The End Fuel Poverty Coalition warns of a ‘perfect storm’ brewing within the sector as a result of increased winter fuel bills, draughty homes, and the COVID-19 crisis looking set to continue throughout winter.
Energy regulator Ofgem previously expressed its intention to adopt a standardised approach in which companies offer help to the most vulnerable consumers amid the crisis. However, industry experts believe that more action should be taken to tackle the impending issues in the fuel sector come winter.
Labour Co-op MP Preet Kaur Gill, who championed the reversal of British Gas’ increase on minimum top-ups for prepayment meters, expressed her support for the regulator’s proposal.
Hundreds of thousands of UK households could be struggling to pay their energy bills because of the pandemic, especially with the scarcity of measures that can be taken to make homes warmer.
Over 200,000 households are expected to suffer fuel poverty as a result of the COVID-19 lockdown. Several industry experts cited the stunted economic recovery as the main reason for this – a scenario they feel is highly likely to happen unless urgent action is taken.
The failure to make homes warmer could pose a further health risk to people, as a flurry of respiratory infections are known to persist in winter. With COVID-19 still wreaking havoc as well, the situation could become catastrophic – particularly for people who struggle to afford effective heating for their homes.
Recently, the government – through Chancellor Rishi Sunak’s Summer Statement – announced £3 billion worth of investments in home insulation. Around £2 billion will be allocated to the refurbishment of homes, with the aim of making them more energy efficient. This scheme will also create more green jobs and help to tackle climate change, as per the statement.
The remaining £1 billion funding will go towards maximising the energy efficiency of public sector buildings such as hospitals, schools, military bases, and council buildings.
However, the coalition is still pushing for a £9.2 billion energy efficiency investment pledge, wider home upgrade grants, and a warm home discount.
Labour MP Preet Kaur Gill also expressed that the government should do more to respond to the fuel poverty crisis so that low-income consumers don’t have to choose between ‘heating or eating’ this winter.
National Energy Action CEO Adam Scorer also called on the government to improve the energy efficiency of social housing. He stated that thousands of people are admitted to hospital for severe respiratory ailments each year because of poorly insulated houses, with some sadly losing their lives in such situations.
Scorer urged for an election manifesto pledge to save lives, create jobs, and meet net-zero targets by the set date.
The Department for Business, Energy, and Industrial Strategy (BEIS) revealed that around 2.4 million households in England are living in fuel poverty – meaning that their fuel costs go over the national average. Most of them are on the brink of the official poverty line too, given that they have to spend a huge amount of their income to pay for fuel.
Ofgem stated that customers using prepayment meters are more likely to be living in fuel poverty.
In line with this, energy companies have coordinated with BEIS to voluntarily support prepayment meter consumers who are struggling to top-up due to the coronavirus crisis. Suppliers offer emergency credit and a friendly-hours credit – such as during the weekends or bank holidays – to ensure that consumers have ample supply despite a number of top-up points closing.
The industry regulator is now committing to its proposal of permanently imposing the measures placed at the start of the COVID-19 pandemic. These solutions would ensure that consumers will not go without energy or have to be disconnected due to insufficient credit on their payment plans or meters.
Coalition member William Baker called for urgent action, saying that the government needs to ‘fix the roof’ of this problem as early as this summer when the sun is still shining. He mentioned that winter has always been a time when the sector can struggle to maintain services.
Fuel Poverty Action’s Ruth London stated that the proposed £2 billion allocated to retrofitting homes could have been used for the relief of fuel poverty instead. She also said the lack of clear protections could leave consumers colder and poorer due to pressure from salespeople and unskilled retrofitters.
As per the Business Department spokesperson, the government should act quickly to secure agreements with all energy providers and protect households, especially in the colder times of the year.