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CAR urges Government to support Fuel-Poor Households NOW

Millions of households are facing the next winter with no financial support from the government for their fuel bills. We need an urgent commitment from government to give these fuel poor households the money to keep warm when it starts getting cold in October. The timetable is already extremely tight – decisions cannot wait.  

This plea comes from research CAR has been doing with the Environmental Change Institute at the University of Oxford for the energy supplier Utilita. We have exposed disturbing evidence of hardship as energy prices have escalated, and we have identified the government interventions urgently needed to support low-income households for the coming winter, and beyond. 

The evidence 

We examined energy use by 28,000 households with both gas and electricity smart pre-payment meters – households that are highly likely to be in fuel poverty. We scrutinised energy consumption data from January 2019 to April 2023 – four complete winters. The evidence showed: 

  • Households use less energy now than they did in 2019, both gas and electricity; 
  • They are increasingly ‘self-disconnecting’, as they run out of money to put onto the meter and the meter cuts out; 
  • Nearly two-thirds of these households have self-disconnected an average of five times a year; 
  • Worrying numbers of these households have stopped using their gas central heating and are reliant on electricity for warmth. They are using so little electricity that they must be seriously cold and putting their health at risk; 
Energy suppliers all have a Priority Services Register (PSR) to identify those who must be connected promptly if there is a failure in supply, for instance because the household depends on electricity for medical equipment, or there is a baby or elderly person in the home.  However, even households on the PSR are self-disconnecting, when they have insufficient money to keep their own supply on, which runs completely against the principle of the register.  

The timescale 

Our work demonstrates the need for urgent action by the government to prevent greater hardship this coming winter: 
  • Fuel bills for the typical household are double the level they were in October 2020: £2074 today instead of £1042 in October 2020;  
  • Government support through the Energy Bill Support Scheme (EBSS) provided all households with £400, but this ended in March 2023; 
  • No new direct energy bill support assistance has been given to the fuel poor since then, and none has been announced for this coming winter;
The money is available to support vulnerable and fuel poor households now, as the government budgeted £8bn more to support energy bills than it now expects to spend in 2023-24 [1]
We are calling for: 
  • £1000 extra this winter – Our work demonstrates that the previous £400 of EBSS (on the electricity account only) was insufficient to prevent a quarter of self-disconnections, so £500 is now needed. There was no support put onto gas bill, where self-disconnection remained high. A further £500 is needed for gas as well. Therefore, starting on 1 October 2023, a new fuel bill support scheme (FBSS) should provide all fuel-poor households with £1000 credited directly and automatically onto their energy bills. The amount should be split between gas and electricity if both fuels are used. This would bring the fuel bills of the typical household back to the level they were in October 2020, before the increases in fuel prices and before the steep rise in the cost of living.  
  • An end to self-disconnections for ‘Do Not Off Supply’ customers – Those who should never be disconnected due to using medical equipment, etc. should stay on supply, even when they run out of money. Households on the standard PSR list (the elderly, and those with illnesses or disabilities) should never be disconnected in winter (October to March). 
  • End energy vouchers – Households with traditional or ‘legacy’ prepayment meters (who have not transferred to smart meters) received vouchers, instead of credit on their meters, last winter. Many of these vouchers were not redeemed, so the households received less help. A better system of providing help is needed, directly crediting the energy account.  
  • Advanced support before cold weather – The present Cold Weather Payment scheme provides £25 for eligible households if it is below freezing for seven consecutive days in their region. This is inadequate and of minimal help as it is retrospective – households receive the payment after the cold spell is over, too late to use it for their meters. A new Extreme Weather Payment is needed that credits the energy account by £10 of all eligible households on every day that the Met Office declares the temperature will drop below -4 degrees Celsius the following day.  
Our detailed report is due out at the end of August.

[1] 14th June 2023 Commons Library Research Briefing on Gas and electricity prices under Energy Price Guarantee and beyond, Page 10: “On the morning of Budget 2023 the Chancellor announced that … the cost of the EPG in 2023-24 is expected to be much lower than expected at £4 billion compared to the £12 billion estimate made in the Autumn Statement.”