Fuel poverty will hit 15 million homes - so who's going to help?

Millions of energy bills will go unpaid because people simply cannot afford them.

Bernard Ponsonby: Fuel poverty will hit 15 million homes – so who’s going to help? iStock

The consultancy, Cornwall Insight, said on Tuesday that the price cap for energy bills could hit £4,266 for the first quarter of 2023.

This is higher than their previous observation and comes hard on the heels of the announcement that the energy regulator Ofgem will now review the price cap every three months.

Every time I see the words ‘price cap’ or ‘Cornwall Insight’ my heart sinks and not just because it would appear to be an inevitable precursor to more financial heartache for some and destitution for others.

Let’s be clear.

Millions of people can’t pay energy costs of £4,266 per year. If you rely solely on the state pension or Universal Credit or are in a low-paid job, you can’t pay what you don’t have.

Even allowing for the package of measures announced by former chancellor Rishi Sunak, bills of this magnitude won’t be paid.

They won’t be paid, not as an act of defiance, but for the simple reason you can’t pay when your reserves are exhausted.

Some context…

The definition of fuel poverty is measured differently in the constituent nations of the UK.

In Scotland, you are deemed to be in fuel poverty if you spend more than 10% of your disposable income on energy after deducting what is spent on housing costs.

Currently, 25% of households in Scotland are in fuel poverty.

However, according to the Child Poverty Action Group (CPAG), that could rise to an astonishing 61% in 2023 if the predictions of Cornwall Insight come true.

Throughout the UK, the CPAG estimate that 15 million households will be in effective fuel poverty.

Let that sink in, 15 million, over half of all households.

Alarmingly they estimate this will affect 80% of large families and lone parent and pensioner couple households.

Given the pronouncements from the regulator, it would appear it is not a matter of if but when these statistics become a reality.

That reality will manifest itself in cold homes, a run on mental health as people worry about what will happen when they rack up huge arrears.

It will lead to illness from the cold as some parents choose to eat rather than heat.

Children’s performance at school could suffer and adults will rage against a private shame that, through no fault of their own, they can’t keep their kids warm.

It is almost unimaginable that this scenario is playing out in the UK in the year 2022, but it is about to be a hard reality.

That is why on Monday the former Labour prme minister Gordon Brown said a package of measures to mitigate this disaster could not wait until members of the Conservative Party choose a new leader to become PM.

It is why the First Minister demanded an urgent meeting with the Prime Minister to deal with the crisis.

The view from 10 Downing Street is clear. There will be no summit, no new package of measures, and no indication of future strategy until a new Prime Minister is in post in exactly one month.

So, of the two people who could be PM, what have they said on this subject?

Precious little of any substance is the answer.

Whilst most voters mull over what they can afford and what lifestyle choices will have to be made to free up more money for energy costs, Rishi Sunak and Liz Truss fight on an agenda that excites 160,000 members of the Conservative Party.

It says nothing about the here-and-now crisis, far less addresses those who do not have a lifestyle to adjust and await indebtedness. 

Liz Truss does not want handouts but tax cuts, decreases in taxation that give more money to help with the rising bills.

As her rival points out, her proposals would not even scratch the surface of the problem and would, in relative terms, help those who are better placed to weather the storm.

Truss is likely to be Prime Minister, but her tax-cutting agenda has little relevance to dealing with the scale of the impending disaster.

Let me give you a prediction. Her politics, motoring to a tax cutting, smaller state, non- interventionist agenda, will perform the quickest u-turn of any premier in history.

Slogans don’t make a policy. And her feet won’t get warm around the cabinet table before a little thing called reality bins her rhetoric and starts to concentrate her mind to the possibility of indebtedness on a scale not seen in modern times.

The poor will never clear their arrears. The government and/or the energy companies will be forced to write debts off in the years to come, since chasing the poor for what they don’t have is a pointless pursuit.

For Prime Minister Truss, this is a poll tax moment, a point when those disinterested in politics are radicalised and scandalised by what their government is failing to do.

There will be government rhetoric about personal responsibility and fevered denunciations of militants and of the country being held to ransom by extremists and law breakers.

These lines normally chime and at times are even successful.

But if 15 million households fall into fuel poverty and many more are having their standard of living scythed, the favoured script of Conservative ministers will ring hollow and be seen as evidence of a Prime Minister who is out of touch.

The current storm over energy bills, higher inflation, higher interest rates, and strikes aplenty born of panic over the cost-of-living crisis would be enough to test the temperament and leadership skills of a heavyweight political figure.

Liz Truss is no heavyweight. She does a fair impersonation of a malleable stooge being worked from behind by more ideologically robust Conservatives who are on a mission to destroy state socialism.

In just a month, the new Prime Minister will inherit a poisoned chalice. There won’t be much time to avert disaster. To keep the country onside, it will involve an embrace of everything she has spent her leadership campaign denouncing.