Fuel Poverty and the need for a social tariff

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2023 National Energy Service Group Conference
8 February 2023

Over the last couple of years, we have seen how the continued impacts of the energy crisis have affected ourselves, our members, and the customers we serve. Low wages, below inflation pay rises, substandard housing, to name a few, have seen us all struggling to make ends meet.

We all know fuel poverty is on the increase and this will continue to rise if there is no intervention. A report from the End Fuel poverty Coalition highlights the following:

1) 3.2 million – The official number of households in fuel poverty in England in 2020 according to the latest definition

2) 7 million – The estimated number of households across the UK in fuel poverty from 1 October 2022.

3) 8.6 million – The estimated number of households from 1 April 2023 as the current package of support for households runs out and the Energy Price Guarantee changes.

4) 7,409 – Average number of winter deaths caused by cold homes.

5) Nearly half of low-income households are still living in energy-leaking homes, with campaigners warning the rate of improvements is well below what is needed to lift people out of fuel poverty by a target date of 2030.

6) 1.8 million carers, 5.9 million low-income and financially vulnerable households, 3.6 million people with a disability and 1.6 million households in off-gas homes will all be in fuel poverty from April 2023 (NEA).

7) Over 9 million adults lived in cold damp homes in December 2023 (Warm This Winter) which contributed to worsening public health and pressures on the NHS.

8) 28% of disabled people plan to cut back on showering and bathing, and over half said increasing costs were affecting their mental health.

9) Nearly 3 million disabled people are facing on average £367 a year shortfall in support, with those facing the highest living costs seeing a shortfall of up to £505.

10) A quarter of disabled people are already unable to heat their home. Many are already living in fuel poverty, and those who are not are in danger of being pushed into this.

Philippe Commaret, managing director for customers at EDF, to Utility week (27 Jan 2023) his organisation is “in complete agreement with Ofgem about the urgent need to look into how a social tariff could be introduced as soon as is practicable”.

However, he also stressed the need to maintain the current level of the Energy Price Guarantee while a more targeted approach to bill support is fleshed out.

He added: “The energy price cap has not protected vulnerable customers and even with the predicted price falls, energy bills would still be more than double where they were a few years ago. For some customers this will remain unaffordable. We hope to see this become a priority for the government.

“With costs to the government of the Energy Price Guarantee set to become much lower, we would also like government to look at holding the Energy Price Guarantee at £2,500 until more targeted support, for example, a social tariff, can be put in. we know further increases in energy costs, even short term, will be unbearable for some of our customers”.

While we have seen individual companies implement social tariffs in the past, the mechanism for determining who were entitled to receive these tariffs was not robust enough and those really needed these tariffs were often excluded,

While we as a branch continue to support the Energy Service Group’s policy to re-nationalise the energy retail market, a UK wide Social Tariff is needed to support our most vulnerable in society and eradicate fuel poverty.

Conference calls upon the Energy Service Group Executive to:

1) Continue to campaign for a re-nationalised Energy Retail Market

2) Work with Labour Link to lobby government for a social tariff.

3) Work with the NEC to create a national social tariff campaign, linking this in with the cost-of-living crisis.