Rocketing fuel and energy bills, forecasts of double-digit inflation, and rising interest rates mean misery for many families. And unless there is urgent action from Government, the situation is only going to get worse (writes NASUWT’s Dr.PATRICK ROACH).
Teachers and schools leaders do not need to be reminded of the stark effects of this crisis on their pupils and in their own lives.
They see it every day in their schools and in their classrooms.
Children whose parents find themselves in insecure jobs and are struggling to make ends meet. Many relying on food banks and struggling to pay their bills. Hungry pupils can’t concentrate on their learning and the knock-on effects on behaviour are making a challenging job even more stressful.
Schools are struggling as they find themselves taking on more to try and support children, work which was often supported by local authorities but is no longer provided due to austerity.
Teaching has become even more challenging because of deep cuts to school budgets, the loss of vital support for children and families and a crisis of teacher and headteacher recruitment and retention.
Despite ministers’ promises to protect education, in the last decade education spending has fallen by 10%. And the salaries of teachers has fallen too – across the board, teachers’ pay has been slashed by at least 19% since 2010.
Many teachers are relying on credit cards, overdrafts and some are even using the same foodbanks their pupils’ families rely on as well. Around one in ten teachers work second jobs and many more are worried about their financial situation.
And in addition to the cost of living crisis, there is a wellbeing crisis caused by extreme workload pressures.
However, at the Department for Education, ministers are presiding over a system where teachers and headteachers are at breaking point. Unless action is taken now, a desperate situation is set to become even worse.
Already, one in three student teachers choose not to enter the profession after they’ve qualified because of the stress of the job and 40% of new teachers leave within five years.
The latest data from our own ‘Big Question’ survey found that two-thirds of teachers are seriously considering quitting the profession – citing workload, wellbeing and pay as key reasons.
More headteachers are leaving and fewer and fewer teachers are wanting to take their place.
Perhaps not surprisingly, nine in ten teachers we surveyed report that their job has adversely impacted their mental health in the last year and a disturbing 3% have self-harmed and are experiencing a severe mental health crisis because of the job.
And on top of that we have the growing problem of Long Covid which is a ticking time-bomb in our schools.
As part of our campaign, we’re calling on the Government to recognise that a world-class education system needs highly motivated teachers working in world-class schools and colleges.
To that end, we want to see:
a substantial real-terms pay rise for every teacher,
an enforceable contractual working time limit for teachers,
the right to switch off and disconnect from work at the end of the day and at weekends,
the ending of fire and rehire practices,
banning zero-hours contracts,
equal rights for supply teachers
scrapping the link between performance and teachers’ pay,
and safer workplaces underpinned by safe and respectful working practices.
We will be highlighting these demands at the national demonstration that takes place in London on 18th June, where teachers and workers from across the public and private sectors will be demanding action on the cost of living crisis, a decent pay rise for workers and a better deal for all working people.
It’s time for the Government to understand that the situation needs to change. Teachers are demanding change and so are parents and the general public.
Spread the word: be there on June 18th – join us, join in, and help win a better deal for teachers.
More information about the national demonstration can be found here.
Governments across the world are raising wages, cutting tax and announcing hefty financial aid packages for people and workplaces affected by the energy crisis (writes TUC’s NINA REECE):
War in Ukraine is exposing the cracks in a global energy system that privileges profit over people and the climate and is too reliant on international trade in fossil fuels. The result is a massive increase in energy costs that is hurling people into poverty while energy companies announce another year of eye-watering profit.
But the Conservative government’s decision not to help the people or sectors most affected by the energy crisis is the exception, not the rule. Here is how other governments across Europe are providing support.
Germany
In Germany, €16billion (£13.4billion) has been made available to ease the burden of rising costs. The support package includes a €9 pass for commuters, giving them a month’s unlimited use of public transport. Making public transport more accessible in the UK is key to reaching our emissions targets.
There is a one-off €300 tax cut for individuals, extra discounts for low-income families and fuel taxes will be cut for three months, with the price per litre cut by €0.30 for petrol and €0.14 for diesel.
Importantly, this package includes a commitment to reducing German reliance on gas, oil and fossil fuels long term.
Germany is also set to raise the national minimum wage by 15 per cent, benefitting nearly 6.2 million low-paid workers – two thirds of them women – giving Germany the second-highest minimum wage in Europe. The rise, agreed as part of the coalition deal, will also cover self-employed and flexible workers.
