established:

  • That financial support for those in fuel poverty will be needed in the short-term
  • That the Government has identified the means with which to fund this significant support

However, we have heard concerns from our Members that there are important questions which remain to be answered by your officials in relation to the support on offer.

There are ten key areas we need clarification on:

  1. How will the scheme work to provide funding to the millions of people on pre-payment meters given the challenges of previously used voucher systems?
  2. What steps can be taken to support those in the Private Rented Sector to ensure landlords pass on the full savings of bills (especially in Multiple Occupancy Households)?
  3. What support will be available to the estimated 200,000 people living in Park Homes?
  4. How can financial help reach those households who do not receive electricity bills?
  5. What will the impact of financial support be on the care charges disabled, elderly and vulnerable people are assessed on?
  6. What will the impact of support be on the benefits cap and the minimum income guarantee?
  7. How will access to the Household Support Fund be made easier and consistent across the country?
  8. What other steps will the Government be taking to ensure full take up of benefits this winter?
  9. How can those living off-gas and people on heat networks be better supported by the Price Cap?
  10. What further steps can be taken to support those households already in fuel debt as a result of recent price increases?

We would also request re-assurances that customers will no longer be penalised for the failures in the energy market through standing charges or other costs added to energy bills.

Members of the End Fuel Poverty Coalition have ideas to help address the above questions and we would welcome the opportunity to facilitate a meeting with you and Coalition Members to discuss the proposed solutions.

We are aware that you will have already heard from our Members that we need urgent, co-ordinated, action to improve the energy efficiency of our homes. We would like to take this opportunity to support these calls and also ask you to prioritise funding for a  skills strategy to deliver the “retrofit army” needed to deliver the improvements needed.

We would also request that you recognise that the support provided will only seek to prevent additional homes entering fuel poverty (based on the predicted Ofgem price cap) and stop many of those in fuel poverty becoming utterly destitute. It will not fundamentally improve the situation of the 6m-plus households already in fuel poverty.

Therefore, we would urge you to make further statements to set out further financial support for people in fuel poverty this winter, announce funding for the action needed to improve the energy efficiency of our homes and ensure we have a secure, renewable-led, domestic energy supply.

End Fuel Poverty Coalition calls for further Ofgem action

The End Fuel Poverty Coalition has called on Ofgem to instigate five urgent reforms to the energy market to help the millions of homes in fuel poverty.

In a letter to the chief executive of the regulator, the Coalition calls for Ofgem to abandon plans to introduce a quarterly price cap increase in January 2023 which will penalise households in the depths of winter.

It also argues that changes to the price cap must be made to support those on pre-payment meters and add consumer protection to consumers who live off-gas and on heat networks.

As record numbers of households face fuel poverty this winter, the Coalition also calls for Ofgem to work with energy suppliers to create a package of additional support from suppliers for this winter.

The package suggested would be similar in scope to that introduced during the Covid pandemic, but enhanced in its ambition given the numbers of people expected to be in fuel poverty this winter and extend to debt relief rather than deferral.

The Coalition also calls for urgent reform of the regressive and punitive standing charges regime that penalises the most vulnerable.

Longer-term, the Coalition has formally requested that Ofgem reviews the operation of the price cap and works with consumer groups to set out reforms to the market that would offer more support to those in fuel poverty.

Campaigners have urged the regulator to consider the introduction of a price ceiling (i.e. a “super cap” set at current levels over which consumers will not have to pay for fair usage) and the introduction of a social tariff or “energy for all allowance.”

A spokesperson for the End Fuel Poverty Coalition, commented:

With a new political will to address the challenge of the millions of homes fuel poverty, we need to see Ofgem taking action to better support households across the country.

Ruth London from Fuel Poverty Action, said:

Ofgem has supported higher charges for people on prepayment meters, and has added to the burden of the standing charge element of bills. Both force people on low incomes to pay for energy at much higher rates than the wealthy. The current crisis makes it urgent to reverse this grotesque injustice and bring in Energy For All – a free band of energy to make sure that everyone can keep warm and keep the lights on.

