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Ofgem to face legal challenge as price hike news sinks in

As news about the October Ofgem 80% price hike sinks in, and estimates from Cornwall Insight suggest it could reach £5,387 from 1 January 2023, further End Fuel Poverty Coalition members have reacted to the news.

The Good Law Project has confirmed that, as a result of the announcement, it will sue Ofgem over its decision. Jo Maugham, Director of Good Law Project said:

The announcement today will devastate families. Just who and what is Ofgem for? Do not be fooled. This is a choice. And the choice they’ve made is to let low-income consumers and small businesses bear the brunt of this crisis.

We believe Ofgem can – and should do more. We intend to put the question before the High Court, and will ask for a fast-tracked timeline to reflect the urgency of this crisis.

Repowering interim CEO, Felix Wight, commented on the price hike:

Today’s news is devastating for millions. But let’s be clear – this is not an energy crisis- it is a fossil fuel crisis, and a political crisis.

Successive governments have failed to respond to the clear majorities calling for decisive action on climate change, and we have been taken down a strategic cul-de-sac where we have lost control of our energy costs.

Many of us have seen this coming, spoken up, and been ignored. We now find ourselves in a hostage situation with fossil fuel producers, with the government considering paying up to £100Bn in ransom.

Putting the burden on individuals to take the hit for the government’s own failure to plan is callous and risks a breakdown in the fabric of our society and economy.

The community energy movement offers a clear alternative- a bottom-up approach to making our 28 million homes more comfortable and affordable, the opportunity for everyone to benefit from home-grown renewable energy, and a model that re-invests in people and communities.

We know it works because those communities who have been able to set up their own energy infrastructure are benefiting right now from fossil-free power that helps protect them from this desperate scramble for natural gas at any price.

Spending just a fraction of the £100Bn fossil fuel subsidy to support community owned energy would start a genuine transformation in our energy landscape and put power where it belongs- in the hands of households across the country.

The time has come to face down the politicians and companies that have lost our trust, and start building an energy system that works for everyone.

Caroline Abrahams, Charity Director at Age UK, said:

Although the ballpark figure for the new price cap had been trailed in advance there will be many older people for whom today’s announcement is completely new and a huge shock. Millions of pensioners will now be coming to terms with the reality of what it means for them: the prospect of trying somehow to get through the autumn and winter with prices soaring and yet with very little flex in their fixed incomes. It’s a truly frightening prospect and one that most could not have prepared for, and never expected to face at this point in their lives. I think a lot of older people will be utterly bewildered that it has come to this and will also feel badly let down, and I can’t say I blame them.

The new Prime Minister must make their first act providing additional support for the millions of households in our country whom rising inflation is set to overwhelm, among them many pensioners. We are fast approaching a national emergency which will leave a significant proportion of the population unable to afford even a basic standard of living. Every day older people are telling us how scared they are; they need urgent reassurance from the Government that they will not abandon them.

It’s later than the Government thinks: we understand that there is essentially a transition underway between one Prime Minister and the next, but every day the economic forecasts seem to worsen and yet there is no clear word from the centre about how they will respond. Unfortunately, this is increasing the sense of insecurity many older people feel.

That’s why the new Government must act quickly to give older people hope and confidence. In the meantime, it would be extremely helpful if both candidates made it clear that they will stand by those with most to fear from soaring inflation, among them many pensioners, over the difficult months to come.”

Adam Scorer, National Energy Action (NEA) chief executive, added:

The scale of harm caused by these price rises needs to sink in. A warm home this winter will be pipedream for millions as they are priced-out of a decent and healthy quality of life.

We’ve all seen the estimates from Cornwall Insight for the past months. Government has had ample time to prepare an intervention to match the challenge. We know who gets hit hardest, what impact it will have and how to get money into the pockets or off the bills of the most vulnerable.

Without bold action to support the most vulnerable and those on the lowest incomes, this will effectively prise their fingers from the cliff edge and push them over the precipice.

The government needs to immediately upgrade the household support package it first announced back in May. Households need money in their pockets to weather this storm or we are going to see millions in dangerously cold homes, suffering in misery with unimaginable debt and ill health.

Even with a mild winter, millions are facing a big freeze. Action is needed now to prevent the bleakest of winters.

A new Warm This Winter campaign, backed by the End Fuel Poverty Coalition, has also launched a petition to call for urgent Government action.