Nordic countries
A six million Swedish kronor (£473m) pot was set aside by the Swedish government to soften the impact of soaring bills. This may not sound like a lot, but with population that is fraction of that of the UK – it is significant. The government has also issued winter bill subsidies of up to 6000 kronor (£488) for 1.8m households from winter into 2022.
The Norwegian government’s package of measures to help households totals more than eight billion kronor (£664m). In January, Norway even committed to covering 80 per cent of electricity costs for a short period whenever the rate for electricity is above 70 Norwegian øre (6p) per kilowatt-hour.
France
President Macron is targeting energy companies.
EDF, the state energy provider, will charge electricity at below market rate and will take an €8.4bn financial hit. It has also been ordered to sell nuclear power to rivals at below current market rate as its reactors generate 70% of the country’s electricity.
This month, the CEO of Total Energie has also announced a freeze on dividends. In the UK, despite massive profits, no caps or restrictions have been placed on the Big Six energy providers.
The French government has also cut electricity taxes in a bid to slow the increase to bills. While here in the UK, gaps in the Chancellor’s support package means the energy crisis will hit the poorest families the hardest, in France 5.8million low-income households were given a €100 payment for energy bills in January this year.
Spain
The Spanish government’s €16billion response to the energy crisis is the most comprehensive. The focus is on curbing profits and protecting jobs.
Some €2billion will be raised from a windfall tax on energy providers. €500million in subsidies will be provided for electricity-intensive industries and companies that receive this aid won’t be able to dismiss staff to balance out their rising energy costs.
€10billion of state loans will also be given to companies in other industries who are forced to spend more on energy. There is protection for truckers and professional drivers with €450million in direct aid for transport professionals.
And for families and individuals, a fuel sales subsidy of €1.4billion will reduce prices by €0.20 a litre, making a full tank about €9 cheaper, far better than Rishi Sunak’s 5p cut to fuel duty which would take just £2.25 off the cost of a full tank.
These responses from other countries show that our government can do more to help families and industries survive what the Governor of the Bank of England calls a ‘historic shock’ to our living standards. Households currently face an annual energy bill of £2000 and prices are to rise again in October.
Sign petition to demand action from Rishi SunakRishi Sunak must come back to parliament and present an Emergency Budget. We need a proper package of economic support for families.
New analysis from the Joseph Rowntree Foundation finds households on low incomes will be spending on average 18% of their income after housing costs on energy bills after April.
For single adult households on low incomes this rises to a shocking 54%, an increase of 21 percentage points since 2019/20.
Lone parents and couples without children will spend around a quarter of their incomes on energy bills, an increase of almost 10 percentage points in the same period.
The analysis compares the household spend on gas and electricity bills of several different family types on low and middle incomes between 2019-20 and after the increase in April this year.
The chart shows the proportion of different households’ incomes that is spent on energy, in 2019/20 and after April 2022. The full analysis is available on request.
While there is little difference in the overall increase in bills from April, with all households facing an immediate increase of between around 40% and 47%, the difference in the proportion of household incomes these increases will represent is stark.
Middle-income households will be spending on average 6% of their incomes on energy bills, and no more than 8% for any family type considered.
The figures are released alongside JRF’s flagship state-of-the-nation report which reveals a worrying increase in the number of children growing up in very deep poverty.
Around 1.8 million children are growing up in very deep poverty, meaning the household’s income is so low that it is completely inadequate to cover the basics.[2] This represents an increase of half a million children between 2011-12 and 2019-20.
JRF is warning that without additional support, people already in poverty are likely to find a sharp increase in energy bills very difficult to cope with.
People living in deep and persistent poverty were already under constant pressure trying to afford food, bills and other essentials. With the impact of rising energy bills expected to be much harsher for families on low incomes, there is a clear case for targeted protections to prevent serious hardship once the energy price cap is lifted.
Following a cut to Universal Credit in the autumn, the level of support for people who are unable to work or looking for work remains profoundly inadequate. JRF is calling for an immediate emergency payment for people on the lowest incomes to help prevent hardship in the months ahead.
Katie Schmuecker at JRF said: “The reality for many families is that too many children know the constant struggle of poverty. The fact that more children are in poverty and sinking deeper into poverty should shame us all.
