David Cameron should freeze energy bills to help freezing pensioners

With excess winter deaths up by 29% and bills up by £300 since the election, it's time for the government to act.

Winter in Britain has traditionally been a major public health challenge, with temperatures dropping and a spike in the number of people falling ill, having accidents, going to A&E, or even succumbing to the cold. But two chilling statistics out this week show us all too clearly that Britain can do better than this.

First it was revealed that episodes of hypothermia have jumped by 40% over the three years since the 2010 election. Doctors treated more than 28,000 cases in NHS hospitals in England last year alone. Then on Tuesday, we learnt that there was a 29% surge in the number of people who died unnecessarily last winter.

The technical term for the figures published by the Office for National Statistics is 'excess winter deaths' – this is the number of additional deaths that occur during winter months compared to the rest of the year. In total, 31,100 more people died between December and last March. That’s 31,100 deaths that by their very definition were entirely preventable.

This isn’t just a one-off that can be explained away by a single cold winter. It’s reflective of the huge pressures being felt across our NHS because people are struggling to keep themselves warm. For every person who tragically loses their life over the winter months, eight more have to be admitted to hospital. That works out at just under a quarter of a million extra patients at a time when David Cameron has put our A&E services into crisis.

Our NHS spends a staggering £850m each year treating winter-related diseases brought on by cold housing. And that’s the key point. According to the World Health Organisation, as many as 30% of excess winter deaths are directly caused by people living in homes that aren’t warm enough.

There are three things the government should be doing right now to address this very serious problem. First, we can’t combat fuel poverty without addressing the fact that our energy market is broken and too many people are being charged sky high prices for their gas and electricity. Energy bills have gone up by £300 since the last election and a typical household now pays an eye-watering £1,400 a year. But while wholesale energy prices have risen just 1.6% since 2011, the Big Six energy giants have hiked prices by an average 10.4% a year over the same period.

That’s why Labour has pledged to freeze gas and electricity prices, break up the Big Six and reset the market to deliver fairer prices in the future. We would also move all pensioners aged over 75 onto the cheapest energy tariff. When over 80% of the people who lose their lives in winter are 75 or older, it makes sense to do this for the age group most vulnerable to cold weather and least likely to be able to access the cheapest energy deals online.

Second, we need to tackle the cost of living crisis. It’s no surprise many people feel nervous about turning their thermostat up when households are £1,600 worse off since 2010 and prices have risen faster than wages in 40 of the last 41 months. That’s why we need to put money in people’s pockets by incentivising firms to pay a living wage, extending childcare and building an economy that works for working people.

Third, much more needs to be done to improve the thermal efficiency of our homes. It’s no coincidence that the region I represent, the North West, has both the highest rate of excess winter deaths and one of the deepest levels of fuel poverty in the country. Ultimately, the best way to help people who can’t afford to properly heat their homes is by reducing the amount of gas and electricity they need to use in the first place.

But as a country we have some of the most energy inefficient domestic properties in Europe. Conversely, countries like Germany, the Netherlands and across Scandinavia have far lower levels of winter mortality than the UK despite many of them having a much harsher winter climate. Take Sweden for instance. The weather there is 7 degrees colder on average, but a home in Dudley uses 4 to 5 times more energy than a typical house in Malmo.

Yet progress in insulating our homes under this government has been utterly lamentable. More than 10,000 people were supposed to sign up to the Green Deal this year, but only 219 have had measures installed so far under the flagship energy efficiency scheme. Its twin ECO scheme is poorly targeted and estimated to lift just 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.

It’s time David Cameron took some real action to help people most threatened by the cold this winter. Too many pensioners will be freezing tonight - the Prime Minister would do far better to freeze energy bills instead. 

David Cameron during a press conference held on the second day of the Commonwealth Heads Of Government Meeting (CHOGM) in Colombo in Sri Lanka on 16 November 2013. Photograph: Getty Images.

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

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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation