Ministers must prepare an Emergency Heat Tariff to cap the cost of heating this winter, the End Fuel Poverty Coalition says, with gas prices already rising 27% year on year from 1st October and fresh forecasts pointing to a further spike in January.
Ofgem has set gas at a maximum 7.97p per kilowatt hour for households on the Standard Variable Tariff from 1st October and while predictions for January prices vary, some forecasts show that it could reach the level at which the last government set the Energy Price Guarantee.
Households which use oil for heating have fared even worse. Prices more than doubled in early March, from 60p to over 120p per litre, and although they fell back to around 70p by early July, renewed geopolitical uncertainty has pushed them above £1 per litre in September. These households have no cap and no protection of any kind, and many must order at least 500 litres at a time, making price spikes acutely difficult to absorb.
Homes using Liquefied Petroleum Gas (LPG), heat networks and electric-only heating are also exposed. Those relying on traditional electric heating such as storage heaters face the highest heating costs per kilowatt hour of any group, with fuel poverty rates close to double the national average.
The Coalition has advised that gas is capped at 10p per kilowatt hour and heating oil at £1 per litre, with equivalent support for LPG, heat network and electric-only households. Support would be universal and would cost nothing in periods when prices stay below the caps.
It is also repeating calls for a referral route allowing healthcare professionals, social workers, debt advisers and energy advisers to refer people directly into targeted support such as debt relief, the Warm Home Discount and Cold Weather Payments.
And it wants immediate action on electricity costs, including moving levies off bills and into general taxation, which would also make heat pumps and electric cooking a more attractive choice.
The proposals come on top of recommendations already made to the Government for the Budget to help vulnerable households immediately through targeted energy bill support. These proposals included expanding the Warm Home Discount, reforming Cold Weather Payments and delivering energy debt relief, which the Coalition says must remain a priority.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “Households did not cause this crisis and cannot escape it, yet a handful of energy firms have announced over £6 billion in profits on UK operations in this year alone.
“These same companies that have extracted 90% of the North Sea‘s commercially viable gas are still reporting huge profits, yet drilling more of what remains will not cut a penny from anyone’s bill as fossil fuels are sold on the international markets.
“With the number of households in fuel poverty set to soar again and at the most dangerous time of the year, the Chancellor has no choice but to act to provide increased targeted support to vulnerable households and plan to deliver wider universal help for people facing a sixth winter of high energy prices.
“If ministers do nothing, millions will spend this winter in cold, damp homes, unable to cook a hot meal. People will get ill. Some will die. And every one of those avoidable cases will be on this Chancellor’s watch.”
Maria Booker, Head of Policy at Fair By Design, said: “Many people on low incomes have been struggling with high energy bills for years. A further rise in January is one they simply cannot afford. Alongside action to address this latest crisis, we need to have a long term, sustainable energy bill support scheme that people can rely on. The Government must substantially increase the Warm Home Discount in the Budget and extend it beyond people receiving means-tested benefits to include disabled people and other vulnerable groups.”
Jonathan Bean from Fuel Poverty Action said: “The Government promised us a £300 bill saving, but we now face prices £500 higher than before the election. And electricity is still more than triple the price of gas and more than double heating oil. It’s not just a broken election promise, it’s a matter of life and death. The Government must act urgently to stop dangerous energy prices and obscene profits.”
The Coalition believes that no new legislation is needed to implement the Emergency Heat Tariff and has called for an urgent meeting with ministers across Government departments to discuss the implementation of the plans.
The full proposal sent to the Government is available here.
January jump
The initiative coincides with a projected huge hike in energy bills from January, with a typical annual bill forecast to jump by £276, a 16% predicted increase.
Lord Prem Sikka points out that household energy debt is expected to hit £7bn soon, while companies profiteer.. Public ownership, he suggests “gives the Government more policy options.”
Momentum noted: “Energy giants will rake in billions while many households will struggle to pay their bills this winter. It’s time for a system that puts people before profit.”
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