The causes of fuel poverty

Fuel poverty is caused by low incomes, high fuel prices, poor energy efficiency and poor quality housing. Playing into it is a national energy system colonised by profit-driven companies, and a ‘captured’ regulator, Ofgem, that has failed in its duty to protect people.

Artificially inflated energy pricing

Over reliance on fossil fuels in the country’s energy system meant that when international gas prices rose with Putin’s invasion of Ukraine, residential bills shot up. Gas is used in the majority of home heating, and electricity prices are also set by the cost of gas most of the time under the marginal pricing system, generating huge windfall profits for electricity generators.

The government and Ofgem failed to take basic precautions before 2022: 

• they allowed gas storage units to close; 
• they failed to invest in meaningful energy efficiency programs; 
• they let privatised retailers expose consumers to volatile wholesale prices without buying in advance. 
• hugely expensive nuclear projects have benefited a French nationalised industry at the expense of UK bill payers. 
• above all, they have made little use of the huge natural resources available on our island: wind, sun, tide and waves, preferring gas.

The way Ofgem has handled things since, has been to continue to ensure that obscene profits are made by a handful of private companies: energy producers (e.g. Equinor and Shell); and the firms that control our energy grid (e.g. National Grid, UK Power Networks and National Gas Transmission) as well as suppliers (e.g. E.on and British Gas). 

Just 20 energy companies have made a staggering £483 billion in profits since 2002 – enough money to build 966 mid-sized hospitals in the UK or train seven million nurses.

The cost of the UK gas network to consumers has surged 38% since 2021 – boosting the profits of Chinese and Qatari Government-backed funds that own much of it.