Category: News

Scottish public call on Ministers to fix nation’s damp homes

An overwhelming majority of the public have called on the Scottish Government to do more to end the cold damp homes crisis.

New figures published in the Daily Record found that 94% of the public wanted action designed to offset the challenges caused by record energy prices. [1]

The data commissioned by the Warm This Winter campaign found that the public was divided among the solutions they wanted to see, but there was clear support for more financial help for households as well as action on the long term solutions to the energy crisis, such as energy efficiency and insulation support.

  • 51% of the public want more government financial support to help households with high energy bills
  • 50% demand funding and support to install solar panels on homes
  • 38% support more funding to help with insulation in homes
  • 30% say there should be help for businesses to install solar panels or other small-scale renewable projects
  • 29% back better protection for tenants living in rented accommodation
  • 26% think there should be better energy efficiency advice and guidance
  • 25% want more funding to help install heat pumps
  • 3% would like more measures to tackle high energy bills, but don’t know what solutions they would like to see
  • 6% don’t support any of these solutions to tackle high energy bills (respondents could select more than one option)

Recently members of the Scottish Parliament were urged to put political differences aside to unite in support measures that will help end fuel poverty.

In a letter sent to all MSPs and to Scottish Government ministers, politicians were asked to ensure the new First Minister does not abandon government policies which could help end the cold damp homes crisis.

The letter, signed by leading civil society organisations and coordinated by the End Fuel Poverty Coalition and Energy Action Scotland, warned that among the most vulnerable, the crisis is even worse.  It came after figures from research among Social Workers Union members found that 69% of Scottish social workers have seen the people they support living in cold damp homes and 400,000 Scots live in uninhabitable conditions.

The campaigners have demanded that MSPs from across all parties to unite in support of:

  1. A Heat in Buildings Bill which is ambitious in its vision for improving the energy efficiency and insulation of the nation’s homes and contains a clear fuel poverty duty enshrined in the legislation.
  2. The current Housing Bill that will enhance tenants’ rights and provide financial protections for tenants during the ongoing cost of living crisis.
  3. Additional Government support in future budgets and legislation to help households cope with the cost of living crisis.
  4. Reintroducing the Fuel Insecurity Fund to help at least those most at risk of harm and struggling in energy debt.
  5. The new Pension Age Winter Heating Payment being fundamentally better targeted than the Winter Fuel Payment that it replaces.
  6. A strengthened framework of support for the renewables and offshore wind sectors and the fastest possible “just transition” for the oil and gas sector, as described in the Draft Energy Strategy and Just Transition Plan.

National organisations that supported these asks ranged from the Poverty Alliance and the Disability Poverty Campaign Group to Fathers Network Scotland, the National Pensioners Convention and Parents for Future Scotland. 

Local groups, such as Aberdeen Heat & Power, East Kilbride Housing Association, East Lothian Foodbank, Stirling District Citizens Advice and Tighean Innse Gall also backed the call.

A spokesperson for the End Fuel Poverty Coalition, commented:

“These figures show that while different households back different types of support to combat the cold homes crisis, everyone is united in demanding action from the new First Minister.

“Part of the long term solution to record energy prices is to improve insulation, ventilation and energy efficiency of homes to reduce our consumption of energy overall. Abandoning a Heat in Buildings Bill now would fail people struggling in cold damp homes.”

Frazer Scott, Chief Executive Officer at Energy Action Scotland, said:

“With one in three households in Scotland in fuel poverty and household energy debt rising, it is clear that the public are demanding that more needs to be done to help with the costs of essential energy.

“Almost half of people in Scotland live in an inefficient, expensive to heat and power home. People need to see action from leaders and decision makers that will improve homes, reduce costs and support people to live a decent quality of life.

“The cost of failing to help people will be measured in the misery of far too many of our households, declines in health & wellbeing and ultimately the unnecessary loss of life from living in a cold damp home.” [2]

Fi Waters, spokesperson for the Warm This Winter campaign, added:

“The First Minister has pledged to tackle child poverty and a good place to start is in the home. All children deserve a warm, dry home, in fact it should be a basic human right for all Scots, which is why policies such as the Heat in Buildings Bill needs to be a central pillar of his parliament.

“Our polling found over half of Scottish people want more government help for people struggling to pay high energy bills, half want to see more funding for solar panels and four in ten more money for insulation.

“The Scottish people have spoken and want a government that will fix the broken energy system by investing in a proper programme of home insulation and homegrown renewable energy to get them off expensive oil and gas and bring bills down permanently. Swinney should listen.”

ENDS

[1] ScotPulse interviewed 2,660 Scottish adults aged over 16 between 7-10 May 2024. Results were weighted by gender and age to Scottish adult population estimates 2021.

[2] Scottish Government published the Scottish House Condition Survey for the year 2022 on 29th February which confirmed that at least 31% of households in Scotland were in fuel poverty and that this was a likely underestimate. It estimated that 37% of households were likely to be in fuel poverty at end March 2023. The 2022 survey identifies that 48% of properties did not reach an Energy Performance Certificate rating of ‘C’, which the Scottish Government determines to be efficient.

Rip Off Britain energy special highlights energy debt dramas

After almost four years of sky high energy bills and repeated Ofgem rulings criticising energy firms’ customer service, BBC’s flagship Rip Off Britain programme has broadcast an energy special.