Ian Preston, director of household energy services at the Centre for Sustainable Energy said:

While we welcome new measures of support, these are only short-term sticking plasters. To help tackle soaring energy bills and cold homes we need a longer-term, large scale home retrofit programme. This must include a green skills strategy to ensure there are enough people to do the work across all trades. We also need more support for energy advice services. CSE’s energy advice line calls are at an all-time high, and it’s going to be another tough winter for so many people unless urgent action is taken.

Rhiannon Hughes, South West London Law Centres, commented:

Some people on prepayment meters do not have the funds to turn their gas on. South West London Law Centres provides debt advice to help people reduce debts and access additional funds but there needs to be permanent solutions. 

The current system is forcing people into crisis and although advice for fuel bills is critical – a better solution is needed. The high cost of services charges on gas prepayment meters mean that people like my uncle disconnect.

My uncle who is partially sighted, a pensioner and works can not afford to put any money on his prepayment meter, when he does have a bit more cash he tries to turn on his gas for heating but because the service charges have been piling up, it has caused so much debt on the meter that any money he puts on will be swallowed in debt repayment, not on heating.

It is already an unjust situation that is due to get worse so needs urgent reform.

Jan Shortt, General Secretary of the National Pensioners’ Convention added:

The NPC has also written to Ofgem and the Chancellor asking them to work together to urgently look at immediate and long term measures to help those struggling with fast rising energy bills. We are calling for a number of specific actions before the price cap rises again in October to a shocking average of £2,800 a year.

NOTES

Full text of the letter to Jonathan Brearley, Chief Executive of Ofgem, also copied to the Secretary of State for Business, Energy and Industrial Strategy and the Chair of the Commons BEIS Committee:

The End Fuel Poverty Coalition would like to thank you for your appearance at the Commons BEIS Committee which sparked the financial support outlined by the Chancellor on 26 May 2022.

With a new political will to address the challenge of the millions of homes in fuel poverty, we would also request that Ofgem reviews the areas where the regulator could better support households across the country.

First, we would urge you to abandon plans for a quarterly price cap and instead move to a three-times a year (at most) model. This would ensure more flexibility in the cap, but also mitigate a devastating January price increase, as predicted by Cornwall Insight, in the middle of winter.

Second, we need to see reform of the price cap itself – especially so that it does more to help those on pre-payment meters and is extended to cover people off-gas and on heat networks.

More broadly, we also need to see Ofgem lead the way to ensure better support for vulnerable customers, including a package of additional support from suppliers for this winter.

This support should be similar in scope to that introduced during the pandemic, but enhanced in its ambition given the numbers of people expected to be in fuel poverty this winter. We would also welcome Ofgem’s views on how it can ensure no-one is disconnected this winter or abandoned by their supplier.

We also need urgent reform of the regressive and punitive standing charges regime that penalises the most vulnerable. These charges should be reduced. In addition, customers should no longer be penalised for the failures in the energy market, which we will highlight as an issue to the Treasury.

Finally, in the longer-term we would request that Ofgem reviews the operation of the price cap and works with consumer groups to set out reforms to the market that would offer more support to those in fuel poverty. This could include the introduction of a price ceiling (i.e. a “super cap” set at current levels over which consumers will not have to pay for fair usage) and the introduction of a social tariff or “energy for all allowance.”

We would welcome the opportunity to speak to you about these issues at a future meeting of the End Fuel Poverty Coalition.

Coalition responds to Chancellor’s cost of living crisis statement

End Fuel Poverty Coalition members have been responding to today’s announcement by the Government that additional support will be made available following reports of record energy price rises.

A spokesperson for End Fuel Poverty Coalition, commented:

“The Government has agreed in principle that a Windfall Tax is vital and the Chancellor has clearly listened to concerns that support for those in fuel poverty needs to be both widespread, but also focussed on the most vulnerable groups.

“But by October, energy bills will have increased by over £1,500 in a year. So while the measures announced today will take the sting out the tail of recent increases, the underlying problem of millions of households in fuel poverty remains.

“People in fuel poverty will need further reassurance that support will be there in the medium-term and we need full investment in a Great Homes Upgrade to improve the energy efficiency of homes as a national priority.”

Ami McCarthy, political campaigner for Greenpeace UK, said:

“This windfall tax will serve only as a sticking plaster. While providing support to millions struggling with sky-high energy bills is 100% the right thing to do, by only skimming the top 25% off oil and gas company profits Sunak has missed a huge opportunity to tackle the root cause of the cost of living crisis and the climate crisis together.

