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.

Reports highlight growing fuel poverty crisis

Two reports have highlighted the gulf between rhetoric and reality in the fight against fuel poverty.

The latest BEIS Committee on Fuel Poverty report revealed that only 15% of funding to improve energy efficiency and help with fuel bills actually went to households in fuel poverty.

Commenting, a spokesperson for the End Fuel Poverty Coalition said:

This is a devastating report which highlights just how much work the government has to do to alleviate the rapidly growing fuel poverty crisis.

Improved financial assistance this winter must be matched by rapid and targeted investment in improving energy efficiency of homes in the long-term. The Budget later this month simply cannot ignore introducing urgent measures to help people.

Meanwhile a report by AgilityEco and Gemserv reveals that current funding and policy to relieve fuel poverty will help only a fraction of the 3.2 million homes that were in fuel poverty in 2019. 

The legally binding target to all but end fuel poverty by 2030 requires a further £18 billion to be spent in fuel poor homes across the rest of the 2020s. Even if some proposed action is taken, double the amount of current funding is still required for energy efficiency programmes.  

A spokesperson for Coalition members, National Energy Action, commented:

The urgent need to provide additional support to fuel poor households has never been greater. We know what needs to be done and how far current policies will take us. We also know all too well the consequences of not meeting our legal duties to help the poorest households who live in the least efficient homes.

Beyond directly supporting the most vulnerable households through this winter and better targeting of current policies, we need to boost investment to improve home energy efficiency in fuel poor homes. Public investment in keeping people warm and well pays for itself and will deliver huge national benefits.

The Treasury’s upcoming Budget and Spending Review provides a vital opportunity to protect health outcomes and support the most vulnerable people across the United Kingdom as well as delivering the Government’s levelling up agenda.

Image: Mike McBey / Flickr / Creative Commons

New fuel poverty strategy for England announced

18 months after the consultation on a new fuel poverty strategy for England closed, the Government has launched “Sustainable Warmth” a new strategy designed to protect the most vulnerable households.

The End Fuel Poverty Coalition commented:

There is much to be applauded in the new strategy and we welcome many of the measures that are being introduced and the announcement of additional funding.
The updated strategy will ensure progress is made towards meeting previously missed milestones and we look forward to seeing the progress being made in the Committee on Fuel Poverty’s upcoming annual reports.
The updated fuel poverty strategy for England also takes another step in revealing the true extent of fuel poverty in the country.
More households are now classified as being in fuel poverty. But we know even more people are struggling with energy bills due to the double impact of a very cold winter and lockdown measures.
While this long term strategy is clearly not the place for short-term measures, we do urge the Government to do more to help people through the challenging, immediate, threat of severe fuel poverty this winter.
More reaction from the Coalition will follow. Our original submission to the consultation can be viewed online.
Featured image: Mike McBey / Flickr / Creative Commons

Lack of money will stymie government fuel poverty review

A lack of funding to tackle statutory targets on fuel poverty in England could have damaging long term consequences, according to the End Fuel Poverty Coalition.

The Coalition’s response to the Government’s Fuel Poverty Strategy Review broadly welcomes the consultation, but warns there are major areas which need improvement.

Fuel poverty means that a household is forced below the poverty line as a result of the cost of using energy in their home. Using the current measurement, at least 2.53m households are in fuel poverty in England alone.

The Strategy review proposes widening this definition to include all low income households living in cold homes (the ‘Low Income, Low Energy Efficiency’ indictor). The government believes this will better incentivise energy efficiency. This increases the number of fuel poor households in England from 2.55 million to 3.66 million: an increase of 44%.

The Coalition’s response argues that the most crucial action that Government can take is to support proposals for a new ‘Clean Growth Fuel Poverty Challenge Fund.’ This would help the poorest households living in the worst F and G-rated homes, mainly in hard to heat homes.

The Coalition’s detailed response to the Strategy Review also calls for additional improvements, to create a longer term framework for energy efficiency. These include:

  1. Better regulation of the private sector
  2. Make the Energy Company Obligation (ECO) Scheme more accessible to those in greatest need
  3. Introduce more locally led, area-based schemes to improve energy efficiency, backed up by a national “safety net”
  4. Ensure all improvements are of the highest and safest quality
  5. Examine new financial measures to improve energy efficiency across the wider housing stock such as stamp duty reforms, zero interest loans, etc.

 Dr Brenda Boardman, Emeritus Fellow at Oxford University’s Environmental Change Institute, and one of the core authors of the Coalition’s response, commented:

Fuel poverty policy has been in the doldrums for several months, so that this consultation is welcome evidence that the Government wants to revive policy.

There is recognition of the crucial importance of energy efficiency improvements, but no statements yet of appropriate funds. And yet there needs to be prompt, positive action to upgrade all the fuel poor in F and G-rated properties in the next 15 months, as promised.

The growing emphasis on regulation, for instance of the privately rented sector, is encouraging, but still depends on enforcement to be effective. We believe this is a great opportunity for the Department for Business, Energy and Industrial Strategy to be strong and really champion the fuel poor. 

Peter Smith, Director of Policy and Research at National Energy Action (NEA), said:

Without more ambitious action 160,000 fuel-poor households could still be living in the least efficient homes by 2020, with the Government way off-track towards meeting its 2030 statutory target. As well as the devastating impacts cold homes have on their occupants, the delayed cost of inaction extend to all of us.

Addressing fuel poverty is a crucial part of meeting the new stretching carbon targets. Without a big improvement in current efforts, the government will not meet its climate change targets. Poorer households will benefit the least from energy policies, whilst paying a higher share of the costs, despite making lower contributions to our overall emissions.

But it doesn’t have to be this way. Ending fuel poverty is in our grasp through a National Energy Efficiency Programme, fully funded support for those in fuel poverty and reform of the private rented sector.

A full copy of the End Fuel Poverty Coalition response is available online.

You can follow the Coalition on Twitter @EndFuelPoverty.