What will happen to our energy bills?
This spring, two in three families of retail workers were struggling to pay for heating, and one in four retail workers said they could not afford to switch the heating on in the winter (according to USDAW). This spring’s prices put an estimated 6.7 million households (nearly one in four families) into fuel poverty, i.e. having to pay more than 10% of their income on energy, even after accounting for the £400 in government support announced over the summer. And with Liz Truss’s planned energy price freeze, these households, like everyone else, will still have to pay more for energy now than this spring, and almost twice as much as this time last year. The Prime Minister announced no further support for these families.
Our broken energy market needs a fundamental overhaul, alongside reforms to get pay rising. What we need is:
Public ownership of energy utility companies - providing a fairer pricing structure with a free energy allowance for basic needs, and a social tariff for those who struggle.
A plan to get pay rising for everyone - with a higher minimum wage, new rights for unions to set minimum pay and conditions across the economy, and decently funded public sector pay rises.
A social security system that delivers a real safety net for all who need it. That means a basic rate of universal credit and legacy benefits set at 80 per cent of the real living wage, a significant increase in support for children, and a plan to replace the broken universal credit system with one that delivers real security for families.
The Government has refused to raise the windfall tax on oil and gas companies, instead promising to explain how the energy price guarantee will be funded in a future statement. As a result, this Government is shoring up an estimated £170 billion in excess profits that the companies did not lift a finger to earn. A larger windfall tax, alongside cancelling loopholes and the planned reduction in corporation tax, could fund an energy bills freeze at the levels they were at last spring, according to TUC estimates.
Will we avoid future crises?
Probably not. The single most effective way of reducing bills over the long-term is to reduce how much energy our homes and workplaces need to stay warm in the first place. And this is fully absent from the Prime Minister’s proposals. If the government is willing to spend an estimated £100 billion on keeping wholesale energy prices down, then why could it not spend even a quarter of that on badly needed home improvements?
Where will we get energy from in the future?
The Prime Minister has made some assurances that she will back building more renewable energy and nuclear power stations, but without detail on how she plans to do so.
She has also promised to lift the ban on fracking - . without any evaluation for how this would help lower bills, nor how safety and environmental concerns were assessed. Only five months ago Chancellor Kwasi Kwarteng said that allowing fracking would have no material impact on prices because “gas producers are not charities”.
Will the plan protect jobs?
The energy price guarantee extends to all businesses and public sector organisations through the winter, though there is no guarantee that businesses will use it to protect jobs. After that, Truss promised to review which sectors will need the support most.
The news may be a short-term relief for some manufacturing workers, as soaring gas prices are sending many energy-intensive industries to the brink of stoppages. But industries like steel and ceramics need a longer-term plan – protection from the current shocks that also ties in investment in a decarbonised, more energy-efficient future.
The verdict: there is much to fight for
The new Government’s plan provides some much-needed relief for workers.
But it will not secure warm homes, or fair pay, or a safe climate for anyone.
We must, and will, demand better.
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