25 May 2022

Energy bills crisis demands emergency budget

Chartered Institute of Housing (CIH) are urging the government to deliver an emergency budget to address the cost-of-living fuel poverty crisis facing the country. As part of The End Fuel Poverty Coalition, CIH are strongly supporting the campaign for urgent action on the energy bill crisis facing the UK.

Gavin Smart  |  Chief executive

CIH firmly believe that everybody has the fundamental right to a safe, secure home that they can afford to heat and power. We urge the government to take decisive action now to stem the exponential rise in fuel poverty which, without intervention, will undoubtedly lead to a rise in evictions and homelessness, further exacerbating the housing crisis in the UK.

Alongside the End Fuel Poverty Coalition CIH are urging the government to take urgent action on the cost-of-living crisis as Ofgem projections firmed up the nightmare scenario of further energy bill rises this winter.

With the number of homes in fuel poverty expected to surge to 43 per cent by this winter, campaigners have warned only an emergency budget will solve the crisis gripping the country.

A household that was paying GBP1,000 for their energy bills in October 2020 could soon be paying almost three-times that. And with inflationary pressures also affecting food prices, the outlook is bleak.

If fuel poverty levels hit the limits predicted, the End Fuel Poverty Coalition estimates that thousands of additional winter deaths will take place due to cold homes in 2022/23 – mainly among the elderly and vulnerable.

To avoid the predicted disaster, the End Fuel Poverty Coalition has called on the chancellor to deliver an emergency budget consisting of:

  • A 50 per cent windfall tax on all energy production firms profits yielding revenue well in excess of GBP20bn. This may have to be levied every year until the price cap returns to a more affordable rate or the market is reformed.
  • An annual anti-fuel poverty payment (AFPP) of GBP1,800 to the lowest income households, including those newly facing fuel poverty this winter.
  • A one off £20,000 investment in each of the fuel poor households in the UK that are dependent on oil, LPG or coal for heating to improve their homes, so they are well insulated and using a cheaper, less-polluting fuel – heat pump or new night storage heaters.
  • In future years, any excess revenue generated by the windfall tax could raise additional funding for the emergency hardship funds available to local authorities and charitable organisations working with vulnerable groups to deploy.

In addition to the windfall tax, the government must urgently fulfil the promises made in its 2019 Conservative party election manifesto that would help lower energy bills by investing £9.2bn in the energy efficiency of homes, schools, and hospitals in England, including £2.5bn for the home upgrade grant scheme. To date, less than half of the government’s 2019 manifesto pledges on fuel poverty have been committed. 

The coalition has also urged BEIS to launch a fundamental review of the UK energy market to address concerns which will persist even after the emergency financial measures suggested. This review should consider alternative proposals put forward by campaigners such as the idea of “social tariffs” or a state-funded energy allowance for all.

CIH has also reiterated its calls to use the benefits system to ensure that help is targeted at those who need it most.