Yet again, UK households are feeling the brunt of our volatile energy market. Dependent as we still are on fossil fuels, the impact of international events on oil and gas supplies make our energy bills susceptible to the smallest change.
Ofgem has today announced the energy price cap will increase by 5% from January. This means the average UK household will be paying around £160 a month for their energy – an extra £94 on their annual bill. With many incomes already squeezed this is no small sum and will continue to pile the pressure on to those who can least afford it.
Already this winter, Severn Wye has seen demand for fuel poverty advice and advocacy rise beyond last year’s peak and, while we are better prepared to offer support quickly, the distress and fear people are experiencing continues to grow. High energy bills mean many are still forced to stay in bed to keep warm, heat only one room or choose between heating and eating – it’s become a cliché for a reason. We see many people growing isolated as they sacrifice time out with friends or are too embarrassed to invite family over to a cold home.
All the analysis and our own experience tells us that fuel bills are going to stay high for a long time to come… the answer is retrofit.
We know our services make a difference to peoples lives. Our advocacy teams provide support in people’s homes, to restructure energy debt, advise on reducing energy use and access emergency funds. We can even hand out small measures such as LED lightbulbs or radiator reflectors which all play a small part in reducing bills. This year already we have handed out £270,000 in payments to those who need it most.
Our clients have told us that emergency payments have kept them out of hospital for the first winter in years, given them confidence that their young children won’t have another freezing Christmas, or provided central heating they thought they’d never be able to afford. Our innovative Warmth on Prescription programme in Gloucestershire is working with 300 NHS patients with chronic health conditions affected by the cold, offering payments to keep them warm and even pay for some home retrofit services.
I have been in my role as CEO of Severn Wye for 18 months now and during that time Ofgem has changed the energy price cap seven times. Thankfully it’s lower than the peak of last winter but bills are still two-and-a-half times higher than before the start of the war in Ukraine, and incomes and benefits haven’t kept up. All the analysis and our own experience tells us that fuel bills are going to stay high for a long time to come. So while the services we and our partners offer are vital, they are a sticking plaster for a long-term and deeper problem.
We need to deal with the root cause – our leaky homes. Investment in energy efficiency retrofit is still woefully inadequate. Government subsidies for those on the lowest incomes are welcome but they are thin, aimed only at off-gas properties – good for some rural areas but almost irrelevant for anyone living in a town or city.
And yesterday’s Autumn Statement still offered no incentives for anyone thinking about paying for their own retrofit. The financial sector, including building societies like Newbury and Nationwide, offer reduced rates for energy improvement loans, but take-up is minimal. More financial incentives – such as changes to stamp duty or subsidies for retrofit work – could stimulate the market, but this government seems uninterested in tackling systemic problems.
We will continue on the ‘price cap roller coaster’ as long as international energy markets remain in flux. Sticking plasters will not help us – the answer is retrofit. As a nation we need to insist that fuel poverty caused by inefficient homes is not acceptable, and realise that investing in improving Britain’s houses will keep bills low for everyone.
