Cold Homes Kill
Millions of households are living in fuel poverty, and it's only set to grow worse as government support is scaled back. Last week's cold snap makes it clear: we need to bring the bills down, and for good.
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Even if the government had maintained the energy price cap’s summer rate of £1,971, one million more people would have been pushed into poverty in 2022, according to a report from the Legatum Institute. (Koldunov / Getty Images)
Millions of families are facing the freezing weather unsure about whether they will be able to afford to heat their homes. A recent report found that twelve million households are facing financial emergency as a result of unaffordable energy costs, and the government has announced that the energy support guarantee introduced in October will be scaled back from April 2023.
The chancellor has said more targeted support will be provided to families in extreme need—those in receipt of social security payments like out of work benefits and the state pension. But of the twelve million households struggling to pay their energy bills, nearly three million will not qualify for government support.
There are more than seven million people living in those three million households, many of whom are children and elderly people, who will find themselves pushed even deeper into poverty as a result of the government’s decision.
Poverty in the UK has already been on the rise for some time. Wages stagnated for the longest period since the turn of the eighteenth century in the wake of the 2008 financial crisis, and austerity meant deep cuts to social security and public services that might have blunted the impact of lower wages.
Thankfully, for most of this period, inflationary pressure remained relatively muted. The increase in prices seen over the past year has made 2022 the worst year for wage growth since 1977. Research from the TUC has shown that working people have lost £80 per month over the course of the year as wages have failed to keep up with inflation.
Even if the government had maintained the energy price cap’s summer rate of £1,971, one million more people would have been pushed into poverty in 2022, according to a report from the right-wing Legatum Institute. Even this Conservative think tank insisted that it was critical for the government to support working people through what they called a ‘once in a generation’ increase in poverty.
Food bank usage has skyrocketed since the introduction of austerity in 2010. Between 2008/9 and 2020/21, the number of people using foodbanks has increased every year—rising from around 26,000 in 2008 to more than 2.5 million today.
The UK now faces the spectre of millions of people huddled together in public spaces just to stay warm. So-called ‘warm banks’ are springing up across the country as charities and local authorities struggle to support residents who can’t afford to heat their homes. But their efforts are being hampered by a severe lack of funding—another legacy of the first round of cuts.
There is simply no justification for the scaling back of government support in this context. Even Conservatives must concede that the government faces an ethical imperative to act to alleviate the desperate conditions being faced by working people. So why are Rishi Sunak and Jeremy Hunt refusing to provide the support necessary to deal with the cost of living crisis?
Sunak entered office under immense pressure from financial markets to demonstrate that the UK’s borrowing wasn’t about to race even farther ahead of economic growth. In this context, he had two options.
The first option was to announce swingeing cuts to public services, tax increases, and a range of measures to bring down spending and increase revenues over the short- to medium-term. In other words, austerity. This is the path the government chose.
But we know from very recent bitter experience that austerity doesn’t work. It drags down growth and productivity, making the weight of existing debt heavier over the long term. And it also places the country in a far worse position to tackle issues like climate breakdown.
The second option would have been to announce a wide-ranging programme of investment designed to deal with the underlying cause of the energy crisis through decarbonising the economy, as well as providing jobs, boosting skills, and augmenting productivity. The inflationary impact of this spending would have had to be addressed through price controls and tax rises for the wealthy and large corporations, as well as a crackdown on avoidance and evasion.
But such a significant programme of investment would mean much higher rates of employment and wages, and therefore far greater bargaining power for UK workers. The government undoubtedly believes that the UK labour movement has already become far too belligerent, and it can’t risk shifting the balance of power any further in workers’ favour.
Between beating down workers and beating back pressure from financial markets, Sunak and Hunt have little room for manoeuvre. But it is becoming increasingly clear that British society cannot survive another round of deep cuts to public spending. In fact, many thousands of people may not survive this winter as a result of yet more Tory cuts.
Ultimately, this government’s callousness is likely to cost them dearly at the next election. But Keir Starmer will face the exact same set of pressures as Rishi Sunak, and he has given us absolutely no reason to believe that he would do anything differently.