Tag: Warm This Winter

Revealed: The charges keeping electricity bills high

Freezing households are being hit by 14 obscure energy charges that are keeping electricity bills expensive.

The figures are revealed in the latest Warm This Winter Tariff Watch Report by researchers at Future Energy Associates which examines the electricity network costs which are added to customers’ standing charges and bills. [1]

Among the 14 charges which get passed onto bills through the Ofgem price cap, customers are hit by costs such as the ‘Non-Locational demand residual banded charge’, ‘Available Supply Capacity Charges’, ‘Electricity Systems Operator Internal Allowances’ and ‘Ancillary Services costs.’ [2]

Also hidden in the charges are so-called “Line Losses” which set out the amount of energy lost while transmitting electricity around the network. These losses are added to consumers’ bills as a set amount, rather than reflecting the actual wastage incurred.

The combined impact of some of these costs and charges has meant Electricity Standing Charges have surged 119% since winter 2020/21 and account for £194 a year for every household. 

Separately, the report reveals rules which allow Distribution Network Operators (DNOs) who maintain and upgrade the grid to keep money charged to consumers but not spent.

The DNOs forecast budgets in advance and overestimation of these costs can mean that DNOs underspend and could potentially profit under a complex system called the “totex incentive mechanism” (TIM). This splits the benefit of any underspend between customers and the DNO. 

Between 2015 and 2022, DNOs spent £933 million less than they forecasted, but those that did underspend will have only given around half of that money back to consumers. [3]

The new findings also reveal that energy firms have underspent on plans to upgrade the electricity network. While these firms have overspent on short-term costs, the lack of investment in the grid is one of the reasons that electricity prices remain high despite Britain’s successful renewables industry. [4] 

The Warm This Winter Tariff Watch report also paints a poor picture for consumers looking to switch around for the best energy deal. While there are more tariffs on the market, the researchers could only find a handful of deals worth switching to and these all came with complex conditions or caveats.

Two groups which continue to lose out are those who pay on standard credit terms and are subject to a 6.2% premium and those on Economy 7 tariffs. 

One EDF overnight tariff, aimed at EV owners, offers an average nighttime electricity unit rate of just 8.00 pence per kWh across all DNO regions. In stark contrast, the Standard Variable tariff, serving as an Economy 7 equivalent from the same firm, imposes a significantly higher night-time unit rate of 16.63 pence per kWh.

A spokesperson for the End Fuel Poverty Coalition, commented:

“The complex world of electricity pricing should now be firmly in the sights of regulators and ministers.

“There must be a review into how we have arrived at so many covert charges and Ofgem must improve the transparency in the calculation of how our standing charges are arrived at.

“Of particular concern is the system whereby we are paying upfront for vital infrastructure upgrades which could help bring down electricity bills, but which are seemingly not delivered.

“We need a full audit of what has been charged, what has been spent and what could be returned to the bill payer.”

Fiona Waters of the Warm This Winter campaign, which commissioned the report added:

“The findings of the latest Tariff Watch Report reveal a disgraceful picture.

“Hardup households are being punished multiple times by energy giants. Our energy bills are still forecasted to remain well above 2021 levels for the rest of the year and the vital grid infrastructure upgrades needed to bring electricity costs down are potentially not being delivered.

“Perversely, the failure to upgrade and maintain the grid then results in line losses, which consumers also have to pay for via their bills.”

Dylan Johnson, Director at Future Energy Associates commented: 

“Ofgem must improve transparency around Distribution Use of System (DuOS) charges. There’s a clear need for a centralised repository on their website, detailing these costs, and the formulas used for their calculation. 

“Additionally, Ofgem should revisit their methodology for Line Losses, especially as we transition to a more decentralised energy system. 

“For instance, in areas like Cornwall during sunny hours, Line Loss calculations must reflect the reduced losses when electricity is generated and consumed locally. This change is crucial for a fair and efficient energy system.”

ENDS

[1] This press release refers 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-3-FINAL.pdf

[2] Full list of charges:

  1. Non-Locational demand residual banded charge – all domestic users contribute to the fixed costs of maintaining the transmission network.
  2. Transmission Network Use of System Non-Half-Hourly demand tariff – cost of using the transmission network to supply electricity and factors in the cost of infrastructure investment and the need to ensure network reliability and capacity for future demands. Paid by consumers on unit rates.
  3. Distribution Use of System Consumption Charges – charges are based on the electricity consumption of an organisation, with rates varying according to the time of use.
  4. Meter Point Administration Number Standing Charges – a fixed daily charge applied per Meter Point Administration Number (MPAN), covering the fixed costs of electricity distribution.
  5. Available Supply Capacity Charges – These are levied based on the assigned Available Supply Capacity (ASC) of an organisation, with higher capacities incurring greater charges.
  6. Reactive Power Charges – Applied for the reactive power used by an organisation, which is essential for maintaining voltage levels within the distribution network.
  7. SOLR Fixed charge – to cover costs associated with collapsed energy firms
  8. Excess SOLR Fixed charge – to cover costs associated with collapsed energy firms
  9. Eligible Bad Debt Fixed Charge Adder – an additional charge to cover the costs associated with uncollectible debts.
  10. Balancing Use of Systems Balancing Mechanism – when there is a variance between scheduled energy generation and actual demand, the Balancing Mechanism activates to maintain grid stability.
  11. Ancillary Services costs – this covers a range of services, including frequency response, demand flexibility service, reactive power and reserve services. 
  12. Electricity Systems Operator Internal Allowances – Internal costs (allowed revenue) are calculated in the Price Control Financial Model.
  13. Balancing Use of Systems Energy Trading Costs – these are costs for trading done with generators outside of the balancing mechanism e.g. forward trading via bilateral agreements.
  14. Line Losses – the amount of energy lost while transmitting electricity around the network.