Price cap confirmation like a dagger to the hearts of millions

End Fuel Poverty Coalition members have reacted to news that Ofgem has confirmed the price cap will increase from £1,971 to £3,549 from 1 October 2022. In winter 2021/22 the cap was set at £1,277.

For pre-payment meter customers, the rise will be even more punishing with the average annual bill for these 4.5 million customers due to go up to £3,608.

In response, a new campaign backed by the End Fuel Poverty Coalition, Warm This Winter, has launched a petition to call for urgent Government action.

A spokesperson for the End Fuel Poverty Coalition commented:

Today’s Ofgem price hike is like a dagger to the hearts of millions of people up and down the country.

Sarah MacFadyen, Head of Policy & External Affairs at Asthma + Lung UK, said:

Ofgem’s latest energy cap price hike risks pricing people with lung conditions out of breathing. Winter is already the deadliest season for people with lung conditions, and the cost of living increase will only make this worse and put seismic pressure on the NHS at a time where people, especially those with lung conditions, need it more than ever.

Cold air is a top trigger for people living with lung conditions like asthma and COPD, leaving people fighting for breath. Cold weather can also contribute to mould and damp – a trigger for around 2.5 million people with asthma in the UK. The best way for people with lung conditions to stay well is to ensure they take their medication and keep their houses warm, but rising costs could leave people choosing to skip their medication or turn off their heating.

As a charity we’re already seeing a 150% spike in calls to our helpline for support with financial and welfare benefits advice, and we’re worried that as energy prices rise we’re going to see a sharp decline in the country’s lung health this winter. With the triple threat of freezing homes, colds and flu, and expected COVID-19 peaks, we’re running the risk of yet another major healthcare crisis. As part of the End Fuel Poverty Coalition, we’re calling on the UK government to provide more financial support for people with long-term health conditions and on low incomes, so they can afford to keep their homes warm this winter.

Graham Duxbury, Groundwork’s UK Chief Executive, said:

As a charity that supports people living in fuel poverty, we are alarmed at the volume of requests for help that are coming through. With more price rises due over the winter, we are deeply concerned that those most vulnerable won’t have access to help they desperately need.

The latest forecasts make it clearer still that urgent action is needed to help people cope with this worsening crisis which will lead to unprecedented hardship. 

Energy companies, charities and independent experts all agree that the measures in place are not enough. As well as more emergency financial support and a long-term commitment to improving the energy efficiency of our homes we also need more – and better coordinated – advice. Groundwork’s Green Doctor service is one of many trying to help people through practical advice and emotional support, but these services are too often reliant on short-term funding with complex rules.

What we need is simpler, more stable funding models so that we can help those worst off to make best use of the help they’re getting and preserve as much warmth as they can this winter, but also help those who are being pitched into fuel poverty for the first time.

Ruth London from Fuel Poverty Action, added:

These astronomical price rises are completely unnecessary. Energy costs no more to produce than it did last year. People will go without food to pay these bills, while the energy generators and suppliers make a killing: our money goes straight into wealthy shareholders pockets, and into further investment in expensive, polluting, and climate-wrecking oil and gas. The government is adding to this heist by increasing the millions of pounds they daily pay in subsidies to fossil fuel giants while offering only sticking plasters to UK residents.

They must urgently insulate homes, switch to cleaner, cheaper renewable sources of energy, and reverse the gross injustices of the present pricing framework, including high prepayment prices, high standing charges, and more.

Fuel Poverty Action is advocating Energy For All – a completely new pricing system, where every household will receive, free enough energy to cover basic needs. It will be paid for by higher prices for profligate energy used, windfall taxes, and an end to fossil fuel subsidies. Our petition, with over 408,000 signatures will be delivered on 19 September.

Ofgem has not been protecting customers, and with the Good Law Project we are challenging their priorities. Without radical change, many more thousands will die this winter in cold homes.

Following reports that rural areas will be heavily affected by the rising price cap, Richard Quallington, Executive Director of Action with Communities in Rural England said:

The fact rural parts of the country are some of the worst affected is no surprise to us. Much of the housing stock in the countryside is older and more difficult to heat and many households still depend on heating oil which is not subject to the price cap.

This, combined with typically lower rural incomes and the cost of travelling to access jobs and services is creating the perfect storm in the countryside.

The challenge for policy makers is twofold. They need to find ways of getting more financial support to the people who most need it, and this requires more creative localised responses in rural communities. And there also needs to be a longer-term plan for improving the energy efficiency of homes which is suited to the fabric of older buildings. The needs of rural communities cannot be overlooked.

