The government should introduce controls on how benefit claimants spend their money, an energy retail boss has suggested.
Utilita chief executive Bill Bullen said taxpayers will grow tired of funding support for the vulnerable if there is a perception that this money is then being frittered away.
Bullen told Utility Week: “The key thing here is that people need to spend their money wisely – and they don’t. That is the reality of the situation.”
He went on to suggest that technology could be used to ensure that benefit claimants were using state subsidies to pay for essential items and services but added “obviously people will still have some pocket money”.
Bullen was discussing the urgent need for government to announce a targeted energy bills support package before Parliament breaks for its summer recess next Friday (21 July).
He said research Utilita conducted with the University of Oxford showed the need for grants of between £600 and £1,000 for up to 10 million household expected to be in fuel poverty this winter.
This could be funded through scrapping Renewables Obligation (RO) payments, Bullen said, estimating this would raise the £6 billion needed to provide grants at the £600 level. He stressed that the mechanism to do this was already in place through a targeted version of the Energy Bills Support Scheme, which distributed £400 grants to all billpayers last winter.
“Renewables don’t need to be subsidised at current wholesale prices. So that pays for the £600 going to 10 million households. There’s also academic research that says 40% of that extra money would offset costs that will otherwise arise in the NHS as we go through winter. This makes total sense.”
Asked why it was important for this money to go directly onto energy bills, Bullen said: “If you’re going to provide some extra help, you want to know that it is being spent wisely. What we don’t want to do is to fund drink, drugs and gambling habits. People joke about it but problem gambling is massively on the rise. Drinking and drug dependencies are also massively on the increase. This is going on, it’s a fact. What we need to do is to use technology to make people spend their money more wisely.”
Bullen admitted his suggested approach was “a bit Big Brother-ish” and emphasised that this was a long-term conversation.
But he added: “People are paying their taxes in order to provide these benefits and we don’t want them to be disengaged or basically get fed up with the process of just throwing money away.”
Dr Brenda Boardman, a research fellow at Oxford and fuel poverty campaigner, told Utility Week the government has a duty to act and politicians should not be going on holiday until they have given reassurance to poorer households.
She said: “Bills are still double what they were in 2020 and households have now lost all resilience. If we get a really cold spell this winter there could be terrible consequences. This situation needs urgent attention and we cannot wait until the clocks turn back to find a solution.”
Asked whether the government would make any announcement over the next week on energy bills support for this winter, a spokesperson for the Department for Energy Security and Net Zero said: “We covered around half a typical household’s energy bill over winter and with costs falling from next month as the new price cap kicks in, the Energy Price Guarantee will remain in place as a safety net through to April 2024 – with additional help targeted at the most vulnerable.
“As set out in the Autumn Statement, we’re working with consumer groups and industry to assess the best long-term approach to helping vulnerable households, as part of wider market reforms.”
As part of our Action on Bills campaign, Utility Week has commissioned exclusive consumer research, which shows strong support from the public for further bills support this winter. The results can be found here.
Affordability will be a key topic of debate at Utility Week Forum in October. Find out more here.