[3] Electricity North West, National Grid Electricity Distribution and UK Power Networks are the worst offenders. These three companies taken together have a combined underspend of more than £1.1bn.

The reason this is more than the 933m total is that some DNOs – especially Scottish Power Networks – have overspent. Scottish Power Energy Networks (operates MANWEB and South Scotland) does have some of the highest standing charges in the UK. 

DNO allowance and expenditure cumulative 2015-16 to 2021-22:

DNO Operator (sharing rate) DNO Region Allowance Expenditure Difference
£m £m £m %
Electricity North West (58%) North West          2,085         1,917 -168 -8%
Northern Power Grid (56%) North East          1,472         1,515     43 3%
Yorkshire         1,953         1,921 -32 -2%
National Grid Electricity Distribution (70%) Midlands         2,318         2,329       11 0%
East Midlands         2,346         2,312 -34 -1%
South Wales         1,228         1,163 -65 -5%
South West         1,890         1,831 -59 -3%
UK Power Networks (53%) London         2,007         1,741 -267 -13%
South East         1,941         1,657 -284 -15%
East Anglia         2,889         2,622 -268 -9%
Scottish Power Energy Networks (54%) South Scotland         1,747         1,792       45 3%
MANWEB         1,952         2,037       85 4%
Scottish and Southern Electricity Networks (56%) North Scotland         1,492         1,519       26 2%
Southern         2,635         2,670       34 1%
Total GB       27,957       27,023 -933 -3%

[4] Underspend has generally been in longer term investment in networks i.e. network reinforcement and replacing equipment and totals c.GBP2.5bn. Conversely over-spend has generally been in shorter term operational activities and totals c.GBP1.5bn.

Households at risk from mould in cold damp homes crisis

A third of the UK population (29%, 15.4m people) experiences mould in their homes frequently or occasionally as Britain’s energy crisis bites hard.

The new data is based on research for the Warm This Winter campaign and reveals that 10% (5.3m people) experience mouldy living conditions frequently.

Among the major cities, the data shows a clear geographic split in an unwelcome league table of mouldy properties. Cities in the west of the UK were found to be significantly more likely to experience dangerous living conditions.

  1. Cardiff – 42% frequently or occasionally experience mould (19% frequently)
  2. Plymouth – 36% (14%)
  3. Manchester – 35% (16%)
  4. London – 32% (10%)
  5. Leeds – 31% (10%)
  6. Bristol – 31% (4%)
  7. Sheffield – 30% (11%)
  8. Glasgow – 29% (14%)
  9. Liverpool – 29% (13%)
  10. Birmingham – 29% (8%)
  11. Belfast – 26% (10%)
  12. Southampton – 24% (10%)
  13. Newcastle – 23% (6%)
  14. Brighton – 22% (14%)
  15. Nottingham – 22% (6%)
  16. Edinburgh – 18% (2%)
  17. Norwich – 12% (2%)

Even in areas where mould is less common it can still result in tragedy. Recently a coroner reported that a 52 year-old tenant of one East Midlands council died of lung disease made worse by living in mouldy conditions and an estate in Edinburgh has been described by one resident with lung conditions as “riddled with damp and mould“.

Not only does damp and mould produce mould spores and other toxins that are harmful to health, but even excessive moisture can lead to the growth of mould and other fungi, certain species of house dust mites, bacteria or viruses. 

The tragic case of Awaab Ishak highlighted the need to take the issue of mould in UK homes seriously and the NHS advises all young children to be kept away from damp and mould. But the figures show 3.4m people who have frequent or occasional exposure to mould and who have a child under 6 or who are pregnant.

Becca Lyon, head of child poverty for Save the Children UK, said: 

“Children should not grow up in homes with mould that risks their health. We know budgets are so tight that housing is becoming ever more difficult to afford and that 140,000 children in the UK are in temporary accommodation.

“This story should make the UK government take notice, and endeavour to do more for families. Reform to the Local Housing Allowance was a good start but measures like scrapping the unfair two-child limit to benefits would put more money in families’ pockets to help them heat their homes.”

The Government warns that the “more serious the damp and mould problem and the longer it is left untreated, the worse the health impacts and risks are likely to be.” The solutions to mouldy damp homes are insulation and better energy efficiency of buildings as well as access to cheaper renewable energy.

