THREE million households are doomed to remain trapped in fuel poverty by 2030 as the government is set to fail to meet its energy efficiency targets, according to new research.
The report surfaced as the Office of National Statistics (ONS) issued new data today that found that some four in 10 adults reported finding it “very” or “somewhat” difficult to afford their energy bills, while 14 per cent of those finding it hard to keep warm in their home also experienced difficulties affording food.
The National Energy Action and Energy Action Scotland report has found that the poorest households could be left paying £480 more a year to meet their energy needs while remaining in cold, damp and unhealthy homes.
It found that the government is projected to miss its target to upgrade the energy efficiency of homes to at least a band C “by a staggering margin.”
An independent analysis by Gemserv found there is a funding shortfall of at least £18 billion for the measures needed to meet the legal requirement to ensure fuel-poor homes in England are brought up to standard by 2030.
The leading trade union body has slammed government policy for benefiting corporate profiteering at the expense of household bills, leading renewed calls to nationalise the energy sector after the 5% energy price cap rise.
Households will be ‘hammered even harder’ in 2024 the Trades Union Congress (TUC) has said, as the Ofgem price cap rise came into effect from January 1, which will see households across the country face a 5% increase in their energy bill.
It has led to further warnings from charities about struggling households facing another cold start to the year and renewed calls for government support to help households struggling with their energy bills.
“No one should struggle to get by in one of the richest countries in the world,” said TUC General Secretary Paul Nowak.
“But 13 years of wage stagnation and cuts to social security have left millions badly exposed to sky-high bills this winter.”
With energy bills already 50% higher than two years ago, Nowak said the price cap rise will only “hammer households even harder in the coming year”.
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Warm This Winter, a coalition of 50 leading UK charities, warned of the effects the government’s inaction at tackling the energy crisis will have across services.
“Failure to avert this cold homes crisis will lead to pressure on the NHS, a mental health catastrophe and additional winter deaths caused by living in cold damp homes,” said Fiona Waters, Warm This Winter spokesperson.
Domestic energy prices more than doubled during 2022 compared with the year before. This meant that the number of UK households in fuel poverty who could not afford to heat their homes to a safe level rose from 4.5 million to 7.3 million.
The UK government attempted to alleviate the impact of rocketing bills with a package of support measures. This included capping the unit cost of electricity and gas, a £400 rebate to all households using mains gas for heating and £200 for those using alternative fuels, and a further £650 “cost of living payment” to claimants of means-tested benefits.
Many of these schemes ended in spring 2023. And with wholesale gas costs and the government’s energy price cap having come down somewhat, you could be forgiven for thinking that the worst of the energy crisis has passed.
But that’s not the case for many billpayers – in fact, this winter is likely to be worse than the last for many households.
The energy price cap, introduced in 2019 by market regulator Ofgem, limits how much people pay for each unit of gas and electricity. The latest price cap, set on October 1 2023, means that a typical household will pay £1,834 a year for energy – less than £2,000 for the first time in 18 months.
This might sound like good news, but it’s still a substantial increase on the pre-crisis cap. In August 2021, the most a typical household could expect to pay in a year for energy was £1,277.
Although the unit prices of electricity and gas have fallen, there has been a steep increase in standing charges. These are a levy on all energy bills which cover the costs associated with supplying energy to homes.
Standing charges have gone up from around £186 a year pre-crisis to just over £300 now – effectively adding £110 to bills.
Standing charges pay for the upkeep of the UK’s energy supply network. KingTa/Shutterstock
Standing charges are regressive because they are the same for everyone, regardless of how much energy you consume. Poorer households often use much less energy than wealthier ones, so standing charges make up a larger proportion of their energy costs.
The £400 energy bill rebate paid to all households last winter has now ended. Meanwhile, cost of living payments to claimants of means-tested benefits have increased from £650 to £900 a year. This will be helpful to those who qualify, but one third of households eligible for means-tested welfare payments do not claim them due to stigma, lack of awareness or bad experiences with the assessment process, and so will receive no assistance.
Many households who do receive these cost of living payments will spend it on other expenses, such as food, rather than heating their home. This reflects the fact that energy is often seen by struggling households as something that can be rationed.
If you’re in a household that does not qualify for the cost of living payment then the savings of around £150 that resulted from the lowering of the cap will soon be more than cancelled out by the lack of a rebate.
Cold homes can kill
Despite the financial support offered last winter, average levels of energy debt for people contacting Citizens Advice in England and Wales have risen sharply over the last year, from around £1,400 per household on average in March 2022 to £1,711 in July 2023. One-third of UK energy customers are now in arrears.
So although energy bills have fallen slightly, many households are less resilient to financial shocks than they were in early 2022. Volatile energy prices are predicted to last until the end of the decade.