“The case for targeted support to help people on the lowest incomes could not be clearer. But this must go hand in hand with urgent action to strengthen our social security system, which was woefully inadequate even before living costs began to rise.
“Our basic rate of benefits is at its lowest real rate for 30 years and this is causing avoidable hardship. The Government must do the right thing and strengthen this vital public service.
“Rising energy prices will affect everyone, but our analysis shows they have the potential to devastate the budgets of families on the lowest incomes. The Government cannot stand by and allow the rising cost of living to knock people off their feet.”
Family type
Low income family
Middle income family
Proportion of income After Housing Costs spent on gas and electricity
Ppt increase
Proportion of income After Housing Costs spent on gas and electricity
Ppt increase
2019/20
April-Sept 2022
2019/20
April-Sept 2022
Working-age family with children (2)
10%
16%
6%
3%
6%
2%
…with couple parents
9%
14%
5%
3%
6%
2%
… with lone parent family
15%
25%
9%
4%
7%
3%
Working-age family without children (2)
19%
29%
11%
4%
6%
2%
…couple without children
14%
22%
8%
4%
6%
3%
…single adults without children
33%
54%
21%
5%
8%
2%
Pensioner family
10%
15%
5%
4%
7%
2%
All families
12%
18%
7%
4%
6%
2%
[2] Very deep poverty is defined as household income equivalent to or less than 40% of the average income for their family type in the UK. On average across all family types, a household in very deep poverty would have an income of £9,900 or less per year after housing costs, taxes and National Insurance contirbutions are deducted although this varies by family type as shown in this table.
Household type
Maximum household income after housing costs, taxes and NI
Average household income after housing costs, taxes and NI
Very deep poverty
Deep poverty
Poverty
Average income
Lone parent with two children, one 14 or over and one under 14
Annual
Weekly
Annual
Weekly
Annual
Weekly
Annual
Weekly
£11,900
£228
£14,900
£285
£17,900
£343
£29,800
£571
Couple with two children one 14 and over and one under 14
2022 is set to the ‘year of the squeeze’, with real wages set to be no higher next Christmas than today, and families face a typical income hit of around £1,200 a year from April as a result of tax rises and soaring energy bills, according to new Resolution Foundation research published today.
The Foundation’s latest quarterly Labour Market Outlook looks ahead to how workers and families will be affected by the big economic shifts in 2022.
It notes that while Omicron is rightly at the forefront of people’s minds at present, it is unlikely to be the defining economic feature of next year as the wave is expected to be relatively short-lived.
Instead, 2022 will be defined as the ‘year of the squeeze’ for family budgets, with inflation set to peak at 6 per cent in Spring 2022 (its highest level since 1992) and pay packets stagnating as a result.
The report notes that real wage growth was flat in October, almost certainly started falling last month, and is unlikely to start growing again until the final quarter of 2022. As a result, real wages are on course to be just 0.1 per cent higher at the end of 2022 than at the start.
By the end of 2024, real wages are set to be £740 a year lower than had the UK’s (already sluggish) pre-pandemic pay growth continued. This shows just how much the Covid-19 crisis has scarred pay packets across Britain, says the Foundation.
The peak of the squeeze will come in April, says the report, which risks being a cost of living catastrophe as energy bills and taxes rise steeply overnight.
The cap on energy bills is expected to rise by around £500 a year. Coupled with a further £100 rise to recoup the costs associated with energy firm failures, this could mean a typical energy bill rising by around £600 a year.
This rise will fall disproportionately on low-income families as they spend far more of their income on energy. The share of income spent on energy bills among the poorest households is set to rise from 8.5 to 12 per cent – three times as high as the share spent by the richest households.
Higher-income families will instead by disproportionately affected by rising tax bills in April. The average combined impact of the freeze to income tax thresholds and the 1.25 per cent increase in personal National Insurance contributions is £600 per household. For families in the top half of the income distribution, the NI rise alone will raise tax bills by £750 on average.
The Foundation says the scale of this April cost of living catastrophe, at a time of falling real wages, means the government is likely to have to act.
While there is little the Chancellor can do in the short-term to tame inflation or boost wage growth, the welcome 6.6 per cent rise in the National Living Wage next April should protect the lowest earners from shrinking pay packets.
The top priority for further action should be tackling rising energy bills, says the Foundation. Options for doing so include:
Reducing the size of the energy cap rise directly. Compensating energy suppliers for a six month, £200 reduction would cost around £2.7 billion, or £450 million if focused on lower-income households on Universal Credit.
