Shell and Centrica are declaring record profits, while consumers’ energy bills will almost triple in a year. They’ve increased from an average £1277 last year, to around £1971 now, and potentially £3800 from this October. On average pay, you would have to earn over £3500 more to take home the extra £2500 needed. Even if you get a £3500 pay rise, you wouldn’t want it all to go on increased fuel costs. And what about pensioners or benefit claimants?
There was time to plan for this
We all knew it was coming – I for one have had emails with frightening predictions from my energy company since last year. Martin Lewis of Money Saving Expert has been sounding the alarm for months.
He recently made a desperate plea to the two leadership candidates, one of whom must hit the ground (running) in September to sort out the ‘cataclysm’. He warns that many will be thrown into fuel poverty this winter, in addition to struggling with huge fuel increases and food inflation. National Energy Action estimate it could leave 8.2 million (almost a third) of households in fuel poverty.
Lewis says the £400 discount on bills pledged by Rishi Sunak has already been swallowed up by the increase in the predicted rise. He foresees civil unrest, possibly mass non-payment. He is also worried that lives will be lost.
Lewis also points out the panic it’s causing: “Rishi Sunak, Liz Truss, Boris Johnson, if you’re listening, please, go and sit in a room together, make a collective decision now of what help you can give and make an announcement now to forestall the mental damage that is coming…”
The first step has not been not taken
Home insulation is the quickest, most cost-effective way to use less energy and be warmer. But UK houses are among the least efficient in Europe. 19 million homes need retrofitted insulation to stop heat escaping. It’s a win-win-win: save money, be warmer, reduce carbon emissions.
Insulate Britain campaigns to persuade government to fully insulate all housing by 2030 to decarbonise the economy. This would additionally reduce bills too, but so far, campaigners have been ignored by government, if not penalised.
So it’s disheartening to read this: ‘The absence of a home insulation programme is an unacceptable gap in policy that must be urgently rectified. Since wholesale prices rose following July 2021, tens of thousands of homes could have been insulated each week had there been the political will to do so. Without addressing the underlying problem of draughty homes, the Government will again be forced to introduce costly and avoidable short-term fixes.’
Who is saying this? A pressure group, Labour spokesperson or anti-poverty charity? No. It’s in the report of the House of Commons Business, Energy & Industrial Strategy Committee, published on 26 July.
Insulation programmes have stalled
Government-supported home insulation measures have been inconsistent. In 2012, there was a huge increase in installations, but since they have only run at 10% of that amount.
The Climate Change Committee estimates consumers could be saving £1 billion on their 2022 bills if home insulation rates had continued at the 2012 level.
Climate change think tank E3G calculates that when the energy price cap rises, homes with an Energy Performance Certificate (EPC) of D or worse will pay more than £916 extra per year for adequate heating, than those rated EPC C or better.
Some householders will have realised the scale of the future crisis and installed their own insulation measures, if they are financially able to pay.
But the elderly widow living alone may not be. Nor the working single parent, young renter or zero-hours employee. Yet again those who can least afford price-hikes are least able to protect themselves.
Warm banks and social tariffs
We need government to urgently set up large-scale subsidised insulation programmes. Sadly, councils may have to set up warm banks to prevent vulnerable residents from suffering hypothermia, like this one in Bungay, Suffolk.
This report calls for the Government to consider ‘a social tariff for the most vulnerable customers…to provide deeper price protection for vulnerable, fuel poor, low income households.’
A lost opportunity
So far, there has been scant preparation for winter. Perhaps this year the government has been too distracted by its own internal chaos to react constructively to recent dramatic price increases. This, coming on top of years of insufficient action to insulate homes, will intensify the crisis. There is little sign that a new administration will be able to provide a solution, leaving many families in crisis.
We can only hope that next year we are not looking back and lamenting sad consequences for ordinary people.