Billing errors, smart meter malfunctions and soaring levels of energy debt were discussed over the course of the 45-minute long programme, fronted by Angela Rippon, Gloria Hunniford and Julia Somerville.

Warm This Winter data has found that 4.4m households (15% of the public) are in energy debt. This figure is far higher than the 2.5m estimated by Ofgem, which only counts a household being in debt if the debt is more than 90 days old. [1]

Joining the programme was the coordinator of the End Fuel Poverty Coalition, Simon Francis, who said:

“Millions of people are in energy debt and with the prices of energy still 50% above 2021 levels, the strain households are being put under is intolerable.

“Indeed, a fifth of people in energy debt are also turning to illegal money lenders due to the strain on their finances. The ongoing energy bills crisis is causing horrendous implications for households and wider society.

“Warm This Winter campaign research found that £1.3bn of consumers’ money is being given to energy firms to administer bad debt this year. But not all of it will be used to actually write off the debt caused by soaring energy prices and record energy industry profits.

“The next Government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.”

In the programme, the energy industry was called on to back a Help To Repay scheme for energy debt which would see the £1.3bn – or money raised by the Windfall Tax on energy profits – used to match consumer repayments of energy bills.

The programme also offered advice to viewers including one who was struggling to get their energy firm to set a reasonable direct debit. In response, the show highlighted recent Warm This Winter Tariff Watch reports which found that customers who are experiencing bad customer service may be prevented from switching by exit fees which have increased 345% in recent years.

Recently more than 14,000 consumers have signed up to take action to reclaim credit from energy bills built up as their direct debits were set too high. The organisers behind the “Big Energy Credit Claimback” revealed that over a third of households in permanent energy credit are also on low incomes. [2]

Warm This Winter campaign spokesperson Fiona Waters commented:

“Everyone is fed up with being ripped off and used as cash machines by energy suppliers. Even with Friday’s price cap reduction, people are still paying 50 percent more than they were three years ago.

“That’s why thousands have joined our Big Energy Credit Claim Back protest because energy suppliers have been consistently overcharging them and are sitting on £3 billion of credit that is owed to bill payers and those companies have made millions in interest.

“We urge everyone to join us and send a wake up call that we demand change to our broken energy system, You can find out all about that on our Warm This Winter website.”

The programme can now be watched on catch up, iPlayer or online at bbc.co.uk/ripoffbritain. 

ENDS

[1] Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

[2] Figure is a combination of sign ups to 38 Degrees and Warm This Winter online actions and was correct as of 1700 on Friday 24 May 2024.

Customers out of pocket due to Britain’s broken energy system

The average household has spent £2,500 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 £72bn.

The new figures calculated by the End Fuel Poverty Coalition come as Ofgem has lowered the price cap for domestic energy bills by 7%. However, the new cap level means that gas and electricity costs remain 50% higher than in 2021 and are predicted to increase again from 1 October according to expert forecasters. [2] 

Recent research by Ipsos found that a third of people expect their disposable income to fall even further over the next year, while the Stop The Squeeze campaign has claimed that fewer than one in ten of the public feel that the cost of living crisis is over. 

Meanwhile, the head of the energy regulator told MPs on the Energy Security and Net Zero Committee that prices “are still significantly higher than they were before, and when we look further out our best estimate is that prices are going to stay high and volatile over time.”

A spokesperson for the End Fuel Poverty Coalition, commented:

“Years of staggering energy bills have taken their toll and we now know the true cost of the crisis. Customers are £2,500 out of pocket because of Britain’s broken energy system, people are turning to loan sharks to pay their energy bills, millions of people are living in cold damp homes and many are experiencing a mental health crisis driven by high bills.  

“The next Government will need to act quickly after the election to end energy debt, protect households from the energy market, bring down bills for good, improve housing standards and make Britain a clean energy superpower.”

Warm This Winter campaign spokesperson Fiona Waters commented:

“Even with today’s price cap reduction, people will still be paying 50 percent more than they were three years ago for gas and electricity.

“They are simply fed up with being ripped off and used as cash machines by the energy industry that week after week announces billions in profits. People want to see investment in a fairer system, especially during these times of global uncertainty when there could easily be another worldwide energy price shock.

“That’s why thousands have joined our Big Energy Credit Claim Back protest and political parties should listen.  Voters want to see our broken energy system mended with a shift to homegrown renewable energy and a proper insulation scheme which will both reduce bills and increase energy security by freeing us from volatile global gas prices.”

ENDS

[1] £2,500 and £72bn 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  
01-Jul-24 £    1,568 £                              132
TOTAL     £                           2,495 £  72,340,500,000

[2] End Fuel Poverty Coalition records based on Ofgem price cap announcements and (in italics) Cornwall Insight predictions (last checked 20 May 2024)

Cap change date Cap change (GBP) Average household energy bill (GBP) % change 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 -122 1,568 -7.22% -24.40% 59.48% 22.79%
01-Oct-24 71.83 1,631 4.61% -11.04% 56.57% 27.76%
01-Jan-25 2.76 1,634 0.17% -15.24% 56.83% 27.97%

Italics = Based on Cornwall Insight predictions

 

Low income households over-charged for energy direct debits

Over a third (38%) of people in permanent credit to their energy firms live in households with low incomes and may have cut back on energy use or other essentials because the direct debits set by energy firms are far too high. [1]

The new research from the Warm This Winter campaign has been published as over 12,000 bill payers are set to take action to claim back energy credit in protest at Britain’s broken energy system. [2]

Currently UK energy suppliers are sitting on over £3bn worth of customer credit, with nearly a third of UK households (32%) in the black to their energy supplier all year. 