Extending the time period over which the costs of supplier failures are recouped, with the £100 bill rise reflecting a policy of recouping costs over a single year.
Moving environmental and social levies currently added to electricity bills into general taxation, saving households £160 per year and costing up £4.5 billion per year.
Extending and increasing the Warm Homes Discount.
Torsten Bell, Chief Executive of the Resolution Foundation, said:“2022 will begin with Omicron at the forefront of everyone’s minds. But while the economic impact of this new wave is uncertain, it should at least be short-lived. Instead, 2022 will be defined as the ‘year of the squeeze’.
“The overall picture is likely to be one of prices surging and pay packets stagnating. In fact, real wages have already started falling, and are set to go into next Christmas barely higher than they are now.
“The peak of the squeeze will be in April, as families face a £1,200 income hit from soaring energy bills and tax rises. So large is this overnight cost of living catastrophe that it’s hard to see how the Government avoids stepping in.
“Top of the Government’s New Year resolutions should be addressing April’s energy bills hike, particularly for the poorest households who will be hardest hit by rising gas and electricity bills.”
RESEARCH SHOWS THAT BRITS WOULD FOREGO A WHITE CHRISTMAS AS ENERGY BILLS RISE
Almost seven in 10 Britons (68 percent) hope for a white Christmas each year
However, 62 percent admit they would prefer a warmer Christmas this year if it meant they could save money on their heating bills
Almost three quarters (74 percent) will consider using the heating less during the festive season in order to save money
Ever since Bing Crosby hit the airwaves in 1942 with Irving Berlin’s nostalgic song, ‘White Christmas’, snow-laden vistas and frosted windows have defined the perfect festive setting for many of us.
Yet whilst almost seven in 10 Britons (68 percent) continue to hold out hope for a snowy Christmas, new research has revealed that 62% would actually prefer a warm Yuletide if it meant they could save on their dreaded winter heating bills this year.
The research by home heating expert Alpha Heating Innovation comes as the collapse of further energy firms is predicted for the coming weeks, following the 22 suppliers which have already folded since September 2021.
With the energy price cap now expected to rise by over 40% next April, the UK is bracing itself for an increase in household bills and looking for ways to conserve home running costs.
As a result, almost three quarters (74 percent) would consider using the heating less during the festive season in order to save money.
Darran Smith, Technical Manager for home heating expert, Alpha Heating Innovation, commented: “With gas prices set to radically increase in 2022 and fuel poverty likely to extend far beyond the four million households already struggling to pay their energy bills, it is little wonder that most of us would happily forego a white Christmas.
“We are urging households to consider ways of keeping their heating bills manageable over the festive period and look to establish some good home heating habits now before the price hikes arrive.”
When it comes to the nation’s Christmas finances, a warm home features in the top three items which UK households prioritise (38 percent), along with presents for friends and family (53 percent) and festive food (52 percent).
The top 10 things Brits prioritise financially over the Christmas period:
1. Lovely presents for friends and family (53%)
2. Festive food (52%)
3. A warm home (38%)
4. Trees and decorations (29%)
5. Christmas lights (26%)
6. Alcohol (24%)
7. Posting gifts/cards (17%)
8. Days out (14%)
9. Nights out (13%)
10. Hosting Christmas parties (12%)
But there’s good news. Whilst gift budgets can be set and purse strings for food tightened, there are simple and efficient ways to save on heating bills without compromising on comfort.
Darran continues: “One of the best ways to heat your home economically is to learn how to control the settings of your heating system so it delivers the optimum temperature for your lifestyle and comfort level, while ensuring you only use the energy you need.
“Don’t waste energy on heating the whole house all night. If you have thermostatic radiator valves, turn them down or off in rooms that aren’t regularly used. Think about what room temperature you normally set and reduce it by just 1ºC – you won’t notice any difference but you can cut heating bills by up to £105 a year in a typical home.
“And finally, put on an extra layer such as that festive must-have: the Christmas jumper. Very simple; but it never fails to make a surprisingly big difference.”
For more practical tips on how to save on heating bills, visit:
An additional £18 million will be available this year to help householders install energy efficient measures and reduce their heating bills, bringing the total support available through Home Energy Scotland to £50 million in 2021-2022.
