Default and pre-payment meter energy tariff caps set to increase

Ofgem, the regulator for gas and electricity markets, has today announced an increase to the cap on default and pre-payment meter tariffs.

First introduced on 1st January 2019, the energy price cap set a limit on a unit price of energy and a maximum standing charge. This meant energy suppliers had to charge consumers a price either at the level of or below the cap. As a result, consumers were expected to save an average of £76 annually.

However, as a result of higher wholesale energy costs, Ofgem has increased the level of the cap. The new cap will come into effect on 1st April 2019, under which the default tariff price cap will increase by £117 annually and the pre-payment meter cap by £106.

Responses from End Fuel Poverty Coalition members, Citizens Advice and National Energy Action, can be viewed by clicking on the member’s name.

Excess winter deaths hit record high at 50,100

Figures released by the Office for National Statistics today estimate that in 2017/18 there were an estimated 50,100 excess winter deaths (the number of deaths between December and March compared to those outside of these months) in England and Wales. This is the highest on record since 1975/76.

15,000 of these deaths are thought to be linked to living in a cold home. These deaths were avoidable and could have been prevented.

Jenny Holland, Chair of the End Fuel Poverty Coalition (EFPC) said:

“These figures are deeply shocking. We saw a staggering 40% leap in excess winter deaths last year compared with the number over the previous 5 years. There are many causes for these extra deaths, but over a third of them will have been related to living in a cold home.

“Every one of these preventable deaths has a tragic human story behind it. We call on Government to take urgent action to deliver the energy efficiency improvements to people’s homes that are so sorely needed. This will help alleviate winter pressures on GP surgeries and hospitals by tackling the avoidable illnesses and health problems linked to living in a cold home.”

Individual responses from members of the EFPC can be viewed by clicking on the members name; Age UK and National Energy Action.

Ofgem announce final details of price cap

Ofgem, the regulator for gas and electricity markets, has announced the level and timing of the price cap on default tariffs. This will mean energy suppliers will be required to reduce their prices to either the level of, or below the cap. Ofgem’s announcement can be downloaded here.

The cap will come into effect on 1st January 2019 and will be set at £1,137 for a typical dual fuel customer who pays by a direct debit. Consumers are expected to save an average of £76 each year, with this increasing to £120 for those on the most expensive tariffs. Those customers who are in receipt of the Warm Homes Discount but do not have a prepayment meter will be placed onto the default price cap and no longer on the safeguard tariff.

Members of the End Fuel Poverty Coalition have issued individual responses to Ofgem’s announcement. You can read these by clicking on the member’s name; Citizens Advice and National Energy Action.

Landlords required to improve energy efficiency of lowest performing homes

The Government has today announced new energy efficiency regulations under which landlords are required to spend up to £3,500 installing energy efficient measures into the lowest energy performance rated properties (F and G).

Jenny Holland, Chair of the End Fuel Poverty Coalition, said: 

“Over 45% of households living in F-and G-rated privately rented homes are fuel poor. These are homes that are cold, draughty and damp. Today’s announcement – that landlords will have to spend up to £3,500 to improve them – is a step in the right direction, but a minor one.

“According to the Government’s own figures, a cost cap of £3,500 will mean that over two-thirds of these cold, unhealthy homes will fail to reach energy band E. We are very disappointed that the Government failed to heed our call for a £5,000 cost cap, which would have improved far more homes and given hard-pressed households much greater bill savings.


End Fuel Poverty Coalition responds to EPC call for evidence

The End Fuel Poverty Coalition (EFPC) has responded to the Department for Business, Energy and Industrial Strategy (BEIS) and the Ministry of Housing, Communities and Local Government (MHCLG)’s call for evidence on Energy Performance Certificates (EPCs). These are used to measure the energy performance of a building and are an imperative tool in promoting a buildings energy efficiency.

The EFPC’s response focuses on the role of EPCs in the private rented sector, particularly houses in multiple occupation (HMOs). Energy efficiency problems, such as damp and unhealthily low temperatures, are more prevalent in HMOs, with these properties often occupied by vulnerable people. However, the domestic Minimum Energy Efficiency Standards (MEES) only apply to HMOs with an EPC, of which there is no obligation for an EPC to be obtained for individual self-contained units with a property.