New figures suggest that the combined bank interest likely to have been earned on customer credit balances was at least £159m in 2023 alone. [3]

Campaigners from 38 Degrees and Warm This Winter have now launched a “Big Energy Credit Claim Back” drive as the early summer is the ideal time to reset energy bill direct debit payments for the year ahead. 

The campaign will make clear that customers should not cancel their direct debits though as this could lead to higher unit costs being imposed on households. It also warns that claiming back credit could lead to higher direct debit payments this summer.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Experts have recently pointed out that while it is sensible to build up credit in the summer months to pay for higher energy use in the winter, customer credit balances have become too high.

“It’s highly concerning that low income households may have been charged too much on their direct debits leaving them to struggle to make ends meet during the cost of living crisis.

“With the huge sums being earned in interest by the energy firms, the least they can do is make sure that credit balances are not running too high, direct debits are set appropriately and the interest they have earned is either paid back to consumers or used to cancel energy debt of those most in need.”

Warm This Winter spokesperson Fiona Waters said: 

“Energy companies are sitting on over £3 billion of bill payers’ money whilst providing an appalling service in many cases and making billions in profits.

“The Big Energy Claim Back is a way people who pay by direct debit can issue a wake up call to companies that customers are not prepared to be ripped off anymore and demand energy suppliers provide a fit for purpose service. Whether it’s smart meters that actually work, customer service centres that pick up the phone to fair tariffs, an end to extortionate exit fees and just basically doing their job.”

The protest is backed by groups such as the National Pensioners Convention and 38 Degrees.

Matthew McGregor, CEO at 38 Degrees, said: 

“Claiming back the cash we’ve been overcharged is a simple way for busy people to show energy companies they are sick of this broken energy system. That’s why thousands upon thousands of us are coming together to move millions of pounds straight from those companies back into the pockets of hardworking people. 

“By claiming back their credit, people can claw back some much-needed cash whilst sending a clear message to energy companies. But this crisis needs proper government action too and this should be a wake up call to all political parties: from cheaper rates for those struggling the most to a proper plan to tackle energy debt, customers need help and they shouldn’t be left to take on the energy industry by themselves.”

Jonathan Bean from Fuel Poverty Action said:

“Yet again energy firms have been caught overcharging us. We demand our money back and proper action from Ofgem.”

Jan Shortt, General Secretary of the National Pensioners Convention, added:

“People have been struggling to pay their bills and it is shocking to learn that these bills may have been set far too high.  Some energy suppliers will act and give credit back, most don’t so consumers need to know how to get their credit back.” 

Warm This Winter has launched a guide which includes advice and guidance on how consumers can claim back their credit. The guide also includes areas consumers should watch out for, for example, it is important that people do not cancel their direct debits or else they may be moved onto a higher tariff. 

ENDS

[1] USwitch data as of spring 2024. 

Ofgem also reports on data, but with a lag. Ofgem data highlights the credit trends over time which show that credit balances range from £2.3bn to £5.1bn during a year. Latest data available is from 2023: https://www.ofgem.gov.uk/retail-market-indicators 

Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

[2] Data from 38 Degrees and Warm This Winter campaign supporter databases. Total signed up to take part as at midday on 20 May 2024 was 12,908 individuals.

[3] Analysis of Ofgem customer credit data and based on a standard NatWest business savings account offering 4.25% interest.

Quarter Customer Credit Balance (Ofgem) Add 4.25% interest (based on NatWest Business Saver account) Interest earned on balance (if annual) Adjusted for quarterly figure (i.e. previous column divided by 4)
1 £ 2,300,000,000 £ 2,397,750,000 £        97,750,000 £      24,437,500
2 £ 3,298,000,000 £ 3,438,165,000 £         140,165,000 £      35,041,250
3 £ 5,078,000,000 £ 5,293,815,000 £         215,815,000 £      53,953,750
4 £ 4,291,000,000 £ 4,473,367,500 £         182,367,500 £      45,591,875
Total estimated interest earned on consumer credit balances for 2023 £   159,024,375

 

High bills and energy debt fuelling a women’s mental health crisis

Over one in ten UK women (14%) have been in energy debt in the last six months – with nearly a third (29%) of those worried about paying their bills, and 19% suffering sleepless nights.

Nine percent even say it has made them ill, with 6% missing work because of stress, according to new research from the Women’s Institute (WI) published during Mental Health Awareness Week (May 13 to May 19). 

The survey was commissioned by Warm This Winter for The WI and polled over a thousand women across the UK. Its aim was to assess the impact of the cost-of-living crisis on women – financially and from a mental health viewpoint. 

In further key findings, 15% of women are either considering or have skipped meals to make ends meet, one in eight now considers relying on foodbanks and 14% have given up their hobbies, which in turn affects mental health.

Melissa Green, National Federation of Women’s Institutes (NFWI) CEO said: 

“Our research shows that the cost-of-living crisis deeply affects women, who often take on the mental load of running a household on top of their jobs. 