People in Edinburgh and across the country are being urged to seek support and advice from Home Energy Scotland to help make their homes warmer and reduce their heating bills, on average by up to £300 per year.
Financial support worth up to £5,000 is also available to make homes more energy efficient through improvements like home insulation or a new heating system.
Home Energy Scotland also supports households with practical advice and, where appropriate, install energy efficient measures – making homes more energy efficient and saving householders money.
Minister for Zero Carbon Buildings Patrick Harvie, said:“As the colder weather returns and given the concern around rising energy bills, we want to ensure people living in Edinburgh and around Scotland are aware of the support available to keep their homes warm this winter.
“Home Energy Scotland offers advice, support and funding to help people make energy saving improvements, helping them reduce their energy costs.
“The free impartial advice and support is available for anyone concerned about paying their energy bills and we would urge people struggling with their fuel bills to get in touch with Home Energy Scotland.”
Recent research by Home Energy Scotland shows that 70% of people in Scotland feel concerned about energy bills rising, with almost two thirds using more energy than usual during the first 12 months of the pandemic. The research also found that 59% of Scots have noticed a worrying rise in their energy bills already.
Harry Mayers, Head of Home Energy Scotland said:“24,000 households across the country including Edinburgh have already benefited from new energy efficient measures, like a new heating system or insulation, by getting in contact with Home Energy Scotland.
“But with people spending more time at home over the past 18 months due to coronavirus, energy usage has been greater than ever. We therefore want to be able to help even more people to make energy saving improvements to their home.
“A home that isn’t well insulated can lose more than 50% of its heat through its roof and walls so making improvements can help your finances and make your home more energy efficient, comfortable and cheaper to heat while helping lower emissions in Scotland”.
The UK Government sets out the background to the issue of wholesale gas prices and the action the it is taking to protect the UK’s energy supply, industry, and consumers:
There has recently been widespread media coverage of wholesale gas prices, and the effect this could have on household energy bills. The impact on certain areas of industry, and its ability to continue production, has also attracted attention.
This explainer sets out the background to the issue and the action the government is taking to protect the UK’s energy supply, industry, and consumers.
Natural gas prices have been steadily rising across the globe this year for a number of reasons. This has affected Europe, including the UK, as well as other countries around the world.
We have a diverse range of gas supply sources, with sufficient capacity to more than meet demand. The UK’s gas system continues to operate reliably and we do not anticipate any increased risk of supply emergencies this winter.
Why are there high global gas prices?
The prices that are currently visible reflect the high value being placed on gas at the present time, with prices being determined by global supply and demand. They are not necessarily representative of pre-existing contracts and therefore do not apply to all of the gas being consumed in the UK this winter.
Current prices reflect a number of factors including:
as the world comes out of COVID-19 lockdowns and economies reopen, we are seeing an uptick in global gas demand this year. *combined with a cold winter (which has an impact on gas demand as gas is often used for heating homes) this has led to a much tighter gas market with less spare capacity
in particular, high demand in Asia for Liquified Natural Gas (LNG), natural gas transported globally by ship, means less LNG than expected has reached Europe *some essential maintenance projects rescheduled from 2020 due to coronavirus coincided with necessary scheduled projects in 2021, while weather events in the US have adversely affected their LNG exports to Europe
How are high global gas prices impacting the UK?
The gas market is crucial to the UK’s energy supply because of its significance in heating, industry and power generation.
Over 22 million households are connected to the gas grid and in 2020, 38% of the UK’s gas demand was used for domestic heating, 29% for electricity generation and 11% for industrial and commercial use.
High gas wholesale prices have subsequently driven an increase in wholesale power prices this year.
In recent weeks, this trend has been exacerbated by the weather and planned maintenance at some power stations. This has resulted in unusually low margins for this time of year. These factors have combined to cause spikes in wholesale electricity prices, with a number of short-term markets trading at, or near, record levels.
While we are not complacent, we do not expect supply emergencies this winter.
Is our gas supply at risk?
The Great Britain (GB) gas system has delivered securely to date and is expected to continue to function effectively, with a diverse range of supply sources and sufficient delivery capacity to more than meet demand.
While our largest single source of gas supply continues to be the UK Continental Shelf (approximately 48% of total supply in 2020), the maturity of that source means we have to supplement supply from international markets.
