I am writing to you to raise my concerns about the inaction of your government in relation to the looming energy price cap rise and in particular the impact on energy customers using prepayment meters.
As I am sure you are aware, the latest forecast for the energy price cap rise coming into force on 1st October is £3,582. Further to this, the forecast for the price cap in January 2023 is now £4,266. As a comparison, the price cap in February 2021 was £1,138. You can read more about the price cap forecasts here: https://www.cornwall-insight.com/price-cap-forecasts-for-january-rise-to-over-4200-as-wholesale-prices-surge-again-and-ofgem-revises-cap-methodology/
Should these forecasts be correct, and they are being revised up not down on a regular basis, it will mean that a typical user’s average bill will rise from £95 a month to £355 a month. This rise will not be sustainable for many previously financially comfortable families in your constituency who will experience fuel poverty for the first time. However, for those already struggling to make ends meet it is no exaggeration to say it will be a financial catastrophe and will lead to them choosing between heating or eating. We face the real prospect of your constituents dying of the cold this winter.
While the situation is dire for those of us who pay monthly via direct debit, it is even worse for those who have to pay for their energy in advance via a prepayment meter. There are around 4.4 million electric and 3.4 million gas prepayment customers in the UK. Prepayment customers already pay higher rates per unit of energy than anyone else, on the questionable pretext that they are more expensive to administer. It is just not right that the people in our constituency who can least afford to pay, are charged the highest rates for their energy. Even Keith Anderson, the CEO of Scottish Power, described this situation as ‘perverse’ during a House of Commons Business, Energy and Industrial Strategy Committee (BEIS) evidence session, which I note you attended. A link to the full session of evidence from various energy company CEOs can be found here: https://committees.parliament.uk/oralevidence/10102/default/ and the relevant quote from Kevin Anderson is below.
“Right now, people on a prepayment meter pay more, and that is perverse. A social tariff should be brought in to discount the price for people in fuel poverty and those on prepayment. The cost of that should be borne by those who can afford to pay.”Kevin Anderson CEO Scottish Power in evidence to the House of Commons BEIS Committee 19th April 2022
Further to this, unlike customers who pay by direct debit and can spread their costs evenly throughout the year, prepayment customers will face an instant and alarming hike in their energy prices from the moment the price cap comes into effect on 1st October. They will again have a further instant price shock when the predicted additional rise comes into force in January 2023. Prepayment customers are already very likely to be struggling financially and many will already be in energy debt, the reason for them being put on to prepayment meters in the first place. The option to change to a credit meter will not be available to the vast majority of these people, as they would be required to pass a credit check and pay off any outstanding debt to do so.
Should we have a cold winter, the consequences for the most vulnerable people within our constituency and across the UK do not bear thinking about.
Unfortunately, while many people are facing an unprecedented financial shock, our Prime Minister appears to have gone absent, seemingly in some sort of huff, while two leadership contenders appear more interested in outdoing each other in how many migrants they will be sending to Rwanda, or how they will ‘keep Brexit safe’. They appear totally out of touch with the current and pressing concerns of the electorate. They seem reluctant to discuss the issue, but the solutions they have suggested to date are totally inadequate. Income tax cuts will not benefit those in most need and a cut to the VAT on energy bills will be little help given the scale of the increase.
An emergency like this needs a collaborative approach and it cannot wait until September. I do acknowledge the considerable support that the government has provided to date and I set this out in my blog on the cost of living emergency here: https://julianvaughan.blog/2022/08/02/the-looming-cost-of-living-emergency/
However, the scale of the crisis has increased significantly since then and further, sustained support is required.
I ask that you urgently press for the following:
- An immediate package of support for prepayment customers across the UK.
- The provision of a ‘social tariff’ for those in fuel poverty and on prepayment meters – I know you are aware of the details around this as it has been discussed in BEIS Committee evidence.
- A further ‘windfall tax’ on the energy companies to offset the costs of the above.
- A commitment to adequately insulate the UK housing stock. The government currently has no coherent approach to this following the abject failure of the ‘Green Homes Grant’ scheme.
Finally, without comprehensive financial support, it is likely that many people will simply be unable to afford to heat their homes. I understand that discussions are being held around the UK about the provision of communal ‘warm places’ to help those unable to heat their homes this winter. Would this be something that the Conservative Club in Biggleswade would be able to provide?
I look forward to hearing from you on this urgent matter. Please regard this as an open letter.
Julian Vaughan to Richard Fuller, MP for NE Bedfordshire via email on 10th August 2022
Fuel Poverty in the UK: House of Commons Library https://commonslibrary.parliament.uk/research-briefings/cbp-8730/
Energy Bills and tariff Caps: House of Commons Library https://commonslibrary.parliament.uk/research-briefings/cbp-8081/
Citizens Advice letter to the BEIS Committee on changes to the Energy Bills Support Scheme June 2022 https://www.citizensadvice.org.uk/Global/CitizensAdvice/Energy/Energy%20Consultation%20responses/20.06.22%20Citizens%20Advice%20response%20to%20BEIS%20letter%20on%20changes%20to%20the%20Energy%20Bills%20Support%20Scheme.pdf
Government Support – cost of living factsheet May 2022 https://www.gov.uk/government/publications/government-support-for-the-cost-of-living-factsheet/government-support-for-the-cost-of-living-factsheet
2 thoughts on “A letter to my MP on the looming energy bills catastrophe”
UK democracy is a myth. The media knows it, the political class knows it, and I think more and more of the public now know it. OECD countries like the UK are plutocracies with some superficial democratic features (managed elections, pro forma parliamentary processes, corrupt/coopted institutions, etc.).
A vote for any mainstream party (Labour, Cons, Greens, Libdems, etc.) is a vote for the status quo. I see direct democracy as the only way out of this personally.