A spokesperson for the End Fuel Poverty Coalition, commented:

“We urgently need an Emergency Energy Tariff for vulnerable households and a Help To Repay scheme for those in energy debt to help people ensure their homes are free from mould. 

“Vulnerable households, including young families and expectant mothers, are struggling because of Ministers’ failure to provide emergency financial assistance this winter and longer term failures to invest in the permanent solutions to fuel poverty, such as insulation and reform of energy pricing.”

Chia Harrington from Fuel Poverty Action commented: 

“In Glasgow, mould is a real problem and it can contribute to lower life expectancy in the city.

“We have seen cases where the mould problem is so bad that the health of occupants had totally deteriorated, with people developing severe breathing problems and – in one case – a resident even had to have teeth removed because the toxins from the mould had affected his health so badly.

“It’s wrong that housing associations and landlords can get away with their tenants living in conditions that are so bad, but this is also connected to the wider issues within our energy system that mean people can’t afford the energy to prevent damp accumulating. 

“Our energy system and housing system needs urgent reform so that people are not made ill by their homes.”

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

“Families are feeling the squeeze from every direction with the lowest living standards since records began and the poorest and most vulnerable in society bearing the brunt of sky high energy bills which will be increasing again in January.”

John McGowan, General Secretary of the Social Workers Union, added:

“Across the country social workers report seeing families struggling in living conditions that are more like Victorian novels than modern day Britain. It’s clear that households – especially those most at risk from the health complications of living in cold damp homes – need more support.”

ENDS

Methodology note: Opinium conducted a nationally representative survey among 2,000 UK Adults from the 24th – 28th November 2023. Results were weighted to be nationally representative. Population estimates based on ONS projections of adults aged 18+ for mid-2021 (the latest figures available), i.e. UK 18+ population 53,188,204.

Fixed price tariffs could trap customers on higher bills

The second Warm This Winter Tariff Watch report has revealed that the energy market has 337 fixed price tariffs that are more expensive than the current Ofgem price cap. 206 tariffs will still be more expensive than the predicted January price cap.

Consumers on these tariffs will be paying a penalty for having fixed their energy bills and with an average exit fee of £138, many households could feel trapped into remaining on tariffs which now represent a bad deal.

The report also reveals an unwelcome league table of the exit fees some energy firms charge for leaving a tariff early. [1]

Just one in twenty (6%) British Gas tariffs come with no exit fees – and the firm’s average exit fee is £62. Among the other main suppliers, 12% of EONs tariffs have no exit fees, 14% of EDF and 15% of Ovo’s tariffs are free of exit fees.  Ecotricity, Utility Warehouse, So Energy also had small proportions of their tariffs with zero exit fees.

On the other hand, almost all tariffs for Good Energy, Octopus and Cooperative Energy come with no exit fees. However, one smaller supplier, Ecotricity, charges the highest exit fees, averaging £150.

As unit costs have come down in recent months, but are expected to increase again in January 2024, the report reveals that customers could save money over the next 12 months if offered a “one year fixed” tariff with unit rates and standing charges below the current price cap. [2]

These rates for a direct debit customer are as the below:

  • Standing Charges: Electric 53 p/day, Gas 30 p/day
  • Unit Rates: Electric 27 p/kWh, Gas 7 p/kWh

However, the analysis shows there just ONE dual fuel fixed tariff currently on the market is below these levels. For the best variable deal, the report authors predict that the current best offer could be with two different suppliers.

The report also reveals that energy firms’ operating costs are making up £242 (an average of 13%) of customers’ bills.

In an analysis of firms’ operating costs, the report reveals that energy firms may be spending almost as much on marketing, which includes sponsoring football teams, event venues and creating TV adverts (c.11% of operating costs), as they do on operating customer contact centres (c.12% of operating costs).

Operating costs, which go into the standing charges paid by households, also consist of central overheads, such as office rents and the cost of maintaining energy meters.

The report also reveals that suppliers are now expected to make an additional £140m in profit on the nation’s energy bills over the next 12 months, thanks to changes to the Ofgem price cap which came into force on 1 October.

The new rules mean that firms now make an average £64.70 profit per customer per year, up by £4.70 per customer. The projected 12 month profits for all energy suppliers has hit £1.88bn, an increase of £140m from the previous Warm This Winter Tariff Watch report (an 8% increase).

The predictions are in addition to any profits which firms have already made in 2023, which stand at a conservative estimate of over £2bn. [3]

A spokesperson for the End Fuel Poverty Coalition, commented:

“With energy prices subject to change, customers should exercise extreme caution when thinking about switching and fixing and we would call on companies to waive exit fees so people can switch easily to the cheapest tariff available.

“And while households suffer, the Government sits on its hands and refuses to introduce longer term tariff reforms which could bring down bills and help people stay warm this winter and every winter.

“Indeed, with the Prime Minister recently halting work to improve the energy efficiency of buildings, Britain’s households will be trapped in cold damp homes for years to come.”