Whilst the diversity of those international sources promotes our energy security, by reducing reliance on a particular source, the UK – as with other nations – is exposed to global trends in supply and demand which affect the price of gas traded at UK’s market hub (the National Balancing Point).
We have a wide range of supply sources including direct pipelines across the North Sea from Norway to the UK, our single biggest source of imports. We are also investing millions into scaling up strong renewable energy capacity and driving down demand for fossil fuels.
GB also has a number of gas storage facilities that act as a source of system flexibility when responding to short-run changes in supply and demand.
What is the government doing on this?
Energy security is an absolute priority for this government. The government works closely with the regulator and gas supply operators to monitor supply and demand.
While wholesale gas prices have increased internationally this year, the market continues to balance supply and demand through adjusting the prices at which energy trades take place. We have no reason to suggest this will not continue but will monitor the market.
National Grid Gas has a number of tools at its disposal to mitigate the risk of a gas supply emergency, including requesting additional gas supplies be delivered to the National Transmission System. Together with the Department for Business, Energy and Industrial Strategy (BEIS), National Grid Gas has robust response plans in place in the unlikely event that risk should materialise. Read plans for network gas supply emergencies.
Will this affect energy bills?
The high wholesale gas prices that are currently visible may not be the actual prices being paid by all consumers.
This is because major energy suppliers purchase much of their wholesale supplies many months in advance, giving protection to them and their customers from short-term price spikes.
The Energy Price Cap is also in place to protect millions of customers from the sudden increases in global gas prices this winter. Despite the rising costs of wholesale energy, the cap still saves 15 million households up to £100 a year.
The current global wholesale gas price situation as set out above could have an effect on companies.
Companies without longer-term contracts may face higher costs, but we expect that companies with longer-term contracts in place may have little exposure to the current high wholesale prices. If there were an event where a supplier fails, Ofgem would work to ensure that customers are moved to a new supplier, so they are not without energy.
How is the government helping poorer households?
Our Energy Price Cap will protect millions of customers from the sudden increases in global gas prices this winter.
We are also supporting low income and fuel poor households with their energy bills in a number of ways which demonstrates the government’s commitment.
This includes through:
the Warm Home Discount which provides eligible households with a £140 discount
in addition, Winter Fuel Payments and Cold Weather Payments will help ensure those most vulnerable are better able to heat their homes over the colder months
Vulnerable people and anyone in financial distress during this time should talk to their energy supplier, who will be able to discuss personal circumstances and consider options to help, including reassessing, reducing or pausing payments. Emergency measures have been agreed between government and energy suppliers to support those most in need during the disruption caused by COVID-19, and this agreement remains in place this winter. Read details of the agreement.
As set out in the Energy white paper, we plan to extend the Warm Home Discount until 2026, increase it to £150, and help an extra 780,000 pensioners and low-income families with their energy bills. With a total of 2.7 million to get support, with the vast majority to receive the money back automatically, without having to apply as at present.
Cold Weather Payments provide vulnerable households on qualifying benefits with financial support when the weather has been, or is forecasted to be, unusually cold. £25 is available for eligible households for each 7 day period of very cold weather between 1 November and 31 March.
Business and Energy Secretary meets and energy industry chiefs
Business and Energy Secretary Kwasi Kwarteng held a series of individual meetings with senior executives from the energy industry yesterday to discuss the impact of high gas prices, driven by international supply and demand factors.
During the calls, the Secretary of State was reassured that security of supply was not a cause for immediate concern within the industry. The UK benefits from having a diverse range of gas supply sources, with sufficient capacity to more than meet demand. As previously stated, the UK’s gas system continues to operate reliably and we do not anticipate any increased risk of supply emergencies this winter.
The Secretary of State stressed that energy security is an absolute priority for this government. We are confident that security of supply can be maintained under a wide range of scenarios. Great Britain also benefits from a diverse electricity mix, which is one of the reasons why we have one of the most reliable electricity systems in the world.
Whilst our largest single supply source of gas continues to be from domestic production – and the vast majority of imports come from reliable suppliers such as Norway – the UK’s exposure to volatile global gas prices underscores the importance of the government’s plan to build a strong, home-grown renewable energy sector to further reduce our reliance on fossil fuels.
The pressure being faced by some energy companies was also discussed during the meetings after four small suppliers ceased to trade in recent weeks. Ofgem has robust measures in place to ensure that customers do not need to worry, their needs are met, and their gas and electricity supply will continue uninterrupted if a supplier fails.
