Sector must double its efforts to protect vulnerable customers

Despite the prime minister’s announcement that the government will freeze the price cap at £2,500 for two years from October, there is still more work to be done to ensure customers are protected over the coming months. National Energy Action’s Peter Smith outlines his charity’s view on what further support is needed.

The energy crisis has become the most prominent public policy issue facing the country. How we can help low-income and vulnerable households that will struggle to afford heating their homes this winter is central to this debate.

Following the UK government’s recent intervention, more than 24 million households across Great Britain are now set to avoid paying average bills of £3,500. This could save over 2 million households from being plunged into fuel poverty in October. This is to be warmly welcomed, as is the supplementary support that has been announced across the whole of the UK for those reliant on heating oil and other types of non-gas fuels.

We estimate however that 6.7 million households across the UK will still be trapped in fuel poverty as the winter months approach. A ‘freeze’ in bills means these households will still be left to ration their energy use to a point it might be damaging their health. The intervention to freeze the GB wide cap also does not automatically apply in Northern Ireland and it is still unclear how ‘equivalent support’ for customers in Northern Ireland will operate.

Without a resolution to the current political impasse approximately £435 million of Barnett consequential funding that arose from the previous cost-of-living measures and an additional £340 million allocated for NI is currently being held by HM Treasury, yet still isn’t being released. Added to the money for the consequential, for NI to benefit from the price freeze, it’s vital that these issues are overcome in the coming weeks before the heating season begins.

Beyond this winter, analysts say that prices could remain relatively high, perhaps for the rest of this decade. So, despite the recent announcement, we must double our efforts to shape future policy and regulation to protect low income and vulnerable households from the worst impacts of sustained inflated gas prices. This must come in two guises. Firstly, through market reform, and secondly, through an accelerated move towards a fair and affordable transition to net zero.

National Energy Action (NEA) has led calls for a new social tariff that is additional to current protections, mandatory for suppliers to offer, well targeted on those who need it most, provides a meaningful discount and auto enrols eligible households. Countless other organisations have joined us in calling for a social tariff including anti-poverty charities, green NGOs, energy suppliers, parliamentary committees and the Resolution Foundation. NEA will continue to push for a duty on the government to plan for a social tariff through an amendment to the Energy Bill. We will also share our learning with the NI Energy Regulator and in time, a functioning Executive.

Finally, the UK Government’s focus on lowering prices and enhancing supply overlooks the other key lever the government has still not deployed in the crisis. Greater investment in energy efficiency not only saves consumers money and makes homes warm and safe places to live, it creates jobs, provides an economic return to the Treasury and reduces strain and costs for our stretched health services.

We hope that this opportunity does not continue to be overlooked at a time when the case for action seems to grow daily. The upcoming Financial Statement or Autumn Budget provides this opportunity, as does ensuring minimum standards for rented housing are finally implemented in England and similar policy frameworks are in place across the other UK nations. This will support a move towards a fair and affordable transition to net zero across the whole of the UK. Affordability for the long-term requires it and won’t be achieved without it.

The theme of balancing security of supply, decarbonisation and affordability sits at the heart of the agenda of the Utility Week Forum, which will take place in London on 8-9 November. Find out more here.