Tag: Energy Crisis

Energy bills crisis has cost the average household £2,300 each

The average household has spent £2,300 more on energy bills since April 2021 than they would have done had prices remained stable. [1]

The data takes into account the Government support schemes that were set up to help households and means that, across the whole country, the additional spend by households on energy over the last three years totals more than £68bn.

The new figures calculated by the End Fuel Poverty Coalition come as Ofgem has lowered the price cap by around 12% for domestic energy bills.

However, the new cap level means that gas and electricity costs remain 60% higher than in 2021 when the energy bills crisis began. [2] 

Meanwhile, households are still struggling in record levels of debt, with over 3 million households owing money to their energy firm.

New research by YouGov for the Stop The Squeeze campaign found that 61% of respondents – including 70% of Conservative voters – chose energy bill support as one of the interventions they would most like to see. [3]

Energy bill support was found to be more than twice as popular as cuts to taxes on wages (29%) and has gained in popularity among voters since the last time the research was conducted in July 2023.

However, the Government is set to end both the Energy Price Guarantee and the Household Support Fund on 31 March 2024. 

The Energy Price Guarantee currently protects households from fluctuating global energy markets and could also be used to introduce an Emergency Energy Tariff to help those struggling the most with the high cost of energy.

The Household Support Fund provides local authorities with additional resources to help communities most hit by high energy bills, with 26 million grants given by councils to households struggling to afford the essentials. The End Fuel Poverty Coalition was recently among 120 organisations that signed a letter to the Chancellor calling for the Fund to be extended by at least another year.

Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:

“Even after this latest change to the price cap, energy prices remain 60% higher than they were before the energy bills crisis began.  

“Three years of staggering energy bills have placed an unbearable strain on household finances up and down the country. Household energy debt is at record levels, millions of people are living in cold damp homes and children are suffering in mouldy conditions.  

“Everybody can see what is happening in Britain’s broken energy system and it is time for politicians to unite to enact the measures needed to end fuel poverty. This includes cross-party consensus on a long-term plan to help all households upgrade their homes and short-term financial support for households most in need.”

Megan Davies from Stop the Squeeze said:

“The fact that the public appetite for energy bill support is rising, not falling, should be a wake up call to the government that the cost of living crisis is far from over.

“Any fall in the price cap is of course welcome, but it is no substitute for the structural reform to the energy market that is needed to guarantee more affordable clean power into the future.

“This Budget could be the government’s last opportunity before the election to listen to the public and show they are serious about taking action on energy bills.”

Warm This Winter campaign spokesperson Fiona Waters commented:

“It’s clear Britain’s energy system is broken with a few firms making obscene profits while ordinary people suffer and household energy debt at record levels. What’s worse, millions, including the elderly and children, are living in unhealthy cold damp mouldy homes. 

“People are tired of this constant cycle and want action. What politicians should be focussed on is bringing down energy bills through a proper programme of insulating homes and investing in cheap and abundantly available renewable energy.”

ENDS

[1] £2,300 and £68bn figures calculated as below. Price cap at 30 March 2021 was £1,042 for the average household. All figures based on Ofgem data. Average household energy bill levels include the relevant Energy Price Guarantee and Energy Bills Support Scheme payments where appropriate (the £52bn net cost of those measures are also borne by the taxpayer). Cap data is based on the prevailing typical domestic consumption values at the time – as set by Ofgem.

Cap change date Average household energy bill (GBP) Amount above GBP1,042 per household weighted for the number of months in price cap period (e.g. annual amount above cap halved for periods starting 1-Apr-21, but then quartered for periods from 1-Apr-23) All households
01-Oct-20 £    1,042 Baseline   
01-Apr-21 £    1,138 £                                48  
01-Oct-21 £    1,277 £                              118  
01-Apr-22 £    1,971 £                              465  
01-Oct-22 £    2,100 £                              529  
01-Apr-23 £    2,500 £                              365  
01-Jul-23 £    2,074 £                              258  
01-Oct-23 £    1,834 £                              198  
01-Jan-24 £    1,928 £                              222  
01-Apr-24 £    1,690 £                              162  
TOTAL   £                           2,363 £  68,527,000,000

