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3 February 2022

Rishi Sunak’s help comes far too late for Britain’s fuel poor

Ahead of the energy price cap rising, people and businesses are already struggling to keep the lights on.

By Anoosh Chakelian and Josh Rayman

Under a sky streaked with purple and red, it is the eve of the energy price cap rise on Ripple Road in Barking and Dagenham, a residential slice of suburbia in outer east London.

Pebble-dashed houses, a car dealership, petrol station and local cemetery surround the red-brick Elizabethan manor of Eastbury House, a Grade I-listed National Trust property whose multiple chimneys overlook the quiet streets.

This spot is ground zero of the energy price squeeze.

It is the most fuel-poor locale in the borough with the highest levels of fuel poverty in England. Residents here are already struggling with higher energy bills, and cannot even contemplate prices rising any more.

The regulator Ofgem has announced that the energy price cap will rise by £693 in England, Wales and Scotland from April. Bills for the average customer will go up to £1,971.

This is far higher than the last biggest increase, which was £139 per customer on average in October 2021. The cost is “catastrophic”, said Simon Francis of the End Fuel Poverty Coalition. “Everything else we’ve ever seen before pales into insignificance.”

“It’s a ridiculous increase,” said Barry Alver, 28, who has run the Ripple Market off-licence for four years. Its name shines out on to the street in neon red and blue. Schoolkids in blazers queue to buy snacks – he asks after their parents by name. “If she needs anything, just let me know.”

Showing me his January bill, which he had been poring over behind the till – sandwiched between cascades of chewing gum and shelves of every spirit imaginable – he said he was facing a “100 per cent rise”.

He has four freezers and three fridges to run. He cannot pay his latest bill.

“I can’t do this price,” he said. “It’s a big problem, I’m going to have to call them or try and change supplier – but I know it’s going up for everyone.”

Inflation has already increased the price of the products he sells, and higher energy costs add to the burden on his customers.

“My customers come in here to top up their keys and cards for electric and gas, and they say they used to pay £10 and now it’s £20. It’s really hard for them, and this isn’t the most affluent part of the country.”

Now, a new energy price cap, which takes effect in April, will affect 22 million households in England, Wales and Scotland.

The government is unveiling schemes to use loans to defer the full costs and relieve the pain in the short term – briefing that there will be a £200 rebate for every household, and help for the poorest via the council tax system – but these may not arrive in time for many customers already choosing between heating and eating.

“If it’s talking about a £200 rebate, that still leaves you with a £493 rise – what’s that going to do?” asked Francis.

“Maybe a couple of thousand people will be kept out of fuel poverty by that, but it’s just really playing with statistics when this is actually the lives of our kids and the health and wellbeing of our elderly that are going to be absolutely decimated by this rise: there’s just no way people can afford it.”

A “full package of measures”, including a windfall tax on the profits of energy firms, and “acting now” to control people’s bills would be more likely to help, he argued.

The latest government data, released last year, reveals a shocking proportion of the country are already struggling to afford to heat their homes. An estimated 13.4 per cent of English households were in fuel poverty in 2019 – meaning that they were below the poverty line and living in a property with an energy efficiency rating of band D or lower.

Barking and Dagenham is the local authority with the highest rate of fuel poverty in England, at 22.5 per cent of households. It’s followed by Stoke-on-Trent (21.8 per cent of households), Newham (21.7 per cent) and Birmingham (21.2 per cent).

When looking at parliamentary seats, households in Labour voting areas have a higher proportion of fuel poverty.

Yet Conservative constituencies are deeply affected too. At a food bank in Boris Johnson’s constituency of Uxbridge and South Ruislip, Hamdi, 28, a local resident and mother of a two-year-old, told me in September 2021 ahead of the October price rise that she had already built up £500 worth of debt to her gas company.

“I’m turning off all the wall sockets,” she said in desperation. “I’m really worried about gas and electric.” She was having to use mobile phone data to access an IT course she was attending five days a week because she couldn’t afford wi-fi or a laptop. She couldn’t even afford to have a television at home.

Johnson’s constituency is an outer west London suburb, with some similarities to Barking and Dagenham. Urban households are slightly more likely than rural ones to fall below the fuel poverty line, with converted flats and older terraced houses the most likely type of property, due to poor energy efficiency.

People in the private rental sector are more than three times as likely as those who own their own home to be in fuel poverty. Just 8.2 per cent of owner occupier households are fuel poor, compared with 26.8 per cent of private renters.

You can find out the proportion of households in your neighbourhood using the tool below:

Fuel poverty has long affected millions across Britain. But the latest rises, alongside record inflation rises, the £20-a-week cut to Universal Credit and a looming National Insurance tax rise, make last-minute concessions from ministers unlikely to make people feel comfortable about the cost of living.

“I’ve never seen anything like this before,” said Barry Alver. “The government should talk to the energy companies and try and stop this happening. They should help business again. They helped us out once during the pandemic but I know they wouldn’t really help us again.”

[See also: Why the cost of living has increased more than the ONS says]

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