Energy bills are still going up – Labour must rise to the challenge of protecting the poorest

For the fourth winter in a row, Brits are facing sky-high energy bills, with the latest increase at 1.2%. Compared to 2020-21, people are paying 65% above what they previously were, with £700 added to the average household’s bill.

People are already struggling due to the cost of living crisis, meaning households have less ability to pay these high prices. Levels of energy debt are soaring as a result and fuel poor households are forced to use dangerously low amounts of energy during cold snaps.

Meanwhile, the energy industry continues to post huge profits. Twenty firms have made more than £457bn since the start of the crisis between them.

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Voters placed their trust in this government to fix the system, but have been let down at their first winter. For some pensioners who previously benefited from winter fuel payments, but now miss out, energy prices will seem higher than at any point. Those losing winter fuel payments this year include 1.2 million pensioners in absolute poverty. Four-fifths of older people with a long-term health condition or disability will no longer receive support with energy bills this winter. As a result, 752,000 older people will not use heating at all this winter. 

With Ofgem themselves warning that high energy bills will last into next winter, ministers must support those most at risk from the ill effects of living in a cold damp home. The solution backed by most charities is a social tariff – a unit discount on bills for those groups who have pre-existing health conditions, disabilities or other vulnerabilities which make them susceptible to the energy prices.

In the long term, the government has inherited a broken energy system and it will take time to untangle the mess and bring down bills. As a country, we have suffered disproportionately from the energy crisis, due to our over-reliance on volatile oil and gas.

Most of our heating is still derived from gas which is bought on international markets, with prices at the whim of global factors. Ed Miliband’s department is on the right track, with its commitment to ramping up investment in homegrown, abundantly available, renewable energy and infrastructure. But none of the benefits of a green future will take hold as long as the electricity pricing system is tethered to the price of gas-fired power plants generating electricity. Ministers must review options for reform, focusing on those which will reduce bills.

Ministers are also right to invest in grid infrastructure and look at innovative solutions to energy storage and pricing. Currently the cost of grid upgrades are huge and will be added to our bills through standing charges. If this is allowed to continue, costs may rise rather than fall. The chancellor and GB Energy need to find a better way to pay for nationally vital infrastructure.

Linked to this are the standing charges we pay as part of our bills just to access the grid. These have been inflated by packing a range of obscure charges onto the daily charges. Reform is long overdue.

Last week the government made more money available and loosened planning regulations around heat pumps to boost energy efficiency through its £7,500 grant scheme for homes, as well as committing to invest in energy performance upgrades in social housing and rented accommodation. 

It is another welcome step to bring down bills in the long term, but this needs to be extended to more households than the 300,000 targeted. Without significant investment in energy efficiency and insulation, there will be no way to bring down energy usage and therefore bills.

Ministers in the energy department understand most of this, they now need the backing of the chancellor and the prime minister to get the job done. If they make the right moves, it will be possible for Labour to say that they have brought energy bills down come the next election.

Simon Francis is coordinator of The End Fuel Poverty Coalition – a broad coalition of anti-poverty, health, housing and environmental campaigners, charities, local authorities, trade unions and consumer organisations. It is also supported by academics, social enterprises and those working on the front line of fighting fuel poverty.

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