As the Chancellor unveiled his mini-Budget, there was little immediate support for households in fuel poverty. However, some positive moves on energy efficiency and renewables have been given a qualified welcomed by campaigners.
A spokesperson for the End Fuel Poverty Coalition commented:
The Chancellor’s mini-Budget was especially minimal on the support needed to keep people warm this winter.
Even with the measures pledged by the Government so far, there is now just a week to go until energy bills increase by 64% compared to last winter.
The start of the Chancellor’s ‘new era’ will see 7 million households left facing desperate fuel poverty this winter.
Millions of people will spend the winter struggling in cold damp homes. This will cause health problems for many and place more strain on the NHS and social care system.
Millions will face additional hardship due to the unfair standing charges regime and being forced onto more expensive pre-payment meters.
Hidden away in the small print of the Chancellor’s Plan for Growth is an announcement to expand the Energy Company Obligation (ECO) – which requires energy companies to install energy saving measures in fuel poor homes – with a £1bn boost over three years, starting from next April.
The new funding will be targeted at those most vulnerable, and made available for the least efficient homes in lower council tax bands. In addition, the government will also ‘imminently open applications for up to £2.1 billion over the next two years to support local authorities, housing associations, schools and hospitals invest in energy efficiency and renewable heating.’
While the ECO expansion will provide vital relief for the households that stand to benefit, alone it cannot shift the dial on the resilience of UK households to energy price shocks now or in future.
Experts at E3G estimate it is about a fifth of the amount needed to be spent on green building measures and the opportunity was missed to meet the Home Upgrade Grant Conservative manifesto pledge – which is still £1.4 billion short of what should have been committed to 2025.
Juliet Phillips, Senior Policy Advisor at E3G, commented:
The cold and leaky nature of Britain’s homes and buildings have left families sharply exposed to volatile international fossil fuel markets and spiralling energy bills.
Today’s small top-up to expand energy efficiency support is welcome step which will help cut household bills and boost the UK’s energy security.
We hope to see the government go further and faster to unleash the full potential that energy efficiency has to offer to protect UK households from future energy shocks.
Members of the Warm This Winter campaign, Possible, have also highlighted how the mini-Budget appears to have positive news for renewables with an end to the effective ban on building on-shore wind in England.
However, there was little detail on how the nation’s books will be balanced. A spokesperson for Greenpeace commented:
Failing to properly tax the obscene profits of fossil fuel giants and encouraging bankers to get richer is reckless and unfair.
Rather than seeking to deregulate and attack those on benefits, the new Chancellor should be looking for ways to raise taxes on those profiting from the crisis.
This could help fund emergency support for households, and cover the vital investment needed in home insulation to help cut our energy bills and climate emissions once and for all.
Ministers are ignoring common-sense, win-win solutions to bring down bills and carbon emissions – things like stopping energy waste, heat-pumps and solar panels.
Instead of boosting the economy through investments in green infrastructure, public services and skills training, the government’s plan is little more than a charter for fossil fuel profits and casino capitalism.
Earlier this week, Age UK analysis found that from October 2022, around three in ten older households in England will be living in fuel poverty, including 1.3m lower income older households.
Caroline Abrahams, Charity Director at Age UK, commented:
Our new analysis shows that the Government’s relief package will not do enough to prevent approaching two million more pensioners from being plunged into fuel poverty in a couple of weeks’ time.
Most worrying of all, in excess of half a million of them are already living on lower incomes, so they will be in an impossible position financially, unless the Government does more to help.
However hard they try their income is not going to stretch far enough to cover the essentials any more.
Can you imagine how terrifying this prospect is if you are an older person on a low fixed income who has just about managed so far? Once they realise what a deep financial hole they are about to be in our biggest concern is that some will cut their spending to such a degree that it puts them at risk.
The Chartered Institute of Housing has also recently written to the Prime Minister for urgent government action to:
- Bring forward the planned uprating of benefits from next April to this October
- Limit deductions from Universal Credit for prior overpayments/sanctions
- Remove the benefit cap and two-child limit
- Restore local housing allowance rates to at least the 30th percentile and return to annual uprating
- Prevent energy companies from forcibly switching customers to prepayment meters
- Commit to bring forward additional funding for energy efficiency measures in homes
The average household bill in winter 2021/22 was GBP1277. This has increased to GBP2,100 for winter 2022/23, taking into account the support promised so far. For some of the most vulnerable households, the increase will be limited to an average household bill of GBP1,700 this winter – still representing a 33% increase year-on-year. Please note, the Energy Price Guarantee caps the unit cost of energy, not the total bill.
In winter 2021/22, the End Fuel Poverty Coalition estimates 4.6m UK households were in fuel poverty (based on official definitions). This will rise to 6.99m in winter 2022/23.