We welcome the Government’s recognition that the exclusion of HMOs from the Private Rented Sector Minimum Energy Efficiency Standard (MEES) should be addressed. The EFPC advocates for the introduction of a requirement for an EPC for the whole building to be produced when a single unit in the building is marketed for rent and strongly endorses that MEES and EPCs are better aligned.

You can download the EFPC’s full response here.

10,853 people living in cold homes perished this winter

10,853 people in the UK perished during the winter of 2017/18 as a result of living in a cold home. This shocking statistic comes from End Fuel Poverty Coalition member National Energy Action‘s (NEA) 2018 UK Fuel Poverty Monitor. You can download a copy of the report here.

The Monitor is NEA and Energy Action Scotland‘s (EAS) annual investigative report into fuel poverty across the UK and within each of the four nations; England, Northern Ireland, Scotland and Wales. This year’s monitor focuses on the severe cold weather experienced in February and March of this year, referred to by the media as the ‘Beast from the East’.

Between February 28th and March 3rd 2018, the UK was struck by some of the most severe winter weather experienced in almost a decade. Much of the country was swathed in snow and wind-chill temperatures plummeted the already freezing temperatures further. Health and social care services faced unprecedented pressures, roads were impassable, communities isolated and many households suffered power cuts. A short video presenting the UK’s experience of the ‘Beast from the East’ can be viewed here.

The report identifies that the February and March cold snap resulted in an influx of demand on frontline services, with many seeing an increased number of households with more complex needs, seeking support. Many organisations were dependent on the goodwill of staff and volunteers but a lack of planning and resource meant many services creaked at the seams, leaving far too many households living in a cold home.

NEA and EAS make a number of recommendations, much of which reiterate those made in the 2017 UK Fuel Poverty Monitor. These include:

  • Clarification across each nation on fuel poverty commitments, with this embedded within legislation and relevant local and national health and social care frameworks
  • The development of annual registration for Single Point of Contact referral services to ensure local support services have greater visibility
  • Re-establishment of grant schemes to fund the delivery of health prevention-based affordable warmth programmes
  • The introduction of requirements, similar to those required of regulated energy suppliers and distribution companies under the Priority Services Register, and enhanced regulatory scrutiny for unregulated sectors such as Liquefied Petroleum Gas (LPG) and oil.
  • Revisions to the Digital Economy Act to permit local authorities, public sector health bodies and energy network companies to data-match with the Department for Work and Pensions, autonomous from licensed energy suppliers.


Ofgem announces proposals for price cap on energy tariffs

Ofgem, the regulator for gas and electricity markets, has announced details of a proposed price cap on energy tariffs. This will mean households covered by the cap will be protected from being charged more than they should for their energy, with suppliers being required to reduce prices either to the level of, or below the cap. It is expected that the cap will be in place by the end of the year.

The price cap is expected to save consumers approximately £1 billion, with the exact savings a household may see dependent on their energy use, their current energy deal, how much they currently pay for their energy and whether they are duel customers. 11 million households on poor value default tariffs will be protected, whilst a typical consumer on the most expensive tariff is expected to save more than £120. Standard duel fuel energy consumers will have their tariff capped at £1,136, meaning customers will save an average of £75 each year.

Ofgem’s press release is available here and you can read the full proposals here.

A number of the End Fuel Poverty Coalition’s members issued statements in response to the price cap. You can read each members response by clicking on their name; Citizens Advice and National Energy Action.

The Coalition raises concerns over proposals to remove support for oil-fired boilers under ECO3

The End Fuel Poverty Coalition (EFPC) has written to the Minister of State for Energy and Clean Growth, Claire Perry, over the Department for Business, Energy and Industrial Strategy’s (BEIS) proposals to remove support for oil-fired boilers through the Energy Company Obligation (ECO). You can read the proposals for ECO3 here.

Dramatically improving domestic energy efficiency levels is the most enduring solution to ending cold homes. Yet in England, ECO – a scheme under which suppliers with more than 250,000 domestic customers provide funding to support vulnerable consumers – is the only mechanism which delivers vital domestic energy efficiency improvements.

An end to support for oil-fired boilers under ECO3 was proposed by BEIS and the Coalition expresses significant concern over this. Households using oil-fired boilers are often off-gas and in the deepest fuel poverty, leaving 140,000 of the poorest households in England with no way to heat their home. We believe that should the Government end support for oil-boilers, households must be able to access alternative policies, such as the Renewable Heat Incentive.