“Taxing the full profits at 70% would have more than doubled the cash available. This could have been used to provide short-term relief to households, as well as upgrades to homes to ensure they use and waste less energy, and keep bills low for years to come.

“Instead of driving money into clean energy solutions, Sunak has used this announcement to encourage oil and gas company investments. Yet the current cost-of-living crisis is mostly a result of gas price rises – hard-up families shouldn’t have to wait for the Prime Minister and Chancellor to deliver cheaper and cleaner energy to help with their bills.”

National Energy Action commented:

“By October the average energy bill was predicted to more than double from last year. This vast increase would have pushed millions of households into destitution, turning to desperate measures to stay warm at home. Without additional support, we were facing an utterly disastrous winter. The Chancellor’s new package today averts the darkest of outcomes, offering some hope to the millions of fuel poor households across the UK.

“Millions will still be struggling and the energy crisis is far from over, but a large, more targeted intervention is what was needed ahead of winter.

“The Government urgently needs to plan for energy prices to remain high for the longer term. This must include a social tariff, setting an affordable price of energy for the poorest households. And there must be additional effort into making the homes of fuel poor households more energy efficient, making them more resilient to the sort of price shock that they are currently shouldering.”

James Taylor, Director of Strategy at disability equality charity Scope, said:

“The Chancellor has importantly acknowledged that life costs more if you are disabled.

“This package is a significant short-term boost to disabled people whose backs are against the wall.

“But inflation and energy prices are still running riot, and disabled people are much more likely to live in poverty.

“Even before the cost of living crisis, disabled people were facing extra costs of almost £600 a month. Many struggling with sky-high bills from needing more energy to charge vital equipment, or extra heating to stay warm.

“Our Disability Energy Support Service has been inundated by disabled people in crisis and nowhere else to turn.

“The Chancellor needs to continue to use the benefit system in the long term to target support at disabled people where it’s needed most. The Government must also make sure that no disabled people fall through the gaps in receiving the support needed to get through this winter and beyond.”

Caroline Abrahams, Charity Director at Age UK, said:

“Age UK is pleased and relieved that the Government has recognised the extreme risks soaring inflation pose to the health and welfare of pensioners, particularly those on low incomes, and has announced a package of measures today with the aim of mitigating them. With prices continuing to go up for everything they buy, life is certainly not going to be easy for many older people over the next few months, but the extra support the Chancellor is bringing forward will make a difference and will protect most from the worst of the unprecedented surge in the cost of living they face.

“Targeting most of the support on offer to pensioners who receive means-tested benefits, that is Pension Credit, was undoubtedly the right thing to do, but as a result it is more important than ever that every older person who qualifies receives their due. We know that some three quarters of a million are missing out at the moment, so we urge anyone who thinks they may be eligible to put in a claim without delay.  If they act quickly, it is possible they may be eligible for some of the additional financial help that is now available, and this could be life-changing for them.

“No one knows what will happen to prices later in the year and it may well be that the Government will need to go further and do more in the autumn Budget, if inflation goes on ratcheting up. At Age UK we will be tracking the experiences of older people, especially those on low incomes, as the months go by.  We will also continue to campaign with others for more investment in energy efficiency and for the reintroduction of a social energy tariff since, in the longer term, these would help pensioners to keep on top of their energy bills and support progress towards our zero carbon targets.

“It is absolutely crucial for older people that the triple lock kicks in again next year, so it was important that the Chancellor restated his commitment to this during his speech. Age UK will hold him to his word.”

Ed Matthew from E3G commented:

“The increased support for households this winter is welcome but the Chancellor has failed to fix the underlying crisis. The UK has the worst insulated homes in western Europe. He could halve household energy demand through efficiency measures alone, but it won’t happen unless he provides the financial support needed. The windfall tax should have been used in part to do that. It’s a missed opportunity and keeps citizens reliant on gas. We will all pay the price for this missed opportunity.”

Ruth London from Fuel Poverty Action commented:

“Champagne corks will be popping in the  boardrooms of North Sea oil and gas extractors. While in millions of homes, people on low incomes may risk the expense of turning on the kettle and splurging on a cup of tea.