Fi Waters, spokesperson for the Warm This Winter campaign which commissioned the report, said:

“Energy firms spending £242 per customer on operating costs adds insult to injury for UK households struggling to stay warm this winter. Customers should not be subsidising fancy headquarters, entertaining and marketing when these companies are making billions. That money should be used to end energy debt and lower bills. It’s yet another example of our broken energy system which the government and energy firms seem to be in denial about.”

ENDS

This press release refers to England, Scotland and Wales only. For full details, methodology and sources, read the full report available at: https://www.endfuelpoverty.org.uk/wp-content/uploads/Tariff_Watch_2_Final_Oct_2023.pdf

[1] Minimum, maximum and average single fuel exit fees per supplier for fixed tariffs in the last two years.​​

Energy firm Minimum exit fee Maximum exit fee Average exit fee Count of zero exit fee tariffs % with zero exit fees
Ecotricity £100 £200 £150 0 0%
Utility Warehouse £25 £75 £46 0 0%
So Energy £5 £75 £27 0 0%
Shell Energy £30 £75 £44 1 1%
British Gas £30 £100 £62 7 6%
E.ON £25 £30 £29 3 12%
EDF Energy £15 £200 £66 29 14%
OVO Energy £30 £75 £37 30 15%
SSE £30 £75 £40 19 33%
ScottishPower £30 £150 £66 66 40%
Outfox the Market £30 £300 £62 24 47%
Sainsbury’s Energy £30 £30 £30 9 69%
Affect Energy £75 £75 £75 25 93%
Ebico Living £75 £75 £75 33 94%
Co-operative Energy £75 £75 £75 85 98%
Octopus Energy £75 £75 £75 249 99%
Good Energy £0 £0 £0 4 100%

[2] Best tariff prices correct as of 2 October 2023. The energy market is constantly changing and customers should always check for the best deal based on their actual usage. The information on suppliers is solely a reflection on tariff prices and takes no other factors into account (e.g. customer service levels, support for vulnerable households etc). Households should always think before they fix. 

Advice provided in this press release should not be seen as formal financial advice. Energy prices are volatile and subject to significant changes at short notice. Ofgem updates its price cap calculations every quarter. Future Energy Associates advise that households who suspect they may be on overly expensive energy tariffs should explore alternative options on price comparison websites, consult with their energy suppliers, or seek guidance from consumer advocacy groups, such as Citizen’s Advice to determine the most suitable steps for them.

[3] Declared profits from 2023:

Among the firms which also provided energy, but whose supply side profits are harder to quantify EDF, profits lept to £2bn (€2.3 billion) in the first half of 2023. Ofgem is consulting on plans to make profits reporting more transparent.

Winter energy crisis inevitable warn MPs

MPs on the House of Commons Energy Security Committee have warned that another winter energy crisis is “inevitable” without further Government support for households.

The cross-party Committee took evidence from organisations, including the End Fuel Poverty Coalition members, energy firms and regulators. The final report acknowledges that more support for energy bills will be needed this winter.

End Fuel Poverty Coalition members put forward examples of dangerous behaviour that households resorted to in order to try and keep bills down last winter. But despite the Government help for households last winter, almost 5,000 excess winter deaths were caused by living in cold damp homes.

In its final report, the Committee recommended that the energy firms improve the customer service and the empathy shown to households this winter – as well as providing a priority crisis line for charities working with the most vulnerable.

MPs also suggested that the Government must take steps to get 2022 Energy Bills Support Scheme cash to households who missed out, extend the Warm Home Discount and reform cold weather payments. It also recommends radical overhaul of standing charges and the introduction of a social tariff for vulnerable households.

The coordinator of the End Fuel Poverty Coalition was one of the experts called to give evidence to the Committee. They commented:

“This is a welcome report full of practical recommendations that could help avert the looming cold homes crisis this winter.

“We’re disappointed there is nothing specific in the report to help the millions of households in debt to their energy firms and who are running just to stand still with their payments. Frontline charities have recently backed proposals sent to ministers to introduce a “Help to Repay” scheme to tackle the growing mountain of energy debt.

“But the big elephant in the room is if the Government will listen to the eminently sensible suggestions from MPs and take urgent action to keep people warm this winter.”

Recently the End Fuel Poverty Coalition wrote to the new Secretary of State to issue a warning about the risks of the winter ahead and to offer additional suggestions to help tackle fuel poverty in the short and long term.

This week the Coalition, which is part of the Warm This Winter campaign, also joined more than 400 organisations to write to the Prime Minister asking the Government to think again about weakening of net zero policies which could cause lasting damage to the UK economy.

For poverty campaigners, the PM’s decision to rule out increased energy efficiency standards comes with serious implications. New Citizens Advice figures revealed that private renters wasted £1.1bn this year on energy that leaks out of their homes, with this figure now set to continue.

A spokesperson for the End Fuel Poverty Coalition said:

“There is a real-life cost to the PM’s posturing – especially for the millions of households who rent from a private landlord. Many will now face high bills and cold damp homes forever after being abandoned by the Government.

“Last winter, the health problems caused by living in cold homes mounted up. The Prime Minister and Energy Secretary should be focussed on providing help for households to survive this winter and improve their living conditions in the long run.

