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Winter heating crisis: how fuel spikes have created an eight-year high


For people who were already in poverty before the pandemic, the past 18 months have hit particularly hard. Many have had to deal with a drastic reduction in income as a result of loss of employment, and those on benefits now face the combined blow of a £20 cut to universal credit, inflation at its highest rate for 10 years and a major hike in fuel prices. It is, says Matt Copeland, head of policy affairs at National Energy Action, a “toxic cocktail”.

Indeed, a study by the Legatum Institute found that 700,000 people had already been plunged into poverty in 2020. Many people who relied on casual work were suddenly unemployed and ineligible for furlough schemes during this period, exacerbating the problem.

Between 1 April 2020 and 31 March 2021, the Trussell Trust’s network of food banks distributed 2.5m emergency food parcels – an increase of a third on the previous year and a 128% increase on the same period five years ago, as tens of thousands found themselves using a food bank for the first time.

“If somebody is unable to afford food, the likelihood is that they are already struggling to afford heating and their core utilities, as well as other things, including their accommodation costs and personal hygiene items,” says Emma Revie, chief executive of the Trussell Trust. Even before the rise in fuel prices, she adds, 95% of people in need of assistance from food banks were already experiencing destitution.

But as the cost of natural gas soars, there are fears that far more households will be thrown into fuel poverty. This term can be defined a number of ways, but one definition is a household that spends more than 10% of net income on energy bills. By this measure, 2.5m households were already in fuel poverty in 2021, and a study by York University predicts the figure will rise to nearly 3.5m this year.

Those households will be faced with what Simon Francis, coordinator of the End Fuel Poverty Coalition, describes as the “terrible choice” between turning on the heating or paying for food.

Boxout

“Certain groups are more likely to fall through the safety net than others,” says Revie. Disabled people, she says, are significantly overrepresented at food banks. But families with multiple children are badly affected too, due to the combined costs of cooking regularly for more people and keeping the house warm.

Those on the frontline are already observing this play out. Between mid-October and mid-November, the Citizens Advice Bureau (CAB) says it saw a 10% increase over the previous month in people seeking referrals for food banks and for extra charitable support, including for toiletries and other essentials. Kayley Hignell, head of policy for Families, Welfare and Work at CAB, says that since the cut to universal credit, advisers have seen an increase in people needing crisis support. “That means food bank referrals so families can put a meal on the table and fuel vouchers so they can have the heating on,” she says.

Others are in extremely desperate situations due to the overlapping effects of illness and poverty. Hignell cites as an example a cancer patient referred to CAB who is only able to afford to heat one room in their house because money is so tight following the universal credit cut. “They’re struggling to afford healthy food and are worried about rising bills this winter,” she says.

But the rise in natural gas prices doesn’t just mean higher bills. Twenty-eight energy suppliers went out of business in 2021, with potentially devastating repercussions for those behind on their bills. When user debt from those suppliers is transferred to an administrator, different rules can apply, says Copeland: “While an energy supplier has to have detailed conversations with you to make sure you’re able to pay, and that you’re on a reasonable debt repayment plan, you could just be visited by the administrator and asked for the money, and debt collection agencies can get involved very quickly.”

Further, says Copeland, if a household uses a prepayment meter, and their supplier goes out of business, the infrastructure allowing them to top up their meter may stop working – leaving them with no energy.

Households on low incomes are entitled to apply for the government’s Warm Home Discount Scheme, a one-off £140 discount to electricity bills for households on low incomes. If the discount has been agreed with the supplier, but not yet paid, however, and the supplier goes bust, there is no guarantee it will be transferred to the new supplier, says Copeland.

Only limited help is available. The £500m Household Support Fund and the Cold Weather Payment of £25 for each seven-day period of very cold weather were introduced to help poorer households. They will make a difference, says Copeland, but not enough. Food banks in the Trussell Trust network also help by signposting users to specialist welfare advisers who make sure they are receiving their full entitlement. But, says Revie, even the full entitlements available can often not be enough in practice. “We’re seeing people at food banks who have their maximum entitlement or who have secured everything they can and are still not able to afford those essentials,” she says.

Revie is deeply concerned about what the next year may have in store for those on the brink of destitution. “Emergency food parcels are a sticking plaster,” she says. “We know [demand] is driven by people not having enough money. A substantial rise in energy prices for households who are already struggling will have a catastrophic impact – I think we can’t really overstate it.”



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