Ross Matthewman, Head of Policy and Campaigns at the Chartered Institute of Environmental Health, said:

Following reports that Ofgem is to announce yet another crippling increase in energy bills, we urgently call on the UK government to intervene to protect millions of households being plunged into fuel poverty this winter.

While we welcomed the government’s Energy Bills Support Scheme, it is apparent that £400 spread over six months is simply not going to be enough to tackle the spiralling cost of energy crisis, with more significant intervention needed.

Not only are we are calling on the government to double the amount of financial support provided to households to protect households this winter but urging them to introduce a raft of energy efficiency measures. Such measures can act both as a means of supporting households most in need right now as well as shielding households from spiralling energy bills in the long-term. Energy efficiency measures also  play a key role in fighting climate change and reducing carbon emissions.

The End Fuel Poverty Coalition spokesperson concluded:

As a result of the decision, parents will be unable to feed their children, the sick and elderly will be condemned to worsening health, disabled people will go without vital medical equipment and households will be forced into poverty for the first time in generations.

All the solutions lie at the Westminster Government’s door, yet it is silent in the face of this looming disaster.

We need emergency financial support, especially for the most in need. But we also need reform to Britain’s broken energy system as well as increased support for energy efficiency measures and homegrown renewables.

Further reaction and revised predictions on the levels of people expected to be in fuel poverty will be published by the Coalition in due course.

The Warm This Winter petition can be signed online: https://www.warmthiswinter.org.uk/#petition

Ofgem criticised for standing charge decision

Campaigners have written to Ofgem criticising the “gross injustice” of the current energy bills standing charges regime.

Standing charges make up a portion of the energy bill which every household user pays, regardless of how much energy they actually use.

Last week, Ofgem confirmed that the cost of market failures (e.g. energy firms collapsing) would continue to be recouped from consumers through the standing charges.

The decision comes just weeks after Ofgem confirmed an “inhumane” increase in energy bills will take place in January 2023 as well as this October. Ofgem are also now facing the prospect of legal action against its decisions following a notice of action from the Good Law Project last week.

Now Fuel Poverty Action and Disabled People Against Cuts have together written to Ofgem CEO Jonathan Brierley about present standing charges, including loading the cost of failed suppliers onto this part of people’s bills.

The letter states:

It is appalling that yet again Ofgem is punishing low income customers for its own failed regulation and the upside down priorities of the energy industry.  … This is consistent with the blinkered approach that has led you to give “too much benefit to companies at the expense of consumers”, in the words of  Christine Farnish, the Ofgem director who resigned recently.

Ofgem has claimed that high standing charges are the only way to protect high users, some of whom are people with health needs for electricity, e.g. for electrical medical equipment.

But the two groups suggest that Ofgem’s obligation towards vulnerable customers is being abused as an excuse for policies that impoverish and endanger thousands of people, including many who are disabled people. 

They name instead several alternative ways to protect people with high energy needs – without impoverishing vast numbers of low income customers. 

With Fuel Poverty Action’s proposal of Energy For All (e4a) each household would be entitled, free, to enough energy to cover basic needs, but people would pay a higher tariff for what they use above that amount. This would offer much needed security to all – including those who need more because of their health, disabilities, housing conditions, or family size. It would be paid for by the higher per-unit tariff on excess use, by windfall taxes and by ending the millions of pounds now poured daily into fossil fuel subsidies. 

Other options listed  include extensions of the Warm Home Discount, social tariffs, better disability benefits, and good safe insulation for vulnerable customers.  And they say that companies that cannot fulfil their purpose of providing the energy people need at a cost they can afford, could – and must – be brought back into public hands.

Ruth London from Fuel Poverty Action commented: 

Instead of looking at real, proportionate, workable changes to the current upside down pricing framework, Ofgem has chosen to continue hitting low income users harder than affluent neighbours. The standing charge means that however much they cut down their usage many people will never be able to pay their bills.

Paula Peters of DPAC says:

I’m a low energy user because I am terrified to switch it on and worrying about costs all the time. It’s making me permanently anxious as it is all of us. Last winter I was in a lot of pain with a cold house.  I needed NHS intervention: a steroid injection and a Nebuliser at A & E.

9,000 energy crisis hotspots in England and Wales revealed

The neighbourhoods that are being worst impacted by soaring energy prices have been identified for the first time as part of new research by Friends of the Earth.