The Coalition also raised concerns as to the financial contributions households are likely to be required to make towards the energy efficiency measures provided through the scheme, despite having already contributed to the policy through their energy bills. This means those in the deepest fuel poverty will be unable to benefit from much-needed improvements due to them not being able to afford to make capital contributions.

You can read the Coalition’s letter to the Minister of State for Energy and Clean Growth here.

Since sending the letter, the Coalition is pleased to report that BEIS have announced in their response to the ECO3 consultation, that they will continue to allow new oil boilers to be install under ECO3. BEIS expects that new oil boilers will mostly be delivered in rural areas, although the policy doesn’t exclude other areas. Furthermore, BEIS announced a 400% uplift available to provide support for the replacement of broken boilers (including oil-fired boilers) under the cap to low income, vulnerable and fuel poor households. BEIS’ response to the consultation is available here.

The Coalition calls on Ofgem to preserve and extend the Safeguard Tariff

The End Fuel Poverty Coalition (EFPC) has written to Ofgem, the government regulator for electricity and gas markets in Great Britain, calling for the Safeguard Tariff to be preserved and extended.

Under the Safeguard Tariff, customers on prepayment meters or in receipt of the Warm Home Discount (WHD) are safeguarded as to how much they pay for their energy. This means there is a price cap at which suppliers can charge customers for their gas and electricity. More information about the Safeguard Tariff is available here.

Vulnerable customers are less likely to switch suppliers or tariffs. In 2016, the Competition and Markets Authority (CMA) reported that those on a low income, over the age of 65, on the Priority Services Register or with a disability are less likely to have switched supplier in the last 3 years. These consumers are therefore more likely to be on the highest tariffs and paying more than they should for their gas and electricity.

The Coalition advocates that the current Safeguard Tariff is expanded and is very concerned it will be prematurely withdrawn. Currently the Tariff is only available for those households in receipt of the WHD, which is made up of 2 groups; the ‘Core Group’, which largely consists of poorer pensioners, and the ‘Broader Group’ consisting of a small number of households who apply. This means many households who are of working age, in the lowest income deciles and burdened by high living costs miss out on the vital support provided.

Failure to extend and preserve the Safeguard Tariff could leave many low-income households exposed to increases in their energy bills, in turn creating anxiety over finances and leading to the adoption of unsafe coping mechanisms.

You can read the Coalition’s letter to Dermot Nolan, Chief Executive of Ofgem, here.

Fuel poverty recommendations for the next government

As the general election of 8th June approaches closer, the End Fuel Poverty Coalition makes five key recommendations to the parties, and to the government that is democratically elected.

Millions of people cannot afford to heat and power their homes. Millions are suffering ill-health, stress and anxiety from unaffordable fuel bills, which in turn can lead to social isolation and reduced educational attainment. The End Fuel Poverty Coalition believes that everybody has the right to a warm, dry home that they can afford to heat and power. We call on the next Government to take action to end fuel poverty and thereby improve people’s health and quality of life, reduce the cost of living, create jobs and cut carbon emissions.

1. Improve the homes of all low income households to the energy standards of homes built today (Energy Performance Certificate (EPC) Band C) by 2025 and make this a central element of its programme to address the lack of affordable housing in this country. This will result in dramatic improvements in comfort, health and quality of life and energy bill affordability for occupants.

2. Make improving the energy standards of our homes a central priority for investment in the country’s infrastructure and secure long-term funding for this. Improving the energy efficiency of Britain’s homes could cut household bills by around £370 a year, while reducing our reliance on gas imports by a quarter. It would also boost economic growth, create jobs in every constituency of the country and reduce pressure on health and social care services

3. Require fuel companies to provide bill rebates for all low income consumers and stop companies charging unfair prices to consumers who pay by prepayment meter and who have not benefited from energy market competition.

4. Take immediate action to improve the standards of private rented homes. This requires tough regulation – and effective enforcement of regulation – to outlaw dangerously cold homes from 2018 onwards. This should form part of a wider programme to improve tenants’ rights and security of tenure.

5. Implement a cross-departmental Fuel Poverty Strategy to end fuel poverty that sets targets for all relevant Government departments. In particular, this should address joint action to tackle cold-related ill-health, employment and income policies to make sure people have sufficient income to afford energy and other essential services and devolving power and resources to local authorities so that they can play a central role in delivering the Strategy.

The End Fuel Poverty Coalition’s recommendations can be downloaded here – Key recommendations to government May 2017.