Kate Hollern MP: ‘The price cap will provide little relief’

During last week’s oral questions to the Department for Energy Security and Net Zero, I asked the Secretary of State about the number of families in fuel poverty. At 16.6 per cent, the number of households in fuel poverty in my Blackburn constituency is higher than the regional (14.4 per cent) and national (13.4 per cent) average.

The announcement by energy regulator Ofgem that the price cap will be reduced to an annual level of £2,074 from July 1 appears to be good news. However, average energy bills are still almost double what they were in October 2021. This price cap announcement also signals the end of the government’s Energy Price Guarantee scheme. As such, it will provide little relief to many families.

One of the best solutions to fuel poverty is energy efficiency, but progress is too slow. According to the UK Business Council for Sustainable Development, at the current rate of progress it will take almost 200 years for the government to get all the energy efficiency of all UK homes up to EPC C.

As I reminded the minister last Tuesday, a report by the Environmental Audit Committee, published in January, criticised the government’s energy efficiency target as “vague” and “unspecific”. Meanwhile, recent figures reveal that energy companies such as Shell are making £61,000 a minute. The government’s windfall tax only came in in May 2022, yet there is a loophole in the super deduction worth £11 billion. This could insulate at least 4 million homes.

Record profits are being reported across other sectors of the economy. Earlier this month it was revealed that the Competition and Markets Authority is to question supermarket bosses after finding evidence that higher pump prices cannot be attributed solely to factors outside the control of the retailers. The competition watchdog will also step up its work in the grocery sector to better understand the cause of rising food prices, as top supermarkets report huge profits. There is mounting evidence that global factors cannot be solely blamed for the soaring cost of living.

This systemic problem must be addressed at a policy level. A comprehensive windfall tax on the obscene profits of oil and gas giants, combined with an ambitious plan to upgrade energy efficiency across the UK – particularly in the most fuel-poor areas – are urgently needed to ease the fuel poverty and climate crises.