“We need the Government to double down on support for households, including improving energy efficiency and reforming electricity pricing markets to ensure customers can enjoy the advantages of more affordable renewable electricity.”

Energy Secretary warned of perilous winter ahead

Following the new Energy Secretary’s first appearance in front of MPs, ministers have been warned of a perilous winter ahead.

A letter sent by the End Fuel Poverty Coalition to the new Secretary of State comes after the group warned MPs that almost 5,000 excess winter deaths were caused by people living in cold damp homes in the relatively mild winter of 2022/23.

The letter states that “the situation is perilous, the outlook deeply worrying and the need for support with energy bills is increasingly urgent.”

After the new Secretary of State failed to attend the House of Commons Energy Committee last week, her first major intervention since taking office was an article in the Sun which also failed to acknowledge the challenge faced by families this winter. 

And while Rt Hon Claire Coutinho MP answered questions in the House of Commons chamber on long term energy issues, she was silent on the need for help for families this winter.

But alongside longer-term reforms to Britain’s broken energy system, the Government has been urged by campaigners to launch a new “Help to Repay” to tackle energy debt this winter, to reform the Energy Bills Support Scheme (EBSS) Alternative Fund, to move policy costs from energy bills onto general government spending and to bring in a new Extreme Weather Payment.

To bring bills down for the most in need, a new energy cost support scheme (ECSS) has been proposed via the reduction of unit costs and standing charges under the existing Energy Price Guarantee legislation. 

Local authorities could also be supported by investing the underspend in the Energy Bills Support Scheme into Household Support Funds and further work to reform the Private Rented Sector to ensure higher and more enforceable Minimum Energy Efficiency Standards.

A spokesperson for the End Fuel Poverty Coalition which is part of the Warm This Winter Campaign, commented:

“The Government appears to have abandoned plans to consult on reform of energy tariffs which could help protect the most vulnerable from the worst excesses of the energy market. This means they must bring in support to help people trapped in energy debt now and introduce an emergency tariff for vulnerable households this winter. We believe this is more than possible using existing legislation.”

Tessa Khan, director of Uplift, commented:

“While the minister is obsessed with nuclear fusion, oil and gas, the Government is ignoring the plight of millions of people facing a winter in cold damp homes. What the Secretary of State should be focussed on is helping people to insulate their homes, unblocking cheaper onshore renewables and bringing down our energy bills.”

ENDS

The full letter is available to read online (pdf) and is below.  It was sent on 8 September 2023.

On behalf of the End Fuel Poverty Coalition, congratulations on your appointment as Secretary of State for Energy Security and Net Zero.

We appreciate that you will be incredibly busy with the volume of vital decisions that are in your in-tray. And we know from recent polling that policies to reduce energy bills are seen by voters as the best way to tackle the cost of living crisis.

It is vitally important that the right decisions are made to reform Britain’s broken energy system. As we explained in evidence to the House of Commons Energy Security Committee this week, the situation is perilous, the outlook deeply worrying and the need for support with energy bills is increasingly urgent. 

We were disappointed that the previous Secretary of State abandoned plans to consult on reform of energy tariffs which could help protect the most vulnerable from the worst excesses of the energy market in the long term. We hope you will recommit the Government to this vital consultation on a social tariff – and introduce reforms before the Energy Price Guarantee protections end in Spring 2024. You can read our letter to the Speaker of the House of Commons online [pdf link].

As an immediate priority, the Government must commit to providing a targeted package of support to help the most vulnerable stay warm this winter:

  • Introduce the widely supported “Help to Repay” proposals to tackle energy debt
  • Move policy costs from energy bills to be covered by general government spending
  • Support local authorities by investing the underspend in the Energy Bills Support Scheme into Household Support Funds
  • Reform and re-run the Energy Bills Support Scheme (EBSS) Alternative Fund
  • Deliver a new Extreme Weather Payment of £6.50 per day for every day the Met Office declares the temperature will drop below -4 degrees Celsius (with the potential for a similar equivalent for summer months also investigated)
  • Ensure that all households who received the Warm Homes Discount in winter 2021/22 can access a £150 rebate this winter, regardless of the new process introduced in winter 2022/23 which uses an algorithm to decide who benefits.
  • Provide a new energy cost support scheme (ECSS) for households most in need of support applied directly to energy accounts (for example via the reduction of unit costs and standing charges, which can be done using existing Energy Price Guarantee mechanisms).
  • Ban the forced transfer of homes to prepayment meters and end the Government’s dereliction of duty on this issue.
  • Work with housing ministers to reform the Private Rented Sector to ensure higher and more enforceable Minimum Energy Efficiency Standards

 At the moment, many of the other vital reforms needed to reduce energy bills are seen as longer term, but the reality is that decisions need to be taken now to:

  • Speed up reforms to ensure customers start enjoying the advantages of more affordable renewable electricity options, and that their electricity rates are no longer subject to the unpredictable cost fluctuations of fossil fuels. 
  • Turn the current crisis into an opportunity to engage households in a large-scale retrofitting programme, investing in an emergency roll out of cheap energy saving measures that could permanently cut energy bills by hundreds of pounds.
  • Address UK energy security and independence by quickly weaning the UK off its dependence on oil and gas and ending subsidies for fossil fuels, using the money to support a fair transition, invest in immediate support for vulnerable households and long term measures to reduce the cost of energy and make the UK supply more secure.
  • Ensure Ofgem works with energy firms to improve standards of customer service at energy firms, holding them accountable for contact ease, success and empathy. This means customers can get in touch with their energy supplier to resolve issues easily, that problems are solved in one contact and that customers are treated with respect and understanding throughout all forms of communication from the energy firm. 