[2] End Fuel Poverty Coalition records based on Ofgem price cap announcements and (in italics) Cornwall Insight predictions (last checked 16 Feb 2024)

Cap change date Increase (GBP) Average household energy bill (GBP) % increase from last period YOY change Change from Pre-Energy Bill Crisis Change from Pre-Ukraine Invasion
Pre-cap   1067        
01-Oct-17 -19 1048 -1.78      
01-Apr-18 41 1089 3.91      
01-Oct-18 47 1136 4.31 8.40%    
01-Apr-19 117 1254 10.39      
01-Oct-19 -75 1179 -5.98 3.79%    
01-Apr-20 -17 1162 -1.44%      
01-Oct-20 -120 1042 -10.33% -11.62%    
01-Apr-21 96 1138 9.21%      
01-Oct-21 139 1277 12.21% 22.55% 22.55%  
01-Apr-22 693 1971 54.35%      
01-Oct-22 129 2100 6.54% 64.45% 101.54% 64.45%
01-Apr-23 400 2500 26.84%      
01-Jul-23 -426 2074 -17.04% 5.23% 99.04% 62.41%
01-Oct-23 -240 1,834 -11.57% -12.67% 76.01% 43.62%
01-Jan-24 94 1,928 5.13% -8.19% 85.03% 50.98%
01-Apr-24 -238 1,690 -12.34% -32.40% 62.19% 32.34%
01-Jul-24 -193 1,497 -11.42% -27.82% 43.67% 17.23%
01-Oct-24 44 1,541 2.94% -15.98% 47.89% 20.67%

 

[3] YouGov Plc. Total sample size was 2,186 adults. Fieldwork was undertaken between 15th – 16th February 2024. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

 

Older people’s ‘parliament’ debates energy crisis

The 2023 National Pensioners’ Annual Convention has heard a stark warning that millions of vulnerable people will be unable to stay warm this winter.

Last year, over 9m adults lived in Dickensian conditions unable to keep their homes warm and damp free. The figures for the Warm This Winter campaign, also revealed that over 1m of these adults were older and those with disabilities were especially vulnerable to living in cold damp conditions.

From 1 July energy bills will be roughly the same as last winter and while some reduction in the Ofgem price cap may come through before winter 2023/24, the Convention heard that this would still mean energy bills are double what they were in 2021/22.

New figures from Age UK and the ONS reveal that almost half (45%, 11.3 million) of people aged 50+ in Great Britain are currently finding it difficult to afford their energy bills.

Addressing the meeting in Blackpool, Simon Francis, coordinator of the End Fuel Poverty Coalition, said:

“At a recent meeting with pensioners, one told me that the only change between their living conditions in the 1940s and those of today was that they had an inside toilet now. They said that the poverty they experienced as a child is what they are now experiencing again.

“Food banks, sanitary banks, pet food banks and massive government support for energy bills are the only things keeping people from destitution.

“We cannot allow this to continue any more and the Government needs to act to keep people warm this winter and every winter. We can only do this through debt relief and financial support now alongside a rapid programme of energy efficiency improvements and speeding up the generation of cheap renewable energy and moving us away from the fossil fuel profiteers of the past.”

Delegates representing the National Pensioners Convention’s 1.1 million UK members have met at The Imperial Hotel in Blackpool to discuss why millions of today’s – and tomorrow’s – older people face poverty, hardship and the loss of vital services.

NPC General Secretary Jan Shortt said: 

“The last few years have been particularly tough on our oldest and most vulnerable. 

“Hundreds of thousands died in the pandemic, and millions now struggle to make ends meet as prices rocket, while the real value of pensions drop. Older people are having to choose between eating and heating, while the essential services they rely upon, from health and care to housing and transport, continue to decline or disappear completely. 

