Economy

UK fuel poverty will hit 12mn without ‘immediate’ action, warn groups

The number of UK households in fuel poverty will more than double in January to at least 12mn unless the next prime minister takes “immediate” action to curb spiralling energy bills, a coalition of groups has warned.

About 28mn people in 12mn homes, or 42 per cent of all households, will not be able to afford to adequately heat and power their properties from January, when a typical yearly energy bill is forecast to exceed £5,300, according to the End Fuel Poverty Coalition.

That compares with an estimated 10.7mn people in 4.6mn homes who faced the same stresses last winter.

Roughly 9mn households will struggle to live in a warm, dry home from October 1 when Britain’s energy price cap will rise 80 per cent to £3,549, according to the forecasts. The cap dictates bills for the majority of British households.

The bleak forecasts will add to the pressure on Liz Truss and Rishi Sunak, Tory leadership contenders, to tackle energy prices and the wider cost of living crisis. The winner of the race to become the next prime minister will be announced on Monday.

“The households affected in these numbers all face a real risk of making daily economic sacrifices that compromise their standard of living, with many of them at risk of health complications caused by living in a cold damp home,” the coalition warned.

Ruth London from Fuel Poverty Action, a coalition member, said there would be “many thousands of deaths in cold damp homes” this winter unless the government took further action.

She also warned of “widespread health crises, cold and hungry children unable to play or do homework, and older people who can’t be discharged from hospital because their homes are not fit to live in”.

The coalition — whose members include the trade union Unison, local authorities such as the London Borough of Camden and charities and campaign groups — said its forecasts followed a similar methodology to government data tracking fuel poverty, which can be defined in various ways.

Energy companies have urged the new prime minister to immediately ease pressure by increasing a £400 discount on all households’ energy bills, which is due to take effect in October. Officials have also been preparing a list of alternative options to present to Boris Johnson’s successor as early as next week.

Truss, the frontrunner in the race, has refused to be drawn into details about how she will tackle the cost of living crisis, but has said she would look to increase domestic energy supplies, and outlined support for measures such as a one-year moratorium on green energy levies.

Sunak, meanwhile, has said he would support families struggling with soaring energy prices by scrapping VAT on fuel bills.

Fuel poverty has traditionally been defined as a household spending more than 10 per cent of its income on energy, although that definition has been rejected by many campaign groups, including the Fuel Poverty Coalition. It says that definition includes wealthier families that can spend a tenth of their income on gas and electricity.

The government said: “Direct support will continue to reach people’s pockets in the weeks and months ahead, targeted at those who need it most like low-income households, pensioners and those with disabilities.

“As part of our £37bn package of help for households, one in four of all UK households will see £1,200 extra support, provided in instalments across the year, and most people will receive a £400 discount on their energy bills over winter.

 “Ministers are having ongoing discussions with industry on what more can be done to ensure markets function effectively for consumers in the face of rising gas prices.”

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