“We all know and feel the financial impact, but it’s desperately worrying to see women skipping meals, cutting back on essentials, or borrowing just to make ends meet. Overall, 60% said that 2023 had been a more difficult year than 2022 – which is a depressing statistic.”

Fiona Waters from Warm This Winter said:

“The survey indicates that women can see that the UK’s energy system is broken and want long term solutions such as 73% calling for properly funded insulation and renewable energy schemes that will end the vicious circle of sky high bills. They also want the UK to move away from being so dependent on expensive gas for our energy, which harms the climate, creates insecurity and inflates bills.”[1]

The research by Opinium also found that over two-thirds (68 percent) felt there should be financial support for vulnerable people such as children, the ill or elderly, to help with their energy bills. Respondents also felt that the recent £28 additional charge being levied by Ofgem to help energy suppliers recover energy debt should be spent on helping people to repay their debt (38%) or even write off customer debt (20 percent) altogether.

A spokesperson for the End Fuel Poverty Campaign commented:

“People have spent over three years facing sky high energy bills and are no longer prepared to put up with increases in their bills to line the pockets of an energy industry which has made billions from the energy costs crisis. What people want to see are a mixture of long term solutions to fix Britain’s broken energy system and short term support for those who need extra help with their bills.”

Melissa Green, NFWI CEO said these findings are ‘a clear clarion call’: 

“With 15% of women in fuel poverty telling us they are borrowing money from friends or family, and 20% again in energy debt – using overdrafts and credit cards to cover their bills – there is much more that policy makers can do to make companies work for their customers; and not simply shareholders. Women are the change-makers here, representing just over half of UK eligible voters. It’s time to hold those in power to account – which the WI has never shied away from doing.”

ENDS

[1] The majority of women feel the UK’s energy system is broken (60 percent) and want to see real change with nearly three quarters (73 percent) calling for proper financial help to insulate homes and 71 percent asking for more investment in homegrown renewable energy that would improve the UK’s energy security.  Nearly two-thirds (61 percent) also want to see a ‘proper plan’ in place to phase out gas powered energy plants.

Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

Energy debt causing households to live in fear of loan sharks

Households in energy debt are turning to illegal money lenders to pay for their bills and everyday essentials, according to new research shared with the House of Commons Energy Security and Net Zero Committee today.

Research among households in energy debt by the Warm This Winter campaign, found that almost one in five (18%) have turned to illegal money lending sources in the last 12 months. [1]

Among younger households in debt the situation is even worse, with a quarter (24%) of under 35s and a third (32%) of customers aged 35-44 turning to illegal money lending.

In the next 12 months, the illegal debt mountain is due to grow with two-thirds of households in energy debt due to look for more sources of money. While many will turn to credit cards (27%) and overdrafts (14%), 20% will borrow from family and 14% will turn to illegal money lenders.

The impact on households is that 13% of customers in energy debt owe money to someone they are frightened of. This figure rises to 18% among those living with long-term illness and in households with young children under the age of 5.

Simon Francis, coordinator of the End Fuel Poverty Coalition gave evidence to the Committee and presented them with the research findings:

“The findings are horrific and worse than experts had feared. 

“Energy debt is forcing households to wake up in the morning scared of the consequences of using electricity or gas.

“Energy bills and energy debt are a fundamental part of our broken energy system which has led to the cold damp homes crisis we saw this winter. 

“The long term solutions are obviously wider than changes to standing charges and tariff reform. We need to see more insulation, ventilation, unblocked cheaper renewables and weaning ourselves off oil and gas to improve energy security.”

The Committee also heard that Time of Use tariffs, one of the main proposed solutions to high energy bills, risk leaving behind millions of households. Research by Survation for campaign group 38 Degrees found that over half (54%) of the public may become energy exiles – unable to access the latest market innovations due to their household circumstances. [2]

Veronica Hawking, acting campaigns director at 38 Degrees said:

“This research shows millions could miss out on time-specific tariffs designed to lower bills, through absolutely no fault of their own. This includes people who rely on energy for medical needs, who need to leave the house at a regular time of day, or who can’t access a smart meter.

“That’s why it’s crucial that any changes to our broken energy system must be underpinned by a social tariff, and why the government’s U-turn on a social tariff consultation was a huge missed opportunity. Whoever forms the next government must make it an absolute priority.”

As well as introducing a social tariff and banning discriminatory energy tariffs, the Committee heard recommendations on tackling the energy debt crisis. These included:

  1. A universal, consistent, nationwide, debt matching programme funded by the £1.3bn customers are paying through our bills for energy debt costs this year.
  2. A ban on energy firms from selling on debt to debt collectors.
  3. Better regulation of energy debt with energy debt and debt collection agencies used by energy firms to be subject to Financial Conduct Authority rules.
  4. More training for energy firms’ staff in recognising illegal money lending.
  5. Reforms to standing charges, including their abolition for prepayment meter customers if certain conditions are met. [3]

Warm This Winter spokesperson Fiona Waters said: 

“We like to think of ourselves as a civilised society but surely having heat and power is a fundamental human right for everyone and the idea that people are so desperate they are turning to dangerous loan sharks is horrific. 