“This isn’t just a problem for older people now, it is a major issue for today’s workers who wonder if they’ll ever be able to afford to retire. Especially if the government pushes back the retirement age to 68 and threatens to scrap the Triple Lock that should guarantee state pension cost of living increases.” 

Other Convention speakers will include Robert Palmer from Tax Justice, John Lister from Keep Our NHS Public, Lord Davies of Brixton on the future of the state pension, and Tom Lowe from the Digital Poverty Alliance on the exclusion of older people from our increasingly online world. Leaders from national organisations like Age UK, Independent Age, Ageing Better, as well as the TUC, Unite and UNISON will also be attending.

Hypothermia cases in England surge during energy bills crisis

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

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

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

A spokesperson for the End Fuel Poverty Coalition commented:

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

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

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

New chancellor set to axe Energy Price Guarantee from April

Fuel poverty campaigners have reacted with shock to news that the new Chancellor will end the Energy Price Guarantee in April 2023.

A spokesperson for the End Fuel Poverty Coalition commented:

The country was already facing a financial cliff edge in April due to plans to end other support packages, but this cliff edge has now become even steeper.
Without the Energy Price Guarantee, the Government will need to fundamentally reform the energy market alongside providing unprecedented levels of support for energy efficiency schemes and financial support for the most vulnerable.
But any threat to people’s energy security is a threat to their health and wellbeing. If people cannot trust the Government to deliver the support it has promised, what trust can anyone have that they will keep people warm this winter and beyond?
The need for the Government to provide additional support for the most vulnerable this winter has also not disappeared and we hope the Treasury quickly acts to reassure households.

Chaitanya Kumar, head of environment and the green transition at the New Economics Foundation, commented:

The biggest surprise in the chancellor’s statement is to scale back the energy price guarantee, the government’s flagship support programme. The unfrozen price cap is now expected to rise above £6,000 from April 2023, which creates a massive cliff edge for families.

The government should get support where it’s most needed and fix our broken energy market. One way of doing this is by entitling every family to a basic amount of universal energy at free or subsidised rates.

This can ensure that nobody is left to make choices between heating and eating while encouraging those who can afford it to reduce their energy use.

But the only long-term solution to real energy security is to help people cut their energy demand and the first step is to help insulate our homes.

There is still time to roll out an emergency insulation programme this winter that can save both families and the treasury billions.

Henry Gregg, Director of External Affairs at Asthma + Lung UK, said:

Removing the energy price guarantee will spark fear in people living with long-term lung conditions, such as asthma and COPD, who need to keep their homes warm to survive.

People who were already struggling with rising energy bills are now hanging on by a thread with no safety net in place beyond next spring. Millions of people in this country are already living in fuel poverty and an end to the bill freeze in April could negatively impact many, many more.

Lives are already being lost, the Government must act now to prevent further damage. It must commit to helping people with lung conditions, who need warm homes to survive, and provide financial support for people facing extra energy bills for life-saving medical equipment.

Juliet Philips from the E3G think tank tweeted:

▶️Essential gov gets ‘targeting’ right – huge risk that millions could fall through gap with simple metrics
▶️£2.5k is untenable for fuel poor – quantum must be increased for vulnerable
▶️Must boost investment in long-term solutions to lower bills; home retrofits & renewables https://t.co/8b19IDZghZ— Juliet Phillips (@_JulietPhillips) October 17, 2022

While National Energy Action called the plan, said the almighty trade-off “may provide confidence and certainty for markets, it could cause anxiety and doubt for households” leaving families “clinging on by their fingertips.”

Caroline Abrahams, Charity Director at Age UK, said:

It’s been hard keeping up with all the fiscal policy changes the last few days, but they seem to leave us in a position now in which nothing is guaranteed and with the Government increasingly warning of ‘hard choices to come’. This chilling outlook will be a huge concern for our older population, with only the healthiest and wealthiest able to view the future with equanimity.