The environmental group has found that there are almost 9,000 energy crisis hotspots across England and Wales where communities are at greatest risk of serious financial hardship as a result of unaffordable energy costs.

Birmingham (1st), Bradford (2nd), Cornwall (3rd), Sandwell (4th), County Durham and Enfield (joint 5th) rank highest among 30 local authority areas with the most energy crisis hotspots. Birmingham and Bradford also top a list of areas with the most homes that are missing basic insulation measures.

A full list of energy crisis hotspots by local authority area is available here.

Energy crisis hotspots are neighbourhoods where energy use is high and typical household income is below the national average. In many cases, energy use is high in these neighbourhoods because homes are poorly insulated, meaning they require more energy to remain warm.

The latest analysis has found that these at-risk neighbourhoods are not only home to a higher proportion of children than other areas, but that people of colour are also twice as likely to live in them, highlighting the disparities that exist across local areas.

The average annual energy bill is currently more than 50% higher than it was six months ago. This increase is already devastating millions of households across the country.

Yet costs are expected to climb higher still later this week when the new energy price cap is announced by the regulator Ofgem. The latest forecasts predict that annual energy costs will exceed £3,500 for the average household come October, rising to £4,200 by January. Experts Cornwall Insights predict that prices will remain high throughout 2023 and even beyond.

Compounded by other rising living costs, such as rent – which has increased by an average of 11% this year – food and fuel costs, millions more are at risk of being plunged into financially unstable positions. Recent estimates predict that one in three households will be living in fuel poverty this October unless the government meaningfully intervenes.

Mike Childs, head of science, policy and research at Friends of the Earth, said:

There’s no downplaying how catastrophic this and following winters will be for millions of people if energy bills rise as high as they’re predicted to, unless the government meaningfully intervenes. Instead of woeful and poorly targeted cash handouts, or the promise of tax cuts that won’t help those who need it the most, the government must beef up its package of emergency financial support by channelling money to those least able to pay their energy bills.

And while vital, this is only a short-term solution. The highest priority of all is fixing the UK’s leaky, inefficient housing stock, otherwise cash handouts will be required year on year. By rolling out a free programme of street-by-street energy efficiency measures, prioritising the most in-need neighbourhoods, we can help to bring bills down quickly, make homes warmer and slash Earth-warming emissions at the same time.

A new report by the New Economics Foundation (NEF) on behalf of Friends of the Earth shows how an emergency energy efficiency scheme for England and Wales could be delivered by local authorities over the coming months, starting with the neighbourhoods most in need, to protect people from soaring bills before this winter and beyond.

It reveals that households could make savings of between £490 and £720 each year on their bills through the rapid roll-out of a council-led, street-by-street programme of insulation and other energy saving measures. These estimates were made before the most recent energy price cap forecasts were given, making the potential savings even higher.

That’s why in England, Friends of the Earth is calling on the candidates vying to be the next Prime Minister to commit to a rapid programme of free, council-led street-by-street loft and cavity wall insulation and basic energy efficiency measures.

And in Wales, the group is urging the Welsh government to urgently roll out its Warm Homes Programme, prioritising the most in-need households and neighbourhoods for insulation.

Estimates by Friends of the Earth put total costs for an England and Wales scheme in the region of £15 billion, which is three times lower than what households could save over a ten year period as identified in the NEF report.

Friends of the Earth believes the government could begin to roll out such a scheme out using the money raised through its Windfall Levy, which is expected to raise around £5bn. A much tougher windfall tax, without loopholes that allow fossil fuel firms to pay a much lower rate, could make this funding pot go even further.

The group is also urging the Conservative leadership candidates to guarantee better emergency financial support for those struggling most if elected, which is desperately needed to stop people going cold this winter. And while a vital lifeline, this can only be a temporary fix. The energy crisis will continue to impact lives for years to come unless steps are taken to reduce the amount of energy lost from our heat-leaking homes.

Speculation continues over new measures to tackle fuel poverty

Senior figures in the Conservative Party came under increasing scrutiny this week as consistent media headlines accused them of failing to act.

After last week’s headlines about the Ofgem price cap changes, Cornwall Insight provided the latest estimates on the likely price cap.

This revealed that the average energy bill in October will rise to £3,542 (£3,182 including the Government’s planned household support” and then to £4,266 from January.

The End Fuel Poverty Coalition predicts that this will result in 9.2m households being in fuel poverty in October, with the number growing to 10.5m in early 2023.

