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On energy prices, we are not all in this together

The impact of rising energy costs will not fall equally across our society – we are not all in this together.

Connect Housing’s Martyn Broadest shares his thoughts on the cost of living crisis.

Sure – we will all notice the rising cost of gas and electricity, and the price of petrol at the pump.

Thankfully, many will have sufficient financial resilience to be able to adjust to these price rises. But for a significant and rapidly growing section of our community, this aspect of the cost of living crisis is about to hit very hard indeed and the impacts will be far reaching.

Martyn Broadest

Martyn Broadest

The choice facing many people of whether to “eat or heat” is a popular media soundbite at the moment. But as this crisis deepens into next winter, for many vulnerable people even that choice will be taken away from them. Heating will become a luxury many are unable to afford.

The issue is not just whether people are cold in their homes – the knock-on effects are profound. There are direct adverse health impacts associated with living in poorly heated homes, such as increased incidence of respiratory and cardio-vascular disease, exacerbated for older people and people with existing health conditions and disabilities.

Poorly heated homes are more likely to suffer from condensation and mould growth, potentially contributing further to adverse health impacts. Mental health is also likely to be affected by the stress of continual financial hardship, and by greater social isolation often associated with living in a cold home. Imagine too your children trying to concentrate on their school homework, whilst wrapped in blankets trying to stay warm in an unheated house. Their education is bound to suffer.

But energy is not just used for heating. Already we are hearing about people accessing foodbanks selecting Pot Noodles over fresh veg, because they perceive the costs of cooking the latter are unaffordable. Such choices leading to a poor diet and nutrition could also further exacerbate health inequalities.

Energy costs are also a material factor in the production, packaging and distribution of our food. We are all noticing rising prices on the supermarket shelves, and this will continue as increasing energy costs gradually filter through to the consumer, limiting further the choices people have on how to spend their hard-earned cash.

The impact on society therefore of not addressing high energy costs and fuel poverty effectively will be huge, and much of this burden will fall upon our already overstretched public services. Surely, we must now start to implement an effective prevention strategy to mitigate the worst effects of this crisis?

Firstly, and straight away, the Government should uprate social security benefits in line with the real level of inflation felt by people on the lowest incomes, who spend a far greater proportion of their incomes on the basic essentials and feel the impacts of rises in energy costs and food prices far more keenly than the average family. Not only will this support those families directly, but it will also support small businesses on our high streets, where that money will most often be spent.

Secondly, and within the next 12 months, the Government should legislate to change the way we pay for our domestic energy. Standing charges and flat tariffs (regardless of usage) should be replaced by a stepped tariff system, akin to how income tax works.

Everyone would get a basic allowance of energy which is charged at a subsidised nominal rate, affordable to people on low incomes. Above that basic allowance, the tariff charged rises in bands linked to higher energy use with the charges for the high users cross-subsidising the basic allowance band. Such an approach would both help to remove people from fuel poverty, ensuring they can enjoy a basic level of comfort, and also incentivise high users to invest in energy efficiency measures.

Thirdly, we need a serious national strategy to address the woeful condition of our housing stock, which is amongst the worst for energy efficiency in Europe. After all, the cheapest energy of all is that which we don’t use. Retrofitting homes properly is a complex business, but with a coherent and properly funded long-term plan, we can make real inroads into our energy use, create hundreds of thousands of highly skilled well-paid jobs, and help reduce UK carbon emissions by around a quarter in the process.

None of these measures is without cost. But I would argue that cost of not implementing these sorts of policies will be felt far more keenly in the longer term, and failing to invest now would be the worst form of government myopia.

Article originally published in The Yorkshire Post on April 26, 2022

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