Research last winter found that households in fuel poverty were underheating their homes, causing damp and mould that can create serious health problems and exacerbating anguish and stress. The health risks of a cold home increase with repeated exposure.
As temperatures begin to fall again, a range of measures are urgently needed to prevent a crisis worse than that of last winter.
What can be done to help?
Since energy prices are expected to remain high for years, long-term solutions are vital. There must be increased investment in efforts to insulate the UK’s leaky housing stock. But with winter just weeks away, what can the government do right now?
To start, it could offer greater energy bill rebates. Given the scale of the fuel poverty problem, eligibility for these rebates must be wide enough for anyone on a below average income to receive help.
Alternatively, the government could make the rebates universal again, and potentially recoup the costs by increasing taxes on the most wealthy or energy company profits. At the very least, unclaimed energy bill support from last winter should be used to support those likely to struggle in the coming winter, rather than being returned to the treasury.
Cut funding for government-backed advice services could also be restored. And there are reforms to the retail energy market that could be implemented fairly quickly, such as bringing standing charges in line with levels of usage.
More fundamentally, there are a number of proposals that would be fairer than the current system and could be implemented together for maximum impact. These include a “green power pool”, which would ensure that the cheap power generated by renewables such as wind and solar benefits those most in need first and foremost, social tariffs (discounted energy bills for low-income households), or a national energy guarantee that would secure access to enough free energy to meet everyone’s basic needs.
The government’s forthcoming autumn statement must not sidestep these issues if people in fuel poverty are to stay safe and warm this winter.
Don’t have time to read about climate change as much as you’d like?
Activists held protest in Harrods, the British Museum and Scottish Power headquarters today (3 December), as part of national demonstrationsagainst surging energy bills and fuel poverty.
Don’t Pay UK, Fuel Poverty Action, Just Stop Oil and others groups held a series of what they describe as ‘warm-up’ protests.
Activists entered the British Museum’s great hall – the largest indoor public square in Europe – where they also protested against the Bloomsbury venue’s sponsorship links with oil giant BP.
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Just Stop Oil supporters cosy up at Harrods on Fuel Poverty Day of Action
Image: Just Stop Oil, Rich Feldgate
Just Stop Oil supporters have occupied beds and sofas in Harrods to demand that the government Just Stop Fuel Poverty by insulating homes and ending our reliance on expensive, dangerous and dirty fossil fuels.
At around 1pm, 4 Just Stop Oil supporters briefly occupied beds and sofas in Harrods department store on Brompton Road in central London and displayed signs reading “Just Stop Oil, Just Start Insulation”, “Just Stop Fuel Poverty” and “Oil Equals Death”. They were rapidly escorted out of the store by around 20 security guards.
Image: just Stop Oil.
Just Stop Oil supporters are acting today in solidarity with Fuel Poverty Action’s Energy For All campaign and the Don’t Pay UK campaign. The action is one of several Warm-Ups taking place across the UK in towns and cities including Glasgow, Liverpool, Bristol and London in support of the Warm This Winter coalition’s Day of Action on fuel poverty.
A spokesperson for Just Stop Oil said
“This government is allowing ordinary people to starve and freeze this winter as greedy energy companies squeeze every last penny out of us. The health service is in crisis, workers’ wages are being squeezed, and nurses are using food banks. Austerity is a political choice and the cost of living crisis is an unprovoked attack on ordinary people.
“Worse still, rocketing energy prices are funding the companies who are torching the climate. Rishi Sunak’s government plans to allow over 100 new UK fossil fuel projects. They are signing our death warrants. New oil and gas is criminal, an act of genocide against billions of people in the poorest countries on earth, and an act of war against the young.
“If the government really cared about ordinary people, as they keep claiming, we’d see an emergency response to the climate and cost of living crisis. Everyone would have their basic energy needs met and bills would be shrunk through insulation, renewables and free public transport, paid for by the fossil fuel companies and the rich.”
National Energy Action estimates that as a result of rising energy costs, around 2.2 million more people have fallen into fuel poverty this year in the UK raising the total figure to 6.7 million. The chancellor’s decision to further raise the energy price cap in 2023 could see the number of households in fuel poverty rise from the current 7 million this winter to 8.6 million households by next April according to the End Fuel Poverty Coalition.
Dozens of climate and energy justice campaigners call for a stronger windfall profits tax to fund home insulation and renewable power generation from inside the U.K. Parliament in London on October 24, 2022. (Photo: Suzanne Plunkett/Greenpeace)
[The situation on fracking has changed since this article was published 3 days ago. The new UK government under Rishi Sunak has made clear that fracking is not permitted in UK.] Republished from Common Dreams under Creative Commons licence (CC BY-NC-ND 3.0).
“Delay has cost lives. Chaos costs lives. And it will cost more lives this winter and every winter,” campaigners say. “No one benefits except the oil and gas profiteers.”
