How David Cameron's failure on energy bills is hitting households

While big energy companies are reaping billions in profits, millions of vulnerable households are being pushed deeper into fuel poverty.

Heating or eating? That’s the choice too many families are being faced with today – meeting the soaring cost of keeping their homes warm or putting food on the table. Under this Tory-led government, life for ordinary people is getting harder, with real wages falling in 36 of the 37 months since David Cameron entered Downing Street.

It amounts to nothing less than a crisis in living standards where the rising cost of energy is many households’ chief financial headache. Since 2010, the average family energy bill has shot up by more than £300 and now stands at a whopping £1,400 per year.

Now it has been revealed that millions of vulnerable households are being pushed even deeper into fuel poverty. Figures from the government’s own Fuel Poverty Report – quietly slipped out in the middle of summer recess – show that the fuel poverty gap is expected to increase by £200m between 2011 and 2013. That means that the distance between people’s fuel bills and what they can afford to pay is growing wider. On average the gap is currently £438 and expected to increase to £494. In 2003 it was £248.

This jump is just the latest evidence of the Prime Minister’s failure to stand up for hard-pressed bill payers and get tough with the big energy companies. The news comes hot on the heels of Labour revelations that the energy giants are reaping much greater profits under David Cameron. In 2009, the UK’s big six energy companies turned a profit of just over £2bn. By 2012, that had rocketed to £4bn. Added together, Britain’s six largest energy firms have enjoyed a windfall of £3.3bn in additional profits over the last three years. That’s £3.3bn on top of the profits they were already making.

But while profits climb, this government has scandalously slashed support for people struggling to keep their homes warm in winter. While millionaires are enjoying a huge tax cut, help for people in fuel poverty has halved.

Many of the schemes that the last Labour government used to help achieve a substantial reduction in fuel poverty have been discontinued. The ending of the Warm Front scheme, in particular, means this is the first administration since the 1970s not to have a government-funded energy efficiency scheme to help the fuel poor. And just a few weeks ago, ministers announced they would be abandoning Labour’s target to abolish fuel poverty altogether by 2016. The decision follows a review by Professor John Hills, which has proposed a new way to measure how many people are fuel poor. But the government must not be allowed to get away with using a new fuel poverty definition as cover for cutting support for people most in need.

Neither should a redefinition distract from very real concerns about the government’s two flagship schemes to improve home energy efficiency – the Green Deal and the Energy Company Obligation (ECO). Ultimately, the best way to aid people struggling with their gas and electricity costs is by reducing the amount of energy they use in the first place.

But as of July, only 36 people have signed on the dotted line for a Green Deal package so far. Meanwhile, the government estimates the ECO will lift 250,000 households out of fuel poverty over the next 10 years. That’s 50,000 fewer than fell into fuel poverty last winter alone. What’s more, up to 60% of the ECO funding available could end up going to households who can already afford to pay, rather than those most in need. That’s why Labour has said that support should go to people in fuel poverty before those who can afford to do it themselves.

The government needs to get its priorities right. The most recent statistics show the UK suffered 24,000 excess winter deaths in 2011/12. According to the World Health Organisation, as many as 30% of winter deaths in Europe may be caused by people living in homes that are too cold. Fuel poverty isn’t something that can be ignored.

As summer slowly gives way to autumn and warnings of more energy price hikes this winter, it’s clearer than ever that Britain needs a One Nation Labour government. We need real reform of the energy market and action to help those who will struggle to keep warm this winter.

That will only be possible if we break the dominance of the energy giants. Only a tough new regulator with the power to force energy companies to pass on savings to consumers will protect the public from being ripped off. David Cameron has had over three years to get consumers the fair deal they deserve. It’s time he decided whose side he is on. 

David Cameron speaks at the Clean Energy Ministerial Conference alongside his Energy Secretary Ed Davey on April 26, 2012 in London. Photograph: Getty Images.

Luciana Berger is the Labour and Co-operative MP for Liverpool Wavertree and Shadow Minister for Energy & Climate Change.

Photo: André Spicer
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“It’s scary to do it again”: the five-year-old fined £150 for running a lemonade stand

Enforcement officers penalised a child selling home-made lemonade in the street. Her father tells the full story. 

It was a lively Saturday afternoon in east London’s Mile End. Groups of people streamed through residential streets on their way to a music festival in the local park; booming bass could be heard from the surrounding houses.

One five-year-old girl who lived in the area had an idea. She had been to her school’s summer fête recently and looked longingly at the stalls. She loved the idea of setting up her own stall, and today was a good day for it.

“She eventually came round to the idea of selling lemonade,” her father André Spicer tells me. So he and his daughter went to their local shop to buy some lemons. They mixed a few jugs of lemonade, the girl made a fetching A4 sign with some lemons drawn on it – 50p for a small cup, £1 for a large – and they carried a table from home to the end of their road. 

“People suddenly started coming up and buying stuff, pretty quickly, and they were very happy,” Spicer recalls. “People looked overjoyed at this cute little girl on the side of the road – community feel and all that sort of stuff.”

But the heart-warming scene was soon interrupted. After about half an hour of what Spicer describes as “brisk” trade – his daughter’s recipe secret was some mint and a little bit of cucumber, for a “bit of a British touch” – four enforcement officers came striding up to the stand.

Three were in uniform, and one was in plain clothes. One uniformed officer turned the camera on his vest on, and began reciting a legal script at the weeping five-year-old.

“You’re trading without a licence, pursuant to x, y, z act and blah dah dah dah, really going through a script,” Spicer tells me, saying they showed no compassion for his daughter. “This is my job, I’m doing it and that’s it, basically.”

The girl burst into tears the moment they arrived.

“Officials have some degree of intimidation. I’m a grown adult, so I wasn’t super intimidated, but I was a bit shocked,” says Spicer. “But my daughter was intimidated. She started crying straight away.”

As they continued to recite their legalese, her father picked her up to try to comfort her – but that didn’t stop the officers giving her stall a £150 fine and handing them a penalty notice. “TRADING WITHOUT LICENCE,” it screamed.


Picture: André Spicer

“She was crying and repeating, ‘I’ve done a bad thing’,” says Spicer. “As we walked home, I had to try and convince her that it wasn’t her, it wasn’t her fault. It wasn’t her who had done something bad.”

She cried all the way home, and it wasn’t until she watched her favourite film, Brave, that she calmed down. It was then that Spicer suggested next time they would “do it all correctly”, get a permit, and set up another stand.

“No, I don’t want to, it’s a bit scary to do it again,” she replied. Her father hopes that “she’ll be able to get over it”, and that her enterprising spirit will return.

The Council has since apologised and cancelled the fine, and called on its officials to “show common sense and to use their powers sensibly”.

But Spicer felt “there’s a bigger principle here”, and wrote a piece for the Telegraph arguing that children in modern Britain are too restricted.

He would “absolutely” encourage his daughter to set up another stall, and “I’d encourage other people to go and do it as well. It’s a great way to spend a bit of time with the kids in the holidays, and they might learn something.”

A fitting reminder of the great life lesson: when life gives you a fixed penalty notice, make lemonade.

Anoosh Chakelian is senior writer at the New Statesman.