If the appointment of a Supplier of Last Resort is not possible, Ofgem and the Government have agreed processes in place to appoint a special administrator to temporarily run the business until such time as a new supplier can be found for the customers.
The Secretary of State also stressed the importance of protecting vulnerable customers during a time of heightened global gas prices. Government initiatives such as the Warm Home Discount, Winter Fuel Payments and Cold Weather Payments will help ensure those most vulnerable are better able to heat their homes over the colder months. The Energy Price Cap is also in place to protect millions of customers from the sudden increases in global gas prices this winter.
The Business Secretary will be meeting with Ofgem this morning to discuss the issues raised by the industry in more detail, and on Monday he will convene a roundtable with industry to plan a way forward.
The Secretary of State is also working in contact with colleagues across government to manage the wider implications of the global gas price increase.
*Energy Price Cap extended until end of 2021, protecting around 11 million UK households from being overcharged
*households on standard variable and default energy tariffs will continue to save between £75 and £100 a year on dual fuel bills
*2.8 million electricity and 2.1 million gas customers switched supplier in the first six months of 2020
Around 11 million households across the UK will be protected from being overcharged on their energy bills thanks to an extension to the government’s Energy Price Cap until the end of next year.
The Energy Price Cap shields those least likely to shop around for the best deals – including the elderly and most vulnerable – from being charged excessive prices.
Since its introduction in January 2019, the cap has saved customers around £1 billion a year, equivalent to around £75-100 a year for typical households on default energy tariffs.
An additional 4 million households with prepayment meters on default tariffs will also come under the protection of the cap from January.
Business and Energy Secretary Alok Sharma said: The Energy Price Cap has been vital in ensuring customers do not pay too much on their bills, which is why we are keeping it in place for at least another year.
“Switching energy supplier to find the best value deals is still the best way to save on bills, but this government is determined to make sure all customers are treated fairly and get the protection they deserve.”
In addition to the price cap, millions of customers have been able to benefit from lower bills as the numbers of those switching to cheaper tariffs has increased and the rollout of smart meters has progressed in recent years.
A total of 2.8 million electricity and 2.1 million gas customers switched supplier in the first 6 months of 2020, building on record numbers of households switching to cheaper tariffs in 2019, the first full year of the Energy Price Cap.
However, more than half of customers are still on standard variable or default tariffs, where, in the absence of the cap, they would likely still be paying excessive charges for energy use.
In August, the independent energy regulator, Ofgem, recommended an extension to the cap following a review into the market. Today’s announcement follows that recommendation.
The Energy Price Cap extension is the latest government measure to help vulnerable customers with their energy bills and follows particular support during the coronavirus pandemic.
Energy suppliers have given prepayment and pay-as-you-go customers support when they faced financial distress.
Those with prepayment meters have also benefited from a price cap that is in place until the end of the year.
Today’s announcement means a further 4 million households with prepayment meters on default tariffs will continue to be protected from excessive prices by the wider Energy Price Cap once the Competition and Market Authority’s Prepayment Meter Cap expires at the end of 2020.
Jonathan Brearley, Chief Executive of Ofgem, said: The Secretary of State’s announcement means that 15 million households will continue to be protected under the price cap and will pay a fair price for their energy in 2021.
“Although those protected by the cap are paying a fair price, they can also reduce their energy bills further by shopping around for a better deal.
“Ofgem will continue to protect consumers in the difficult months ahead as we work with industry and government to build a greener, fairer energy system.”
Natalie Hitchins, Head of Home Products and Services at Which?, said:“With energy bills expected to rise and tighter coronavirus restrictions returning to many parts of the country, it is good to see the regulator taking steps to protect vulnerable customers and ensure they can stay warm this winter.
“Anyone facing financial difficulty or struggling to pay their energy bills should speak to their provider about what support may be available to them. Households could also potentially save themselves hundreds of pounds a year by switching to a provider offering a cheaper deal and possibly better customer service.”
Customers looking for cheaper energy deals can compare deals with Which? Switch, a transparent and impartial way to compare energy tariffs and find the best gas and electricity supplier for you.