 We look forward to working with you in your role and if you would like to discuss any of the issues we have raised, please do not hesitate to contact us via our coordinator.

Yours sincerely,

The End Fuel Poverty Coalition

 

Almost 5,000 excess winter deaths caused by cold homes last winter

The House of Commons Energy Security and Net Zero Committee has heard estimates that there were 4,706 excess winter deaths in 2022/23 caused by living in a cold home in England, Scotland and Wales. [1]

The figures, compiled by the End Fuel Poverty Coalition using official data, were presented to MPs at the Committee’s inquiry into Government preparations for winter.

At the same time, a report card by the Warm This Winter campaign on the Government’s progress against 8 key measures to tackle the energy bills crisis, has revealed that on half of these measures Ministers are making no progress. [2]

The report card shows that on 3 measures rapid progress is needed, but on one measure, the Government has actually gone backwards, by taking steps that will deepen the country’s reliance on expensive fossil fuels.

Meanwhile, mounting evidence suggests that a new class system is emerging in Britain, based on access to energy.

Fewer than 5m of the UK’s 28m households could be classed as being in the “energy elite” and unaffected by the current energy bills crisis. Around 8m have to borrow money to pay their energy bills and over 1m have disconnected for periods this year. [3]

The rest of the population are also subject to high energy bills, which have doubled in the last three years. Among this wider group, people have used up savings and cut back on essentials to keep the lights and heat on. With winter approaching and the cost of living crisis continuing, the ability of people to pay sky high energy costs is severely diminished. [4]

The health implications of living in cold damp homes are severe. In addition to contributing to excess winter deaths, existing medical conditions are made worse and a new pan-European study found that two-thirds of people in fuel poverty experience debilitating depression or anxiety. [5]

The End Fuel Poverty Coalition was among consumer groups giving evidence to the Committee:

A spokesperson for the Coalition also commented:

“The public see tackling the energy bills crisis as the main way the Government can help ease the cost of living crisis, but sadly ministers have been making slow or no progress on the policies needed to keep people warm this winter and the next.

“Thousands of people die every year in cold damp homes and countless more turn to the NHS as existing health conditions worsen due to living in such conditions. Fuel poverty is a public health crisis, but it can only be addressed by economic and engineering solutions.

“Many of the solutions do not need to place extra burden on the Treasury and we expect MPs to ensure ministers and the energy industry do much more to help those most in need this winter.”

Tessa Khan, executive director of Uplift, which is part of the Warm This Winter campaign, added:

“Energy is now barely affordable for a majority of households in the UK, and millions of people are saddled with energy debt or have had to disconnect because they are simply priced out of today’s energy market. 

“While it helped pay our bills last year, this government has done nothing to fix Britain’s broken energy system. There’s been next to no progress on insulating homes or unblocking the barriers to cheaper renewable energy. Instead, we’ve had a lot of hot air over new North Sea drilling, which will do nothing to lower people’s bills. The real solutions are obvious, the government is just failing to act.”

Jonathan Bean, spokesperson for Fuel Poverty Action said: 

“The country will never forgive a government that allows energy firms to profiteer whilst children go hungry and their grandparents are left shivering in their beds. And now Ofgem is planning to allow homes to be broken into again this winter to install prepayment meters – terrorising those struggling to stay warm.”

ENDS

The House of Commons Energy Security & Net Zero Committee Inquiry starts at 1000 on Wednesday 6 September and can be viewed online:

https://committees.parliament.uk/event/19027/formal-meeting-oral-evidence-session/

[1] Excess Winter Deaths (EWDs) for winter 2022/23 data taken from provisional tables from:

  • Office of National Statistics (table 11, England: column J, lines 13-16 = 18,142 EWDs. Wales: column J, lines 37-40 = 1,324 EWDs) 
  • National Records of Scotland (link, table M1, col. N, lines 221-224 = 2,424 EWDs). 
  • Institute of Health Equity methodology suggests that 21.5% of EWDs are caused by living in cold homes. 

Applying the IHE methodology to EWDs, means that the number of EWDs caused by living in cold damp homes are: England 3,906, Scotland 521, Wales 285. Total 4,706. 

All data is flagged as provisional. NI data not available yet. Winter is defined as December, January, February and March.

Comparative number for winter 2021/22 (i.e. excluding NI) is 3,186. Previous years data sourced from ONS and NRS and collated by EFPC and published online.

[2] The Warm This Winter Report Card, summary below.

