PM urged to give support to millions of households set to struggle with energy costs this winter
Rishi Sunak is under growing pressure to provide support for millions of households expected to struggle with energy costs this winter.
More than 140 charities and organisations are urging the prime minister to avoid a “costly sticking plaster” and support Britons against “once unthinkable” prices.
Energy bills are set to be about 13% more expensive on average than they were last winter, which were the highest in living memory.
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As a result, a third of British adults expect to struggle to afford their heating bills over the winter months without government support, according to a survey for National Energy Action (NEA).
In an open letter, a coalition including NEA, Age UK, Citizens Advice and MoneySavingExpert calls on the government to act.
“With winter fast approaching, short-term, targeted support is needed to protect the most vulnerable households in and on the edge of fuel poverty,” they wrote.
“These are people whose bills have become so unaffordable that they are having to make the desperate choice nobody should have to make – between heating and eating.”
It adds: “This is a long-term problem that requires a sustainable safety net for these people. Anything else will be a costly sticking plaster.
“There’s now a significant risk that no new protections will be in place by the time they are desperately needed.
“One of the most effective ways the government can address this enduring challenge is through the introduction of comprehensive targeted energy support, sometimes referred to as a social tariff.
“This would provide a deeper price protection for all households struggling with their energy bills.”
Rishi Sunak is facing calls to give support. Pic: AP
Prices are set to rise despite the price cap falling from the current £2,074 to £1,923 from 1 October for the average dual fuel customer, the letter warns – with costs still more than 50% higher than pre-crisis levels.
Last year, the Energy Price Guarantee limited average bills to £2,500 per year and each household received a further £400 over six months to offset soaring costs.
These measures brought the average monthly cost of energy down to £141, but unless further support is announced, average costs from October to December 2023 will rise to £160.
NEA figures suggest 6.3 million households will be in fuel poverty from Sunday, which is an increase of more than two million since 2021.
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Energy cap: ‘All options’ on table
Martin Lewis, founder of MoneySavingExpert.com, said: “A typical house now pays a once unthinkable, still unaffordable, £2,000 a year for energy – worse, this winter people won’t get the £400 support they did last.
“The energy market is broken – the limited competition there is hardly impacts what people pay.
“Even when there was competition, it failed many elderly or vulnerable people unable to take advantage of deals.
“That’s why I’ve long supported a social tariff. It’s why I was excited when the government said it’d bring one in.
“Now I’m despairing at the deafening silence of inaction. This isn’t trivial, it’s a core well-being issue for millions. The government needs to pull its bloody finger out.”
A Department for Energy Security and Net Zero spokesman said: “We recognise the cost of living challenges families are facing and spent £40bn paying around half a typical household’s energy bill last winter.
“While energy prices are falling our Energy Price Guarantee remains in place to protect people until April next year.
“We are also providing additional targeted support for the most vulnerable, with three million households expected to benefit from the £150 Warm Home Discount and millions of vulnerable households will receive up to £900 in further cost of living payments.”
The spokesman added that the government continues to “keep all options under review for those most in need”.
Business
Vivergo: How US-UK trade deal could bring about collapse of huge renewable energy plant in Hull
The smell of yeast still hangs in the air at the Vivergo plant in Hull but the machines have fallen quiet.
More than 100 lorries usually pass through here each day, carrying 3,000 tonnes of wheat. It is milled, fermented and distilled. The final product is bioethanol, a renewable fuel that is then blended into E10 petrol.
This is a vast operation. It took several years to build, with considerable investment, but it is on the verge of closing down. Management and staff are holding out for a last-minute reprieve from the government but time is running out.
It’s been a turbulent journey. The plant was already being annihilated by US rivals, losing about £3m a month. Vivergo and Ensus, based in Teesside, blamed regulations that enable US companies to earn double subsidies.
They were pushing for regulatory change but then a killer blow: The US-UK trade deal, which allows 1.4 billion litres of American ethanol into the UK tariff-free (down from 19%).
“We’ve effectively given the whole of the UK market to the US producers,” said Ben Hackett, managing director at Vivergo.
“If we were to have the same support that the US industry has, if we could use genetically modified crops, we wouldn’t need that tariff. We would be able to compete. If we had the same energy costs. We wouldn’t need those tariffs.”
The government has the weekend to come up with a plan that could keep the business running. If it fails, Vivergo will begin issuing redundancy notices to its 160 staff.
Ben Hackett
It’s a devastating prospect for workers, many of them live in Hull and are nervous about alternative opportunities in the area.
Mike Walsh, a logistics manager who has been working at the plant for 14 years, said: “It’s not a great place to be at the moment. It’s a very well paid, very high-skilled role and they’ve (Vivergo) given everybody an opportunity in an area that doesn’t pay that well…. The jobs market isn’t as good as what people would like. So it does impact the local economy.”
He called on the government to “help us, save us, give this industry a future”.
His colleague Claire Wood, lead productions engineer, said: “I moved here after a career in oil and gas for 10 years, partly because I want to be part of the transition to renewable fuels. I can see so much potential here and it’s absolutely devastating to know that this place might be closed very, very shortly and that all that potential just goes away.”
Thousands more could be affected. Haulage companies may have to lay off truck drivers and farmers could also suffer a blow.
Vivergo makes bioethanol using wheat. That wheat is bought from farms from Yorkshire and Lincolnshire.
Claire Wood
The National Farmers Union has sounded the alarm, saying: “Biofuels are extremely important for the crops sector, and their domestic demand of up to two million tonnes can be very important to balance supply and demand and to produce up to one million tonnes of animal feed as a by-product.”
Another bioproduct is carbon dioxide. The gas can be captured and used to put the fizz in drinks or injected into packaging to preserve food.
If Vivergo and Ensus were to go, Britain would lose as much as 80% of its output of carbon dioxide. Supplies are already tight across Europe, meaning this decision could compound shortages across a range of sectors, from meat-packing to healthcare.
The industry is calling on the government to help. Vivergo says it needs temporary financial support but that the government must create a regulatory and commercial environment in which it can thrive.
It says rules that award double subsidies to companies that use waste product in their bioethanol must be changed. At present, these rules are being used by US companies that make ethanol from Uldr – a by-product of processing corn. They argue this is not a genuine waste product.
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Another option is to grow the market. Industry leaders are calling on ministers to increase the mandated renewable fuel content in petrol from 10% to 15% and for an expansion into aviation fuels. That would allow British companies to carve out a space.
The government has been locked in talks with the company since June.
It said: “We will continue to take proactive steps to address the long-standing challenges it faces and remain committed to a way forward that protects supply chains, jobs and livelihoods.”
However, the time for talking is almost over.
Mr Hackett said he had no idea how the government would respond but he was firm with his stance, saying: “In times of global uncertainty, losing that energy certainty and supply from the UK is a problem.
“I think what they’re missing out on is the future growth agenda. We’re the foundation on which the green industrial strategy can be built. We make bioethanol that today decarbonises transport. Tomorrow it will decarbonise marine. It will decarbonise aviation.”
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