Which? calculates that a medium user (using 12,000kWh gas and 2,900kWh electricity per year) on a dual-fuel default tariff at the level of the current price cap could save up to £221 by switching to the cheapest deal on the market. Based on widely-available tariffs available across England, Scotland and Wales, paying by monthly direct debit, with paperless bills. Data is from Energylinx and correct on 13 October 2020.
Small businesses in Scotland could save up to £8,000 on average each year simply by making energy efficiency improvements – and cut their annual energy consumption by a quarter. That’s the message from Zero Waste Scotland and the Scottish Government, who have announced a new ‘cashback’ scheme to help businesses in Scotland tackle rising energy costs and reduce their carbon footprint.
For a limited time only, eligible small and medium-sized businesses (SMEs) applying for an interest-free, unsecured Scottish Government loan can receive 30% cashback on the value. That’s up to £10,000 in cashback on completion of their energy efficiency improvements.
Minister for Business, Innovation and Energy, Paul Wheelhouse,announced the cashback incentive today during a visit to Goldenacre Mini Market in Edinburgh. The convenience store is among more than 300 businesses in Scotland to have benefitted from an SME Loan in the past five years.
The SME Loan scheme has seen nearly £10million invested in the Scottish small business community since 2013.
Paul Wheelhouse MSP, Scottish Government Minister for Business, Innovation and Energy, said: “Improving energy efficiency is one of the smartest ways that businesses in Scotland can hold onto their hard-earned profits and make a real difference to the bottom line.
“In addition to benefits for individual businesses, reducing the environmental impact of Scotland’s energy needs will bring us closer to the low carbon energy future set out in Scotland’s Energy Strategy – generating benefits for Scotland’s economy as well as the environment.
“This fund is part of Scotland’s Energy Efficiency Programme (SEEP), which will support buildings across Scotland – both domestic and non-domestic – to improve their energy efficiency rating over a 15-20 year period.
“We will be publishing a SEEP Routemap, later in 2018, to set out our long-term ambition for the Programme and make our commitment to this agenda clear, given the more than £500 million we have which earmarked to the programme over this term of Parliament.”
The SME Loan 30% Cashback incentive is open to applications from SMEs with energy efficiency projects that demonstrate cost and carbon savings. These include, but are not limited to:
· investing in LED lighting,
· installing more efficient heating systems,
· improving the insulation of a building or investing in more energy efficient equipment, such as a state of the art oven or a more efficient refrigeration unit.
Eligible applicants will receive a dedicated expert advisor from Zero Waste Scotland’s Resource Efficient Scotland service, which is supported by the European Regional Development Fund (ERDF), to guide them through the process at no cost, helping them identify efficiency improvements with the greatest benefit to the bottom line.
Iain Gulland, Chief Executive, Zero Waste Scotland, said: “Our work with small businesses in Scotland tells us that companies want to do their bit for the environment – indeed, our advisors have already supported organisations in Scotland to identify over £42million worth of savings.
“We understand that with small businesses, the need to see fast return on investment and the time needed to complete lengthy application processes can preclude positive action. That’s why the SME Loan and associated support is designed with busy Scottish SMEs in mind – and with up to £10,000 cashback now available there’s even more reason to act and secure a more sustainable, cost-effective future for your business.”
Small business owner Aleem Farooqi runs the Goldenacre Mini Market on Edinburgh’s Inverleith Row. His successful application for the SME Loan in 2016, to upgrade the store’s lighting and refrigeration, has generated annual electricity savings worth almost £1,800.
Mr Farooqi said: “As a small business, keeping my energy bills to a minimum while also ensuring an excellent customer experience is paramount. Having operated Goldenacre Mini Market in Edinburgh for 15 years, I was delighted to have the chance to upgrade some of my older lighting and refrigeration equipment to more energy efficient models that are now saving me about 30% on my electricity bills. That’s money that I can put back into my business and continue to serve the community.
“I would recommend the SME Loan to any small business owner – and with an additional cashback element now available it’s a great opportunity for retailers to invest in the future of their business.”
To find out more about the SME Loan 30% Cashback incentive, and to apply, call Zero Waste Scotland’s Resource Efficient Scotland service on 0808 808 2268, or visit www.resourceefficientscotland.com/SMEloan
Zero Waste Scotland leads on delivery of the £73million Resource Efficient Circular Economy Accelerator Programme, which aims to improve the economic performance of SMEs while at the same time reducing the impact of economic activity on the natural environment, supporting Scottish Government and EU policies.
