Tackling the national emergency

With his charity already seeing winter-levels of demand in the summer Matthew Cole, head of the Fuel Bank Foundation, outlines the dire situation facing vulnerable customers in the coming months, and emphasises the need for both immediate relief from rising bills and longer-term action to improve energy efficiency.

The UK is facing a national emergency. In October, when the new energy price cap kicks in, millions of households across the country will see their monthly fuel bills increase by
80 per cent.

The price cap increase is energy regulator Ofgem’s response to rising global gas and oil prices to protect the market, and consumers, from further energy company casualties.

Whether or not you agree with Ofgem’s reasoning or indeed the staggering amount by which the cap has increased, what cannot be disputed is the huge financial impact it will have on households, especially those that are low income and already at breaking point.

Fuel Bank Foundation was set up with those sole purpose of helping people who cannot afford to top up their prepayment gas and/or electricity meter. To date, more than 650,000 people have been supported by the charity with emergency top up fuel vouchers. The £49 voucher (£30 during summer months) provides respite and time to work through some simple and easy to action advice from the Foundation.

Since the start of the Covid-19 global pandemic in 2019, we have seen the number of people turning to us for help increase considerably. Following the energy price cap increase in April this year, we saw a record number of people accessing our services, and we’re now approaching 2,000 people helped every day. This level of demand is typical during peak winter months, so to see it in summer demonstrates how bad the situation is. Our fear is that further price cap increases will mean the monthly cost of topping up a prepayment meter will become unaffordable for even more people.

In January, at the peak of winter, prepayment meter customers paid on average £183 for a month’s energy. By Christmas this year, the same customer will need to pay £480 – a
262 per cent increase or, in real terms, an extra £297. Even more worrying is that in January 2023, the cost of topping up a prepayment meter per month could reach a staggering £713, if the industry analysts’ predictions are correct, which they have been so far.

For the four million households in Great Britain with a prepayment meter, the majority of which are low income, this isn’t financially feasible.

Unlike direct debit customers who can soften the blow of price increases by spreading their energy costs over 12 months, prepayment meter users feel the impact far more acutely as they don’t have a credit or buffer to tide them over the heating season and cold winter months when costs increase. No money means no energy.

Sadly, it is inevitable that more people will be forced to live without the essentials needed to survive during winter because they can’t afford to put money in their meter. It has now gone beyond a choice of whether to eat or heat – it’s life or death.

This is why we have been calling on the government to do more to help those who are the most vulnerable and at risk of living without energy this winter.

It is no exaggeration to say that we are on the precipice of a national fuel crisis. Swift and decisive action therefore needs to be taken by the new prime minister, firstly by confirming that meaningful financial support to cover the uplift in energy bills households face in October will be provided to those already struggling to pay their fuel bills, in addition to those who will be plunged into fuel poverty following the energy price cap increases. It must also be targeted at those who need it and will benefit from it the most.

Longer-term, it is essential that government addresses the amount of energy households use, since this is also a way to reduce bills. Funding should therefore be made available to better insulate homes, at pace, of some of the poorest in society so we can move beyond having to provide crisis financial support to keep homes warm.

But the government cannot tackle the crisis on its own. A national emergency requires a collective national effort and we – charities, government (at all levels), advice agencies, consumers groups, suppliers, and industry bodies – need to work more closely together.

Time-and-time again we see Fuel Bank clients – real people living real lives who are struggling with the enormity of ever-increasing bills – who have fallen out of processes and between some of the support packages that already exist. We need to ensure universality of support and end the lottery that sometimes exists if you live in the right part of the country or speak to the right organisation.

We also need to ensure a fair approach to guarantee that those who are struggling and who spend more than the average to heat their homes do not lose out in real terms through no fault of their own, because they cannot afford efficiency measures, or live off the gas grid and rely on heating oil or other solid fuels, which have risen in price by more than 100 per cent in 12 months.

Energy advice must also be consistent, easy to access and simple to implement, regardless of whether it’s from a highly trained advisor, a local volunteer, or somebody trying to ‘self-serve’. The stigma of being in fuel crisis, and of being afraid to put your hand up and say you need help because of the consequences it might bring must also be removed. The situation people are in has not been brought about through poor choices; families across the UK are being hit by a combination of things out with their control, and the narrative that a bit of batch cooking and tin foil behind the radiators will help solve the problem is unhelpful, since it won’t.

For that reason, collective effort is needed to provide the very support that people need today. Support they can rely on; support they can act upon; support that provides reassurance and options.

The country is facing an unprecedented cost-of-living crisis. In these challenging times, strong leadership and creative thinking is required to ensure no one has to live in a cold, dark home this winter.