Mon 13 November at 9 am is the deadline for responses to a proposed limited cap on energy prices.
You may know that the government has for over a year been promising relief for people who pay the default “standard variable tariff” (SVT) – and who are getting ripped off as a result. Meanwhile prices have soared, and so have suppliers’ profits. A small cap on tariffs has been brought in for people with Prepayment Meters. It’s inadequate, but better than nothing. For people with credit meters, Theresa May promised a cap, then went back on it, then promised it again: u-turn upon u-turn. And she is now reassuring the energy industry that it will take ages, if it comes in at all. But meanwhile, the energy regulator Ofgem, with government support, is proposing a limited “safeguarding” cap, which would apply only to people who receive the Warm Home Discount.
Here the story gets murky. Warm Home Discount – worth £140 a year off your electricity bill — is awarded automatically to pensioners on low incomes. People deemed “vulnerable” for other reasons – particularly disability or illness, or children aged 5 or under, can apply to their energy supplier and may get it, but it is “first come first served” with a limited pot, and all the suppliers have different requirements to say who qualifies, mostly based on what benefits you receive. Some smaller suppliers don’t offer Warm Home Discount at all.
This means that despite being eligible, disabled people and children will often be excluded – not only from the discount itself, but now from the cap, which Ofgem say could save the average user around £120 a year. That is a total of over £260 a year, and much more if you need the heat on a lot or use a lot of power.
Ofgem are consulting on this plan, and Fuel Poverty Action will be telling them that this is particularly shocking. Disabled people often need more heat, for medical reasons or if we’re home a lot, and can suffer much worse effects if we can’t afford to keep warm. And, having been hit hardest by multiple cuts, disabled people are in a worse position to deal with rising fuel prices. The same is true for the parents of babies and young children, with benefit cuts, universal credit and low wages causing a massive increase in child poverty.
There is even a risk that, if the cap is applied to some people, the people who don’t qualify for the cap may see our fuel prices rise by even more, as suppliers try to make up the difference through cross-subsidisation!
An Ofgem press release says they will “Ofgem will work on extending price protection to at least a further 2 million vulnerable households for winter next year once the timing of the Government’s price cap is confirmed”. However, there is nothing about this “work” in the actual consultation papers; instead they repeatedly say that to bring the cap in quickly, they will limit it to people who already get the Warm Home Discount.
Fuel Poverty Action think a cap should apply across the board – no means-testing, no cliff-edge where your bills go up if you get knocked off disability benefits, or get a rise in pay, or get married … The prices are too high for everyone now, thousands of people in all sorts of situations are dying from cold every year, and suppliers are making a killing.
But in the meantime, the Ofgem cap is scheduled to come in this coming February. At the very least, it should apply to everyone who would be eligible for Warm Home Discount, whether or not you actually get it. If you want to help make sure that the cap covers more of the people who need it most urgently, you can send a simple email to:
Jemma Baker at email@example.com, by 9am on Monday 13 November
And send us a copy at firstname.lastname@example.org!
Tell them: warm homes are a right – not a “first-come-first-served” lottery!
Feel free to check out our response for inspiration.
Cold homes, fuel poverty, climate change, millions of homes in debt to their energy supplier, huge profits for the Big Six… the energy system isn’t working.
Another energy system is possible! Get behind the Fuel Poverty Action Energy Bill of Rights