Help for people THIS WINTER

Provide more financial support for those most in need 

Is the government fixing it? NO PROGRESS

Tackle the growing energy debt mountain

Is the government fixing it? NO PROGRESS

Stop forcing people onto more expensive pre-payment meters

Is the government fixing it? NO PROGRESS

An affordable ‘social tariff’ for people priced out of the market

Is the government fixing it? NO PROGRESS


Lowering energy bills FOR GOOD

Reduce bills for good with a nationwide insulation drive

Is the government fixing it? RAPID PROGRESS NEEDED

Lower electricity costs by developing more renewable energy 

Is the government fixing it? RAPID PROGRESS NEEDED

Reduce the UK’s reliance on expensive gas imports

Is the government fixing it? GOING BACKWARDS

Claw back excessive profits 

Is the government fixing it? RAPID PROGRESS NEEDED

The full report card and source data is available: https://www.endfuelpoverty.org.uk/about-fuel-poverty/september-2023-fuel-poverty-stock-take/

[3] 28.2m ONS household data. 16% of the population have been able to maintain usual spending so far, and expect to be able to continue to do so (YouGov, July 2023), which is also supported by Grant Thornton figures on projected household expenditure in 2021/22 (suggested that 14% of households are financially immune from cuts). 

8m figure from Citizens Advice. 1m figure from Ofgem based on Q1 2023.

[4] “Used up savings” (Bank of England, as reported by Press Association, 29 June 2023), “cut back on essentials” (YouGov, July 2023).

[5] Latest health resources and evidence cited on the End Fuel Poverty Coalition website. Two thirds of people in cold damp homes suffer from anxiety or depression according to a Europe-wide study by the Wellbased group of academics [pdf].

Minister Amanda Solloway invited to discuss energy bills support

Members of the End Fuel Poverty Coalition have invited Amanda Solloway MP, the Minister for Energy Consumers and Affordability, to meet and discuss plans to keep everyone warm this winter.

The letter to the Minister says:

“We all know that this winter will be as challenging as the last for many households, with energy bills remaining around double what they were in winter 2020/21.

“While last winter’s unprecedented levels of Government support did indeed help households, we know that millions still spent the winter in cold, damp homes.

“And this winter, people’s ability to pay high energy bills has been further diminished by the increased cost of living (while inflation may be falling, the high prices will remain with us).”

The letter sets out some immediate financial and non-financial support the Government could provide households. A wider package of recommendations are being developed by Coalition members as part of the Warm This Winter campaign and will be launched later in summer 2023.

The immediate actions the Coalition suggests are:

  • Directing the money returned to Government through unused Energy Bills Support Scheme payments and vouchers to be given to local authorities to use in the Household Support Funds (or equivalents in Scotland and Wales).
  • Introducing a ban on the forced transfer of households onto prepayment meters (PPMs) when the Energy Bill returns to the Commons at Report Stage.
  • Using funds raised through an extension to the Windfall Tax to help introduce a “Help to Repay” scheme which is backed by a range of charities. 

Additional proposals and recommendations are being developed by Coalition members as part of the Warm This Winter campaign and will be published shortly.

A spokesperson for the End Fuel Poverty Coalition commented:

“Many of our members have heard the Minister speak passionately about fuel poverty in recent weeks. We would welcome the opportunity to discuss our wider proposals to provide support for households this winter – and beyond – with the Minister.”

The full letter can be read online: https://www.endfuelpoverty.org.uk/wp-content/uploads/230713-Amanda-Solloway-EFPC-Letter.pdf 

Older people’s ‘parliament’ debates energy crisis

The 2023 National Pensioners’ Annual Convention has heard a stark warning that millions of vulnerable people will be unable to stay warm this winter.

Last year, over 9m adults lived in Dickensian conditions unable to keep their homes warm and damp free. The figures for the Warm This Winter campaign, also revealed that over 1m of these adults were older and those with disabilities were especially vulnerable to living in cold damp conditions.

From 1 July energy bills will be roughly the same as last winter and while some reduction in the Ofgem price cap may come through before winter 2023/24, the Convention heard that this would still mean energy bills are double what they were in 2021/22.

New figures from Age UK and the ONS reveal that almost half (45%, 11.3 million) of people aged 50+ in Great Britain are currently finding it difficult to afford their energy bills.

Addressing the meeting in Blackpool, Simon Francis, coordinator of the End Fuel Poverty Coalition, said:

“At a recent meeting with pensioners, one told me that the only change between their living conditions in the 1940s and those of today was that they had an inside toilet now. They said that the poverty they experienced as a child is what they are now experiencing again.

“Food banks, sanitary banks, pet food banks and massive government support for energy bills are the only things keeping people from destitution.

“We cannot allow this to continue any more and the Government needs to act to keep people warm this winter and every winter. We can only do this through debt relief and financial support now alongside a rapid programme of energy efficiency improvements and speeding up the generation of cheap renewable energy and moving us away from the fossil fuel profiteers of the past.”

Delegates representing the National Pensioners Convention’s 1.1 million UK members have met at The Imperial Hotel in Blackpool to discuss why millions of today’s – and tomorrow’s – older people face poverty, hardship and the loss of vital services.