As the Coalition told CNN:

Only a full programme of emergency financial support, a rapid expansion of energy efficiency programmes and a commitment to bringing more cheap renewable energy on stream will help people stay warm this winter and into the future.

During the week, the leadership contenders felt the pressure as fuel poverty campaigners with Warm This Winter targeted the Darlington hustings to press home the message that more needed to be done.

Rishi Sunak responded with plans for more support for households, but also an expansion in the country’s reliance on fossil fuels.

Meanwhile Liz Truss continued to avoid directly promising support. This lead to her local paper, the Eastern Daily Press to run a large feature highlighting the devastating impact her policies will have on her own constituency.

After accusations that he was presiding over a Zombie Government, the acting Prime Minister also attended a meeting with energy firms. Afterwards, the Treasury admitted to the Guardian that support would not be enough.

As the week drew to a close, figures showing a slight decline in GDP also posed a challenge to leaders, with Jennifer Wallace from Carnegie UK (which proposes a wellbeing approach to measuring a nation‘s success) commenting:

These figures take into account a dramatic increase in the cost of living, in part due to the rising costs of home energy bills.

While this has helped prop up the GDP figures somewhat, it is hugely damaging for the UK’s collective wellbeing due to rising anxiety for people who are worried about being unable to heat their homes this winter.

As an article in the Sunday Times revealed that people will not be able to afford vital care, the Government is also now rumoured to be planning for additional help. However, the Coalition commented:

The toll on the mental health of people struggling to pay their energy bills or plan ahead should not be under-estimated.

We are already seeing disabled people unable to charge their medical equipment because they can’t afford to use electricity.

If the Government is unwilling to help everyone this winter, it should at least support the most vulnerable.

The Lib Dems and Labour revealed some of their suggestions for helping offset the energy bills rise.

Labour has pledged to act on the unfair pre-payment meter tariffs in the first of a proposed series of announcements, while the Lib Dems called for universal support to be extended to cancel out the October price rise.

 

Energy bills campaigners send message to leadership debates

Campaigners will take to the streets of Darlington ahead of the next Conservative Leadership Debate to demand urgent government action on the energy bills crisis.

New figures from the End Fuel Poverty Coalition show that around 36,000 people in over 9,000 homes will be in fuel poverty from 1 October in Darlington alone.

Now campaigners have formed a new group, Warm This Winter, to ask the leadership candidates to take the issue seriously.

They will be asking attendees at the event in Hippodrome to raise the energy bills crisis with Liz Truss and Rishi Sunak and ask them to commit to doing whatever it takes to avoid a nightmare winter for millions of people.

Local organiser, Kendra Ullyart, who is also coordinator of Darlington Friends of the Earth, said:

We all deserve to be warm in our own homes but right now soaring energy prices mean that millions of people are struggling to pay their bills, never mind this winter when costs will climb even higher.

The worrying part is that gas prices are predicted to stay high until at least 2030.In 2020, there were already thousands of households in Darlington living in fuel poverty, but rocketing energy costs mean there are now many more who need urgent, long-term solutions.

That’s why Darlington Friends of the Earth is adding its voice to the Warm This Winter campaign, to demand emergency financial support for those who will need it most this winter, as well as funding for a massive insulation scheme to cut the nation’s bills. Moving the country away from expensive gas and onto cheaper, renewable energy will also help to protect us all from future price shocks.

The public has grasped the scale and seriousness of the energy crisis, and deserves a leader who will act in our best interests. Tonight we hope Rishi Sunak and Liz Truss will set out credible plans to ensure everyone stays warm this winter, and for years to come.

A spokesperson for the End Fuel Poverty Coalition, added:

Across the North East hundreds of thousands of people will find themselves in fuel poverty this winter, with millions more having to make difficult decisions about household finances this winter.

We congratulate the campaigners for taking action in Darlington. The Warm this Winter campaign simply must succeed in ensuring the government helps those people who need it today and fixes the UK’s broken energy system for good.

Warm This Winter is a new campaign to ensure that families are helped this winter and to put the country in the best possible position to avoid future shocks and save money in the long-term.

It is calling on the government to provide more direct financial support to vulnerable households now, a national programme of energy efficiency for households to cut waste, a rollout of cheaper onshore renewables, and an end to the development of new oil and gas fields so that we are not locked into volatile fossil fuels for longer than is necessary.