“In the boardrooms they won’t fail to notice that the dreaded, long-delayed windfall tax will remove only £5bn of their £13bn windfall profits.  And even at its temporary peak, UK tax will be lower than the 70% norm for other countries.

“Continuing the UK’s strong record of give-aways to fossil fuel polluters, these giant corporations will get 90p back in tax relief for every pound they invest.  And that investment must go into oil and gas – four times more expensive than wind and solar energy, and costing us all even more than that, through pollution of the air, the sea and the climate.  Rishi Sunak says he doesn’t want to “burden future generations”.  But subsidising fossil fuels may mean they have no future at all.

“Back in the kitchen, some of the sums in the Chancellor’s ‘support’ package will provide much needed relief. But it is hard to feel grateful.  Even the maximum support he has offered to the poorest will not make up the increase in fuel bills this year, let alone the rising cost of food and rents. The missing £8 billion from windfall profits could have done so much to relieve the pain of a decade of cuts, rising prices, overwork, and cold, uninsulated homes!”

Energy bills crisis demands Emergency Budget

Campaigners have urged the Government to deliver an emergency budget to address the cost of living crisis facing the country.

The End Fuel Poverty Coalition has made the call as Ofgem projections firmed up the nightmare scenario of further energy bill rises this winter. [1]

With the number of homes in fuel poverty expected to surge to 43% by this winter, campaigners have warned only an emergency budget will solve the crisis gripping the country. [2]

A household that was paying GBP1,000 for their energy bills in October 2020 could soon be paying almost three-times that. And with inflationary pressures also affecting food prices, the outlook is bleak.

If fuel poverty levels hit the limits predicted, the End Fuel Poverty Coalition estimates that thousands of additional winter deaths will take place due to cold homes in 2022/23 – mainly among the elderly and vulnerable. [3]

To avoid the predicted disaster, the End Fuel Poverty Coalition, has called on the Chancellor to deliver an emergency budget consisting of:

  • A 50% Windfall Tax on all Energy Production Firms Profits yielding revenue well in excess of GBP20bn, this may have to be levied every year until the Price Cap returns to a more affordable rate or the market is reformed. [4]
  • An annual Anti-Fuel Poverty Payment (AFPP) of GBP1,800 to the lowest income households, including those newly facing fuel poverty this winter. [5]
  • A one off £20,000 investment in each of the fuel poor households in the UK that are dependent on oil, LPG or coal for heating to improve their homes so they are well insulated and using a cheaper, less-polluting fuel – heat pump or new night storage heaters.
  • In future years, any excess revenue generated by the Windfall Tax could raise additional funding for the Emergency Hardship Funds available to local authorities and charitable organisations working with vulnerable groups to deploy.

In addition to the Windfall Tax, the Government must urgently fulfil the promises made in its 2019 Conservative party election manifesto that would help lower energy bills by investing £9.2bn in the energy efficiency of homes, schools and hospitals in England, including £2.5bn for the Home Upgrade Grant Scheme. To date, less than half of the Government’s 2019 manifesto pledges on fuel poverty have been committed. 

The Coalition has also urged BEIS to launch a fundamental review of the UK Energy Market to address concerns which will persist even after the emergency financial measures suggested. This review should consider alternative proposals put forward by campaigners such as the idea of “social tariffs” or a state-funded energy allowance for all.

For example, the average unit of gas has been sold up to 22 times before it gets to customers’ meters, meaning several private firms all making fuel bills that much higher. Consumers have also been required to bail out the costs of 31 companies going bankrupt as a result of Ofgem’s inadequate regulation. [6]

Dr Brenda Boardman, Emeritus Fellow, Environmental Change Institute, University of Oxford, commented:

The injustice of it all is just incredible. We desperately need an energy market that is designed around the needs of the consumers, not the needs of the suppliers. This is, after all, a basic necessity, that is ultimately about life and death, as well as comfort, good health and child development.

A spokesperson for the End Fuel Poverty Coalition added:

Previous measures implemented by the Government to tackle fuel poverty do not scratch the surface and the majority of the help has gone to all households, not necessarily those in fuel poverty specifically. Significant sums have also been spent on the petrol and diesel rebate, which goes to better-off households, who own cars and drive the most.