NPC General Secretary Jan Shortt said: 

“The last few years have been particularly tough on our oldest and most vulnerable. 

“Hundreds of thousands died in the pandemic, and millions now struggle to make ends meet as prices rocket, while the real value of pensions drop. Older people are having to choose between eating and heating, while the essential services they rely upon, from health and care to housing and transport, continue to decline or disappear completely. 

“This isn’t just a problem for older people now, it is a major issue for today’s workers who wonder if they’ll ever be able to afford to retire. Especially if the government pushes back the retirement age to 68 and threatens to scrap the Triple Lock that should guarantee state pension cost of living increases.” 

Other Convention speakers will include Robert Palmer from Tax Justice, John Lister from Keep Our NHS Public, Lord Davies of Brixton on the future of the state pension, and Tom Lowe from the Digital Poverty Alliance on the exclusion of older people from our increasingly online world. Leaders from national organisations like Age UK, Independent Age, Ageing Better, as well as the TUC, Unite and UNISON will also be attending.

Energy firms holding £280m of cash meant for customers

Britain’s leading energy firms are sitting on a multi-million pound cash stockpile which is earmarked for customers under the Energy Bills Support Scheme which finished in March.

According to figures reported in the Mail on Sunday, over four million monthly payments of £66 or £67 had still to be made to or redeemed by households for the period October 2022 to February 2023. Figures including March payments will be available later this month.

The value of these missed payments stacks up to almost £280 million, with half owed to customers on traditional prepayment meters who have not cashed in 2.1m vouchers issued by the firms.

While there are no suggestions of wrongdoing – as any money not paid out to consumers will be returned to the Treasury – the revelations highlight the problem of energy firms not passing the EBSS payments onto people who will be in desperate need and that spent the winter in cold damp homes.

A spokesperson for the End Fuel Poverty Coalition, which is part of the Warm This Winter campaign, commented:

“In some cases, energy firms have been far too slow to pass on these vital funds to customers who may have spent the winter living in cold damp homes.

“While many millions of households have had their payments issued with no problem, the figures around pre-payment meter voucher redemption are particularly worrying. These customers are often among the most vulnerable and have been paying more for their energy in the first place.

“Energy firms need to up their game significantly to end this breakdown in customer service and help get the Energy Bills Support Scheme to those who need it.

“If a customer believes they are missing a payment or a voucher for their prepayment meter they should contact their energy supplier as soon as possible as payments can still be made and vouchers can be reissued.”

The Government also issued figures under Freedom of Information rules to The Times suggesting that the number of prepayment meter vouchers still to be cashed in now stands at 341,000. However, the official published data suggests that this figure is the number of prepayment meter vouchers that have been paid to energy firms but have yet to be delivered to households, rather than the number not redeemed by customers.

Energy firms told the Mail on Sunday that would also urge customers to claim the payments.

The full data set is available to download: MoS EFPC CALCULATIONS

Energy bills crisis continues on April Fuels Day

Every household in the country will see their energy bills increase by at least £67 a month from 1 April as the energy bills crisis continues.

Dubbed April Fuels Day by campaigners, who are staging a mass lobby of MPs at over 70 locations across the country on Saturday, the increase in bills is caused by the Energy Bills Support Scheme coming to an end.

Figures from the Warm This Winter campaign have revealed that more than a quarter of people (29%) are already in debt to their energy companies even before the price rise. With Debt Justice calculating that those on prepayment meters have combined debts of £1bn.

An investigation by Bloomberg has uncovered that three energy firms have added half a billion pounds to energy bills by manipulating the electricity market by powering down their generators at peak times, only to then demand a much higher price from the Grid.

Figures from National Energy Action also reveals that standing charges, which customers pay every day to access the grid regardless of use, will hit a new high from 1 April – up 64%. It means that almost half (41%) of what those in the poorest households spend on energy will now go solely on these daily fees.

A spokesperson for the End Fuel Poverty Coalition commented:

“People are being taken for fools. The Government is saying that it is providing support to households, but the reality is that everyone’s bills are going up.

“Even when market conditions return to energy bills later in 2023, people will still be paying double for their energy than they were in 2020.

“Meanwhile, every week we learn about new ways the energy firms are profiting from the misery of households. The latest revelations about energy firms’ excesses show just how broken Britain’s energy system is.

“This week was supposed to be the Government’s big energy security announcement, but instead we got a dump of thousands of pages of policy and data with no real substance.”

Tessa Khan, executive director of Uplift, which is part of the Warm This Winter campaign added:

“The government has finally recognised that Britain’s energy system is broken but, by its own admission, its plans this week won’t do anything to lower our energy bills.

“Its rehashed policies on energy efficiency fall miles short of the national programme of insulation and home upgrades that is needed, and it continues to deny communities access to onshore wind, which is among the cheapest energy sources around and a resource we have in abundance.”

“Instead Ministers are handing billions in subsidies to oil and gas developments that won’t lower bills or boost UK energy security, as most of its oil for export. It’s beyond time that this government delivered real policies that address the big issues affecting people’s lives, not least eye-watering energy bills.”