Further action is planned for hustings in Birmingham, Norwich and London. To get involved, email info@endfuelpoverty.org.uk.

Decision on January price increase branded inhumane

Ofgem have confirmed that it will introduce a quarterly price cap increase on the energy bills of millions of people.

A spokesperson for the End Fuel Poverty Coalition commented:

Households will face a two-stage cost of living crisis this winter, thanks to Ofgem’s confirmation that energy bills will go up in October and again in January.

From October, millions of families across the country will face the real prospect of skipping meals to pay for energy, older people will shut themselves into one room to save on heating and disabled people will be unable to afford to charge vital equipment, such as electric wheelchairs.

Then in January, they will be asked to pay even more for their energy.

Ultimately, this decision will force more people into fuel poverty in the middle of winter, causing additional stress on the NHS and it may ultimately lead to increased levels of excess winter deaths this year. It is simply inhumane.

It’s clear that the Government and the Conservative Party leadership hopefuls just don’t get the scale of the problem facing the country, nor the public anger at rising bills. They are running out of time to act.

Only a full programme of emergency financial support, a rapid expansion of energy efficiency programmes and a commitment to bringing more cheap renewable energy on stream will help people stay warm this winter and into the future.

The decision comes after a week of massive increases in profits for energy firms, but with Centrica warning that its profits in its British Gas consumer division were hit by it having to ‘hedge‘ buying of energy due to the previous six monthly nature of the price cap regime.

Ross Matthewman, Head of Policy and Campaigns for the Chartered Institute of Environmental Health, said:

Ofgem’s decision to introduce a quarterly price cap confirming household energy bills for millions of people will increase substantially in the depths of Winter is a further blow to those already struggling amidst this cost-of-living crisis.

Industry experts estimate that the typical households would be faced with energy bills of £3,358 from October, then £3,615 from January 2023. This is up from average energy bills of £1,400 a year in October 2021.

Ofgem’s principal duty is to protect the interests of existing and future consumers. Following today’s announcement which will plunge millions into fuel poverty, it is clear that it is failing in its duty to consumers.

UNISON head of energy Matt Lay said:

The government must stop pretending it’s done enough. Support for consumers has so far been pitiful. Other European governments have been both swifter and bolder to lessen the blows from big bills.

All but the richest consumers face a terrifying prospect this winter. Many simply don’t have the means to pay. Swift and radical government action is needed to cap the horrific price hikes predicted. Otherwise, there will be a crisis of unimaginable proportions.

Details of Energy Bills Support Scheme announced

Millions of households across Great Britain will receive non-repayable discounts on their energy bills this winter, as the UK Government today has set out further details of the Energy Bills Support Scheme (EBSS).

The £400 discount, administered by energy suppliers, will be paid to consumers over six months with payments starting from October 2022, to ensure households receive financial support throughout the winter months.

The Government has stressed that in all cases, no household should be asked for bank details at any point. Ministers are urging consumers to stay alert of potential scams and report these to the relevant authorities where they are suspected.

A spokesperson for the End Fuel Poverty Coalition commented:

The details of the Energy Bills Support Scheme are broadly welcome.
The officials involved in the development of the scheme have done a good job in listening to the concerns of End Fuel Poverty Coalition members and have taken steps to ensure that every household will be able to benefit.
While there are a few outstanding concerns, we are pleased that BEIS has agreed to work with our members to address these.
The bigger issue, however, is that the level of support available will not be enough to offset the rises in energy bills expected in October and Ministers will need to instruct officials to expand the funding for the scheme.

The Government has issued detailed information for people on how the scheme will work, based on the current proposed £400 discount:

  • The £400 discount will be administered by suppliers and paid to consumers over six months with payments starting from October 2022, to ensure households receive financial support over the winter months.
  • Households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023.
  • The discount will be provided on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.
  • Households will never be asked for their bank details, and those with a domestic electricity connection will not need to apply.
  • There is no need to contact your supplier as all domestic electricity customers will be automatically eligible. Electricity bill payers should enquire with their supplier if they have not received their first instalment by the end of October.

