Here is the sure sign of a government in a death spiral, devoid of ideas, plans or solutions. Can they really stand by and do next to nothing while shocking energy bills land this month? Already the poorest people on expensive prepay meters find their electricity running out at the speed of light. If it’s bad now, “a truly horrific winter” lies ahead, warned energy companies in parliament this week. Bills will shoot up again in October, just as people turn up their heating.
The government’s response has been nugatory, its mean mitigations mostly in loans that only stoke future problems for households: high energy prices are not set to be a brief spike. When energy companies warn that some 40% of households will fall into fuel poverty, with thousands telling them already about their inability to pay, inaction is not an option. Food banks are already overwhelmed, with long queues for the most basic of supplies. Laissez-faire is unthinkable.
There are solutions, short and long term. Here is a particularly imaginative one, from Fuel Poverty Action, which would reverse the perversities in current pricing. Give everyone a minimum quantity of free energy, paid for by ending fossil fuel subsidies and by windfall taxes, then via higher prices on profligate energy use. Taking this idea, I’d suggest the minimum should be enough to just about manage frugally in a small home and you would then raise the tariff on a steep gradient for all extra energy used, so big properties and heavy users pay higher and higher rates the more they use, covering the cost of the free energy. The incentive for everyone would be to cut back as much as they could, so high-earners who never bothered about it before would find energy extravagance exorbitant. They too would soon be turning off lights and devices on standby, using less water (energy intensive) and wearing more vests and jumpers.
The present system does the opposite. With standing charges, the lowest users pay the highest rates, those with prepay meters pay monstrous rates, and it tails off for high users the more they use.
This basic good idea can be adjusted in all kinds of ways: older people, and those who are sick or frail and have to stay home all day, would need extra allowances, extending the present warm homes discount scheme. The winter fuel allowance would be abandoned. I never thought dishing out cash according to age, regardless of income, was a wise distribution of funds. Other adjustments might be for most people to pay a little towards the first tranche of energy rather making it free, if that quells Tory instincts. It could be means-tested from the start. But a free first tranche is far more appealing, with a stronger incentive for more households to try to keep within its free ration. The vital point is to end the topsy-turvy nature of the current system, to charge those who can afford it more, encouraging everyone to use less.
Diane Skidmore, a 71-year-old woman living in a cold Lambeth council flat, is an activist with Fuel Poverty Action, and has started a petition to Boris Johnson to bring in this #EnergyForAll system. She is stunned by the shock effect of the energy price rise on neighbours in her block. “They can’t believe what’s happening to them, as their prepay meters keep running out,” she tells me. In her petition, she writes: “I am asthmatic, and many of us have health problems, as well as problems with our housing conditions … There are too many people who cannot afford or struggle to keep warm.”
Her petition points out that even before the pandemic and Ukraine-related price rises, the “excess deaths” each winter due to cold were high: according to the Office for National Statistics, there were 23,670 excess deaths in the winter of 2018-2019. The numbers signing up to her petition are pouring in.
Her plan is, of course, redistribution, like a basic income but for basic energy. No government will ever cover the entire cost of this energy price rise indefinitely, so one way or another, the unbearable cost has to be carried by the broadest shoulders. It’s better to do it by making everyone keenly aware of their own energy use than through subsidies paid from general taxes.
As the End Fuel Poverty coalition of environment and poverty charities points out, other energy saving has been all but abandoned. Ever since David Cameron flippantly cut “the green crap” and stripped out green subsidies on insulation, the number of homes getting loft or cavity wall insulation plummeted by 92% and 74% respectively.
The government has rejected Labour’s proposed windfall tax on soaring, unexpected energy profits: as Keir Starmer told the Commons, BP made £9.5bn and Shell £14bn, while the National Audit Office shows in some years the government paid more to oil and gas companies in tax relief than it received from them in taxes.
The recent white paper offered no new immediate help with bills nor any progress on energy efficiency, and only weak aspirations on renewable energy supplies, rejecting onshore wind. The New Economics Foundation welcomes Labour’s support for its Great Homes Upgrade, pledging to insulate 19m homes by 2030, the best possible “levelling up”. Insulation means training large numbers of people in jobs retrofitting Britain’s cold, damp housing, with the most deprived areas needing it most. Boris Johnson still has no roadmap to his 2050 zero-carbon pledge. Would he take up Diane Skidmore’s plan? I’m afraid pigs and flying comes to mind.
This article was amended on 23 April 2022 to make a clearer distinction between Fuel Poverty Action’s proposal for a minimum quantity of free energy, and the writer’s own ideas based on that proposal.
Polly Toynbee is a Guardian columnist