“It’s extremely worrying to see a quarter of under 35 year-olds in energy debt have no way out other than turning to illegal money lending. This is setting themselves up for a lifetime of being at the mercy of loan sharks and their ilk and I dread to think of the impact this has on young families. 

“We need a government that won’t abandon people with unaffordable energy bills and will instead invest in permanent solutions, like home insulation and homegrown renewable energy.”

Jonathan Bean, from Fuel Poverty Action added:

“Energy inequality is growing to dangerous levels, with millions of us starved of energy or forced into dangerous borrowing. We need a fairer system where everyone is safe, and has access to cheap renewable energy.”

ENDS

[1] Research was conducted among 500 people across the UK living with energy debt. The interviews were conducted online by Sapio Research between April and May 2024 using an email invitation and an online survey. 

Results of any sample are subject to sampling variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 4.4 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample. Sample was selected from Online partner panels. 

[2] Survation polling for 38 Degrees. Survation polled 2,018 members of the general public, online between 26-29 April. Data were weighted to the profile of individuals aged 18+ in UK. Data were weighted by age, sex,  region, ethnicity, education level, and annual household income. The total includes those who are unable to access smart meters, rely on energy for medical or disability needs, have inefficient heating or who are unable to control when they use electrical appliances.

[3] Campaigners have called for reform of standing charges so that:

  • Investment and all policy costs are moved onto general taxation (and an end to the Ofgem “float and true up process”)
  • Reductions in marketing, operating, headroom and EBIT allowances for suppliers and moving marketing and operating costs onto unit charges to improve market competitiveness.
  • Review the £30bn profits in the network and transmission sector and examine the impact of moving network costs onto unit charges.
  • After reforms and reductions in charges, the end to PPM standing charges should be possible, subject to further analysis and equalities impact assessments.

MSPs must act to help end cold homes crisis

Members of the Scottish Parliament have been urged to put political differences aside to unite in support measures that will help end fuel poverty.

In a letter sent to all MSPs, politicians have been asked to ensure the next First Minister does not abandon government policies which could help end the cold damp homes crisis.

For over 400,000 Scots, their homes are almost uninhabitable due to the cold and damp. 

The letter, signed by leading civil society organisations and coordinated by the End Fuel Poverty Coalition and Energy Action Scotland, warns that among the most vulnerable, the crisis is even worse. 

New figures from research among Social Workers Union members has found that 69% of Scottish social workers have seen the people they support living in cold damp homes.

The letter states that the health complications of this are potentially serious: “Everyone remembers the tragic case of Awaab Ishak, but people young and old, with disabilities or with a range of health conditions are at risk.”

The campaigners have demanded that MSPs from across all parties to unite in support of:

  1. A Heat in Buildings Bill which is ambitious in its vision for improving the energy efficiency and insulation of the nation’s homes and contains a clear fuel poverty duty enshrined in the legislation.
  2. The current Housing Bill that will enhance tenants’ rights and provide financial protections for tenants during the ongoing cost of living crisis.
  3. Additional Government support in future budgets and legislation to help households cope with the cost of living crisis.
  4. Reintroducing the Fuel Insecurity Fund to help at least those most at risk of harm and struggling in energy debt.
  5. The new Pension Age Winter Heating Payment being fundamentally better targeted than the Winter Fuel Payment that it replaces.
  6. A strengthened framework of support for the renewables and offshore wind sectors and the fastest possible “just transition” for the oil and gas sector, as described in the Draft Energy Strategy and Just Transition Plan.

A spokesperson for the End Fuel Poverty Coalition, commented:

“Any further delays to boosting energy efficiency plans, protecting tenants rights and organising financial support for the most vulnerable will hit households hard.

“We need MSPs to come together and unite on a programme that will tackle the long term causes of Scotland’s cold homes crisis and provide emergency support to those most at risk next winter.”

Other groups signing the letter range from the Poverty Alliance and the Disability Poverty Campaign Group to Fathers Network Scotland, the National Pensioners Convention and Parents for Future Scotland. 

Local groups such as Aberdeen Heat & Power, East Kilbride Housing Association, Musselburgh Food Pantry, Stirling District Citizens Advice and Tighean Innse Gall have also backed the letter.

One signatory, Gaynor Allen from Sustaining Musselburgh, which is organising an event to help East Lothian residents find out how to make their homes warmer and less expensive to heat on 1st June, said:

“Everyday we hear more shocking stories of the hardships people are facing due to high energy bills and poorly insulated homes. We need both the UK and Scottish Governments to prioritise the short term and long term solutions to fix people’s cold homes.”

Warm This Winter spokesperson Fiona Waters, added:

“What voters really care about is the cost of living crisis driven by high energy bills that is still putting unbearable pressure on millions of households around the country.

“We need governments in each nation who will prioritise fixing our broken energy system by getting us off expensive oil and gas and onto cheap, homegrown renewables and by properly insulating our leaky housing stock to bring down bills for good.

“Politicians should not lose sight of that or they will pay at the ballot box.”

To read the full letter, click here.

Surge in energy exit fees since 2021

Bill payers risk being stuck on expensive fixed rate energy tariffs or with poor customer service as exit fees have increased by 345% in the last three years.

Around three million UK households have opted for fixed energy tariffs and the latest Warm This Winter Tariff Watch report shows that the majority have exit fees of more than £100.

