Millions face food or fuel choice as energy bills set to soar

There is nothing new about the fuel poverty issue. But this year, with retail prices and energy prices surging, and pop up energy suppliers failing, keeping people warm should be soaring up in the political agenda. But fuel poverty remains in the margins of Westminster thinking. Perhaps that will change today with a report from the Resolution Foundation warning that "2022 is set to be the 'year of the squeeze'".

The failure of the UK's privatised and badly regulated energy market to anticipate and react to supply shocks including the surge in wholesale gas prices is shocking. The problem has been made worse by our country's abysmal failure to reduce energy use by insulating homes. Vulnerable people shiver under blankets while the precious and expensive energy they pay for heating seeps out through the walls, doors and windows and vents through the roof.

The Liberal Democrats are calling for the Warm Homes Discount to be doubled and expanded to support vulnerable households with their energy bills throughout the winter months. Ed Davey said:

"The Conservatives have totally failed to tackle the problem. They've scrapped insulation programmes that would have reduced people's bills, cut support for the most vulnerable whilst increasing the UK's dependence on imported gas, making our country more vulnerable too."

In England, households are classified as being in fuel poverty if they have fuel costs above the national median level and, if they could afford to spend that amount, they would be left with a residual income below the official poverty line. In Scotland and Wales, a household is in fuel poverty if more than 10% of their income after housing costs is spent on heating.

In July, the House of Commons Library reported:

"Around 13% of households in England were classed as fuel poor, 25% in Scotland, 12% in Wales, and 18% in Northern Ireland. In all nations, fuel poverty rates have either been relatively stable, or falling in recent years."

Heating costs must be paid for alongside other everyday essentials. Those essentials are getting pricey.

Food and catering prices rose by 3.6% in the year to November. There are gloomy predictions of higher inflation. The cost of petrol and oil, including fuel oil, has shot up by 29.4% over the last year. Electricity costs reached a five year high having risen by 18.8%. It is the same story with gas, up 28.8%. The temporary uplift in Universal Credit has ended. Food bank use has been soaring.

There are dire portents from trade body Energy UK that domestic energy prices are likely to go up 45% to 50% in the spring, with money guru Martin Lewis predicting the energy price cap will rise to £1,660 a year on typical use in April 2022. Our choice of energy suppliers has been reduced after 26 boutique suppliers collapsed. That was not unexpected but instead of the pop up suppliers merging and forming more sustainable competitors to the big six, their collapse has consolidated the control, some would say stranglehold, of the big six over energy supply. The six, also called legacy suppliers, are reported to be seeking terms with Ofgem on dealing with extra costs of £1.8 billion of taking on new customers while adding £100 to the average energy bill.

Although Business Secretary Kwasi Kwarteng has been holding meetings with the energy giants and the regulator, he has been looking out of his depth. The Treasury has said no to any VAT relief for those struggling to keep warm and healthy.

Soaring energy prices are not just a hit to the wallet, they are building up to a public health emergency.

Warmth, along with food, is essential to good health and wellbeing. In England alone the health service is estimated to save £0.42 for every £1 spent on retrofitting fuel poor homes reducing costs to NHS England of around £1.4 billion annually.

It has been long argued that higher energy bills will reduce energy use and with that, reduce carbon emissions. But that is a regressive argument that hits the poorest especially in rural areas with limited access to cheaper energy supplies. The best way to reduce carbon emissions is to reduce energy use through better insulation and to ensure that all new homes have top rated energy performance, including heat pumps and solar panels.

Liberal Democrat Leader Ed Davey MP said over the weekend:

Households in the UK will pay a whopping £100 million more than they did last year for their energy - and that's only during the seven days between Christmas and New Year.

The Christmas period is already set to be tough but this is the worst possible gift from the Government. Once again ministers are leaving hardworking families out in the cold. For many the choice between eating and heating will become a stark one this winter - in sharp contrast to the Number 10 parties and Boris Johnson's posh wallpaper.

The spike in gas prices is seeing energy bills rise to unprecedented levels. Next year energy bills are projected to rise by at least another £400, possibly an inflation-busting £500 a year. Meanwhile, we've seen suppliers collapse, and a reduction in competitive prices…

Liberal Democrats are calling for a new long-term home insulation programme to cut bills permanently, end fuel poverty and reduce emissions. As this is an emergency, we also need action now so the government must double and extend the Warm Home Discount to help the most vulnerable households with their heating bills.

Millions face food or fuel choice as energy bills set to soar (libdemvoice.org)