Hours after lawmakers from the ruling Conservative Party voted to make Rishi Sunak the United Kingdom’s third prime minister this year, more than 30 climate and energy justice activists occupied the lobby of Parliament to demand that the government fund home insulation and renewable power generation through a more robust tax on oil and gas corporations’ windfall profits.
Almost seven million people in the U.K.—nearly a quarter of the country’s population—are facing fuel poverty as winter quickly approaches. Meanwhile, heavily subsidized fossil fuel giants are raking in record profits, which they use to block policies that would facilitate a green transition and rein in their destructive industry.
Greenpeace campaigners, armed with sky-high utility bills from across the country, read the testimonies of people struggling to make ends meet amid a historic cost-of-living crisis that Sunak’s right-wing predecessors—Boris Johnson and Liz Truss—and Tory colleagues have, according to progressive critics, exacerbated through adherence to neoliberal orthodoxy.
Stressing that “chaos costs lives,” activists made the case for simultaneously addressing soaring energy prices and the worsening climate emergency by taxing fossil fuel profits and using the revenue to invest in better residential insulation and expanded clean energy production.
Today 30+ Greenpeace activists occupied parliament, bringing energy bills and reading out testimonies from people across the country just as @RishiSunak is announced as the new Prime Minister. He must deliver a proper windfall tax to insulate homes. #ChaosCostsLivespic.twitter.com/ecVytnsqYc
“Thanks to spiraling gas prices and the oldest, coldest housing in Europe, millions of people are being pushed into fuel poverty,” Greenpeace U.K. noted in a blog post. “People across the country have waited for government after government to provide enough help to lower their energy bills—but mostly what we’ve had is political chaos.”
The group continued:
Rising energy bills and cold homes will cost lives. The U.K. already has the sixth highest rate of excess winter deaths in Europe. Higher bills also disproportionately impact disabled and older people, people of color, and those from impoverished communities. For instance, many medical and mobility devices require electricity. Meaning, on average, disabled people have much higher energy bills just for using equipment they need in their day-to-day lives. Political leaders have failed to put people first and provide sufficient support for the energy crisis.
It’s political choices that have caused the levels of inequality and fuel poverty we’re facing. If this government properly taxed record fossil fuel profits, it could help fund extra support for those in need, and help pay for a nationwide program to insulate homes. Instead, the last six weeks have seen u-turns on the Conservative manifesto pledge on fracking and new commitments to North Sea oil and gas, which will wreck our climate and won’t lower our bills.
Two months ago, the U.K. Treasury estimated that the nation’s energy firms are poised to enjoy up to £170 billion ($191.9 billion) in excess profits—defined as the gap between money made now and what would have been expected based on price forecasts prior to Russia’s invasion of Ukraine—over the next two years.
A 25% windfall tax on oil and gas producers approved in July is expected to raise £5 billion ($5.6 billion) in its first year. However, the existing surtax on excess fossil fuel profits contains loopholes allowing companies to drastically reduce their tax bill by investing more in oil and gas extraction, which the industry claims will boost supply. The recently enacted windfall tax, which lasts through 2025, also exempts eletricity generators, even though Treasury officials attribute roughly two-fifths of the £170 billion in excess profits to such actors.
With winter energy bills projected to triple compared with last year, calls are growing in the U.K. to increase the windfall tax rate on excess fossil fuel profits and extend it to electricity generators benefiting from rising oil and gas prices.
While Truss vehemently opposed windfall taxes—asserting that they “send the wrong message to investors”—Sunak introduced the current windfall tax in May when he was Johnson’s chancellor of the exchequer.
According to Greenpeace, Monday’s action was meant to show Sunak that “he can’t ignore the almost seven million households facing fuel poverty.”
The life-threatening crises of surging utility bills and unmitigated greenhouse gas pollution are both caused by fossil fuel dependence, the group noted. Consequently, these problems have lifesaving solutions that are straightforward and aligned.
“To lower our bills long-term and reduce our emissions,” Greenpeace urged Sunak to do the following:
Commit to investing £6 billion [$6.8 billion] immediately to kickstart a street-by-street insulation program to keep bills low for good;
Shift to renewable energy, like wind and solar, which are cheaper and quicker to build than oil and gas; and
Properly tax oil and gas companies’ excess profits so they pay their fair share, given how much money they’ve made off these crises.
“It’s time we have a government that brings down bills for good and plays its part in tackling the climate crisis,” the group added.
On social media, Greenpeace encouraged people to sign a petition imploring U.K. lawmakers to “keep people warm this winer.”
“Delay has cost lives. Chaos costs lives. And it will cost more lives this winter and every winter,” the group emphasized. “No one benefits except the oil and gas profiteers. If the government were on the people’s side, the U.K. really could get on track to quitting oil, gas, and sky-high energy bills, forever.”
