Red-letter day spells disaster for the poorest households

This Friday, 1 April 2022, over 22 million households across GB will see their home energy bills soar by 50%. This ‘red-letter day’ has been endlessly written about and some readers may now feel desensitised to its significance.

For some people, the impact will be modest – an annoyance, a re-adjusting of a direct debit. For others, it will feel like just another expense at a time when everything else is going up in price; leading to them curtailing spending they would otherwise prefer to channel to a far more enjoyable pursuit.

But just let it sink in…. after the financial battering of the pandemic, the cost of heating an average home has now doubled in 18 months. For 6.5 million of the poorest households across the UK, that spells total disaster.

Writing or reading about what is likely or now happening, is far removed from understanding or directly experiencing the impact this will have on too many people’s lives, or the dread these people will feel now that this terrible moment has arrived.

The consequences are also now all too familiar; only heating one room if heating at all, leaving the house to avoid having to put the heating or electricity on, no hot water for washing or cleaning, falling further into debt or going without other essentials like food. Despite the needless mental illness, or exacerbation of pre-existing chronic medical conditions which this will cause, we are becoming numb to this grim reality.

A detachment from the current scale of the crisis has also grown with early predictions of what bills may rise to again in October. This is the context the Chancellor last week set out his Spring Statement. He had an opportunity to do more now to help vulnerable people keep warm in their homes but decided to wait until October to see how bad it gets and only then review if more support might be needed.

This ‘wait and see’ approach may have been justified if the current package of support was sufficient for the current task in hand, but it’s clearly not. At best the confirmed interventions only offset half of the April rise and because of the choices the Treasury have made about how to deliver that support, the Council Tax rebate and ‘heat now, pay later’ rebate could leave over 1 million of the most vulnerable households out in the cold, with no escape from rocketing energy bills.

While nobody can predict the future, this underlines a hugely worrying lack of understanding of the urgency that some households are already facing with this cost-of-living crisis. The only, very modest, upside is we are now coming into Spring and hopefully milder weather. Through no planning or foresight, we now have a 5–6-month window to plan for this coming winter. Any inertia between now and then would be inexcusable and will result in a public health catastrophe next winter.

The priority for central government is to exempt vulnerable households, in particular prepayment energy users, from paying the £40 per year levy that is currently planned to re-pay the ‘heat now, pay later’ energy bill rebate, or at the very least defer the payment until prices start to fall.

In advance of this winter, they could also provide additional support for low-income households through a bigger Warm Home Discount that directly supports many more people and expand the Winter Fuel Payment beyond pensioners. For months we have also been urging Ofgem to work with government to develop a social tariff and help with utility debt repayments.

These options are still on the table, but time is against us and for far too many, it will be too late to offset the pain and anxiety spiralling energy bills are already creating.