The report also reveals 76% of fixed tariffs have annual costs of £1,690 or more meaning they will pay more than the current price cap. The most expensive tariff is a 2 year fixed at £1,712 a year for a typical household – leaving them £84 worse off and with extortionate exit fees of  £300.

More broadly, researchers found that exit fees have dramatically increased from an average of £42.06 in early 2021 to a peak of £187.21 on average today (a 345% increase).

High tariffs and high exit fees mean that some customers will be worse off and unable to switch to a cheaper tariff because fees would wipe out any potential savings from moving supplier. It also acts as a trap for those customers who have had poor customer service and are unable to switch supplier.

In the latest edition of Tariff Watch compiled by Future Energy Associates (FEA) who analysed the best deals on the market for customers warns that households could end up worse off if they fix now, even with the latest forecasts that prices could rise again slightly later this year. 

A spokesperson for the End Fuel Poverty Coalition commented: 

“Exit fees have gone from a minor irritation to a serious concern. Customers who have had poor customer service may now find themselves trapped with their supplier due to these penalties.

“The energy industry is quick to promote the idea that switching will save you money, but the reality is that the small print could leave struggling customers out of pocket.

“Households who are suffering the most are often the ones looking for the most security through a fixed tariff, but we would urge them to only fix if they are absolutely certain it is the right thing to do.

“Checking your bill to get your existing usage numbers and entering these details into price comparison sites is one way of testing the market – but always check that exit fees are under £100.”

Warm This Winter spokesperson Fiona Waters said:

“Yet again energy suppliers are letting customers down with many stuck in fixed rate deals they can’t get out of because of extortionate exit fees and it’s Hobson’s choice for those who want the peace of mind of a fixed rate but will probably end up worse off later in the year.

“It’s just ridiculous and unnecessary that bill payers have to navigate such a complex tariff system where they get ripped off at every level, from rising standing charges to profiteering gas companies, and still face bills that are 60 percent higher than three years ago.

“We need long term solutions from government such as expanding homegrown renewable energy and a mass programme of insulation to bring down bills once and for all.”

Future Energy Associates analyst Dylan Johnson, who helped compile the report, said: 

“While we have seen the return of competitive market conditions we are worried about certain consumer groups being left behind. Our data shows evidence that specific suppliers are raising prices in certain regions to absurd levels.”

ENDS

Relevant to England, Scotland and Wales only. For full details, methodology and sources, the full report is available to download: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch_4_Final.pdf

Energy profits hit £420bn in recent years as standing charges rise

Energy giants have pocketed over £420 billion in profits since the energy crisis started according to a new analysis of company reports. [1]

Researchers examined the declared profits of firms ranging from energy producers (such as Equinor and Shell) through to the firms that control our energy grid (such as National Grid, UK Power Networks and Cadent) as well as suppliers (such as British Gas).

Around £30 billion of these profits (the equivalent of over £1,000 per household) are thought to be made by the firms and business units responsible for electricity and gas transmission and distribution.

These are the “network costs” consumers pay for maintaining the pipes and wires of the energy system and are usually paid for through standing charges on energy bills.

Electricity standing charges have surged in recent years and from 1 April will be 147% higher than in 2021 – powered by fees such as the 14 hidden charges on every bill for network costs.

Gas standing charges have increased by 15% since 2021, but a recent report for the Warm This Winter campaign found that the network costs for gas are charged differently, through both gas unit costs and standing charges.

Researchers found that the estimated price each household contributes on gas network costs has risen from £118.53 a year in 2021 to £163.69 a year from 1 April 2024 (a 38% increase).

From 1 April the costs that households pay for every unit of energy they use will decrease slightly – but are still almost double what they were in 2021. But standing charges will rise. Compared to the previous quarter, electricity standing charges go up 13% and gas standing charges increase 6%.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The energy firms are taking us for April fools.

“As standing charges go up today, households will have to cut back on their energy use just to keep their bills the same. This means households continue to suffer as a few energy firms make billions in profits.

“These numbers may look like fantastic amounts to shareholders, but the reality is that these profits have caused pain and suffering among people living in fuel poverty for the last few years.”

Warm This Winter spokesperson Fiona Waters said:

“The public are beyond frustrated at being a cash machine for companies who use our broken energy system to cream as much profits as they can out of them, while hard working people are up to their eyeballs in energy debt and fat cat bosses splurge their excessive wealth on luxuries.

“This data should put to bed any final opposition to a proper Windfall Tax on energy firms which ministers must use to help people who are still paying 60 percent more than they were on their energy bills three years ago.

“We need to stop pandering to these profiteers and focus on expanding homegrown renewable energy and a mass programme of insulation to bring down energy bills for good.”

ENDS

[1] The data was compiled from publicly available accounts and financial statements, using the best available measure of company profits by a freelance city journalist. These measures differ from company to company due to reporting processes and regulatory requirements in different jurisdictions. In determining which measure of profitability to use, the research has prioritised the measure preferred in the company’s own accounts.