Breakdown of the delivery process for each payment method:

  • Direct Debit customers will receive the discount automatically as a reduction to the monthly Direct Debit amount collected, or as a refund to the customer’s bank account following Direct Debit collection during each month of delivery.
  • Standard credit customers and payment card customers will see the discount automatically applied as a credit to standard credit customers’ accounts in the first week of each month of delivery, with the credit appearing as it would if the customer had made a payment.
  • Smart prepayment meter customers will see the discount credited directly to their smart prepayment meters in the first week of each month of delivery.
  • Traditional prepayment meter customers will be provided with redeemable vouchers or Special Action Messages (SAMs) in the first week of each month, issued via SMS text, email or post. Customers will need to take action to redeem these at their usual top-up point.
  • Landlords who have a domestic electricity contract with a licensed electricity supplier and then resell the electricity to their tenants based on energy usage must comply with the maximum resale price rules. The maximum resale price for electricity is currently set as the same price as that paid by the person reselling it. Under these circumstances, the Government expects landlords to pass on the discount received to each tenant.
  • Landlords with a domestic electricity connection who charge ‘all inclusive’ rent, often the case for many student houses, where a fixed cost for energy costs are included in their rental charges, must pass on the discounted payments to tenants.
  • Approximately one per cent of UK households are currently ineligible to receive Energy Bills discount as they do not have a domestic electricity meter and a direct relationship with an electricity supplier. The government has confirmed that further funding will be available to provide equivalent support of £400 for energy bills for the 1% of households who will not be reached through the Energy Bills discount. An announcement with details on how and when these households across Great Britain can access this support will be made this Autumn.

The Energy Bills Support Scheme forms part of the Government’s £37 million Cost of Living Support package, providing Help for Households with rising prices, targeted at those most in need.

Commons committee backs urgent action on fuel poverty

The Government should immediately update its package of support to help households with soaring energy bills before the cost-of-living crisis grips even harder following October’s energy price cap increase, according to a new report by the House of Commons Business, Energy and Industrial Strategy Committee. 

The report argues that the Government’s Energy Bills Support Scheme will not be enough given the continued rising energy prices households will face. MPs warn that the size of the package has been ‘eclipsed by the scale of the crisis.’ 

Committee Chair Darren Jones MP said:

Once again, the energy crisis is racing ahead of the Government. To prevent millions from dropping into unmanageable debt it’s imperative that the support package is updated and implemented before October, when the squeeze will become a full-on throttling of household finances and further tip the economy towards recession.

We were told by a number of witnesses, ‘if you think things are bad now, you’ve not seen anything yet’. This Winter is going to be extremely difficult for family finances and it’s therefore critical that public funds are better targeted to those who need it the most.

It’s an injustice that the poorest households continue to pay higher energy costs because they’re on prepayment meters. This must end and a social tariff should be brought forward.

Ultimately, Ministers know that the long-term solution is to reduce our need for energy through insulation works that keep our homes warm in winter and cool in summer. If the Government is really taking this energy crisis and the country’s net zero targets seriously it will come forward with a bold, fully funded, national home insulation program before the end of the year.

A spokesperson for the End Fuel Poverty Coalition said:

MPs are right. The crisis facing millions of homes as energy bills continue to soar is ‘ongoing and severe’.

The energy bills crisis this winter is a nightmare scenario, but the Government is sleepwalking into it.

Tory leadership hopefuls and Ministers need to wake up and announce urgent financial support to offset the predicted price rises this winter and further help vulnerable homes stay warm this winter.

But financial support will only be a stop gap solution.

We also need to see a rapid roll-out of support to make homes and community buildings more energy efficient, a full review of the consumer energy market and action to bring cheap renewable energy on stream as fast as possible.

A spokesperson for National Energy Action added:

Energy prices continue to spiral, and vulnerable households in the energy market are being hardest hit. It is vital that the plans from the UK Government and Ofgem are scrutinised by Parliament, and they act on this credible set of recommendations to help the poorest households through the energy crisis, this winter and beyond.

The next Prime Minister will need to implement these recommendations urgently, topping up the current energy support, announced in May, to offset the October increases. We also agree with the cross-party recommendation to introduce a social tariff to give fuel-poor households deep, enduring protection against persistent high energy prices, and putting in place a new scheme to help households that have accrued a mountain of debt during the crisis. The regulator must also not duck its role in reducing the growing burden of standing charges that are hitting struggling households the most. Overall, it is critical to ensure that pre-payment meter customers do not pay more for their energy and are not punished further as a result of finding their bills already unaffordable.

Finally, the winner of the leadership contest must ensure that reducing the wasted energy in our homes becomes a much more prominent part of the policy response. Improving energy efficiency should be top of their agenda as it will help ease future price spikes now and in the future.

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.