The ‘government needs to go “much further and fast” on its forthcoming Warm Homes Plan’

With another rise in gas and electricity bills confirmed for the new year, there is mounting pressure on the government to take action.

After a decline in the price cap in April and July 2024, rates increased in October and will rise again in January. From January 1 to March 31, 2025, gas prices will be capped at 6.34p per kilowatt hour (kWh), and electricity at 24.86p per kWh. The annual bill for a typical dual-fuel household will increase to £1,738, a £21 rise from the previous cap.

Anti-poverty campaigners are concerned about the impact of these rising costs, especially as energy debt levels reach record highs. Figures by the End Fuel Poverty Coalition show that the total energy debt (which is 91 days or more overdue) had risen to £3.3bn by end the first quarter of 2024, up from £3.1bn at end of Q4 in 2023, and up 57% (from £2.2bn) at the same point in 2023.

The End Fuel Poverty Coalition previously revealed that one in five (18%) of households in energy debt are turning to illegal money lenders to pay for their bills and other everyday essentials.

Compounding the issue, the government has scrapped winter fuel payments of up to £300 all pensioners except those on pension credit and certain other benefits. Labour attributes this decision to the £22bn budget shortfall inherited from the Conservatives.

Jonathan Bean, from the group Fuel Poverty Action, warned that how with temperatures plunging, millions face a brutal winter without heating as prices remain high and pensioner support is cut.

“NHS and care systems will be overwhelmed as people get sick and thousands die in cold homes. Ofgem and the government are allowing big energy firms to profit from our misery instead of protecting us. Urgent action is needed to end cruel standing charges and introduce fairer energy pricing,” Bean warned.

Peter Smith, director of policy and advocacy at National Energy Action, note how the current cold spell is already having a devastating impact on the most vulnerable people.

“With unaffordable energy bills and far less support available nationally this winter, millions of people are already rationing their energy use to dangerous levels or getting deeper into debt trying to keep warm. With increased wholesale prices in the last few months, it is no surprise that there will be no let-up in the unaffordable cost of energy. The most vulnerable people will sink into further difficulties and acute hardship.”

The government was elected on a promise to deliver warmer homes with lower energy bills for families across the country. In its election manifesto, Labour introduced a Warm Homes Plan, a promise to upgrade five million homes over the next five years. This will be achieved through the introduction and renewal of funding schemes and grants and by working with combined authorities, local and devolved governments to boost home improvement measures, such as insulation, solar panels and low carbon heating.

Friends of the Earth is urging the government for an urgent and comprehensive strategy to upgrade poorly insulated homes, which contribute to high energy bills and leave many in cold, damp conditions during winter.

Sana Yusuf, a campaigner from Friends of the Earth, said:

“The rise in inflation this week, driven primarily by climbing energy prices, shows why upgrading our homes goes beyond lifting people out hardship and protecting the planet – it makes economic sense too, as it will leave people with more of their hard-earned cash to spend.

Yusuf says the government needs to go “much further and fast” on its forthcoming Warm Homes Plan, by “committing to spend £6bn a year on a national insulation programme, targeted in the areas most in need first. It’s only with this level of investment that we can end the scourge of cold homes for good.”

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