Table 1: GROUP RESULTS FOR FIRMS PROFITING FROM ENERGY CRISIS

COMPANY (profit type) Financial Year (FY) ending in 2020 FY ending in 2021 FY ending in 2022 FY ending in 2023 FY ending in 2024 [interims where available] TOTAL SINCE ENERGY BILLS CRISIS
SSE (Group – Pretax profit adjusted) £1,023,400,000 £1,064,900,000 £1,164,000,000 £2,183,600,000 £565,200,000 £6,001,100,000
Cadent (Group – Operating profit) £924,000,000 £901,000,000 £685,000,000 £945,000,000.00 £2,510,000,000
Electricity North West (Pre tax profit) £87,000,000 £145,600,000 £64,800,000 £26,000,000 £195,000,000 £518,400,000
Northern Powergrid (Net income / earnings) £158,790,000 £195,130,000 £304,150,000 £136,670,000 £794,740,000
National Gas Transmission (Operating profit) £475,000,000 £484,000,000 £512,000,000 £619,000,000 £2,090,000,000
UK Power Networks (EBITDA) £1,270,200,000 £1,294,300,000 £1,328,900,000 £1,410,400,000 £5,303,800,000
Northern Gas Networks (Group Operating Profit) £213,246,000.00 £157,642,000.00 £151,142,000 £210,687,000 £361,829,000
SGN (Operating profits) £600,600,000 £526,500,000 £364,300,000 £439,500,000 £1,930,900,000
Ovo Energy (Operating profits) -£238,000,000 £367,000,000 -£1,582,000,000 -£1,453,000,000
Octopus Energy (Operating profits) -£47,910,000 -£117,400,000 -£188,400,000 £243,300,000 -£110,410,000
Shell (Profit/Adjusted Earnings) £3,828,340,000 £15,238,310,000 £31,497,300,000 £22,317,500,000 £11,628,800,000 £84,510,250,000
BP (Underlying Replacement Cost Profit (URCP)) -£4,495,100,000 £10,123,850,000 £21,845,870,000 £10,930,440,000 £38,405,060,000
Equinor (Adjusted Earnings) £3,111,020,000 £26,453,940,000 £59,202,600,000 £28,613,800,000 £117,381,360,000
Centrica (Adjusted Operating Profit) £447,000,000 £948,000,000 £3,308,000,000 £2,752,000,000 £7,455,000,000
National Grid (Statutory Pre-Tax Profit) £1,754,000,000 £2,083,000,000 £3,441,000,000 £3,590,000,000 £1,371,000,000 £10,156,000,000
EDF (EBITDA) £13,909,640,000 £15,484,300,000 -£4,287,960,000 £34,314,000,000 £13,851,160,000 £73,271,140,000
EON (EBITDA) £5,938,300,000 £6,784,540,000 £6,930,740,000 £8,058,200,000 £27,711,780,000
Iberdrola (EBITDA) £8,608,772,000 £10,324,902,000 £11,376,166,000 £12,398,620,000 £42,708,460,000
Drax (Group – pre tax profit) -£235,000,000 £122,000,000 £78,000,000 £796,000,000 £761,000,000
Wales & West (pre tax profit) -£24,400,000 £25,900,000 -£176,900,000 £263,100,000 £87,700,000
TOTAL PROFIT £420,395,109,000.00

Table 2: RESULTS FOR FIRMS OR BUSINESS UNITS INVOLVED IN GAS AND ELECTRICITY DISTRIBUTION AND TRANSMISSION (i.e. network costs)

COMPANY Type FY ending in 2020 FY ending in 2021 FY ending in 2022 FY ending in 2023 FY ending in 2024 [interims where available] TOTAL SINCE ENERGY BILLS CRISIS
SSE E Transmission £218,100,000.00 £220,900,000.00 £380,500,000.00 £372,700,000.00 £215,600,000.00 £1,407,800,000.00
SSE E Distribution £356,300,000.00 £267,300,000.00 £351,800,000.00 £382,400,000.00 £120,100,000.00 £1,477,900,000.00
Cadent G Transmission & Distribution £924,000,000.00 £901,000,000.00 £685,000,000.00 £945,000,000.00 £2,510,000,000.00
Electricity North West E Distribution £87,000,000.00 £145,600,000.00 £64,800,000.00 £26,000,000.00 £195,000,000.00 £518,400,000.00
Northern Powergrid E Distribution £158,790,000.00 £195,130,000.00 £304,150,000.00 £136,670,000.00 £794,740,000.00
National Gas G Transmission & Distribution £475,000,000.00 £484,000,000.00 £512,000,000.00 £619,000,000.00 £2,090,000,000.00
UK Power Networks E Distribution £1,270,200,000.00 £1,294,300,000.00 £1,328,900,000.00 £1,410,400,000.00 £5,303,800,000.00
Northern Gas Networks G Transmission & Distribution £213,246,000.00 £157,642,000.00 £151,142,000.00 £210,687,000.00 £361,829,000.00
SGN G Transmission & Distribution £543,000,000.00 £509,000,000.00 £339,000,000.00 £452,000,000.00 £256,000,000.00 £2,099,000,000.00
National Grid E Transmission £1,316,000,000.00 £1,027,000,000.00 £1,055,000,000.00 £993,000,000.00 £838,000,000.00 £5,229,000,000.00
National Grid G Transmission & Distribution £347,000,000.00 £337,000,000.00 £637,000,000.00 £715,000,000.00 £2,036,000,000.00
National Grid E Distribution £909,000,000.00 £1,069,000,000.00 £472,000,000.00 £2,450,000,000.00
National Grid E Systems £443,000,000.00 £443,000,000.00
SP Energy Networks E Distribution £860,000,000.00 £905,408,000.00 £940,238,000.00 £1,059,348,000.00 £3,764,994,000.00
Wales & West G Distribution -£24,400,000.00 £25,900,000.00 -£176,900,000.00 £263,100,000.00 £87,700,000.00
TOTAL PROFIT £30,486,463,000.00
Cost per household £1,051.26

Data as at 26 March 2024.

