London households in fuel poverty to treble in April
The number of London households in fuel poverty is set to treble to almost 700,000 when energy bills rise this April, as the government comes under pressure to do more to tackle a growing cost of living crisis.
Research by think-tank the Resolution Foundation published on Monday found the number of families in the capital spending at least 10 per cent of their budgets on fuel - the definition of ‘fuel stress’ - will increase from seven per cent to 20 per cent.
The steep rise, caused by the jump in the energy price cap from £1277 to nearer £2000 in April, comes amid concerns over soaring inflation and plans to hike National Insurance by 1.25 percentage points.
Jonny Marshall, Senior Economist at the Resolution Foundation, said: “Rising gas prices are causing energy bills to soar, and will see the number of families suffering from ‘fuel stress’ across London almost treble overnight to 690,000 families this summer.”
Mr Marshall called on the Government to take more action to avoid the upcoming rise in energy bills “turning into a cost of living catastrophe for hundreds of thousands of families across the capital”.
According to the research, more than a quarter of households in England will find their gas and electricity bills unaffordable when the price cap rises. Fuel stress is likely to be highest in the northeast and West Midlands at 33 per cent and 32 per cent.
Labour and some Tory MPs are urging the Government to cut VAT on energy bills to help ease the pressure on household budgets.
And while Chancellor Rishi Sunak is weighing further measures to help support struggling families, ministers insist plans to raise the National Living wage and the Universal Credit taper, along with the Warm Homes Discount, will help ease the pressure.
The Resolution Foundation argues this doesn’t go far enough and calls for a faster uprating of benefits along with a more generous Warm Homes Discount, which it says should rise from £140 to nearer £300.
The think-tank also says further savings could be made by spreading the cost of the Government supporting failed energy firms over a number of years and by temporarily transferring green levies on people’s bills to general taxes.
The foundation said in London, this package of changes would reduce the number of families facing fuel stress by nearly half - down from 20 to 12 per cent.
It said the longer term challenge of modernising homes to improve energy efficiency was particularly acute in London because of the capital’s large stock of private rented accommodation which tends to be less well insulated than owner-occupied or social homes.
Education Secretary Nadhim Zahawi said the Government’s changes to the Universal Credit taper and National Living Wage would lead to £2000 of additional help for the most vulnerable.
He told Sky News: “We will always look at other things, I know my colleagues in the Treasury and the Department for Business are looking at how we can further mitigate.
“We continue to monitor the situation closely. We will always go further to make sure we do more for those who are really finding it challenging on energy.”
Ed Miliband, Labour’s Shadow Secretary for Climate Change and Net Zero, attacked a “decade of failed Conservative energy policy”.
He said Labour would levy a windfall tax on the oil and gas companies to save all households around £200, with up to £600 of support for 9 million of the lowest earners, pensioners and the ‘squeezed middle’.
