The Coronavirus fuel poverty crisis won’t be solved without government support

As the Covid 19 crisis unfolds, we are, as anticipated, hearing far too much about people forced into acute fuel poverty through self-isolation and/or loss of income. Gig economy workers have found themselves unable to access government support. The government furlough scheme is kicking in too slowly to help people get their bills paid now, and for those on low incomes 80% of usual earnings won’t stretch far enough. People who can usually afford to cover their needs are finding themselves choosing between adequate food and adequate heat and power. Both are crucial for health.  As the weather improves, there are still cold nights and days, extra needs for power for people home all day, money still owed from the spring and winter, and crushing anxiety about the year ahead.

The government made an agreement with suppliers to suspend disconnections and to support customers at risk. In practice, it isn’t working. What we are hearing is that companies generally won’t, or can’t, reduce bills – most will at best offer deferrals which for some just means the frightening reality of unpayable debts for the future.

Graeme Langton, from Salford says,

Help should be automatic if you’re on a low income, then you might say, ok, I can have it on for that extra hour.  It’s no good if you have to wait till you can produce the bill and apply.  You ask yourself, will I put the heating on in the hope that the government will give a bit back? What if they say no?  If you get in debt, you could lose your home.  And there’ll be interest on it, and 200% for overdrafts. Supermarkets have put prices up.  There’s no more 2 for 1 offers, instead the food prices have gone sky high.  It’s either eat or keep warm.   

In addition, there is a risk of some small companies going bankrupt, without a workable rescue plan for their customers.

To help those in crisis now, the government needs to set up an energy relief fund. This has been advocated by the People’s Energy company, an independent energy supplier that provides 100% renewable power and has pledged to give 75% of profits back to its customer-members through an annual rebate. We are convinced too that vital immediate needs will not be met without this sort of intervention. Government support would transform the implementation of the agreement reached with the energy industry, in line with our own petition.

Strings should be attached. For some energy companies, large and small, such support for customers who cannot pay their bills could be critical to their survival as well as that of their customers. We cannot forget that some of these firms have been responsible for many deaths from fuel poverty, forceful imposition of unwanted prepayment meters, a failure to prioritize energy efficient homes, and promoting fossil fuels over renewable sources of energy.  As this current crisis continues and with time, recedes, it is crucial to ensure that that model of supply does not continue to cause death and suffering.  If companies are going to benefit from this scheme, they should be required to commit to changes which will benefit their most vulnerable customers now and in the future.

These should include:

Thorough adherence to the terms of the agreement, to include short response times to customers in trouble, and a readiness to write off debts where paying them would leave people unable to meet basic needs for energy, rent and food.

Immediate free credit to users of prepayment meters so they are not cut off while they are trying to negotiate with suppliers.  This should not be refundable — no storing up debt for the future.  And standing charges should be waived — they disproportionately hit people who have cut their usage to a bare minimum, but cannot access any power till they’ve covered the standing charge.

Ambitious insulation programmes — installing safe and appropriate insulation  is the best way of bringing down bills. Government programmes were slashed eight years ago, and responsibility for this vital work passed to suppliers.  Home insulation installations  plummeted by 95% between 2012 and last year.

As is commonplace in Europe, companies being supported by government bail-outs should not be paying dividends to shareholders or huge salaries and bonuses to executives. While some energy suppliers are in financial trouble, we are coming to the easiest part of the year for them, and they are benefiting from the fact that wholesale prices of gas and oil have fallen like a stone, which has not been reflected in the price cap. Support for desperate customers must not end up as a windfall for people in no need at all.

Other companies might take a leaf out of People’s Energy’s book on customer service and response to the crisis so many people face. Their customers can expect to get through to them in 18 seconds. The emergency fund they have set up themselves raised £27k within the first day, and is helping them to start addressing customers’ needs.

But the reality is that the scale of the crisis means that government support is needed, and needed now.

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