Pensioners on low and modest incomes, or with high costs, have the most to worry about and for their sake we urge the Government to raise benefits in line with prices, not wages, and to extend help far enough up the income range so that the group once referred to by their party as ‘just about managing’, (i.e. not just those living below the poverty line) also get some support. The truth is that all these groups of older people, numbering several million, need an injection of additional cash to see them through the winter, not only from April 2023 onwards, when we trust that Ministers will keep their promise to reinstate the triple lock. Without more support between now and the spring though, the prospects for pensioners on low and modest incomes and with no savings are bleak, and we cannot see how they will be able to afford to buy even the basics. Without more help it seems certain that some will sink into deep hardship this winter unlike anything most of us have seen before.

Older people depend on being able to access good quality health and social care, and with the quality and availability of these services already severely compromised by shortages of staff and funding, the idea that there could be any further cuts to them is inconceivable. Both need more resources and a long-term sustainable plan for the future, not further cuts and uncertainty.

Like most of the older people we exist to help, at Age UK we are incredibly worried about what may be to come, and we implore the Government to stand with our older population through this crisis.

Blackouts an intolerable situation say campaigners

Commenting on reports that the UK may be subject to rolling black outs or enforced energy cuts, a spokesperson for the End Fuel Poverty Coalition commented:

We need to ensure we have enough supply to help the most vulnerable.

People such as the disabled and elderly or those using respirators, can’t just turn off their energy use. They are already in fuel poverty and keeping usage to a minimum, so it will be life threatening in some situations.

While there may be some scope for some households to reduce usage and save energy, we should not be encouraging self-disconnection or forcing people to live in cold damp homes.

The Government needs to realise that its obsession with fossil fuels has led us to this point and increasing our reliance on them is not the way to end the energy crisis.

This intolerable situation shows that the faster we move to renewables and an improved energy market, the better.

We need a plan to improve energy efficiency, develop more sustainable ways of keeping people warm every winter and for a long term shift away from gas and onto more renewable energy.

 

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.

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.

Energy saving measures could save billions

An expert report has revealed how investing now in energy saving solutions could save the UK Government hundreds of billions in ‘sticking plaster’ solutions this decade.

Experts calculate that the UK government has spent £37bn this year to stand still on soaring costs of living, without meaningful investment in solutions which could permanently reduce bills. With estimates that fossil fuel prices will remain at an unprecedented level until at least 2030, E3G is calling for long-term energy saving solutions to save the Treasury from needing to spend hundreds of billions in ‘sticking plaster’ solutions.

Households living in the least efficient homes will pay around £916 more per year on energy bills when the energy price cap rises to £2,800. If everyone living in homes below Energy Performance Certificate (EPC) band C were improved to EPC C today, the aggregate saving would be £10.6bn each year.

Independent climate and energy think tank E3G has set out a package of measures to make rapid near-term progress, saving families an average of between £450 – over £1,000 per year.

As well as energy efficiency measures in homes, key measures suggested also include launching an Olympic-style skills and training programme for the retrofit supply chain and making independent energy and retrofit advice readily available to people across the country to share what help is available.

Juliet Phillips, Senior Policy Advisor at E3G and lead author of the report says:

With fossil fuel prices expected to remain sky high until at least 2030, the government must decide whether it wants to go on spending £37bn per year just to stand still – or to invest now in permanent solutions for lower bills, which will pay off multiple times over in the years ahead. Until the structural drivers of the cost of living crisis are addressed, including the cold and leaky nature of our housing, the government could be left spending tens of billions on emergency financial support packages each year.

Stew Horne, head of policy at Energy Saving Trust said:

E3G’s latest report highlights the steps the UK Government should take if it is to help people across the country reduce household energy usage and bills for the long-term. Time is ticking away to make the much-needed improvements to the energy efficiency of UK homes that UK government has committed to this decade. Energy Saving Trust particularly welcomes the report’s proposals for bespoke advice and support for consumers as this will play a vital role in helping make the changes that will permanently reduce the energy required to heat their homes and keep energy costs down.

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/