The data was compiled by freelance business journalist David Craik. David’s experience has included writing business and city news and features for national newspapers and magazines such as The Daily Mirror, Sunday Times, Wall Street Journal, Scotsman and Daily Express. Much of his content focuses on company financial results and reports in the energy sector and on personal finance issues including wealth management, property, investing and managing household budgets and bills. If any firm wishes to correct the records below, please email info@endfuelpoverty.org.uk.

Customers set for £1.3bn bill for energy debt charges

Households will be paying energy firms a combined £1.3bn in annual charges to help suppliers recover bad debt from 1 April.

A new report from the Warm This Winter campaign also casts doubt on the effectiveness of the charges in actually helping customers struggling with their bills. [1]

Energy firms were already able to charge £842m a year on bills for bad debt allowances, but from 1 April 2024 Ofgem has ruled that an additional £735m can be charged (or £28 per household per year). The amounts are offset by a £275m adjustment to the bad debt charges incurred after the Covid pandemic. 

The combined impact of these charges varies depending on the bill type with prepayment meter customers paying the least at £25.17 per household per year. Direct debit customers pay £38.96 a year on these charges while standard credit customers are hit hardest paying £129.71.

The report also reveals that “debt-related costs” consist of three main elements: bad debt write offs, debt related administrative costs and working capital. It appears unclear if these write offs will come off customers’ accounts, or if they are written off on supplier income statements while the debt is sold to debt collection agencies.

In addition, the debt related administrative costs and working capital include recouping the costs of the moratorium on involuntary prepayment meter installations. The moratorium was brought in after it was found energy firms were breaking into vulnerable people’s homes to force them onto a prepayment meter.

Firms can also claim for the administrative costs to suppliers from dealing with customers in debt, despite other allowances in the price cap enabling them to cover operating costs. The allowances also allow firms to claim for the day-to-day costs of customer arrears and using the money to cover the period between an energy firm incurring costs and receiving customer payments.

The news has been met with concern from consumers, with new polling from Opinium finding that over half (55%) of the public oppose energy firms using money raised through the additional £28 per household being spent on debt administrative costs. [2]

The public felt that around half (48%) of the money raised from the £28 debt charge should be spent writing off household energy debt of the customer accounts of those most in need.

Fiona  Waters, spokesperson for the Warm This Winter campaign commented:

“Energy bill payers are quite rightly up in arms about these additional costs which look like they do nothing to reduce the debt of ordinary people but instead help energy companies pursue those who simply can’t pay.

“It’s yet another outrageous rip off caused by our broken energy system, where ordinary people are expected to foot the bill all the time whilst energy giants bank billions and their bosses live in the lap of luxury.

“We need long term solutions such as expanding homegrown renewable energy and a mass programme of insulation to bring down energy bills for good so UK families no longer find themselves in debt through no fault of their own and are hounded for payments.”

A spokesperson for the End Fuel Poverty Coalition, said:

“The recovery of energy debt led to the forced prepayment meters scandal in 2023 and customers are still paying the price for energy firms’ poor practices.

“Rather than hit hard pressed households with higher standing charges, we need to see a longer-term approach to solving the energy debt mountain, such as an industry wide Help To Repay scheme.

“If Ofgem persists in implementing this charge, the very least they can do is ensure it is used to write off debts from customer accounts and isn’t spent on hiring debt collection agencies.”

Policy expert and report author Richard Winstone, added:

“Ofgem produced over 350 pages of documentation to reach a conclusion that will cost the public hundreds of millions of pounds extra this year with no clear benefit for consumers. They pack their documents with complicated jargon and formulae, yet they could not find room for a simple explanation as to how this money will actually benefit those struggling with their energy bills. 

“Throwing money at suppliers and hoping they do the right thing is what has led to record profit levels from the likes of British Gas at a time when customer service standards are at their lowest for a decade and customer debt is at its highest. Ofgem either needs to stop increasing the cost to consumers or start creating regulation that ensures suppliers use the additional funds for specific, consumer-benefitting, purposes.”

Jan Shortt, General Secretary of the National Pensioners Convention, commented:

“As always, it is the customer that pays, not the shareholders or energy industry who are currently making the biggest profits for years. Sustainable and affordable energy sources are a must and the regulator should consider how it can protect customers from this unacceptable level of levy when everyone is still struggling with high energy bills.”

ENDS

[1] “An overview of the additional debt related costs”, Richard Winstone / Warm This Winter, March 2024. Full report available to download. 

[2] Public opinion polling from Opinium who interviewed 2,000 people between 15 and 19 March 2024. Results were weighted to be representative of the UK population.

55% oppose using the money to cover admin costs, 25% support, 20% don’t know.

48% figure is based on respondents choosing a range of percentages to be used to write off debt. The figure includes the responses from 16% who felt none of the money should be used in this way, 16% felt all of the money raised should be used in this way.