Only an emergency budget will ensure the measures can be introduced to tackle the cost of living crisis.

Ruth London from Fuel Poverty Action commented:

With over 40% of UK households in or heading for fuel poverty, we need more than pitiful handouts to prevent a widespread health crisis, miserable children, and more deaths. The energy system should be turned on its head to ensure we pay less per unit if we use less energy – not more. Ofgem has loaded the costs of failing suppliers onto the standing charge – the part of the bill we  can’t escape no matter how much we cut down. The injustice of this charge must be urgently reversed, as a first step towards #EnergyForAll. Energy security begins at home.

William Baker from Solutions to Tackle Energy Poverty (STEP) commented:

We are facing a humanitarian crisis this winter unless the Government takes immediate action to ensure low income households can afford their fuel. It must also embark on an ambitious programme to reduce energy demand by insulating our homes; such a programme will reduce fuel poverty, improve energy security, reduce pressure on our health services and give a much needed boost to the economy.  

Tamara Sandoul from Chartered Institute of Environmental Health (CIEH) commented:

Another big rise in the cost of energy will have serious consequences for people’s health and wellbeing. Living in cold homes will hit the most vulnerable hardest – the elderly, those on low incomes, children and those with existing health conditions. The Government needs to act quickly to protect the most vulnerable in our society from the effects of this unprecedented rise in the cost of energy and the cost of living.

Jo Gilbert from CUBES (Customer Utility Bills Expertly Serviced) commented:

When thousands of death’s were predicted due to the Covid-19 pandemic the government stepped in and took measures to safeguard the vulnerable. We are now in a very real ‘Poverty Pandemic’ and thousands of people will freeze and die from cold related illness. The government must take immediate action, as they did with covid-19 to prevent this humanitarian crisis from emerging more than it already has.

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

The 450,000 private renters who emerged from the pandemic with arrears of rent. now face unaffordable fuel bills.  Without decisive action now, we will see an explosion of evictions and homelessness with a cost to the public purse in excess of the measures to reduce fuel poverty being proposed by the End Fuel Poverty Coalition.

NOTES TO EDITORS

[1] Ofgem has suggested that the price rise will be an additional GBP829, taking the price cap to GBP2800 – an additional increase in bills of 42%.

[2] The rise in bills will result in an additional number of households in fuel poverty. According to Ofgem across the UK 12m households will be in fuel poverty this winter, 43% of the 28.1m households.

[3] Overall the End Fuel Poverty Coalition and National Energy Action estimate that based on a five year average, between 8,000 to 10,000 people across the United Kingdom die prematurely during the winter due to the impact of cold homes.  This is based on World Health Organisation modelling that at least 30% of Excess Winter Deaths are attributable to a cold home.

In 2019 there were 3.1m households in fuel poverty in England (official Government figures) and the average winter deaths mid-point would have been 9,000 (i.e. 0.3% of fuel poor homes are likely to have registered a “excess winter death”). If the numbers of fuel poor increase to the levels predicted, so could the numbers of people who die as a result of cold homes. If the figures of excess winter deaths remained proportionate to the levels of people in fuel poverty, this could see 22,500 excess winter deaths, pro rata. However, this assumption will need to be tested and checked against official figures in winter 2022/23 so is only for illustrative purposes.

[4] GBP20bn would be raised from Shell and BP alone, based solely on their 2020-21 profits. In the last quarter, their profits were even higher.

[5] GBP1800 based on the difference between the Ofgem prediction for winter 2022/23 and GBP1,000 cap which was more manageable for those in fuel poverty. This could be adjusted every year. Alternative measures have been suggested by other campaigners, such as the reversal of Universal Credit cuts or expansion of rebate schemes.

[6] “22 times” churn: https://www.oxfordenergy.org/wpcms/wp-content/uploads/2017/05/European-traded-gas-hubs-an-updated-analysis-on-liquidity-maturity-and-barriers-to-market-integration-OIES-Energy-Insight.pdf (table 4, p11). Experts predict this number may have fallen slightly since the table was compiled, but the principles of the market remain.

“31 suppliers”: https://www.forbes.com/uk/advisor/energy/failed-uk-energy-suppliers-update/